*OT* Sawtek Announces Record Profit for Quarter Ended March 31, 1999
Business Wire - April 19, 1999 16:34
ORLANDO, Fla.--(BUSINESS WIRE)--April 19, 1999--Sawtek Inc. (Nasdaq:SAWS) today reported record net income for the quarter ended March 31, 1999. Net income of $7 million, or $.33 per share, diluted, for the quarter compares to $6.8 million, or $.31 per share, diluted, for the same quarter of the previous year. The net income and earnings per share for the current quarter are the highest ever for a quarter in Sawtek's 20-year history. Net income for the six months ended March 31, 1999 of $13.3 million, or $.63 per share, diluted, compares to $13.2 million, or $.61 per share, diluted, for the same period last year. Revenue of $23.5 million for the quarter compares to revenue of $22.2 million for the quarter ended December 31, 1998, and $25.2 million for the quarter ended March 31, 1998.
Steve P. Miller, Chairman and Chief Executive Officer, stated, "The record profit is a result of the Company's continued dedication to improving our manufacturing process and constantly searching for ways to reduce cost while increasing quality. The gross margin for the quarter of 58.2% was higher than expected due to continued improvement in yields, lower material costs, and lower labor costs as more product is being produced in our Costa Rican facility. The Costa Rican operation now accounts for approximately 50% of our consolidated sales. Net sales increased 5.8% over the previous quarter due to increased shipments of both CDMA handset and base station filters. Net sales to South Korean customers continue to rebound and accounted for approximately 16% of net sales for the current quarter compared to 9% in the previous quarter. The Company is beginning to experience a significant increase in unit volume with the worldwide growth of CDMA handset production. As a result, we have revised our capital expenditure plan to accelerate additional capacity that we believe will be necessary to satisfy the demand from our customers. With the favorable announcements made by our customers in the past quarter regarding demand for CDMA handset filters, along with the recent announcement that China will be adopting CDMA as an additional wireless standard, we believe that the long-term prospects for Sawtek remain strong."
Sawtek Inc. is a leading supplier of electronic signal processing components based on surface acoustic wave ("SAW") technology. The Company's primary focus is custom designed, high-performance bandpass filters, resonators, delay lines, oscillators and SAW-based subsystems. These products are used in a wide array of microwave and radio frequency systems such as CDMA and GSM-based digital telephone systems, digital microwave radios, wireless local area networks, cable television, defense and satellite systems, and chemical sensors.
Forward-looking statements in this release are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Act of 1995. Investors are cautioned that forward-looking statements such as statements of the Company's plans, objectives, expectations and intentions involve risks and uncertainties. The cautionary statements made in this release should be read as being applicable to all related forward-looking statements wherever they appear. Statements containing terms such as "believes," "does not believe," "no reason to believe," "expects," "plans," "intends," "estimates" or "anticipates" are considered to contain uncertainty and are forward-looking statements. The Company's actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include the following: the Company's dependence on continuing demand for wireless communications services and CDMA technology, particularly CDMA handset units; economic turmoil in South Korea and other Asia-Pacific countries (as experienced during the past year) or other geographic areas of the world and risks associated with international operations; fluctuations in the value of foreign currency; pressure on revenue and gross profit margins due to competition, change in product mix and other factors; lower average selling prices of Sawtek's products; dependence on a limited number of customers, which are expected to continue to account for a high percentage of the Company's future net sales; fluctuations in the Company's quarterly results and backlog which may be caused by such factors as product mix changes, price competition, availability of manufacturing capacity which could limit the Company's ability to respond timely to customer requirements and limit its ability to grow revenue, limited sources of supply for basic raw materials and potential near-term shortages of supply, and customer order cancellation or rescheduling; the Company's dependence on its timely development of new or improved SAW products (such as SAW chemical sensors) to meet changing market needs and the risk of competing technologies which could replace or reduce the use of SAW technology for certain applications; risks associated with Costa Rica operations, as well as other risks discussed in Sawtek's SEC reports, including Form 10-K and Form 10-Q. A reader of this release should understand that it is not possible to predict or identify all such risk factors. Consequently, the reader should not consider this list to be a complete statement of all potential risks or uncertainties. The Company does not assume the obligation to update any forward-looking statement.
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