Tektronix Reports Third Quarter 1999 Results
PR Newswire - March 18, 1999 08:46
Company Announces Earnings of $14.5 Million
WILSONVILLE, Ore., March 18 /PRNewswire/ -- Tektronix, Inc. (NYSE: TEK) today reported net earnings of $14.5 million, or $0.31 per share, for the third quarter of fiscal 1999 ended Feb. 27, 1999. This compares with earnings of $34.2 million, or $0.68 per share in the year ago period. Net sales for the quarter were $470.6 million compared with $517.6 million in third quarter 1998.
"While disappointed with the lack of top-line growth, we were pleased with the sequential increase in sales and our ability to deliver on earnings expectations," said Jerry Meyer, chairman and CEO of Tektronix. "Additionally, we have demonstrated a return to profitability and are on track with our cost reduction activities.
"Our orders and sales in the quarter continue to be impacted by softness in the broadcast and semiconductor markets. We also delayed the shipment of two recently announced printer products until later in the quarter, which created an additional impact on both orders and sales," said Meyer.
Meyer noted that despite the continued affects of Asia's economy, the company believes the region is slowly returning to health. While sales are still down in the region, orders for the Asian/Pacific countries showed sequential and year over year growth and are expected to improve again in the fourth quarter.
Color Printing and Imaging Division
Color printing sales for the quarter were $197.6 million, compared with $183.7 million for the third quarter fiscal 1998, an increase of 8 percent. Orders for the division decreased 8 percent compared with the same quarter a year ago. This resulted primarily from the delay in new product shipments and the related effect on backlog and reorders. Unit shipments grew over 50 percent compared with the year ago quarter.
The company noted that in the month of February, PC Data reported Tektronix' market share of business color laser-class printers at 41 percent in the United States, a reflection of the first full month of complete new product line shipments.
Measurement Business Division
Measurement business sales declined 16 percent to $202.7 million compared to $240.2 million in the same period last year. Orders for the quarter decreased 5 percent compared to the same quarter last year, a sequential improvement over the second quarter of fiscal 1999.
Though third-quarter sales continue to be impacted by Asian economic conditions, the company realized a sequential increase in orders by the region over second quarter, fiscal 1999. The company also reported that capital spending in the semiconductor industry has begun to show signs of improvement.
A highlight of the quarter was the introduction of the TDS3000, a new high-performance, low-cost digital phosphor oscilloscope (DPO) aimed at the midrange measurement market. Initial unit orders have been strong.
Video and Networking Division
Sales for video and networking were $70.3 million compared with $93.7 million in the third quarter fiscal 1998. Third quarter results reflect the sale of the Network Displays business. The company noted that spending in the broadcast business continues to be soft as the industry transitions from analog to digital.
Forward Looking Statements
Statements and information in this press release that relate to future results and events are based on the company's current expectations. They constitute forward looking statements subject to a number of risk factors that could cause actual results to differ materially from those currently expected or desired. Risk factors include, but are not limited to: worldwide economic and business conditions in the electronics industry, including the continuing effects of the Asian economic crisis and its secondary effects on demand of the company's products; customer order patterns, demand and acceptance of new or recently introduced products; competitive factors, including pricing pressures, technological developments and new products; changes in product and sales mix; timing of new products; availability of reasonably priced parts from suppliers; inventory valuation risks; the timing of orders received during the quarter; currency fluctuations; the significant operational and strategic issues the company faces within the Video and Networking Division; implementation of the reorganization and restructuring plan; and other risk factors listed from time-to-time in the company's Securities and Exchange Commission reports, including but not limited to the quarterly report on Form 10-Q and the annual report on Form 10-K and press releases.
Tektronix is a portfolio of measurement, color printing and video and networking businesses dedicated to applying technology excellence to customer challenges. Tektronix is headquartered in Wilsonville, Oregon, and has operations in 26 countries outside the United States. Founded in 1946, the company had revenues of $2.1 billion in fiscal 1998.
The business and geographic net sales and product orders breakdown is as follows:
Quarter Ended Three Quarters Ended
Feb. 27, Feb. 28, Feb. 27, Feb. 28,
(In thousands) 1999 1998 1999 1998
Net Sales: $470,608 $517,570 $1,321,751 $1,527,890
(Net sales for the three
quarters ended
Feb. 27, 1999, were
reduced $6,464 for sales
returns related to the
business reorganization)
Measurement Business 202,721 240,209 614,307 715,593
Color Printing and Imaging 197,599 183,680 512,231 524,991
Video and Networking 70,288 93,681 195,213 287,306
U.S. 224,226 254,073 667,475 781,873
International 246,382 263,497 654,276 746,017
Product Orders: $410,700 $461,200 $1,285,800 $1,410,600
Measurement Business 187,500 196,500 567,600 636,100
Color Printing and Imaging 159,800 173,200 530,900 494,100
Video and Networking 63,400 91,500 187,300 280,400
U.S. 212,100 232,400 647,800 715,700
International 198,600 228,800 638,000 694,900
Consolidated Statements of Operations
Quarter Ended Three Quarters Ended
Feb. 27, Feb. 28, Feb. 27, Feb. 28,
(In thousands, 1999 1998 1999 1998
except per share amounts)
Net sales $470,608 $517,570 $1,321,751 $1,527,890
(Net sales for the three
quarters ended
Feb. 27, 1999, were
reduced $6,464 for sales
returns related to the
business reorganization)
Cost of sales 281,555 292,716 822,177 909,768
(Cost of sales for the
three quarters ended
Feb. 27, 1999, and
Feb. 28, 1998,
respectively, include
$27,760 and $38,482,
respectively, related
to the business
reorganization)
Gross profit 189,053 224,854 499,574 618,122
Research and development
expenses 44,262 52,944 152,823 149,373
(Research and development
expenses for the three
quarters ended Feb. 27, 1999,
include $4,019 related to
the business reorganization)
Selling, general and
administrative expenses 116,242 123,277 358,512 374,717
(Administrative expenses
for three quarters ended
Feb. 27, 1999, include
$803 of bad debt expense
related to the business
reorganization)
Equity in business
ventures' earnings (loss) 286 (34) (8,894) 430
Non-recurring charges -- -- 81,488 40,478
(For the business
reorganizations during the
three quarters ended
Feb. 27, 1999, and
Feb. 28, 1998, respectively,
and for acquired in-process
R&D for the three quarters
ended Feb. 28, 1998)
Operating income (loss) 28,835 48,599 (102,143) 53,984
Other income (expense)
- net (7,508) 2,507 (9,668) 5,329
Earnings (loss)
before taxes 21,327 51,106 (111,811) 59,313
Income tax expense
(benefit) 6,825 16,865 (35,779) 19,573
Net earnings (loss) $14,502 $34,241 $(76,032) $39,740
Consolidated Statements of Operations (Continued)
Quarter Ended Three Quarters Ended
Feb. 27, Feb. 28, Feb. 27, Feb. 28,
1999 1998 1999 1998
Basic earnings (loss) per share $0.31 $0.68 $(1.59) $0.79
Diluted earnings (loss)
per share 0.31 0.67 (1.59) 0.77
Dividends per share 0.12 0.12 0.36 0.34
Average shares outstanding
- basic 46,846 50,483 47,944 50,438
Average shares outstanding
- diluted 47,249 51,408 47,944 51,381
Capital expenditures 24,934 37,089 80,579 97,622
Depreciation expense 17,399 16,993 52,727 48,328
Dividends 5,622 6,049 17,280 17,130
Consolidated Balance Sheets
(In thousands) Feb. 27, 1999 May 30, 1998
ASSETS
Current assets:
Cash and cash equivalents $36,012 $120,541
Accounts receivable - net 272,740 346,342
Inventories 261,689 214,347
Other current assets 118,828 67,432
Total current assets 689,269 748,662
Property, plant and equipment 432,894 425,153
Deferred tax assets 41,701 25,102
Other long-term assets 159,039 177,893
Total assets $1,322,903 $1,376,810
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $138,223 $5,442
Accounts payable 218,155 209,411
Accrued compensation 110,468 119,842
Deferred revenue 18,598 15,102
Total current liabilities 485,444 349,797
Long-term debt 150,870 150,681
Other long-term liabilities 82,525 91,391
Shareholders' equity:
Common stock 139,924 223,527
Retained earnings 439,367 532,679
Accumulated other comprehensive income 24,773 28,735
Total shareholders' equity 604,064 784,941
Total liabilities and
shareholders' equity $1,322,903 $1,376,810
Shares outstanding 46,848 50,345
Employees 8,020 8,630
SOURCE Tektronix, Inc.
/CONTACT: media, Heather Wyse, 503-685-2878, or analysts, Carl Neun,
503-685-4155, or Scott Hildebrandt, 503-685-4111, all of Tektronix, Inc./
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