Re: Antec(sym:ANTC) Q200 CC Notes
Thread- Well I guess I didn't post Q100 notes. I'm looking at my handwritten notes for Q1 but can't find them on this thread. I guess I'll just integrate whatever comments in Q1 are applicable to Q2.
Well it was an interesting CC for those interested in the cablecos as a Last Mile investment. As usual, ATT was a big part of the call. Recently Harmonic(sym:HLIT) has been substantially cut down mainly due to their losing ATT business(on top of their Divicom problems). A couple of analyst were trying to get ANTC's Bob Stanzione to confess they are stealing market share from HLIT. But to his credit, he didn't give in. He just stuck to the facts as to how ATT is doing as a ANTC account.
Here are some facts regarding ATT and ANTC:
-Q100 ATT was $110 million
-Q100 ATT was up 190% yr/yr
-Q100 ATT was down sequentially q/q
-Q200 ATT was $??? million
-Q200 ATT was up 90% yr/yr
The rest of the revenues discussed(HDT and voice ports) are still heavily ATT slanted, but no solid breakout was given.
Here are some interesting facts for those interested in how the rollout to cable telephony is going. For those that don't know, ATT took an unprecedented risk of spending about $100 billion to buy cable plants. Now they are in the process of converting the cable plant to do Internet data and voice. And for those that follow my posts, IMO this watershed event is FINALLY driving the telcos to rollout ADSL in order to remain competitive.
-1,800 HDTs were in field at end of Q100
-392 new HDTs were shipped in Q2
-Each HDT can do 3,360 voice lines
-119,000 voice ports were deployed in Q2
-Voice ports is up 24% sequential and 300% yr/yr
-Take rate on cable voice is very strong.
-Some COX markets have 20% take rates for cable voice
-ANTC doing end-end VoIP trial in new T market with NT
-ANTC doing IP telephony trial(local loop) with Aldelphia
Overall I felt that this CC was about the cleanest one ANTC has given. Visibility was clear and current stats were clear. Kind of surprising considering ANTC has literally doubled in size over the last two years. I've kind of felt like ANTC has been stumbling along with their growth over the last couple of years. There would always be some kind of red flag raised on a division or two. This time I never really got that impression. Everything seemed to be firing properly for a change.
But that doesn't mean there won't be surprises. When a company has such a HUGE single customer, ATT in this case, it's really dependent upon ATT's commitment to continue upgrading their cable networks. If they hiccup, then ANTC could suffer.
Oh, the other thing that was of particular significance, was their international growth. This was quite interesting. As regular followers of my stats know, I'm of the feeling the ROW(rest of world) market is substantially larger than the US cable market. ANTC is getting a piece of this business. Ironically it's not by going after the market with a vengance, but due to the ownership stakes US investors have in overseas markets. Investors like Bill Gates, Callahan, and Malone. These guys appear to be driving the international upgrades. And that is good because their financing is pretty solid. ANTC did $24 million internationally in Q200. And in looking at my notes they did $17 million in Q100.
Overall their top line growth is 40% yr/yr and it's mainly the best kind, organic. -MikeM(From Florida)
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ANTEC Announces Record Second Quarter Results
Revenues and Net Income Up Over 40%
DULUTH, Ga., July 19 ANTEC Corporation today announced record results for the second quarter of 2000 consisting of sales of $276.1 million and net income of $11.2 million resulting in fully diluted earnings per share of $.27, excluding a net one-time pre-tax gain of $32.4 million in the quarter as discussed below. Including the gain, total earnings were $.68 per diluted share. On a comparative basis, the Company's results continue to be strong. Sales were up 40.6% over the second quarter of last year and 10.3% sequentially from the first quarter. Net income, excluding one-time items, was up 40.1% over the second quarter of last year and 29.0% sequentially over the first quarter.
The net one-time pre-tax gain in the second quarter consisted of a $30.0 million gain recorded in connection with the expiration of the LANcity earnout without further dilution; a $5.9 million gain in connection with the Company's investment in Chromatis Inc., which was acquired by Lucent Technologies; and a $3.5 million increase in the reorganization charge initially incurred in the fourth quarter of 1999 in connection with product discontinuation costs, which is reflected as an increase in cost of goods sold. As previously announced, the first quarter 1999 included a one-time pre- tax gain of $60.0 million in connection with the first part of the LANcity transaction and the first quarter of 2000 included a one-time pre-tax gain of $2.1 million in connection with the pension plan curtailment.
Continuing ANTEC's recent practice of providing supplemental financial information, the following is a schedule of second quarter 2000 results as compared to both first quarter 2000 and second quarter 1999, excluding one- time items, for ANTEC's four major product categories (in thousands[see url].
Growth was robust across all product categories for the quarter. Year- over-year second quarter growth was driven by demand in both the Optical & Broadband Transmission and Telephony & Internet Access products, while sequential growth from the first quarter was strongest in the Outside Plant & Powering and Supplies & Services product category. Sales to AT&T for the quarter were particularly strong, up 90.2% over the second quarter of last year, and 19.2% over the first quarter, reflecting AT&T's continuing upgrade of plant infrastructure and movement into the local loop access market. Revenue from international operations also continued to show strong growth during the quarter. At $23.9 million for the second quarter, international sales were up 71.7% for the year-over-year comparison and up 43.0% sequentially. Bookings for the second quarter were approximately $279.8 million, continuing the Company's positive book to bill metric. The Company ended the record sales quarter with a backlog of $128.4 million as compared to the backlog at the end of the first quarter 2000 and fourth quarter 1999 of $123.5 million and $105.4 million, respectively.
``We continue to see the impact of the fundamental industry capital expenditure drivers of increasing demand for bandwidth, competition in the local loop and the need for our customers to derive additional revenue streams from their operations,'' said Bob Stanzione, ANTEC President and CEO.
``Although there may be shifts from quarter to quarter in customer demand from one ANTEC product category to another based upon our customers' build cycles, the long-term outlook for ANTEC's hybrid fiber-coax (HFC) products remains strong. Our product line innovations, our on-going programs to improve product quality and reliability as well as improvements in customer service and support have enabled ANTEC to grow at a rate in excess of our industry average. With several international markets beginning to show renewed signs of demand, I am gaining confidence that those markets will contribute a larger share of our revenues in 2001 and beyond,'' concluded Stanzione.
``We are very pleased with our international sales results during the first half of 2000,'' said Ron Coppock, President - ANTEC International.
``International sales opportunities are growing and we are very well positioned in a number of countries. For example, we are seeing extensive rollouts of ANTEC Dense Wavelength Division Multiplexing (DWDM) products with major mutiple system operators (MSOs) throughout Europe including the Netherlands.''
The Company also noted that it had made several announcements during the second quarter which position ANTEC to take advantage of the trend towards new internet protocol (IP) based telephony and services. Specifically, on June 21, 2000, ANTEC announced an IP telephony deployment with Adelphia Communications. This announcement represents the second Cornerstone IP telephony deployment utilizing the PacketPort(TM) from ANTEC and follows the previously announced IP trial with AT&T Broadband. Cornerstone continues to be the world's leading family of cable telephony and internet access products from the ANTEC/Nortel Networks, Arris joint venture company. In addition, during the quarter the Company announced new 1550nm optical product enhancements, the development of the LightPlex(TM) optical router and other products that monitor and manage network elements.
``We expect that AT&T will partner with other MSOs and that we will have an opportunity to provide Cornerstone equipment to those customers as well,'' said Mike Wearsch, ANTEC President - Digital Systems. ``We are very impressed with the progress that AT&T continues to make in the rollout of cable telephony and services. Their continued launch of telephone service over the Cornerstone platform in now nine of their ten major markets keeps them on-track with their ambitious schedule,'' concluded Wearsch.
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