Part 2:
Orders for the year totaled $874.7 million, and grew 1%. Wireless
infrastructure orders increased 3% worldwide for the year. Common
carrier and private microwave orders declined 14%. Broadcast orders
overall declined 4% for the year. Government orders rose 19%. Towers and
services orders declined significantly this year — by over $20 million
for the full year. Wireless accessories orders were up 11% for the year.
Income Statement Highlights
Gross margin in the quarter dropped to 37.6% from 40.2% in the year-ago
period. Very competitive market conditions continued, with average
selling prices about 5% lower than in Q4 of fiscal 1997. Price
concessions account for most of the margin decline. For the year, gross
margin was 38.8% versus 40.9% in fiscal 1997, with competitive pricing
accounting for virtually all of the decline.
Research and development spending was down 45% for the quarter and down
37% for the full year. Approximately one-fourth of that decline is
attributable to the discontinuation of the fiberoptic sensors and global
messaging businesses at the end of last year. Completion of new product
development in defense electronics and base station antennas accounts
for the majority of the balance of the decline in R&D spending.
Sales, general, and administrative (SG&A) expense declined 4% in
absolute terms for the quarter. As a percent of sales, SG&A was 15.7% of
sales, compared to 15.5% in last year's Q4. Sales and marketing expenses
were down, while administrative expenses increased as the company
continued to invest in new business systems. Excluding the effect of the
increased business systems spending, administrative expenses also
declined in the quarter. For the year, SG&A was flat in terms of actual
dollars and, as a percent of sales, was 17.0% for fiscal 1998 compared
to 16.8% in fiscal 1997. Sales and marketing expenses were lower, while
administrative expenses increased due to business systems spending.
Operating profit declined 9% for the quarter and 5% for the year.
During the quarter the company had a foreign exchange loss of $2.1
million compared to $400,000 in the year-ago quarter. For the year,
foreign exchange losses offset lower net interest expense, and net
"other expense" was $4.4 million higher than last year. This resulted in
pretax income down 8%.
Net income (before the effect of any restructuring charges in fiscal
1997) declined 13% in the quarter and 7% for the year. EPS was $0.31 for
the quarter, versus $0.34 last year. For the full year, EPS was down 3%
to $1.18 versus $1.21 for fiscal 1997. |
