ADC's Fourth Quarter 2000 Results Continue Strong Growth with First $1 Billion-Plus Sales Quarter.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--Nov. 28, 2000 Sales of $1.03 Billion, Up 63%; Broad-based, Record Sales in All Three Major Business Groups and International; Pro Forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.18, Up 80% ADC (1) See A/D converter. (2) (Apple Display Connector) A peripheral connector from Apple that combines digital video display, USB and power in one cable. (Nasdaq:ADCT ADCT Adaptive Discrete Cosine Transform , www.adc.com), a leading global supplier of fiber optics fiber optics, transmission of digitized messages or information by light pulses along hair-thin glass fibers. Each fiber is surrounded by a cladding having a high index of refractance so that the light is internally reflected and travels the length of the fiber , network equipment, software and integration services for broadband, multiservice networks, today announced all-time high sales of $1.03 billion in the fourth quarter ended October 31, 2000, an increase of 63% over $634 million in the comparable quarter of 1999. The results for 1999 have been restated under the pooling-of-interests accounting method due to ADC's acquisition of Broadband Access See broadband and wireless broadband. Systems in the fourth quarter of 2000. With all-time high sales in all three major business groups, strong growth in the fourth quarter of 2000 reflects 102% growth in Broadband Connectivity sales combined with 22% growth in Broadband Access and Transport sales and 48% growth in Integrated Solutions sales. International sales increased 63% to an all-time high of $227 million or 22% of total sales in this year's fourth quarter. North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe remained ADC's largest sales regions in the quarter. "ADC continues to show strong growth fundamentals as communications service providers are increasing capital expenditures on the last mile/kilometer of their networks to deliver broadband services to consumers and businesses," said William J. Cadogan, chairman and chief executive officer of ADC. "Our broad-based, record-breaking results in the fourth quarter were a great achievement to a high-growth year - annual growth in fiscal year 2000 of 79% in stock price, 53% in sales and 72% in pro forma diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . We were firing on all cylinders as each of our three major business groups and international hit all-time high sales in the quarter. Our outstanding employees were key contributors in ADC surpassing the significant milestone of one billion dollars in sales for the first time in a quarter." Cadogan reiterated his public comments regarding ADC's outlook made on November 2, 2000, "We remain confident that we can achieve our long-term goals Long-term goals Financial goals expected to be accomplished in five years or longer. for annual sales growth at 25% to 30%, with pro forma diluted earnings per share growth at the same or higher rate. ADC's strong operating results to date and continued strong growth expectations are the combined result of our leading market positions, diversified product mix, broad global customer base, outstanding employees, significant capacity expansions worldwide, critical-mass acquisitions and innovative new product platforms." Pro forma results in 2000 and 1999 exclude non-cash stock compensation expenses and non-recurring charges from operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , exclude non-recurring credits from non-operating other income, and exclude the after-tax amount of these expenses, charges and credits from net income and earnings per share. In the fourth quarter of 2000, ADC recorded charges of $77 million ($68 million after tax or $0.09 per diluted share) primarily for non-cash stock compensation expenses and non-recurring charges related to acquisitions. ADC also recorded non-recurring credits in non-operating other income of $32 million ($17 million after tax or $0.02 per diluted share) in the fourth quarter of 2000 for cash gains on investments sold in secondary offerings and a non-cash gain for a change in ownership percentage of an investment in accordance with the SEC-issued Staff Accounting Bulletin No. 51. In summing these items in the quarter, the net charge was $45 million ($51 million after tax or $0.07 per diluted share). In the fourth quarter of 1999, ADC recorded charges of $31 million ($30 million after tax or $0.04 per diluted share) primarily for non-cash stock compensation expenses and non-recurring charges in connection with the acquisition of Saville Systems and the consolidation of the Broadband Access and Transport operations. Pro forma operating income increased 121% to an all-time high of $206 million in the fourth quarter of 2000 compared to $93 million in the prior-year fourth quarter. Pro forma net income in 2000 also reached an all-time high of $138 million ($0.18 per diluted share) increasing 94% in this year's fourth quarter over $71 million ($0.10 per diluted share) in the fourth quarter of 1999. On a financial reporting basis, which includes the impact of all expenses, charges and credits, net income was $87 million ($0.11 per diluted share) in the fourth quarter of 2000 compared to $41 million ($0.06 per diluted share) in the fourth quarter of 1999. Pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. before interest, taxes, depreciation and amortization (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) were $253 million ($0.32 per diluted share) in the fourth quarter of 2000, up 108% compared to $122 million ($0.18 per diluted share) in the comparable 1999 quarter. OUTLOOK For fiscal year 2001, ADC expects at this time to be able to achieve the pro forma diluted earnings-per-share consensus estimates from First Call(R) in the range of $0.68 to $0.70 per share (annual growth of 36-40%) from sales of approximately $4.15-$4.30 billion (annual growth of 25-30%). ADC's long-term goals are for annual sales growth at 25% to 30%, with pro forma diluted earnings-per-share growth at the same or higher rate. By quarter in fiscal year 2001, ADC expects at this time to be able to achieve the following sales and pro forma diluted earnings per share. -- First quarter earnings per share of approximately $0.12 from sales of approximately $850 million. Consistent with ADC's historical seasonal trends, the first quarter is lower on a sequential basis than the fourth quarter of the previous year. -- Second quarter earnings per share of approximately $0.16 from sales of approximately $0.95-$1.00 billion. -- Third quarter earnings per share of approximately $0.18-$0.19 from sales of approximately $1.10-$1.15 billion. -- Fourth quarter earnings per share of approximately $0.22-$0.23 from sales of approximately $1.25-$1.30 billion. For fiscal year 2002, ADC currently expects annual growth for sales to be at approximately 25% and pro forma diluted earnings per share to be in the range of 25% to 30%. ADC VENTURES INCREASES STRATEGIC INVESTMENTS IN PRIVATE COMPANIES As of October 31, 2000, ADC's strategic investments had a market value of $1.4 billion of which $1.1 billion of these investments was carried on the balance sheet as marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has . The cash cost basis of these investments was $347 million. Investments in marketable securities include shares of Redback Networks Redback Networks is a telecommunications equipment company. History Redback Networks was founded in August, 1996. Redback is an ERICSSON subsidiary since the beginning of 2007 (was previously traded on NASDAQ under the symbol RBAK). (Nasdaq: RBAK RBAK Redback Networks Inc. (stock abbreviation, AMEX) rBAK Remote Backup ), Efficient Networks (Nasdaq: EFNT), ONI ONI abbr. Office of Naval Intelligence Noun 1. ONI - the military intelligence agency that provides for the intelligence and counterintelligence and investigative and security requirements of the United States Navy Systems (Nasdaq: ONIS), GlobeSpan (Nasdaq: GSPN GSPN Generalized Stochastic Petri Net ), Vyyo (Nasdaq: VYYO), Mind CTI  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . (Nasdaq: MNDO MNDO Modified Neglect of Differential Overlap MNDO Merchant Navy Discipline Organisation ), InfoInterActive (Nasdaq: IIAA IIAA Independent Insurance Agents & Brokers of America (formerly Independent Insurance Agents of America) IIAA Independent Insurance Agents of America (now Independent Insurance Agents & Brokers of America) ) and interWAVE Communications (Nasdaq: IWAV). ADC has investments in privately held companies privately held company A firm whose shares are held within a relatively small circle of owners and are not traded publicly. carried at cost as long-term investments on the balance sheet as of October 31, 2000. These investments include Tdsoft, G-Connect, ANDA ANDA abbr. abbreviated new drug application Networks, Ensemble Communications and others, as well as ADC Ventures' investments in YAFO Networks, Optical Switch, Northstar Photonics and others. During the quarter, ADC Ventures made investments in several private companies including, among others, Cinta and Fujant. ADC Ventures is a private fund focused on investing in emerging and start-up companies worldwide who are engaged in developing high-performance, next-generation broadband communications technologies. The fund is particularly focused on companies developing next-generation optical, Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (IP), and software technologies that benefit communications service providers deploying broadband, multiservice networks. REVIEW OF BUSINESS GROUPS A review of ADC's performance by its three business groups - Broadband Connectivity, Broadband Access and Transport, and Integrated Solutions - follows. Broadband Connectivity Broadband Connectivity sales in the fourth quarter of 2000 increased 102% to an all-time high of $573 million from $283 million in the comparable prior-year quarter. The growth in the fourth quarter of 2000 was a result of all-time high sales for both fiber- and copper-connectivity systems/components. Sales of fiber-optic systems/components totaled $188 million in the quarter, up 166% from the fourth quarter of 1999. Pro forma operating income, before goodwill, increased 131% to $249 million in the fourth quarter of 2000 compared to the same quarter in 1999. Sales were broad based across all types of Internet, data, video and voice service providers, and original equipment manufacturers (OEMs) around the globe. Most Internet and public network traffic flows through ADC's market-leading Broadband Connectivity products. Strong worldwide growth in Broadband Connectivity's systems and components continues as a result of: -- Rapid growth in Internet/data traffic and digital services, which is creating demand for broader bandwidth connections; -- Increased competition among communications service providers, which is creating demand to deploy connections for new broadband services using DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary and cable modem cable modem Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet. technologies in the last mile/kilometer of the network; and -- Increased globalization globalization Process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world. Factors that have contributed to globalization include increasingly sophisticated communications and transportation , which pulls ADC's products into new locations as multinational communications service providers expand into international markets. ADC continued the significant expansion of Broadband Connectivity's global production capacities in North America, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , Europe and the Asia/Pacific region. In fiscal year 2000, Broadband Connectivity increased its manufacturing capacities by approximately 150% to more than three million square feet. In September 2000, ADC opened its new manufacturing facility in Nanjing, China. The facility will serve as the technology development and product manufacturing center for ADC's fiber-optic connectivity systems, fiber-optic components, and RF components and subsystems for the Chinese and Far East regional markets. During the quarter, ADC continued to expand its capabilities in fiber-optic components. In August 2000, ADC formed the Advanced Photonics Integration Center, which will develop customized, integrated and fully packaged photonics solutions for ADC's customers, including original equipment manufacturers (OEMs). ADC has research and development/production facilities for passive and active optical components in Minnesota, New Jersey, Sweden, Denmark and Australia, as well as other ADC manufacturing facilities throughout the world. ADC intends to leverage its expertise in photonics via the Advanced Photonics Integration Center to become one of the leading global suppliers of fiber-optic solutions for manufacturers of telecommunications systems. In September 2000, ADC successfully developed a Near Field Holography manufacturing process, where very small nanometer-scale structures can be transferred and replicated in high-volume manufacturing setups for integrated optics Combining electrical and optical components on the same silicon-based substrates used in the fabrication of a semiconductor chip. Also called "silicon photonics," fiber-optic communications employs numerous integrated optics devices, including lasers, photodetectors, beam splitters, and semiconductor lasers. In October 2000, ADC announced a three-year strategic co-development and production agreement with MEMSCAP Inc., a leading commercial provider of telecommunications MEMS (MicroElectroMechanical Systems) Tiny mechanical devices that are built onto semiconductor chips and are measured in micrometers. In the research labs since the 1980s, MEMS devices began to materialize as commercial products in the mid-1990s. (Micro-Electro-Mechanical Systems Micro-electro-mechanical systems (MEMS) Systems that couple micromechanisms with microelectronics. Such systems are also referred to as microsystems, and the coupling of micromechanisms with microelectronics is also termed micromechatronics. ). The companies will jointly develop a family of MEMS-based optical communications Optical communications The transmission of speech, data, video, and other information by means of the visible and the infrared portion of the electromagnetic spectrum. components for a number of applications including optical switching. During the quarter, ADC introduced the Digivance(TM) Indoor Coverage Solution, the industry's first fully digital RF transport system for managing and increasing wireless coverage and capacity within and between buildings. Broadband Access and Transport Broadband Access and Transport sales increased 22% to an all-time high $289 million compared to $237 million in the comparable prior-year quarter. Sales in the fourth quarter of 2000 increased from the prior-year fourth quarter primarily as a result of all-time high sales in all four major product groups -- telephone transport and access systems, the international digital loop carrier In telephone communications, a technology that increases the number of channels in the local loop by converting analog signals to digital and multiplexing them back to the end office. business, cable systems and broadband wireless See wireless broadband. systems. Pro forma operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , before goodwill, of $25 million in the fourth quarter of 2000 compared to $19 million in the fourth quarter of 1999 and improved sequentially from $36 million in the third quarter of 2000. Sales of Homeworx(TM) products increased 208% in the fourth quarter of 2000 compared to the comparable prior-year quarter as shipments continued to support deployments of cable telephony See cable telephone. services at numerous U.S. and international customers. In October 2000, ADC announced an estimated $300 million, three-year contract to supply its complete bundle of broadband network equipment and services to Everest Connections, a broadband cable network builder and alternative services provider. Under the terms of the three-year renewable contract, Everest will purchase ADC's Homeworx Cable Telephony System; Optiworx(TM), head end optical transmitters and receivers and outside plant optical nodes; Pathworx(TM), coaxial amplifiers; RF Worx(TM), passive RF splitter and combiners; Fiberworx(TM), fiber guide, splitters, combiners, DWDM (Dense WDM) The term given to wavelength division multiplexing (WDM) when significantly more channels were being added. Since WDM is increasingly more "dense" all the time, both terms are used synonymously. See WDM. DWDM - wavelength division multiplexing , and cross connect systems; DSX DSX Digital Cross Connect DSX Digital Signal Cross-Connect DSX Data Service Cross-connect DSX Digital Signal Level X , ADC's leading Digital Signal Cross Connect systems; and project management and integration services. In September 2000, ADC acquired Broadband Access Systems. Broadband Access Systems provides ADC with the Cuda(TM) 12000 IP Access Switch, an award-winning, next-generation carrier-class Internet Protocol (IP) Cable Modem Termination System A cable modem termination system or CMTS is equipment typically found in a cable company's headend, or at cable company hubsite and is used to provide high speed data services, such as cable internet or Voice over IP, to cable subscribers. (CMTS (Cable Modem Termination System) A computerized device that enables cable modems to send and receive packets over the Internet. It inserts IP packets from the Internet into MPEG frames and transmits them to the cable modems via an RF signal. ) and a comprehensive suite of network management and subscriber management software solutions. The Cuda 12000 platform offers the highest DOCSIS (Data Over Cable Service Interface Specification) A cable modem standard from the CableLabs research consortium (www.cablelabs.com), which provides equipment certification for interoperability. performance capacity of any system in the industry and its powerful distributed architecture supports the intensive quality of service (QoS) needs of next-generation IP services based on the DOCSIS 1.1 specification as well as voice-over-IP (VoIP). In addition, the Cuda 12000 platform is the first next-generation CMTS to receive both DOCSIS and EuroDOCSIS Qualification, enabling ADC to provide standards-based solutions to communications service providers worldwide. Broadband Access Systems' Cuda 12000 platform and software solutions combined with ADC's leading bundles of fiber optics, network equipment, software and integration services will enable communications service providers worldwide to reap the full benefits of high-speed Internet See broadband. access and high-capacity voice-over-IP telephony services. In November 2000, Cox Communications Cox Communications is a privately owned subsidiary of Cox Enterprises providing digital cable television and telecommunications services in the United States. It is the third-largest[2] cable television provider in the United States, serving more than 6. , the fifth largest cable television company in the U.S. with over 6 million subscribers, approved the Cuda 12000 IP Access Switch as a DOCSIS 1.0 CMTS solution. Cox also awarded ADC with a contract to deploy the Cuda platform in its Mid America Region. A deployment of this magnitude reinforces ADC's dedication to providing the best CMTS platform in the market. ADC's Avidia(R) System and customer premise devices continued its ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale in the fourth quarter of 2000 with sales increasing 83% over the fourth quarter of 1999. Sales were strong in both U.S. and international markets. ADC's Avidia System is a best-of-breed access platform architected to support the requirements of incumbent and emerging service providers building next-generation broadband networks  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. . The Avidia System has been designed to allow for the deployment of multiple ATM and frame-relay-based services, including ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line , g.lite, SDSL See DSL. SDSL - Single-line Digital Subscriber Line , IDSL See DSL. , HDSL See DSL. HDSL - High bit-rate Digital Subscriber Line 2, g.shdsl, T1 and E1, from a single platform. Its unique ATM switching fabric allows for traffic management and quality of service provisioning in order for service providers to deliver guaranteed levels of service to their subscribers. During the quarter, ADC achieved success in international markets as follows: -- ADC was awarded contracts for its BroadAccess(TM) Multiservice Access Platforms by Companhia Riograndense de Telecomunicacoes (CRT (1) (C RunTime) See runtime library. (2) (Cathode Ray Tube) A vacuum tube used as a display screen in a computer monitor or TV. The viewing end of the tube is coated with phosphors, which emit light when struck by electrons. ), a leading telecommunications provider in Brazil; MGTS MGTS Message Generator Traffic Simulator MGTS Message Generation Test System , the largest operator of fixed telecom networks in Russia; and Turk Telekom, who chose BroadAccess to be the fiber-based access system with the widest deployment in Turkey. -- ADC signed contracts for its broadband wireless systems with ACOM (language) ACOM - An early system on the IBM 705. [Listed in CACM 2(5):16 (May 1959)]. Comunicacoes, Brazil's first digital broadband fixed wireless operator, and Image Wireless Communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. , a leading wireless digital cable and data service provider in Canada. Integrated Solutions Integrated Solutions sales grew 48% to an all-time high of $170 million over $114 million in the comparable 1999 quarter. Sales increased from the prior-year fourth quarter as a result of all-time high sales of both systems integration services and software systems, plus sales from the acquisition of Centigram cen·ti·gram n. A metric unit of mass equal to one hundredth (10-2) of a gram. centigram one-hundredth of a gram; abbreviated cg. Communications completed in July 2000. Pro forma operating income, before goodwill, of $10 million in the fourth quarter of 2000 compared to $14 million in the fourth quarter in 1999 and improved sequentially from $4 million in the third quarter of 2000. Strong growth in systems integration services is driven by major communications service providers aggressively expanding their network infrastructure needs for both in-region and out-of-region deployments of new broadband services. During the quarter, ADC announced the expansion of its broadband integration service capabilities into Europe with the acquisitions of Computer Telecom Installations Ltd., completed in September 2000, and France Electronique's telecom systems integration business, completed in November 2000. ADC's mission is to become the first choice partner of systems integration services for telecom service providers and partners throughout the world. The European telecommunications market forms an important component of ADC's pan-European systems integration strategy. As U.S.-based communications service providers globalize glob·al·ize tr.v. glob·al·ized, glob·al·iz·ing, glob·al·iz·es To make global or worldwide in scope or application. glob and expand into Europe, European communications service providers also are expanding abroad. Because of this trend, ADC is building a local presence in Europe to serve both sets of customers. Sales in ADC's software business reached all-time highs in the fourth quarter of 2000 on strong sales growth of CALEA CALEA Commission on Accreditation for Law Enforcement Agencies, Inc. (Fairfax, Virginia) CALEA Communications Assistance for Law Enforcement Act of 1994 CALEA Communication Assistance to Low Enforcement Act compliance products, SS7 software for IP networks and short messaging See SMS. software for wireless networks. ADC also closed the most successful quarter in its history for the Singularit.e(TM) OSS Oss (ôs), city (1994 pop. 62,141), North Brabant prov., S Netherlands; chartered 1399. It is a significant industrial center. Manufactures include meat products, chemicals, pharmaceuticals, electrical equipment, and metalware. Suite. During the fourth quarter of 2000, ADC signed 22 contracts for Singularit.e, its suite of operational support system (OSS) software products, including real-time convergent billing, customer management and service assurance applications for integrated communications providers (ICPs). The newly signed contracts range in value from multimillion-dollar agreements with established companies to sizable agreements with new-entry service providers and have a total value in excess of $50 million. Singularit.e's suite of convergent billing and integrated customer management Integrated customer management (or its acronym, ICM) is a business strategy for improving support by sharing information between discrete departments. ICM brings together three business principles: alignment, agility, and customer-centricity. software supports a full range of communications services, including Voice over DSL (Digital Subscriber Line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and ), IP Telephony The two-way transmission of voice over a packet-switched IP network, which is part of the TCP/IP protocol suite. The terms "IP telephony" and "voice over IP" (VoIP) are synonymous. , ATM, frame relay, wireless voice and data, VPNs and Internet connectivity. Singularit.e's suite of quality assurance software supports virtually all types of public carrier infrastructure, including GPRS (General Packet Radio Service) The first high-speed digital data service provided by cellular carriers that used the GSM technology. GPRS added a packet-switched channel to GSM, which uses dedicated, circuit-switched channels for voice conversations. and IP backbone operations. During the quarter, ADC unveiled a new set of IP and self-care capabilities for the Singularit.e suite of real-time convergent billing and integrated customer management software. The new product enhancements allow service providers to use one platform to support data and switched voice services, provide advanced Web-based self-care capabilities and incorporate quality of service (QoS) metrics into the IP-based services they offer their customers. ADC also introduced EasyAdmin Web(TM), the newest release in ADC's line of web-enabled enhanced services software. EasyAdmin Web is a suite of self-administration tools that telecommunications subscribers can use to manage their phone and Internet services via the Web. FULL-YEAR RESULTS Sales for the fiscal year ended October 31, 2000 increased 53% to $3.3 billion compared to $2.2 billion in 1999. Pro forma operating income increased 100% to $571 million for 2000 compared to a 1999 result of $285 million. Pro forma net income increased 95% to $384 million ($0.50 per diluted share) this year compared to $197 million ($0.29 per diluted share) in 1999. On a financial reporting basis, which includes the impact of all expenses, charges and credits, net income was $868 million ($1.13 per diluted share) in 2000 compared to $78 million ($0.11 per diluted share) in 1999. In fiscal year 2000, ADC completed the acquisitions of Broadband Access Systems, Computer Telecom Installations Ltd., PairGain Technologies, Altitun, IBSEN Micro Structures, Centigram Communications, NVision and Comtec Electronica. ADC recorded charges of $205 million ($186 million after tax or $0.24 per diluted share) in 2000 primarily for non-cash stock compensation expenses and non-recurring charges related to these acquisitions. In 2000, ADC also recorded non-recurring credits in non-operating other income of $1.1 billion ($670 million after tax or $0.87 per diluted share) primarily for cash gains related to investments sold in secondary offerings, combined with non-cash gains on the sale of PairGain's microelectronics engineering group, conversion of ADC's investment in Siara Systems into shares of Redback Networks and a change in the ownership percentage of an investment in accordance with the SEC-issued Staff Accounting Bulletin No. 51. In summing these items, the net credit was $878 million ($484 million after tax or $0.63 per diluted share) in 2000. In fiscal year 1999, ADC completed the acquisitions of Saville Systems, Teledata Communications, Hadax Electronics, Phasor Phasor can refer to:
Twice in 2000, ADC has declared two-for-one stock splits of its common stock. The first split became effective on February 15, 2000 and the second split became effective on July 17, 2000. CONFERENCE CALL AND WEBCAST ADC will discuss its fourth quarter 2000 results and current outlook on a conference call scheduled today, November 28, at 5 p.m. Eastern time. The conference call can be accessed by domestic callers at (888) 868-9083 and by international callers at (973) 628-7055 or on the Internet at www.adc.com/investor. The replay of the call can be accessed by domestic callers at (800) 345-5169 and by international callers at (402) 220-1442 or on the Internet at www.adc.com/investor. RESTATED FINANCIALS As a result of the fourth quarter 2000 acquisition of Broadband Access Systems, which was accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. , restated quarterly financial statements for fiscal years 1998 through 2000 can be obtaining by clicking on "Presentations and Investor Info" at www.adc.com/investor. About ADC ADC is The Broadband Company(TM). ADC's fiber optics, network equipment, software and integration services make broadband communications a reality worldwide by enabling communications service providers to deliver high-speed Internet, data, video and voice services to consumers and businesses. ADC (Nasdaq: ADCT) has annual sales of over $3.2 billion and employs more than 22,400 people worldwide. ADC's stock is included in the Standard & Poor's 500 Index and the Nasdaq-100 Index. Learn more about ADC Telecommunications, Inc. at www.adc.com. Cautionary Statement Under the Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995 Any forward looking statements contained in herein reflect management's current expectations or beliefs and are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. ADC Telecommunications cautions readers that future actual results could differ materially from those in forward-looking statements depending on the outcome of certain factors. All such forward-looking statements are subject to certain risks and uncertainties, including, but not limited to, demand for ADC's products or services, availability of materials to make products, changing market conditions either within ADC's industry or generally within the economy, new competition and technologies, increased costs associated with protecting intellectual property rights, fluctuations in ADC's operating results, pressures on the pricing of the products or services ADC offers, and other risks and uncertainties, including those identified in Exhibit 99-a to ADC's Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended October 31, 1999.
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In Millions, except per share amounts)
For the For the
Three Months Ended Year Ended
October 31, October 31,
---------------------- ----------------
2000 1999 2000 1999
------------ --------- ------ ---------
NET SALES $1,032.0 $634.1 $3,287.9 $2,151.8
COST OF PRODUCT SOLD 513.4 336.8 1,679.0 1,148.4
------------ --------- --------- ---------
GROSS PROFIT 518.6 297.3 1,608.9 1,003.4
------------ --------- --------- ---------
EXPENSES:
Research and development 96.1 70.0 338.0 250.7
Selling and administration 202.4 128.3 665.6 445.3
Goodwill amortization 14.4 6.1 34.3 22.2
Non-recurring charges 34.2 30.4 158.0 149.0
Non-cash stock compensation 42.8 0.5 47.1 1.2
------------ --------- --------- ---------
Total expenses 389.9 235.3 1,243.0 868.4
------------ --------- --------- ---------
OPERATING INCOME 128.7 62.0 365.9 135.0
OTHER INCOME (EXPENSE), NET:
Interest 5.1 4.2 19.5 13.9
Other 30.0 (5.8) 1,075.0 (14.0)
------------ --------- --------- ---------
INCOME BEFORE INCOME TAXES 163.8 60.4 1,460.4 134.9
PROVISION FOR INCOME TAXES 76.7 19.3 592.3 57.0
------------ --------- --------- ---------
NET INCOME (a)$87.1 (b)$41.1 (a)$868.1 (b)$77.9
============ ========= ========= =========
AVERAGE COMMON
SHARES OUTSTANDING (BASIC) (c)733.9 669.1 721.6 665.0
============ ========= ========= =========
EARNINGS PER SHARE (BASIC) (c)$0.12 $0.06 $1.20 $0.12
============ ========= ===================
AVERAGE COMMON
SHARES OUTSTANDING (DILUTED) (c)781.6 686.3 770.3 683.3
============ ========= ========= =========
EARNINGS PER SHARE
(DILUTED) (a)&(c)$0.11 (b)$0.06 (a)$1.13 (b)$0.11
============ ========= ========= =========
(a) Excluding $50.8 million and $(483.7) million, net of tax
non-recurring charges and credits and non-cash stock
compensation expenses in the quarter and year ended October
31, 2000, respectively, net income would have been $137.9
million and $384.4 million, respectively. Diluted earnings per
common share would have been $0.18 and $0.50, respectively.
The non-recurring charges are related primarily to
acquisitions. The non-recurring credits in other income are
related primarily to cash and non-cash gains on investments.
Fiscal year 2000 results also include the non-cash gain on the
sale of a business.
(b) Excluding $29.9 million and $119.1 million, net of tax
non-recurring charges and non-cash stock compensation expenses
in the quarter and year ended October 31, 1999, respectively,
net income would have been $71.0 million and $197.0 million,
respectively. Diluted earnings per common share would have
been $0.10 and $0.29, respectively. The non-recurring charges
are related primarily to acquisitions and the restructuring of
operations.
(c) Earnings per share and average common shares outstanding, for
both Basic and Diluted, have been adjusted for two separate
two-for-one stock splits effective February 15, 2000 and July
17, 2000.
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In Millions)
ASSETS
October 31, October 31,
2000 1999
-------------- -------------
CURRENT ASSETS:
Cash and cash equivalents $217.3 $279.0
Short-term investments 1,136.9 255.5
Accounts receivable 714.3 468.0
Inventories 486.1 284.9
Prepaid income taxes and other assets 96.3 89.2
-------------- -------------
Total current assets 2,650.9 1,376.6
PROPERTY AND EQUIPMENT, net 608.6 341.2
OTHER ASSETS, principally goodwill 711.0 340.0
-------------- -------------
$3,970.5 $2,057.8
============== =============
LIABILITIES AND SHAREOWNERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable $211.3 $131.9
Accrued compensation and benefits 233.4 118.3
Other accrued liabilities 202.3 117.9
Accrued income taxes 365.8 44.5
Note payable and current maturities
of long-term debt 28.5 35.9
-------------- -------------
Total current liabilities 1,041.3 448.5
LONG-TERM DEBT, less current maturities 16.5 14.0
-------------- -------------
Total liabilities 1,057.8 462.5
SHAREOWNERS' INVESTMENT
(770.3 and 678.6 shares outstanding) 2,912.7 1,595.3
-------------- -------------
$3,970.5 $2,057.8
============== =============
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion