FOR IMMEDIATE RELEASE
4/14/99 CONTACT: Peter A. Guglielmi
(630) 378-6111
TELLABS BEGINS 25th YEAR WITH BEST FIRST QUARTER IN HISTORY
Lisle, Ill. - Telecommunications-equipment manufacturer Tellabs, Inc., announced Wednesday that it began its 25th year of operation with the highest sales and earnings for any first quarter in company history. It was the company's second-best quarter, exceeded only by the all-time record sales and operating earnings reported in the fourth quarter of 1998.
Sales for the first quarter, ended April 2, were $469,651,000, up 43.4 percent from $327,502,000 a year earlier.
Net income for the first quarter was $103,718,000, up 52 percent from $68,244,000 a year earlier. Earnings per share of common stock on a diluted basis for the first quarter were 52 cents, compared with 37 cents for the first quarter of 1998.
"Tellabs got off to a robust start in 1999, driven primarily by continuing strong demand across our major product lines," said Tellabs President and CEO Michael J. Birck. "Sales of our TITAN® digital cross-connect system family exceeded last year's first-quarter level by 48.9 percent, driven by strong demand for the SONET-based TITAN 5500 and 532L systems. MartisDXX™ system sales were up 21.2 percent. Echo canceller sales, following strong growth at the end of 1998, increased 42 percent, and CABLESPAN® system sales grew meaningfully, as that product continues to gain acceptance in the marketplace."
During the quarter, Tellabs announced the newest member of its TITAN transport family, the TITAN 4500GS global services delivery system. This platform delivers global services over SDH and SONET networks, and was designed in close collaboration with major global super-carriers whose networks traverse international boundaries. The system gives carriers new flexibility and economies for delivering services (Frame Relay, ATM, Internet, digital private line, cable data and telephony, or video) intact between a SONET environment such as the United States or Canada and an SDH environment like Europe, Latin America or the rest of the world. Availability of the TITAN 4500GS system is expected in May 1999.
"In addition to the TITAN 4500GS system and the AN2100 Gateway Exchange™ introduced in late 1998, Tellabs looks forward to introducing two more major new product platforms during 1999," Birck continued. "During the summer, we expect to bring to field trial an optical networking system that uses DWDM technology to address metropolitan service applications. Late in the year, we expect to field-trial a large capacity, ATM-based, broadband transport manager that complements our TITAN family of digital cross-connect systems."
Tellabs designs, manufactures, markets and services voice and data transport and access systems. The company's products are used worldwide by the providers of communications services. Tellabs stock is listed on the Nasdaq Stock Market (TLAB).
This news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, risks associated with introducing new products, entering new markets, competitive response, and a downturn in the telecommunications industry. For a more detailed description of the risk factors, please refer to the company's SEC filings.
Tellabs, the Tellabs logo, TITAN and CABLESPAN are registered trademarks of Tellabs Operations, Inc., in the United States and/or other countries. AN2100 Gateway Exchange is a trademark of Tellabs Operations, Inc., in the United States and/or other countries. MartisDXX is a trademark of Tellabs Oy in Finland and/or in other countries.
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Beginning at approximately 6:30 p.m., Chicago time, Wednesday, 04/14/99, interested investors can listen to a pre-recorded replay of the Tellabs analyst teleconference. This replay will be available for 48 hours.
To listen to the pre-recorded teleconference replay: Call toll-free 1-800-633-8284. When prompted, enter the Tellabs reservation number: 12123328.
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TELLABS, INC.
Results of Operations
(Dollars in thousands, except per-share data)
(Unaudited)
Three Months Ended
04/02/99 04/03/98
Sales $469,651 $327,502
Cost of Goods Sold 194,010 120,219
Gross Profit 275,641 207,283
Operating Exp.
Mktg. & G.A. 66,452 66,601
Research & Dev. 62,112 43,306
Goodwill Amort. 1,473 1,476
Total Oper. Exp. 130,037 111,383
Operating Profit 145,604 95,900
Interest/ Other-Net 8,053 5,202
Profit Before Tax 153,657 101,102
Taxes 49,939 32,858
Net Profit $103,718 $68,244
Earnings per Share:
Basic $.53 $.38
Diluted $.52 $.37
Average Number of Shares
of Common Stock Outstanding
Basic 195,044 181,873
Diluted 200,682 186,947
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TELLABS, INC.
Condensed Consolidated Balance Sheet
(Dollars in thousands)
(Unaudited)
1999
First Quarter 1998
Year End
Assets
Current Assets
Cash and investments $811,235 $642,645
Accounts receivable, less allowance 381,354 480,620
Inventories 135,105 122,424
Other current assets 8,939 7,002
Total Current Assets 1,336,633 1,252,691
Property, Plant and Equipment 410,869 413,891
Less accumulated depreciation (166,850) (159,100)
244,019 254,791
Goodwill 51,446 55,559
Other Assets 81,645 64,550
Total Assets $1,713,743 $1,627,591
Liabilities
Current Liabilities
Accounts payable $59,360 $63,083
Accrued liabilities 89,223 81,927
Income taxes 57,386 73,117
Total Current Liabilities 205,969 218,127
Long-Term Debt 2,850 2,850
Other Long-Term Liabilities 18,856 18,164
Deferred Income Taxes 10,638 11,853
Total Liabilities 238,313 250,994
Stockholders' Equity
Common Stock, $.01 Par Value 1,958 1,945
Additional Paid-In Capital 230,204 192,612
Cumulative Translation Adjustment (49,248) (9,207)
Unrealized Holding Gains on Securities 17,974 20,423
Retained Earnings 1,274,542 1,170,824
Total Stockholders' Equity 1,475,430 1,376,597
Total Liab. and Stockholders' Equity $1,713,743 $1,627,591
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