SCIENTIFIC~ATLANTA SFA Reports Record Bookings, Revenues, and Operating Profit
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Bookings up 96% Over Prior Year's Third Quarter; More Than 1 Million Digital Interactive Set-Tops Ordered in the Quarter
ATLANTA, April 25 /PRNewswire/ -- Scientific-Atlanta, Inc. (NYSE: SFA - news) today reported record financial results for its third fiscal quarter, with bookings, revenues, operating profit, backlog and cash each setting all-time records.
Consistently Strong Financial Performance
For the quarter ending March 31, 2000, bookings were $594.9 million, an increase of $290.8 million, or 96%, over prior year's third quarter. Revenues of $440.7 million rose by $120.7 million, or 38%, from the same period a year ago. Net earnings for the quarter were $38.1 million, or $0.23 per share. This represents a $17.3 million, or 83%, improvement in net earnings over the comparable period of the prior year, which were $0.13 per share, split- adjusted.
Backlog at quarter end was a record $785.8 million, an increase of $289.9 million from last year and up $152.9 million from last quarter.
The company's balance sheet remains strong, with cash, short-term investments, and marketable securities of $401.4 million at the end of the third quarter. This represents an increase of $165.8 million, or 70%, over the prior year and an increase of $49.4 million, or 14%, from last quarter's record balance. The company continues to have no significant debt.
Revenues for the first nine months of fiscal 2000 were $1,162.8 million, an increase of 31%, versus $888.2 million in the previous year. Net earnings for the nine-month period were $96.7 million, or $0.59 per share, an improvement of 76% compared to $55.0 million, or $0.35 per share in the comparable period of the prior year.
Strong third quarter results were driven by the company's Broadband segment. Transmission sales increased 47% year-over-year to $182.8 million, and Subscriber sales increased 45% to $212.9 million. Subscriber bookings of $366.9 million were up 253% from the prior year. Transmission bookings of $184.7 increased 19% year-over-year, led by a 73% increase in opto-electronics. Third quarter bookings and sales in the Satellite segment were flat as compared to the prior year.
Commenting on the third quarter results, James F. McDonald, Scientific- Atlanta's CEO said, ``Our financial performance reflects substantial strength across virtually all of our businesses. The dramatic growth in bookings reflects the increasing momentum of digital interactive system deployments and growing consumer enthusiasm for advanced services based on our Explorer© platform. The markets we participate in are very healthy, and our focus on the execution of our strategy is producing excellent results. We're particularly excited by the sharp increase in demand for our Explorer platform.''
Accelerating Demand for Subscriber Networks
In the third quarter, more than 1 million Explorer digital interactive set-tops were ordered, and 512,000 units were shipped, versus 267,000 shipped in the second quarter. The company shipped 18 commercial digital interactive headends in the quarter, for a total of 140 shipped to date. More than 1.3 million Explorer set-tops had been deployed in consumers' homes as of March 31, an increase of 507,000 in the quarter. As reported earlier, the company is expanding production at its Juarez, Mexico facility to a quarterly capacity of 1 million units by July.
In the third quarter, Scientific-Atlanta began shipping the Explorer model 3000 set-top, which expands the capability of the Explorer platform for demanding interactive applications. The Explorer 6000 set-top, which adds a DOCSIS modem, a second application processor, more memory, and an optional disk drive, is on schedule to ship this summer.
Transmission Strengthened with Strategic Investments
Scientific-Atlanta continues to strengthen its technology and product positioning with strategic investments. Yesterday, the company announced a $10 million investment in Luminous Networks. Luminous provides technology for the transport of IP (Internet Protocol) traffic directly over fiber, without inefficient intermediary protocols. Scientific-Atlanta and Luminous have agreed to enable Scientific-Atlanta's video technology to be integrated into the Luminous platform.
Bookham Technologies Limited (Nasdaq: BKHM - news), a leader in Application Specific Optical Circuit technology, completed its initial public offering earlier this month. Scientific-Atlanta announced last year that it had invested $13.1 million for 6 million Bookham shares.
SciCare(TM) Broadband Services Positioned to Help MSOs Meet Demand
To take full advantage of the rapid expansion of interactive broadband networks, the company introduced its SciCare Broadband Services business in the quarter. This organization has a unique level of expertise in implementing transmission networks and the Explorer system, and it has developed a valuable understanding of customer requirements and advanced applications. The new group will focus on providing the resources, processes, and knowledge to help cable operators deliver advanced services reliably and rapidly.
PowerTV is Broadly Deployed
The PowerTV© operating system has been shipped on more than 1.8 million set-tops, clearly establishing PowerTV as a leading provider of software solutions for digital interactive deployments. During the quarter, PowerTV and PRASARA Technologies Inc. signed a definitive agreement to merge the two companies. PRASARA has deployed interactive applications ranging from video- on-demand to e-commerce to customer care and education. Together, PowerTV and PRASARA will provide the complete software environment for interactive television systems.
Markets Outside of North America Continuing to Show Improvement
International markets continued to show signs of recovery during the quarter. Bookings in Latin America grew by $15.8 million or 313% year-over- year, while Asia/Pacific bookings expanded by $12.3 million, or 73%. The company announced that Metropolis Intercom, one of Chile's largest cable operators with more than 300,000 subscribers, is the first to use Scientific- Atlanta's Explorer 2000 set-tops and digital network to deploy interactive television services in Latin America.
McDonald concluded, ``Our customers are facing strong competition from DBS operators and DSL providers. Scientific-Atlanta provides the advanced transmission systems and digital subscriber products our customers require to defend themselves today, while enabling them to supercede that competition in the future with a broad range of compelling interactive services. Thus, our capabilities support both defensive and offensive strategies as our customers strive to maintain their lead in the digital interactive broadband world.''
``Forward-looking statements,'' as defined in the Private Securities Litigation Reform Act of 1995, may be included in this news release. A variety of factors could cause Scientific-Atlanta's actual results to differ from the anticipated results expressed in such forward-looking statements. Investors are referred to Scientific-Atlanta's Cautionary Statements (Exhibit 99 to the company's most recent Form 10-Q), which statements are incorporated into this news release by reference.
Scientific-Atlanta, Inc. (http://www.scientificatlanta.com) is a leading supplier of broadband transmission networks, digital interactive subscriber systems, and worldwide customer service and support.
Scientific-Atlanta, the Scientific-Atlanta logo, SciCare, and Explorer are trademarks of Scientific-Atlanta, Inc. PowerTV is a trademark of PowerTV, Inc.
SCIENTIFIC-ATLANTA, INC.
consolidated statement of earnings
(in millions, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
March 31, April 2, March 31, April 2,
2000 1999 2000 1999
SALES $440.7 $320.0 $1,162.8 $888.2
COSTS AND EXPENSES
Cost of sales 310.6 228.6 823.6 638.6
Sales and administrative 45.2 37.6 126.4 119.2
Research and development 32.2 27.9 90.1 87.0
Interest expense 0.1 0.2 0.4 0.7
Interest (income) (5.3) (1.7) (13.1) (5.6)
Other (income)
expense, net 3.5 (2.3) (2.8) (30.3)
Total costs and
expenses 386.3 290.3 1,024.6 809.6
EARNINGS BEFORE
INCOME TAXES 54.4 29.7 138.2 78.6
PROVISION FOR
INCOME TAXES 16.3 8.9 41.5 23.6
NET EARNINGS $38.1 $20.8 $96.7 $55.0
EARNINGS PER COMMON SHARE
BASIC $0.24 $0.13 $0.61 $0.36
DILUTED $0.23 $0.13 $0.59 $0.35
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
BASIC 158.6 151.7 157.3 153.6
DILUTED 166.6 156.5 163.9 156.6
BOOKINGS $594.9 $304.1 $1,428.5 $896.2
SOURCE: Scientific-Atlanta, Inc. |
