Gross margins took a big hit this quarter and they have mixed comments about the TCI joint venture. You might see it as an opportunity, but I find it a drag as I was hoping to hold the 15 range and move forward with a recovery. Another delay is not very interesting.
Regards,
Mark
ANTEC Announces Fourth Quarter and Year-End Results and Consolidation Plan
ROLLING MEADOWS, Ill., Feb. 3 /PRNewswire/ -- ANTEC Corporation (Nasdaq: ANTC - news) today announced financial results for the fourth quarter and full year 1997. Revenues were $115.4 million in the quarter which resulted in a loss of $4.3 million or $.11 per share. For the year ended December 31, 1997, sales were $480.1 million with a loss of $21.4 million or $.55 per share. The full year results include a pre-tax, merger/integration charge in connection with the acquisition of TSX Corporation in the first quarter of approximately $28 million (including charges to cost of sales). Excluding these charges full year 1997 operating results were a loss of $3.6 million or $.09 per share.
These results compare with fourth quarter 1996 revenues of $140.7 million and net income of $1.8 million or $.04 per share and revenues for full year 1996 of $690.9 million and net income of $26.4 million or $.67 per share. The fourth quarter of 1996 included a pre-tax non-recurring charge of $3.6 million (including charges to cost of sales) relating to the downsizing of the Company's advertising insertion business.
Gross profit as a percent of sales for the fourth quarter was 21.8% compared with 28.1% before the impact of non-recurring charges in the fourth quarter of 1996. For the year, gross profit as a percent of sales was 25.1% compared with 26.2% in 1996. These reductions in gross profit result from the higher mix of distributed versus manufactured product sales in 1997. Also, the gross profit percentage for the fourth quarter of 1997 was impacted by charges taken to cost of sales due to anticipated customer returns and year end inventory adjustments related primarily to TSX product lines. Without these charges, gross profit as a percent of sales for the fourth quarter of 1997 would have been 23.9%.
''Clearly the substantial reduction of sales to our largest customer during 1997 and the completion of a major international rebuild in Australia during 1996 caused the majority of the decline in our annual results,'' said John Egan, ANTEC Chairman and CEO. ''In addition, the impact of the trades, swaps and partnerships that occurred among domestic cable operators throughout most of 1997 had a significant dampening effect on all domestic equipment purchases in the industry. As a result, we saw many operators delay or defer capital spending during the fourth quarter and the year.''
''Based on current visibility, we see resumption of ANTEC sales to TCI (Telecommunications, Inc. (Nasdaq: TCOMA - news)) not occurring as rapidly in the first quarter of 1998 as previously anticipated. We also expect that our sales in Asia Pacific may be impacted by the current Asian financial crisis. As a result, we do not expect to meet current analyst's estimates for full year 1998 revenues and earnings,'' said Bob Stanzione, ANTEC President & Chief Operating Officer. ''However, we are now taking steps to quickly return the company to profitability in the first half of 1998 and to accelerate the company towards strong profitability in the second half of 1998.''
Accordingly, ANTEC announced a consolidation plan being implemented concurrently with the creation of the new President & Chief Operating Officer organization in Atlanta. ANTEC will consolidate all of its Rolling Meadows, Ill., corporate and administrative functions into either the Atlanta Technology Center or the Englewood, Colo., TeleWire Supply division headquarters during 1998 and 1999. ''As we continue the consolidation of business functions within ANTEC, it has become clear that by consolidating financial and administrative functions we could obtain significant operating and decision making efficiencies,'' said Stanzione. It is also anticipated as part of this consolidation that the two principal facilities located in Atlanta will be consolidated and that certain international operating and administrative functions located in Miami and Chicago will also be consolidated into Atlanta. In connection with these consolidation changes, ANTEC will take a charge of approximately $10 to $12 million in the first quarter of 1998 reflecting the severance, move and real estate costs associated with these consolidations. ANTEC anticipates that these moves will reduce annual operating costs by as much as $10 million; however, the impact of these savings is not expected to be realized in full until 1999.
As previously reported, TCI has awarded an ANTEC joint venture the San Francisco, Seattle and Salt Lake City area network upgrades in an initial round of awards. (ANTEC's joint venture partner is an affiliate of TCI and ANTEC and TCI are in the process of substituting a new partner for the TCI partner.) Contracts for this work have been signed and engineering work is well underway. Current visibility indicates increasing product deployment by TCI in the second quarter and balance of the year. The specific work to be performed and the type and manufacturer of equipment to be used will be governed by discreet project documentation to be agreed upon for each segment/or phase of the area as the work progresses. In addition, it is anticipated that ANTEC will also have the opportunity to supply product to other contractors who have been awarded turnkey work for TCI.
ANTEC Corporation (http://www.antec.com) is an international communications technology company serving the broadband information transport industries. Headquartered in Rolling Meadows, Ill., ANTEC has major divisional offices in Atlanta and Denver, manufacturing facilities in Juarez, Mexico, El Paso, Texas, Tinton Falls, N.J. and Rock Falls, Ill., and sales offices in Europe, Asia/Pacific and Latin America. ANTEC specializes in the manufacturing, materials management and distribution of products for hybrid/fiber coax (HFC) broadband networks, as well as the design and engineering of these networks.
Forward-looking Statements. The statements in this press release that use such words as ''believe,'' ''expect,'' ''intend,'' ''anticipate,'' ''contemplate,'' ''estimate,'' or ''plan'' or similar expressions are forward-looking statements. Our business is dependent upon general economic conditions as well as competitive, technological, and regulatory developments and trends specific to our industry and customers. These conditions and events could be substantially different than we believe or expect and these differences may cause our actual results to differ materially from the forward-looking statements we have made or the results which could be expected to accompany such statements. Specific factors which could cause such material differences include the following: Design or manufacturing defects in our products which could curtail sales and subject us to substantial costs for removal, replacement, and reinstallation of such products; manufacturing or product development problems that we do not anticipate because of our relative experience with these activities; an inability to absorb or adjust our costs in response to lower volumes than we anticipate; unanticipated costs or inefficiencies from the ongoing consolidation of certain of our activities; loss of key management, sales or technical employees to existing or new competitors; decisions by our larger customers to cancel contracts or orders as they are entitled to do or not to enter into new contracts or orders with us because of dissatisfaction, technological or competitive changes or changes in control; and inability as a result of our relative experience to deliver construction services within anticipated costs and time frames which could cause loss of business, operating losses and damage claims. The above listing of factors is representative of the factors which could affect our forward- looking statements and is not intended as an all encompassing list of such factors. In providing forward-looking statements we are not undertaking any obligation to update publicly or otherwise these statements, whether as a result of new information, future events or otherwise. |
