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Technology Stocks : ANDW -- Ignore unavailable to you. Want to Upgrade?

To: David Howe who wrote (731)	10/31/1998 11:56:00 AM
From: Johnny Canuck	Respond to of 857

Conference call notes, courtesy of the the Fool. fool.com

To: David Howe who wrote (731)	10/31/1998 12:42:00 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 857

Part 3: Other Financial Highlights Cash from operations declined 32% in the quarter. Cash from operations for the full year totaled $150 million, within 1% of fiscal 1997's record performance. Cash on hand totaled $78 million on Sept. 30, 1998 as compared to $94 million a year ago. Capital expenditures totaled $58 million, up 18% from fiscal 1997, due to the new Texas facility, startup activities in India, and the purchase of some switches for Russia. Receivables were down $4.3 million and days sales outstanding was 70 versus 67 last year. Inventories increased $1 million, or 1%, to $168 million, with a small improvement in inventory turns for the year to 3.1 versus 2.9 last year. Share repurchase. During the last 16 months the company has repurchased 7.0 million shares of common stock at a total investment of $147.0 million, paid for with cash from operations. In fiscal 1998, Andrew Corp. repurchased 5.5 million shares at a cost of $105.4 million. During the September quarter, 1.7 million shares were repurchased for a total cost of $25.1 million, reducing the total outstanding shares to 84.5 million. The effect of the share repurchase program was to add $0.05 to EPS for fiscal 1998. Management plans to continue an aggressive stock buy-back program. Guidance Overall, management is pleased to see two consecutive quarters of increased orders. Orders for digital television antennas began in Q4, and Andrew looks forward to serving this growing market for the full year in 1999 and beyond. Andrew's new manufacturing plant in China came online in the quarter, producing Heliax cable and base station antennas. Future plans for China involve the manufacture of cable-related products, including connectors, accessories, and assemblies. Slight gains in domestic PCS revenues in fiscal 1999 are expected to be offset by declining cellular revenues, making for flat to slightly down revenue projections for that business. In Brazil, sales are expected to pick up after the full privatization of Telebras (NYSE: TBR) is completed, although order pickup could stall in the near term until that privatization occurs. Management expects the orders comparisons for Southeast Asia to be unfavorable for the next quarter or two, because of strength in the first half of fiscal 1998. The comparisons become considerably easier in the second half of the year and are likely to be favorable. Andrew's joint venture in Russia was operating at a positive cash flow through the end of the quarter and is expected to continue that way going forward. As a minority interest in that joint venture, Andrew's share of income (or losses) is included in the "other income (expense)" line. Andrew's Brazilian operations are also profitable. The goal for fiscal 1999 is to at least maintain current gross margin levels. Management expects some volume increases to help next year. Andrew also will not have the startup costs of new factories in China, Brazil, and India, and the company will continue to focus on lowering ma nufacturing costs and increasing efficiency. Market pricing of products is very difficult to forecast, however. Operating expense projections. R&D spending is expected to grow by about 10-15% in fiscal 1999. SG&A expense is expected to drop as a percent of sales, due partly to revenue increases and partly to expense control, and to be flat to up slightly in dollar terms. Capital expense for fiscal 1999 is expected to drop back to the $40-45 million range. Cash flow from operations is expected to increase to over $150 million.