SAWS-CDMA>
Thursday October 28, 4:06 pm Eastern Time
Company Press Release
Sawtek Announces Record Revenue and Profit for
Quarter and Year Ended September 30, 1999
ORLANDO, Fla.--(BUSINESS WIRE)--Oct. 28, 1999--Sawtek Inc. (Nasdaq:SAWS - news) today reported record revenue, net
income and earnings per share for the quarter and year ended September 30, 1999.
Net income of $9.2 million, or $.21 per diluted share for the quarter is up 50% compared to $6.1 million, or $.14 per diluted share
for the same quarter of the previous year. Net income for the year ended September 30, 1999 of $30.7 million, or $.72 per diluted
share compares to $26.2 million, or $.60 per diluted share for the same period last year. Revenue of $28.5 million for the quarter
compares to revenue of $21.5 million for the quarter ended September 30, 1998. Revenue for the full year of $100.3 million
compares to $97.7 million last year. The revenue, net income and earnings per share for the current quarter and year are the
highest ever for any comparable period in Sawtek's 20-year history.
Gary A. Monetti, Chief Executive Officer, stated, ''The demand for Sawtek's products continues to increase as the worldwide
demand for handset filters based on CDMA technology continues to grow. Sales of bandpass filters for CDMA phones totaled
$31.3 million or 31.2% of revenue, reflecting the increased trend we reported over the past several quarters. International sales
continue to improve with sales to South Korean customers accounting for 23% of Q4 net sales compared to 5% one year ago. We
have experienced success with our new products including our SAW-based RF filters for CDMA phones with the announcement
of our first order for approximately 3,000,000 filters to be delivered in the quarter ending December, 1999 and with our
SAW-based IF filters for GSM phones with our announcement last week of a one million piece order. Lastly, during the past
quarter we experienced favorable manufacturing results that helped us achieve a higher than expected gross profit margin of 59%.
We believe that our long-term prospects continue to be strong, and we are committed to an aggressive plan to ramp-up our
production capability to accommodate this acceleration of demand and to enable us to continue to offer new products to our
customers.''
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 the statements made by Mr. Monetti 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 the statements made by Mr. Monetti. 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 two years) or other
geographic areas of the world and risks associated with international operations; limited sources of supply for basic raw materials
and potential near-term shortages of supply; 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 in a timely
fashion to customers' requirements and limit its ability to grow revenue; customer order cancellation or rescheduling; the
Company's dependence on its timely development of new or improved SAW products (such as SAW RF filters and 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; natural disasters that could impact the
Company's facilities in Florida and Costa Rica; risks associated with failures in information technology systems that are not Year
2000 compliant, 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.
We will be hosting a conference call with the investment community today at 4:45 p.m. EST. Investors will have the opportunity to
listen to the conference call over the Internet through Vcall at vcall.com. To listen to the live call, please go to the web
site at least fifteen minutes early to register, download, and install any necessary audio software. For those who cannot listen to
the live broadcast, a replay will be available shortly after the call and a transcript will be available within 24 to 48 hours.
SAWTEK INC.
Condensed Consolidated Balance Sheets
(in thousands)
Sept. 30, Sept. 30,
1999 1998
ASSETS
Current assets:
Cash, cash equivalents and short-term
investments $ 115,274 $ 84,131
Accounts receivable 18,641 11,569
Inventories 8,052 8,453
Other current assets 3,170 2,363
Total current assets 145,137 106,516
Property, plant and equipment, net 46,442 42,194
Total assets $ 191,579 $ 148,710
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 9,367 $ 6,940
Current maturities of long-term debt 379 469
Income taxes payable 191 69
Total current liabilities 9,937 7,478
Long-term debt, less current maturities 1,790 2,169
Deferred income taxes 21,453 15,186
Shareholders' equity:
Common stock and capital surplus 74,776 72,827
Unearned ESOP compensation (781) (975)
Retained earnings 87,330 56,646
Less common stock held in treasury, at cost (2,926) (4,621)
Total shareholders' equity 158,399 123,877
Total liabilities & shareholders'
equity $ 191,579 $ 148,710
SAWTEK INC.
Consolidated Statements of Income
(in thousands, except per share data)
Quarter Ended Year Ended
(unaudited)
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
1999 1999 1998 1999 1998
Net Sales $28,515 $26,045 $21,522 $100,276 $97,700
Cost of sales 11,701 10,737 9,665 42,224 44,811
Gross profit 16,814 15,308 11,857 58,052 52,889
Operating expenses:
Selling expenses 1,395 1,517 1,295 5,637 6,008
General &
administrative
expenses 1,089 1,114 527 4,319 4,693
Research &
development
expenses 1,480 1,334 1,544 5,627 4,285
Total operating
expenses 3,964 3,965 3,366 15,583 14,986
Operating income 12,850 11,343 8,491 42,469 37,903
Other income, net 1,328 1,174 1,009 4,737 3,542
Income before taxes 14,178 12,517 9,500 47,206 41,445
Income taxes 4,963 4,380 3,420 16,522 15,240
Net income $9,215 $8,137 $6,080 $30,684 $26,205
Net income per
share - basic $ 0.22 $ 0.19 $ 0.14 $ 0.73 $ 0.62
Net income per
share - diluted $ 0.21 $ 0.19 $ 0.14 $ 0.72 $ 0.60
Shares used in
computing net
income per share -
basic 42,193 42,004 42,502 41,946 42,360
Shares used in
computing net
income per share -
diluted 43,236 43,066 43,132 42,815 43,356
All share and per share data has been restated to reflect the
two-for-one stock split in August 1999.
SAWTEK INC.
Consolidated Statements of Income
(Percentage of Net Sales)
Quarter Ended Year Ended
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
1999 1999 1998 1999 1998
Net sales 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales 41.0 41.2 44.9 42.1 45.9
Gross profit 59.0 58.8 55.1 57.9 54.1
Operating expenses:
Selling expenses 4.9 5.8 6.0 5.6 6.1
General &
administrative
expenses 3.8 4.3 2.4 4.3 4.8
Research &
development
expenses 5.2 5.1 7.2 5.6 4.4
Total operating
expenses 13.9 15.2 15.6 15.5 15.3
Operating income 45.1 43.6 39.5 42.4 38.8
Other income, net 4.6 4.4 4.7 4.7 3.6
Income before taxes 49.7 48.0 44.2 47.1 42.4
Income taxes 17.4 16.8 15.9 16.5 15.6
Net income 32.3% 31.2% 28.3% 30.6% 26.8%
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