Antec Announces Strong Second Quarter Revenues And Earnings
PR Newswire - July 23, 1998 07:16
NORCROSS, Ga., July 23 /PRNewswire/ -- ANTEC Corporation (Nasdaq: ANTC) today announced sales of $140.7 million for the quarter ended June 30,1998. This represents a $16.4 million or 13.2% increase over the second quarter of 1997 sales of $124.3 million. Net income increased over 300% to $4.0 million, or $.10 per share, in the quarter versus net income of $1.0 million, or $.02 per share, in the second quarter of 1997. Results were also strong sequentially when compared to first quarter 1998 revenues of $123.4 million and net income of $.04 per share before non-recurring charges.
Gross profit for the quarter was $36.8 million up from $33.6 million achieved in the second quarter of 1997 and up sequentially from the first quarter of 1998 by almost $4.0 million. At 26.1% gross profit margin is down slightly from the first quarter as well as from the second quarter of 1997 primarily due to the completion of certain material management contracts and from manufacturing costs associated with new product introductions. Selling, general and administrative expenses (SG&A) for the second quarter were $25.9 million down $1.5 million from the second quarter of 1997 and down slightly from the first quarter of 1998. As a percent of sales, SG&A expenses are down to 18.4% in the second quarter of 1998 as compared to 22.1% in the second quarter of 1997 and 21.3% in the first quarter of this year.
Operating income increased $4.7 million or 94% to $9.6 million as compared to second quarter 1997 operating income of $4.9 million. As a percent of sales, operating income increased 280 basis points to 6.8% for the quarter versus 4.0% in the second quarter of 1997. Product sales to ANTEC's largest customer, Telecommunications, Inc. (TCI) (Nasdaq: TCOMA) increased by over 300% from the comparable quarter of last year and by 39% as compared to the first quarter of 1998. In addition, both orders and backlog increased sequentially during the quarter and were up sharply as compared to second quarter 1997.
"We are pleased to see the very positive improvements in domestic spending especially by our largest customer, TCI," said John Egan, ANTEC Chairman & CEO. "Although overall results in the quarter were gratifying, international sales were flat as compared to the first quarter. However, I am quite optimistic about the new international business activity that we have seen in South America, Europe and Asia."
Specifically in the international arena, ANTEC has seen a recent resurgence in multiyear planning activities in Argentina involving a broad range of ANTEC products. The company noted that initial orders for laser transmitters, amplifiers and connectors for Argentina have been placed and shipments of these products will begin in the second half of 1998. In Europe, ANTEC has been selected as a prime contractor for hybrid fiber/coax (HFC) technology for CTC, a 2.2 million subscriber system in Spain. In Taiwan, ANTEC also has signed a Letter of Intent with their distributor, United Network Technologies, for the provision of fiber optic and network powering products to East Multimedia Corporation. The Company believes that this new business is a positive sign that in late 1998 and in 1999 international sales will show renewed strength.
"Also of importance," said Egan, "is that the Telecommunications Act of 1996 envisioned facilities based access competition in the local loop to bring advanced voice, video and data services to the home. With the progress that we see in digital video and data modems, our customer's aggressive upgrade plans and the recent excitement concerning cable telephony, that vision of access competition is becoming a reality. ANTEC is well positioned to participate in the access competition through its Arris joint venture with Nortel (NYSE: NT) as the leader in the HFC telephony deployments throughout the country."
During the second quarter ANTEC also announced an exclusive five year contract with Cox Communications for cable telephony, a contract for a complete 870 mHz upgrade of Greater Media's Philadelphia, Pennsylvania operating area and an agreement with United Pan Europe Communications (UPC) for their systems in Europe.
"We are seeing the return of capital spending by some of our largest domestic and international customers as well as the positive effects of our expense and operating efficiency programs at this halfway point in 1998," said Bob Stanzione, ANTEC President and Chief Operating Officer. "In addition, we are pleased with our product development efforts and the new products we are introducing now and in the next several months. The continuing market affirmations of an HFC architecture as the most robust and stable two-way broadband transport medium has been particularly gratifying and only further reinforces our view of the future."
ANTEC Corporation (http://www.antec.com) is an international communications technology company serving the broadband information transport industries. ANTEC specializes in the manufacturing, materials management and distribution of products for hybrid fiber/coax broadband networks, as well as the design and engineering of these networks. Headquartered in Norcross, Georgia, ANTEC has sales offices in Europe, Asia/Pacific and Latin America; major divisional offices in Norcross, Georgia and Denver, Colorado; and manufacturing facilities in Juarez, Mexico, El Paso, Texas, Tinton Falls, New Jersey and Rock Falls, IL.
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 sales 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; 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, changes in control or other reasons; 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.
ANTEC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share data)
(Unaudited)
Three months ended Six Months ended
June 30, June 30,
1998 1997 1998 1997
Net sales $140,704 $124,262 $264,145 $244,296
Cost of sales 103,936 90,669 194,550 184,575
Gross profit 36,768 33,593 69,595 59,721
Operating expenses:
Selling, general and
administrative expenses 25,917 27,411 52,196 54,476
Amortization of goodwill 1,227 1,228 2,453 2,472
Non-recurring items --- --- 12,000 21,550
27,144 28,639 66,649 78,498
Operating income (loss) 9,624 4,954 2,946 (18,777)
Interest expense and other, net 1,923 1,679 3,278 3,041
Income (loss) before
income taxes 7,701 3,275 (332) (21,818)
Income tax expense (benefit) 3,713 2,292 1,212 (6,677)
Net income (loss) $3,988 $983 ($1,544) ($15,141)
Net income (loss) per common and
common equivalent shares:
Basic $0.10 $0.03 ($0.04) ($0.39)
Diluted $0.10 $0.02 ($0.04) ($0.39)
Weighted average common and
common equivalent shares:
Basic 38,273 38,452 38,809 38,436
Diluted 41,303 39,729 38,809 38,436
SOURCE ANTEC Corporation |
