WILSONVILLE, Ore., March 19 /PRNewswire/ -- Tektronix, Inc. (NYSE:TEK)
today reported that earnings for the third quarter fiscal 1998 were $34.2
million, or $0.68 per share, an increase of 19 percent over earnings of $28.8
million, or $0.58 per share, in the year ago period. Revenues were $517.6
million for the period ended February 28, 1998, up 8 percent from revenues of
$478.9 million for the third quarter 1997. [mean was 66-67¢]
"We're very pleased with our earnings, which reflect continuing attention
to managing costs and improving margins. Given the strong dollar and the
economic situation in Asia, we're also satisfied with our revenue performance
for the quarter," said Jerry Meyer, chairman and chief executive officer of
Tektronix. The Asian market conditions affected sales and orders for the
company's three businesses in that region. The decline was partially offset
by strong performances in the company's European and Americas operations.
Meyer said the company's operating model continues to improve, which
resulted in operating margins increasing to 9.4 percent during the quarter.
"In addition, our focus on EVA (economic value added) has continued to result
in substantial improvements in working capital. Inventory turnover increased
29 percent compared to last year," he noted.
Video and Networking
The company said the turnaround underway in its Video and Networking
Division was proceeding ahead of schedule.
"The work the division has done to better align costs with the size of the
business, improve gross margins and lower inventory resulted in a small profit
in the quarter, compared with a significant loss a year ago," Meyer said.
"This performance only increases our confidence that the business will be
solidly profitable in the fourth quarter."
Sales for the business were $93.7 million, compared with $101.7 million in
third quarter 1997, with the netstation business down from last year's third
quarter. The video content business grew year over year, led by strong sales
of the company's Profile professional video server and disk recorder family.
The Profile product line experienced 50 percent growth in units installed and
continues to significantly outpace competition. The Lightworks V.I.P digital
video editing system also performed well and was named Video Editing Product
of the Year by "Video Age."
Color Printing
"Color printer sales to the office market continue strong, with unit
growth close to 50 percent," Meyer said. "This growth drives our higher
margin consumables business, which increased as a percentage of overall
printing revenue during the quarter." In total, color printer sales grew 10
percent to $183.7 million, compared with $167.2 million for the period a year
ago.
Meyer said the Phaser 560 color laser printer performed well and that
sales of the new solid ink Phaser 360 announced during the period were
exceptionally strong.
"Given the price pressures in this market, we recognize that we must
continue to build volume. We have been successful in significantly expanding
our sales channels, doubling our U.S. selling locations in the last eight
months to more than 4,600 locations," Meyer said.
Measurement Business
Measurement Business sales were $240.2 million for the period, an increase
of 14.4 percent over $210.0 million a year ago.
Meyer said that the communications test portion of the business continued
to show exceptional growth, and logic analyzer sales were particularly strong,
doubling from last year's third quarter. "The integration of the
communications test equipment business acquired from Siemens earlier in the
year is proceeding well, with strong market acceptance for this unit's new
products," he said.
"In addition to the direct impact in Asia, we saw a slowdown in orders
from U.S. manufacturers affected by business conditions in that region," he
said. "We believe these conditions will exist for the next few quarters."
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; 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 issues the company faces in
executing its strategy in the Video and Networking Division; 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.
About Tektronix
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 23 countries outside the United States. Founded in 1946, the
company had revenues of $1.94 billion in fiscal 1997.
The business and geographic net sales and product orders breakdown is as
follows:
Quarter Ended Three Quarters Ended
Feb. 28, Mar. 1, Feb. 28, Mar. 1,
(In thousands) 1998 1997 1998 1997
Net Sales: $517,570 $478,886 $1,527,890 $1,396,167
Measurement Business 240,209 209,999 715,593 620,083
Color Printing and Imaging 183,680 167,154 524,991 448,970
Video and Networking 93,681 101,733 287,306 327,114
U.S. 254,073 235,917 781,873 736,055
International 263,497 242,969 746,017 660,112
Product Orders: $461,200 $449,400 $1,410,600 $1,308,000
Measurement Business 196,500 189,200 636,100 565,900
Color Printing and Imaging 173,200 161,900 494,100 427,100
Video and Networking 91,500 98,300 280,400 315,000
U.S. 232,400 227,000 715,700 668,600
International 228,800 222,400 694,900 639,400
Consolidated Statements of Operations
Quarter Ended Three Quarters Ended
Feb. 28, Mar. 1, Feb. 28, Mar. 1,
(In thousands, 1998 1997 1998 1997
except per share amounts)
Net sales $517,570 $478,886 $1,527,890 $1,396,167
Cost of sales 292,716 273,653 909,768 799,900
(Cost of sales for the three
quarters ended Feb. 28, 1998,
includes $38,482 related to the
restructuring of Video and
Networking Division.)
Gross profit 224,854 205,233 618,122 596,267
Research and development
expenses 52,944 45,621 149,373 137,684
Selling, general and
administrative expenses 123,277 117,496 374,717 345,535
Equity in business ventures'
earnings (loss) (34) (861) 430 (467)
Non-recurring charges -- -- 40,478 --
(For acquired in-process R&D
and the restructuring of Video
and Networking Division.)
Operating income 48,599 41,255 53,984 112,581
Other income (expense) - net 2,507 1,042 5,329 2,026
Earnings before taxes 51,106 42,297 59,313 114,607
Income taxes 16,865 13,535 19,573 36,674
Net earnings $34,241 $28,762 $39,740 $77,933
Basic earnings per share $0.68 $0.58 $0.79 $1.58
Diluted earnings per share $0.67 $0.57 $0.77 $1.56
Dividends per share $0.12 $0.10 $0.34 $0.30
Average shares outstanding -
basic 50,483 49,616 50,438 49,362
Average shares outstanding -
diluted 51,408 50,409 51,381 49,928
Capital expenditures 37,089 17,671 97,622 66,419
Depreciation expense 16,993 14,170 48,328 41,768
Dividends 6,049 4,958 17,130 14,796
Consolidated Balance Sheets
(In thousands) Feb. 28, 1998 May 31, 1997
ASSETS
Current assets:
Cash and cash equivalents $112,040 $142,726
Accounts receivable - net 294,771 305,832
Inventories 214,492 238,040
Other current assets 64,907 64,913
Total current assets 686,210 751,511
Property, plant and equipment 386,224 343,130
Deferred tax assets 23,858 12,540
Other long-term assets 191,669 209,560
Total assets $1,287,961 $1,316,741
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $5,182 $6,155
Accounts payable 172,068 181,366
Accrued compensation 99,403 90,946
Deferred revenue 12,461 25,622
Total current liabilities 289,114 304,089
Long-term debt 150,708 151,579
Other long-term liabilities 86,637 89,790
Shareholders' equity:
Common stock 224,272 226,591
Retained earnings 496,192 473,582
Currency adjustment 25,036 34,447
Unrealized holding gains - net 16,002 36,663
Total shareholders' equity 761,502 771,283
Total liabilities and
shareholders' equity $1,287,961 $1,316,741
Shares outstanding 50,491 50,104
Employees 8,598 8,392 |
