Re: Last Mile Specialist- ADC Telecommunications 002Q Results
Thread- I've posted quite a bit of information on this particular company because it counts itself as a Last Mile specialist. From what I have seen with my DD, it appears to be accurate. They are positioned well in all three major broadband access technologies, twisted pair, coaxial, and fixed/mobile wireless. I've edited down their PR to what I thought was significant. I'll post notes from the CC soon.
The PR is kind of long because, hard as it may be to believe, ADCT has no 10% customer. VERY unusual situation for such a large player in the telecom equipment game to be so well diversified. -MikeM(From Florida)
PS Some archived urls regarding ADCT:
Message 12573064
Message 13133146
Message 13194357
Message 13241789
Message 13395778
Message 13398455
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ADC's Powerful Second Quarter 2000 Results Accelerate to All-Time Highs
Internet and Broadband Communications Drive Rapid Growth
Sales of $709 Million, Up 55%; Recurring EPS of $0.29, Up 93%
MINNEAPOLIS--May 18, 2000-- ADC today reported record sales of $709 million in the second quarter ended April 30, 2000, an increase of 55% over the $457 million in the comparable quarter of 1999.
With record second quarter sales in all major product groups, the strong growth reflects 93% growth in Broadband Connectivity sales combined with 17% growth in Broadband Access and Transport sales and 29% growth in Integrated Solutions sales. International sales reached an all-time high of $137 million in this year's second quarter. North America and Europe remained ADC's largest sales regions in the quarter.
"The rapid growth of the Internet and broadband communications is a powerful driver accelerating ADC's financial performance to record levels for any quarter," said William J. Cadogan, chairman and chief executive officer of ADC...."Now that these tremendous global growth opportunities are unfolding, ADC is well-positioned to benefit from the fastest growing or `sweet spot' of capital spending by communications service providers - building and upgrading the `last mile/kilometer' of communications networks for Internet and broadband, multiservice applications."
ADC's STRATEGIC INVESTMENTS BROADEN WITH VENTURE CAPITAL FUND
As of April 30, 2000, ADC's strategic investments had a market value of $679 million of which $534 million is carried on the balance sheet as marketable securities. Investments in marketable securities include shares of Redback Networks, Efficient Networks, Vyyo and interWAVE Communications.
During the quarter, ADC launched a $100 million venture capital fund focused on investing in emerging and start-up companies throughout the world who are engaged in developing high-performance broadband communications technologies. The fund has already started making investments in optical technology companies. ADC has investments in ten privately held companies, including ONI Systems, Mind CTI, Tdsoft, G-Connect, Ensemble Communications, YAFO Networks and Optical Switch, carried at cost as long-term investments on the balance sheet.
REVIEW OF PRODUCT GROUPS
A review of ADC's performance by its three product groups - Broadband Connectivity, Broadband Access and Transport, and Integrated Solutions - follows.
Broadband Connectivity--In the second quarter of 2000, all-time high sales were recorded for both fiber- and copper-connectivity systems/components, as well as wireless components. Sales of fiber-optic systems/components totaled $100 million in the quarter, up 115% from the second quarter of 1999.
Sales were broad based across all types of Internet/data, video and voice service providers - incumbent and new entrants - and original equipment manufacturers(OEMs) around the globe. Strong worldwide growth in broadband connectivity systems and components continues as a result of rapid growth in Internet/data traffic and digital services, which is creating demand for broader bandwidth connections, and the fast growth of new service providers, which is creating demand for connectivity to new and existing communication networks.
In May 2000, ADC acquired two leaders in fiber-optic technologies. The acquired companies, Altitun (www.altitun.com) and IBSEN Micro Structures (www.ibsen.dk), bring ADC many significant strategic advantages to help customers build next-generation, all-optical network equipment. With these acquisitions, ADC will obtain instant sales and technological leadership in tunable lasers with Altitun, and in Phase masks and fiber Bragg grating devices, as well as the development of integrated optics with IBSEN.
During the quarter, ADC expanded its plans to increase Broadband Connectivity's global production capacities with an investment in a major manufacturing facility in Scotland. This investment is in addition to Broadband Connectivity's significant capacity expansion programs in 2000 that are either being planned, under construction or in operation in North America, Latin America and the Asia/Pacific region.
In April 2000, ADC introduced its BroadWire(TM) ADSL splitter, the industry's highest density splitter platform, enabling the delivery of 240 circuits of voice and high-speed data services simultaneously over a twisted-pair copper cable.
Broadband Access and Transport--Sales increased 17% to a second quarter record of $179 million compared to $154 million in the comparable prior-year quarter. Sales in the second quarter of 2000 increased from the prior-year second quarter primarily as a result of all-time high sales of cable television systems, record second quarter sales of telephone transport and access systems and increased sales of broadband wireless systems partially offset by lower sales of international digital loop carrier systems.
As part of ADC's aggressive and determined strategy to become a leading supplier of digital subscriber line (DSL) broadband access systems, ADC announced the pending acquisition of PairGain Technologies in February 2000. The proposed transaction is expected to be completed during ADC's third fiscal quarter, which ends July 31, 2000.
Sales of Homeworx products more than tripled in second quarter 2000 compared to the prior year as shipments continued to support MediaOne's and Seren Innovations' deployments of cable telephony services. In addition to orders for Homeworx products received from MediaOne and Seren Innovations during the quarter, new orders were received from two new customers in Europe and one new customer in the U.S.
In February 2000, ADC and Alcatel announced they intend to work together in an alliance to jointly offer cable telephony solutions on specific communications provider projects worldwide. ADC will contribute its leading Homeworx cable telephony system to the alliance.
Sales of Cellworx© Service Transport Nodes(STN) continued to grow in the second quarter of 2000. During the quarter, several new features were introduced to expand Cellworx STN market opportunities. The new features include OC48 optical interfaces, which quadruple optical capacity, as well as a new international system with related interfaces. Cellworx STN was recently selected by an international alternative service provider for optical transport, and is in the labs of multiple major service providers for technical evaluations. To date, Cellworx STNs have been deployed in a broad range of customer applications, including Iowa Communications Network for its statewide distance learning network; Midcontinent Communications for Internet access and private line services; China's Beijing PTT for voice, frame relay and ATM transport services; a major service provider for broadband switch port consolidation and DSLAM aggregation; U.S. military bases for data, voice and telemetry networks; and international distributors for lab and demo equipment to sell Cellworx STNs in their countries.
In March 2000, WorldCom announced a trial using ADC's Axity Broadband Wireless Access System for high-speed, broadband services in Boston. BellSouth previously announced a trial using ADC's Axity system. The Axity system enables communications service providers to offer wireless Internet/data, video and voice services to businesses, small offices/home offices and residences rather than accessing physical wireline networks. Three competitive access providers in North America currently deploy the Axity technology.
In March 2000, ADC and Redback Networks announced an agreement that combines ADC's strength in video transport technology with Redback's leading SONET and IP expertise, yielding a universal transport and access platform that will allow cable providers to cost-effectively deliver high quality video, digital TV (DTV), high definition TV (HDTV), voice and data (TDM and packet) over SONET networks. Under this agreement, ADC will develop video interface modules for Redback's multiservice platforms, and have the right to market and sell those Redback products to the cable television market. Additionally, Redback gains the right to sell ADC's video modules into non-cable markets.
In April 2000, GTE announced the selection of ADC's AccessPoint Universal Media Access System to deliver its VideoConnect broadcast video service to customers in California and Florida. ADC's AccessPoint system allows for the instantaneous connection of video, audio and data over broadband ATM networks. The system's MPEG over ATM architecture requires less bandwidth to transmit very high quality video images, enabling carriers and network operators the ability to offer more bandwidth efficient, cost-effective video service in point-to-point and point-to-multipoint environments. AccessPoint integrates video, voice and data interfaces, MPEG compression, and ATM transmission interfaces into a single, modular system.
In February 2000, Olsten Staffing Services' selected ADC's ServicePoint(TM) service delivery units (SDUs) for its updated network. Olsten wanted a manageable DSU/CSU that would provide a clear understanding of how the network was performing at each location. ServicePoint is being installed at approximately half of the company's 600 offices in North America. In May 2000, Trans World Airlines selected ADC's SevicePoint SDUs to assure cost-effective bandwidth utilization for the airline's critical corporate Intranet.
During the quarter, COMCOR, a Russian communications carrier, selected ADC's AAC-3 ATM Access Concentrator to enable frame relay over an ATM network for delivery of permanent virtual circuit (PVC) services to businesses in Moscow.
In April 2000, ADC received orders from three public television stations for its Visionary Digital Television transmitter systems. ADC also broadened its strength in the digital and analog television transmission systems market with the acquisition of the television broadcast assets of Continental Electronics.
Integrated Solutions--Sales grew 29% to a second quarter record of $112 million over $87 million in the comparable 1999 quarter. Sales increased from the prior-year second quarter as a result of sales of systems integration services reaching an all-time high and sales of software systems reaching a second quarter record.
Strong growth in systems integration services continues to be driven by a broad range of incumbent and new communications service providers that select ADC for consulting, engineering, installation, software and systems support, and activation of broadband, multiservice communication networks for growth, flexibility and rapid deployment.
In April 2000, ADC formed an alliance with DSET Corporation, a leading supplier of business-to-business e-commerce connectivity solutions for the telecommunications industry. ADC will provide DSET with comprehensive integration services to deploy DSET's electronic-bonding solutions to competitive local exchange carriers (CLECs) and data local exchange carriers (DLECs).
During the quarter, ADC rolled out its Singularit.e suite of software products and services that allows integrated communications providers(ICPs) to build open operational support systems(OSSs) to compete more effectively in the broadband era. Singularit.e automates key OSS processes by combining convergent billing and integrated customer management from ADC's Saville Systems software along with service assurance technology from ADC's Metrica software, both supported by integration services from leading consulting companies, such as the May 2000 announcements of a relationship with Ernst & Young and an alliance with Vitria Technology, a leading e-business platform provider.
In May 2000, Lightship Telecom began shipping convergent bills and providing comprehensive customer care to its business customers using ADC's Saville Systems Convergent Billing Platform(CBP). Lightship is designed to enable companies in northern New England to deploy business-to-business communications strategies through a variety of integrated technologies ranging from high-speed digital Internet access to traditional phone services. Lightship is using CBP to bill for services including: frame relay; digital subscriber line (DSL); asynchronous transfer mode (ATM) voice and data services; as well as local, regional and long distance phone service; e-mail; Web hosting; conference calling and digital virtual private networks (VPNs).
In April 2000, Chunghwa Telecom Co., Ltd.(CHT), Taiwan's PTT and largest mobile telephony operator in Taiwan, selected several solutions from ADC's Metrica product family via prime contractor Teltai (Taiwan) Ltd. Metrica/NPR for Wireless will be used to monitor CHT's wireless (GSM/DCS and AMPS) networks, interfacing with Nortel and Ericsson infrastructure elements. In addition to Metrica/NPR, CHT will use Metrica/PAS (performance alarm server) to monitor both performance data and historical data stored by Metrica/NPR against thresholds and alert operators to potential abnormalities. Also in April 2000, VersaTel selected ADC's Metrica/NPR and the new Traffic Dispersion Analysis tool to better understand traffic behavior between sources and destinations, determine the impact on network capacity, forecast profitabliity, make build/lease decisions and provide input to marketing plans. VersaTel is a competitive local access broadband network operator in Europe.
During the quarter, Telecordia Technologies selected ADC's NewNet IP CALEAserver for deployment with the Telecordia Call Agent in packet-switched networks to meet federally mandated CALEA(Communications Assistance to Law Enforcement Act) requirements.
In April 2000, ADC and RTS Wireless announced a strategic alliance that integrates ADC's NewNet SMserver(TM) short message platform and RTS' Advantage WAP Gateway software system, allowing ADC and RTS to enable delivery of wireless Internet services using short messages.
ADC signed OEM agreements with Mpathix, Technology Control Services (TCS), MasterMind Technologies and Symmetry Communications during the quarter. Mpathix will integrate its Voicemail/Unified Messaging platform with ADC's NewNet SMserver to deliver message waiting indications to wireless handsets and with ADC's NewNet OTAserver(TM) for over-the-air service provisioning. ADC's NewNet SGLite(TM) SS7 signaling gateway platform will be integrated with TCS's LiteSwitch Intelligent Services Architecture to provide innovative IP-based enhanced services applications for next-generation carriers. ADC's NewNet Connect7(TM) SS7 platform will be used in Mastermind's MM7 high-volume switching platform. Using ADC's NewNet Connect7 technology, Symmetry will provide high-speed packet data systems to wireless network operators. SS7 is the globally accepted signaling standard that provides reliable access to wireline and wireless public telephone networks. ADC's NewNet is a leading global supplier of SS7 and enhanced services platforms. |
