ATLANTA, April 19 /PRNewswire/ --
Scientific-Atlanta, Inc. (NYSE: SFA) today reported record financial results for its third fiscal quarter, with bookings, sales, backlog and cash each setting all-time records.
Consistently Strong Financial Performance
For the quarter ending March 30, 2001, bookings were $712.6 million, an increase of $117.8 million, or 20%, over the prior year's third quarter. Sales of $663.7 million rose by $223.0 million, or 51%, from the same period a year ago. Net earnings for the quarter were $76.2 million, or $0.46 per share. This represents a $38.1 million, or 100%, improvement over the comparable period of the prior year, when net earnings were $0.23 per share.
Backlog at quarter end was a record $1.0 billion, an increase of $227.8 million from last year and up $48.9 million from last quarter.
Scientific-Atlanta's balance sheet remains strong, with cash and short- term investments of $723.8 million at the end of the third quarter. This represents an increase of $200.7 million, or 38%, over the fiscal year-end balance at June 30, 2000 and an increase of $145.9 million, or 25%, from last quarter's balance. The Company continues to have no significant debt.
Sales for the first nine months of fiscal year 2001 were $1.9 billion, an increase of 63%, versus $1.2 billion in the comparable period of the prior year. Net earnings for the nine-month period were $260.3 million, or $1.55 per share, an improvement of 169% compared to $96.7 million, or $0.59 per share in the comparable period of the prior year. Excluding one-time events, net earnings for the nine-month period were $210.9 million, or $1.26 per share, an increase of 127% compared to $92.7 million, or $0.57 per share in the first nine months of the prior year.
Strong third quarter results were driven by the Company's Broadband segment. A decline in sales of Transmission related products of 4% year-over- year to $176.3 million was more than offset by a 119% increase in sales of Subscriber related products to $466.1 million. Subscriber product bookings of $510.6 million were up 39% from the prior year. Transmission product bookings of $179.8 million declined by 3% year-over-year. Third quarter bookings and sales of Media Networks products were down slightly as compared to the prior year.
Commenting on the third quarter results, James F. McDonald, Scientific- Atlanta's Chairman and CEO said, "Our success this quarter reflects the priorities of our North American customers. Digital services continue to be very popular with consumers and economically attractive to the cable companies. The resulting demand for our Explorer(R) digital interactive set- tops, coupled with international transmission growth, has been able to compensate for any weakness in the domestic transmission market."
Increased Shipments of Explorer Set-tops and Introduction of International Product
In the third fiscal quarter, the Company again successfully expanded manufacturing capacity at its Juarez plant. More than 1.4 million Explorer digital interactive set-tops were shipped in the quarter, raising the cumulative total to nearly six million units. Twenty-six headends were installed, bringing the total to 241. Commercial services now have been launched at more than 200 of these sites.
Scientific-Atlanta introduced the Explorer 4000DVB set-top in the third quarter. This new model will be capable of delivering digital broadcast video and interactive applications. In addition, with its integrated Euro-DOCSIS cable modem, it will be a home gateway that can simultaneously provide high- speed Internet access to a home computer, Voice-over-IP, and home networking services. The Company also announced that its WebSTAR(TM) Cable Modem received both DOCSIS and Euro-DOCSIS certifications.
Broadband Transmission Products
The Company's Transmission products performed very well in the third quarter despite softness in the domestic market, posting only a slight decline in sales compared to the prior year. International opportunities compensated for most of the shortfall in the US. In the third fiscal quarter, international bookings of Transmission products were up 34% from the prior year and 21% sequentially.
In February, Scientific-Atlanta was selected, as part of a consortium led by Nortel Networks, to provide HFC technology, digital transport for video, and professional services in support of the network upgrade at Kabel NRW, also known as "Callahan." The system is expected to pass as many as 4.2 million German homes by the end of 2003. The Company received initial purchase orders for this project; however, it does not expect significant shipments until fiscal year 2002.
Scientific-Atlanta continued to invest in promising new technologies. In the quarter, the Company announced an investment of $5 million in Pacific Broadband Communications, Inc.(PBC). The combined strengths of Scientific- Atlanta, PBC, and Luminous Networks, in which Scientific-Atlanta invested last year, are expected to result in an implementation of DOCSIS that is significantly more efficient and cost-effective. At its annual Analysts' Meeting, Scientific-Atlanta demonstrated a working Fiber to the Home (FTTH) network and a fixed wireless extension of DOCSIS data capability that has the potential to bring high-speed data services to small businesses not currently served by cable.
Summarizing the quarter, McDonald concluded, "The keys to our ongoing success are our diversity and balance: we are both an end-to-end supplier of transmission infrastructure equipment, and a leading provider of subscriber products. Our Transmission products are balanced between RF electronics and opto-electronics. Our Subscriber products provide a fully integrated network solution including both hardware and software. At this time of transition in the domestic cable market, the diversity of our geographical presence enables us to seek new sources of growth. We believe that our balance and diversity, coupled with favorable customer economics, should enable our growth in the quarters ahead."
"Forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995, may be included in this news release. A variety of factors could cause Scientific-Atlanta's actual results to differ from the anticipated results expressed in such forward-looking statements. Investors are referred to Scientific-Atlanta's Cautionary Statements (Exhibit 99 to the Company's most recent Form 10-Q), which statements are incorporated into this news release by reference.
Scientific-Atlanta, Inc. (http://www.scientificatlanta.com ) is a leading supplier of transmission networks for broadband access to the home, digital interactive subscriber systems designed for video, high speed Internet, and voice over IP (VoIP) networks, and worldwide customer service and support.
For more information contact: Tom Robey, Investor Relations of Scientific-Atlanta, Inc., 770-236-4608, or fax, 770-236-4775, or tom.robey@sciatl.com .
Scientific-Atlanta, the Scientific-Atlanta logo, and Explorer are registered trademarks of Scientific-Atlanta, Inc. WebSTAR is a trademark of Scientific-Atlanta, Inc.
SCIENTIFIC-ATLANTA, INC.
consolidated statement of earnings
(in millions, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
March 30, March 31, March 30, March 31,
2001 2000 2001 2000
SALES $663.7 $440.7 $1,892.4 $1,162.8
COSTS AND EXPENSES
Cost of sales 456.1 310.6 1,313.2 823.6
Sales and
administrative 55.6 45.2 163.9 126.4
Research and
development 41.0 32.2 114.3 90.1
Interest expense 0.1 0.1 0.3 0.4
Interest income (9.6) (5.3) (28.9) (13.1)
Other (income)
expense, net 4.9 3.5 (69.7) (2.8)
Total costs and
expenses 584.1 386.3 1,493.1 1,024.6
EARNINGS BEFORE MINORITY
INTEREST AND INCOME
TAXES 115.6 54.4 399.3 138.2
MINORITY INTEREST (0.1) --- (0.1) ---
EARNINGS BEFORE INCOME
TAXES 115.5 54.4 399.2 138.2
PROVISION FOR INCOME TAXES
Current 53.0 17.8 162.6 38.6
Deferred (13.7) (1.5) (23.7) 2.9
NET EARNINGS $76.2 $ 38.1 $ 260.3 $96.7
EARNINGS PER COMMON SHARE
BASIC $0.47 $0.24 $1.62 $0.61
DILUTED $0.46 $0.23 $1.55 $0.59
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING
BASIC 161.7 158.6 161.0 157.3
DILUTED 167.0 166.6 167.8 163.9
DIVIDENDS PAID PER SHARE $0.01 $0.01 $0.03 $0.025
BOOKINGS $712.6 $594.9 $2,094.6 $1,428.5
SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(IN MILLIONS, EXCEPT SHARE DATA)
(UNAUDITED)
March 30, June 30,
2001 2000
ASSETS
CURRENT ASSETS
Cash and cash equivalents $589.5 $462.5
Short-term investments 134.3 60.6
Receivables, less allowance for doubtful
accounts of $5.6 at March 30
and $4.1 at June 30 445.8 333.2
Inventories 227.5 209.9
Deferred income taxes 60.7 49.7
Other current assets 51.6 34.7
TOTAL CURRENT ASSETS 1,509.4 1,150.6
PROPERTY, PLANT AND EQUIPMENT, at cost
Land and improvements 22.3 20.2
Buildings and improvements 63.3 40.9
Machinery and equipment 258.8 214.3
344.4 275.4
Less - Accumulated depreciation
and amortization 112.3 96.2
232.1 179.2
GOODWILL AND OTHER INTANGIBLE ASSETS 33.2 7.5
NON-CURRENT MARKETABLE SECURITIES 23.4 382.0
OTHER ASSETS 108.9 60.2
TOTAL ASSETS $1,907.0 $1,779.5
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $0.1 $0.4
Accounts payable 237.8 212.1
Accrued liabilities 156.2 149.4
Income taxes currently payable 40.1 18.3
TOTAL CURRENT LIABILITIES 434.2 380.2
LONG-TERM DEBT, less current maturities --- 0.1
DEFERRED INCOME TAXES --- 114.4
OTHER LIABILITIES 94.2 69.8
MINORITY INTEREST 5.8 ---
STOCKHOLDERS' EQUITY
Preferred stock, authorized 50,000,000
shares; no shares issued --- ---
Common stock, $0.50 par value, authorized
350,000,000 shares; issued 162,715,258
shares at March 30 and 159,971,077 shares
at June 30 81.4 80.0
Additional paid-in capital 474.4 339.7
Retained earnings 863.3 607.8
Accumulated other comprehensive income,
net of taxes of $0.3 at March 30
and $135.5 at June 30 0.6 221.1
1,419.7 1,248.6
Less - Treasury stock, at cost
(837,118 shares at March 30 and
651,805 shares at June 30) 46.9 33.6
1,372.8 1,215.0
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,907.0 $1,779.5
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