ADC's Powerful Second Quarter 2000 Results Accelerate to All-Time Highs.Business Editors & Telecommunications Writers MINNEAPOLIS--(BUSINESS WIRE)--May 18, 2000 Internet and Broadband Communications Drive Rapid Growth; Sales of $709 Million, Up 55%; Recurring 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 $0.29, Up 93% 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) today reported record sales of $709 million in the second quarter ended April 30, 2000, an increase of 55% over the $457 million in the comparable quarter of 1999. With record second quarter sales in all major product groups, the strong growth reflects 93% growth in Broadband Connectivity sales combined with 17% growth in Broadband Access See broadband and wireless broadband. and Transport sales and 29% growth in Integrated Solutions sales. International sales reached an all-time high of $137 million in this year's second 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. "The rapid growth of the Internet and broadband communications is a powerful driver accelerating ADC's financial performance to record levels for any quarter," said William J. Cadogan, chairman and chief executive officer of ADC. "Communications service providers are aggressively pushing forward on their Internet and broadband initiatives using ADC's network equipment, software and integration services. Over the past several years, ADC has been developing products and acquiring companies with new skills and capabilities to supply the growth in Internet and broadband communication services. Now that these tremendous global growth opportunities are unfolding, ADC is well-positioned to benefit from the fastest growing or `sweet spot' of capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. by communications service providers - building and upgrading the `last mile/kilometer' of communications networks for Internet and broadband, multiservice applications." 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. increased 105% to a record $141 million in the second quarter of 2000 compared to $69 million in the prior-year second quarter. Net income in the second quarter of 2000 increased to a record $94 million ($0.29 per diluted share) increasing 107% in this year's second quarter over $45 million ($0.15 per diluted share) in the second quarter of 1999. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
ADC's STRATEGIC INVESTMENTS BROADEN WITH VENTURE CAPITAL FUND As of April 30, 2000, ADC's strategic investments had a market value of $679 million of which $534 million is 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 . 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), Vyyo (Nasdaq: VYYO) and interWAVE Communications (Nasdaq: IWAV). During the quarter, ADC launched a $100 million venture capital fund focused on investing in emerging and start-up companies throughout the world who are engaged in developing high-performance broadband communications technologies. The fund has already started making investments in optical technology companies. ADC has investments in ten privately held companies privately held company A firm whose shares are held within a relatively small circle of owners and are not traded publicly. , including 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, 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 . , Tdsoft, G-Connect, Ensemble Communications, YAFO Networks and Optical Switch, carried at cost as long-term investments on the balance sheet. RECOGNITION OF ADC's PERFORMANCE AND POSITION In March 2000, SmartMoney magazine selected ADC for The Ultimate Tech Portfolio for 2000. SmartMoney is The Wall Street Journal magazine of personal business. In the April 2000 Forbes 500 rankings, ADC's market value catapulted to 177th place from a rank of 321 in 1999. ADC was also nominated for the 2000 Outstanding Corporate Growth Award from the Association for Corporate Growth International. In April 2000, Better Investing magazine reported ADC's stock as the 27th most popular and widely held stock by investment clubs in 1999, up from a rank of 48th in 1998 and 106th in 1997. Better Investing magazine is the official publication of the National Association of Investors Corporation National Association of Investors Corporation A Michigan-based association that helps groups establish investment clubs. (NAIC NAIC See National Association of Investors Corporation (NAIC). ), an organization whose membership consists of 730,000 individual and investment club members. REVIEW OF PRODUCT GROUPS A review of ADC's performance by its three product groups - Broadband Connectivity, Broadband Access and Transport, and Integrated Solutions - follows. Broadband Connectivity Broadband Connectivity sales in the second quarter of 2000 increased 93% to an all-time record of $417 million from $216 million in the comparable prior-year quarter. In the second quarter of 2000, all-time high sales were recorded for both fiber- and copper-connectivity systems/components, as well as wireless components. Sales of fiber-optic systems/components totaled $100 million in the quarter, up 115% from the second quarter of 1999. Sales were broad based across all types of Internet/data, video and voice service providers - incumbent and new entrants - and original equipment manufacturers (OEMs) around the globe. Strong worldwide growth in broadband connectivity 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, and the fast growth of new service providers, which is creating demand for connectivity to new and existing communication networks. ADC's market-leading broadband connectivity products connect a substantial portion of the communications networks carrying Internet traffic Internet traffic is the flow of data around the Internet. It includes web traffic, which is the amount of that data that is related to the World Wide Web, along with the traffic from other major uses of the Internet, such as electronic mail and peer-to-peer networks. . In May 2000, ADC acquired two leaders in fiber-optic technologies. The acquired companies, Altitun (www.altitun.com) and IBSEN Micro Structures (www.ibsen.dk), bring ADC many significant strategic advantages to help customers build next-generation, all-optical network A communications network that works completely in the optical domain. It uses optical switches connected by optical fibers. See optical switch and optical computer. equipment. With these acquisitions, ADC will obtain instant sales and technological leadership in tunable lasers with Altitun, and in Phase masks and fiber Bragg grating A short length of optical fiber that filters out a particular wavelength. Periodically spaced zones in the fiber core are altered to have different refractive indexes slightly higher than the core. devices, as well as the development of 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, with IBSEN. Combined with ADC's current fiber-optic operations, Altitun and IBSEN provide ADC the critical mass in key technologies, highly skilled people, and vertically integrated production A farming system that produces high quality food and other products by using natural resources and regulating mechanisms to replace polluting inputs and to secure sustainable farming. processes to be a leading supplier of components and integrated modules for optical networks. ADC expects to take a one-time charge for various acquisition-related expenses the amount of which has not yet been determined. During the quarter, ADC expanded its plans to increase Broadband Connectivity's global production capacities with an investment in a major manufacturing facility in Scotland. This investment is in addition to Broadband Connectivity's significant capacity expansion programs in 2000 that are either being planned, under construction or in operation 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. and the Asia/Pacific region. In April 2000, ADC introduced its BroadWire(TM) ADSL splitter See POTS splitter. , the industry's highest density splitter platform, enabling the delivery of 240 circuits of voice and high-speed data services simultaneously over a twisted-pair copper cable. During the quarter, ADC's LX.5 fiber-optic adapter/connector was named 1999 Technology Award winner by Fiberoptic Product News based on a vote of the publication's readership. Broadband Access and Transport Broadband Access and Transport sales increased 17% to a second quarter record of $179 million compared to $154 million in the comparable prior-year quarter. Sales in the second quarter of 2000 increased from the prior-year second quarter primarily as a result of all-time high sales of cable television systems, record second quarter sales of telephone transport and access systems and increased sales of broadband wireless See wireless broadband. systems partially offset by lower sales of 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. systems. As part of ADC's aggressive and determined strategy to become a leading supplier of 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 (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 ) broadband access systems, ADC announced the pending acquisition of PairGain Technologies (Nasdaq: PAIR, www.pairgain.com) in February 2000. With the May 5, 2000 expiration of the Hart-Scott-Rodino waiting period, the acquisition is subject to approval at PairGain's stockholders meeting and other customary conditions. The proposed transaction is expected to be completed during ADC's third fiscal quarter, which ends July 31, 2000. After closing the transaction, ADC expects to take a one-time charge for various acquisition-related expenses the amount of which has not yet been determined. Sales of Homeworx(TM) products more than tripled in second quarter 2000 compared to the prior year as shipments continued to support MediaOne's and Seren Innovations' deployments of cable telephony See cable telephone. services. In addition to orders for Homeworx products received from MediaOne and Seren Innovations during the quarter, new orders were received from two new customers in Europe and one new customer in the U.S. In February 2000, ADC and Alcatel announced they intend to work together in an alliance to jointly offer cable telephony solutions on specific communications provider projects worldwide. ADC will contribute its leading Homeworx cable telephony system to the alliance. Sales of Cellworx(R) Service Transport Nodes (STN (SuperTwisted Nematic) A passive matrix LCD technology that provides better contrast than twisted nematic (TN) by twisting the molecules from 180 to 270 degrees. See DSTN. ) continued to grow in the second quarter of 2000. During the quarter, several new features were introduced to expand Cellworx STN market opportunities. The new features include OC48 optical interfaces, which quadruple optical capacity, as well as a new international system with related interfaces. Cellworx STN was recently selected by an international alternative service provider for optical transport, and is in the labs of multiple major service providers for technical evaluations. To date, Cellworx STNs have been deployed in a broad range of customer applications, including Iowa Communications Network The Iowa Communications Network (ICN) is a state-administered fiber optics network designed to provide equal access to Iowans with modern telecommunication resources. for its statewide distance learning network; Midcontinent Communications for Internet access and private line services; China's Beijing PTT (1) (Postal, Telegraph & Telephone) The governmental agency responsible for combined postal, telegraph and telephone services in many European countries. (2) See push-to-talk. PTT - Post, Telephone and Telegraph administration for voice, frame relay and ATM transport services; a major service provider for broadband switch port consolidation and DSLAM (DSL Access Multiplexor) A central office (CO) device for ADSL service that intermixes voice traffic and DSL traffic onto a customer's DSL line. It also separates incoming phone and data signals and directs them onto the appropriate carrier's network. See DSL. aggregation; U.S. military bases for data, voice and telemetry telemetry Highly automated communications process by which data are collected from instruments located at remote or inaccessible points and transmitted to receiving equipment for measurement, monitoring, display, and recording. networks; and international distributors for lab and demo equipment to sell Cellworx STNs in their countries. In March 2000, WorldCom announced a trial using ADC's Axity(TM) Broadband Wireless Access System for high-speed, broadband services in Boston. BellSouth previously announced a trial using ADC's Axity system. The Axity system enables communications service providers to offer wireless Internet/data, video and voice services to businesses, small offices/home offices and residences rather than accessing physical wireline networks. Three competitive access providers in North America currently deploy the Axity technology. In March 2000, ADC and Redback Networks announced an agreement that combines ADC's strength in video transport technology with Redback's leading SONET and IP expertise, yielding a universal transport and access platform that will allow cable providers to cost-effectively deliver high quality video, digital TV (DTV (Digital TeleVision) Transmitting TV using digital signals. The major DTV standards are ATSC (North America), DVB (Europe) and ISDB (Japan). All three use MPEG-2 video compression and Dolby Digital audio compression. DVB and ISDB also include MPEG audio compression. ), high definition TV (HDTV (High Definition TV) A set of digital television (DTV) standards that offer the highest resolution and sharpest picture. Although some HDTV sets are available in standard (rather square) screen sizes, the overwhelming majority of sets are wide screen, which eliminates ), voice and data (TDM (Time Division Multiplexing) A technology that transmits multiple signals simultaneously over a single transmission path. Each lower-speed signal is time sliced into one high-speed transmission. and packet) over SONET networks. Under this agreement, ADC will develop video interface modules for Redback's multiservice platforms, and have the right to market and sell those Redback products to the cable television market. Additionally, Redback gains the right to sell ADC's video modules into non-cable markets. In April 2000, GTE GTE General Telephone & Electronics GTE Génie Thermique et Énergie (French) GTE Gas Turbine Engine GTE Global Tropospheric Experiment GTE Geothermal Energy GTE Gas Turbine Efficiency plc (Sweden & USA) announced the selection of ADC's AccessPoint(TM) Universal Media Access System to deliver its VideoConnect broadcast video service to customers in California and Florida. ADC's AccessPoint system allows for the instantaneous connection of video, audio and data over broadband ATM networks. The system's MPEG (Moving Pictures Experts Group) An ISO/ITU standard for compressing digital video. Pronounced "em-peg," it is the universal standard for digital terrestrial, cable and satellite TV, DVDs and digital video recorders (DVRs). over ATM architecture requires less bandwidth to transmit very high quality video images, enabling carriers and network operators the ability to offer more bandwidth efficient, cost-effective video service in point-to-point and point-to-multipoint environments. AccessPoint integrates video, voice and data interfaces, MPEG compression, and ATM transmission interfaces into a single, modular system. In February 2000, Olsten Staffing Services' selected ADC's ServicePoint(TM) service delivery units (SDUs) for its updated network. Olsten wanted a manageable DSU/CSU (Digital (or Data) Service Unit/Channel Service Unit) A pair of communications devices that connect an inhouse line to an external digital circuit (T1, DDS, etc.). that would provide a clear understanding of how the network was performing at each location. ServicePoint is being installed at approximately half of the company's 600 offices in North America. In May 2000, Trans World Airlines Trans World Airlines, commonly known as TWA, was a major American airline company that was acquired by American Airlines in April 2001. For many years it was headquartered at the Kansas City Downtown Airport, as well as midtown Manhattan in New York City. selected ADC's SevicePoint SDUs to assure cost-effective bandwidth utilization for the airline's critical corporate Intranet. During the quarter, COMCOR, a Russian communications carrier, selected ADC's AAC-3(TM) ATM Access Concentrator to enable frame relay over an ATM network for delivery of permanent virtual circuit See PVC. (networking) Permanent Virtual Circuit - (PVC, or in ATM terminology, "Permanent Virtual Connection") A virtual circuit that is permanently established, saving the time associated with circuit establishment and tear-down. (PVC PVC: see polyvinyl chloride. PVC in full polyvinyl chloride Synthetic resin, an organic polymer made by treating vinyl chloride monomers with a peroxide. ) services to businesses in Moscow. ADC's AAC-2(TM) ATM Access Concentrator was selected as a finalist for Network Computings' 2000 Well-Connected Award for ATM access concentration. In April 2000, ADC received orders from three public television stations for its Visionary(TM) Digital Television transmitter systems. ADC also broadened its strength in the digital and analog television transmission systems market with the acquisition of the television broadcast assets of Continental Electronics. Integrated Solutions Integrated Solutions sales grew 29% to a second quarter record of $112 million over $87 million in the comparable 1999 quarter. Sales increased from the prior-year second quarter as a result of sales of systems integration services reaching an all-time high and sales of software systems reaching a second quarter record. Strong growth in systems integration services continues to be driven by a broad range of incumbent and new communications service providers that select ADC for consulting, engineering, installation, software and systems support, and activation of broadband, multiservice communication networks for growth, flexibility and rapid deployment. In April 2000, ADC formed an alliance with DSET DSET Desert Sunshine Exposure Testing Inc. Corporation, a leading supplier of business-to-business e-commerce connectivity solutions for the telecommunications industry. ADC will provide DSET with comprehensive integration services to deploy DSET's electronic-bonding solutions to competitive local exchange carriers (CLECs) and data local exchange carriers (DLECs). During the quarter, ADC rolled out its Singularit.e(TM) suite of software products and services that allows integrated communications providers (ICPs) to build open operational support systems (OSSs) to compete more effectively in the broadband era. Singularit.e automates key 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. processes by combining 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. from ADC's Saville Systems software along with service assurance technology from ADC's Metrica software, both supported by integration services from leading consulting companies, such as the May 2000 announcements of a relationship with Ernst & Young and an alliance with Vitria Technology, a leading e-business platform provider. Singl.eView(TM), the suite's real-time convergent billing and advanced customer management application, created strong interest in the market. In May 2000, Lightship lightship, moored vessel bearing lights and other signal devices to guide ships and warn of hazards to navigation. Lightships are generally stationed at points where a lighthouse cannot be erected; they are given distinctive features (e.g. Telecom began shipping convergent bills and providing comprehensive customer care to its business customers using ADC's Saville Systems Convergent Billing Platform (CBP CBP competitive protein binding. (R)). Lightship is designed to enable companies in northern New England to deploy business-to-business communications strategies through a variety of integrated technologies ranging from high-speed digital Internet access to traditional phone services. Lightship is using CBP to bill for services including: frame relay; digital subscriber line (DSL); asynchronous transfer mode See ATM. (communications) Asynchronous Transfer Mode - (ATM, or "fast packet") A method for the dynamic allocation of bandwidth using a fixed-size packet (called a cell). See also ATM Forum, Wideband ATM. ATM acronyms. Indiana acronyms. (ATM) voice and data services; as well as local, regional and long distance phone service; e-mail; Web hosting; conference calling and digital virtual private networks (VPNs). In April 2000, Chunghwa Telecom Co., Ltd. (CHT CHT Chart CHT Center for Health Transformation (Washington, DC) CHT Chittagong Hill Tracts (Bangladesh region) CHT Certified Hypnotherapist CHT Cylinder Head Temperature CHT Certified Hand Therapist ), Taiwan's PTT and largest mobile telephony operator in Taiwan, selected several solutions from ADC's Metrica product family via prime contractor Teltai (Taiwan) Ltd. Metrica/NPR for Wireless will be used to monitor CHT's wireless (GSM/DCS and AMPS) networks, interfacing with Nortel and Ericsson infrastructure elements. In addition to Metrica/NPR, CHT will use Metrica/PAS (performance alarm server) to monitor both performance data and historical data stored by Metrica/NPR against thresholds and alert operators to potential abnormalities. Also in April 2000, VersaTel selected ADC's Metrica/NPR and the new Traffic Dispersion Analysis tool to better understand traffic behavior between sources and destinations, determine the impact on network capacity, forecast profitabliity, make build/lease decisions and provide input to marketing plans. VersaTel is a competitive local access broadband network operator in Europe. During the quarter, Telecordia Technologies selected ADC's NewNet IP CALEAserver(TM) for deployment with the Telecordia(TM) Call Agent in packet-switched networks to meet federally mandated 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 (Communications Assistance to Law Enforcement Act) requirements. In April 2000, ADC and RTS (Request To Send) An RS-232 signal sent from the transmitting station to the receiving station requesting permission to transmit. Contrast with CTS. 1. (operating system) RTS - run-time system. 2. Wireless announced a strategic alliance that integrates ADC's NewNet SMserver(TM) short message platform and RTS' Advantage WAP Gateway software system, allowing ADC and RTS to enable delivery of wireless Internet services using short messages. ADC signed OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and agreements with Mpathix, Technology Control Services (TCS (Transportation Control System) A widely used integrated information system for railroad transportation developed by the Missouri Pacific Railroad Company in the late 1960s and early 1970s. It was later implemented by Union Pacific when the companies merged. ), MasterMind Technologies and Symmetry Communications during the quarter. Mpathix will integrate its Voicemail/Unified Messaging platform with ADC's NewNet SMserver to deliver message waiting indications to wireless handsets and with ADC's NewNet OTAserver(TM) for over-the-air service provisioning. ADC's NewNet SGLite(TM) SS7 signaling gateway platform will be integrated with TCS's LiteSwitch Intelligent Services Architecture to provide innovative IP-based enhanced services applications for next-generation carriers. ADC's NewNet Connect7(TM) SS7 platform will be used in Mastermind's MM7 high-volume switching platform. Using ADC's NewNet Connect7 technology, Symmetry will provide high-speed packet data systems to wireless network operators. SS7 is the globally accepted signaling standard that provides reliable access to wireline and wireless public telephone networks. ADC's NewNet is a leading global supplier of SS7 and enhanced services platforms. SIX-MONTH RESULTS Sales for the six months ended April 30, 2000 increased 46% to $1.3 billion compared to $861 million in the first half of 1999. Operating income increased 79% to $225 million for the six months of 2000 compared to a first-half 1999 result of $126 million, before one-time charges related to acquisitions and a strategic restructuring in the first quarter of 1999. Net income increased 81% to $150 million ($0.47 per diluted share) in this year's first half compared to $83 million ($0.30 per diluted share), before the one-time charges, in the comparable period of 1999. About ADC ADC Telecommunications, Inc. is a leading global supplier of network equipment, software and integration services for broadband, multiservice networks that deliver data, video and voice communications over telephone, cable television, Internet, broadcast, wireless and enterprise networks. ADC's broadband, multiservice network solutions enable local access, high-speed transmission and software management of communications services from service providers to consumers and businesses over fiber-optic, copper, coaxial and wireless media. Headquartered in Minneapolis, Minnesota, ADC has approximately 16,900 employees around the world and annual sales of $2.3 billion. ADC's stock is included in the Standard & Poor's 500 Index and Nasdaq-100 Index. For more information on ADC, visit our Investor Relations Investor relations The process by which the corporation communicates with its investors. web site at www.adc.com/investor or Call (888) 329-9823 to receive ADC's news releases by fax on demand. Cautionary Statement Under 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 Any forward-looking statements contained herein reflect management's current expectations or beliefs. ADC Telecommunications cautions readers that future actual results could differ materially from those in forward-looking statements depending on the outcome of certain factors, including the risks and uncertainties 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 supports the National Association of Investors Corporation's "Own Your Share of America" campaign, which encourages individuals to invest in stocks.
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In Thousands, except per share amounts)
For the For the
Three Months Six Months
Ended Ended
April 30, April 30,
---------------- ----------------
2000 1999 2000 1999
------ ------ ------ ------
-------------
NET SALES $ 709,158 $ 456,591 $ 1,253,792 $ 860,885
COST OF PRODUCT SOLD 356,655 240,466 639,712 452,776
------- ------- --------- -------
GROSS PROFIT 352,503 216,125 614,080 408,109
------- ------- --------- -------
EXPENSES:
Research and development 66,597 47,350 124,547 93,094
Selling and
administration 138,389 94,442 252,354 178,669
Goodwill amortization 6,137 5,470 11,704 10,567
Non-recurring charges -- -- -- 60,327
------- ------- --------- -------
Total expenses 211,123 147,262 388,605 342,657
------- ------- --------- -------
OPERATING INCOME 141,380 68,863 225,475 65,452
OTHER INCOME
(EXPENSE), NET:
Interest 2,532 671 4,727 1,041
Other (2,001) (1,000) (2,945) (2,208)
------- ------- --------- -------
INCOME BEFORE INCOME
TAXES 141,911 68,534 227,257 64,285
PROVISION FOR INCOME
TAXES 48,249 23,244 77,267 28,677
------- ------- -------- -------
NET INCOME $ 93,662 $ 45,290 $ 149,990(a) $35,608
======= ======= ======== =======
AVERAGE COMMON SHARES
OUTSTANDING
(BASIC) (b) 305,366 298,290 303,761 270,380
======= ======= ======== =======
EARNINGS PER SHARE
(BASIC) (b) $ 0.31 $ 0.15 $ 0.49(a) $ 0.13
======= ======= ======== =======
AVERAGE COMMON SHARES
OUTSTANDING
(DILUTED) (b) 321,934 306,698 318,876 276,746
======= ======= ======== =======
EARNINGS PER SHARE
(DILUTED) (b) $ 0.29 $ 0.15 $ 0.47(a) $ 0.13
======= ======= ======== =======
(a) Excluding $47 million, net-of-tax charges, recorded in the
first quarter of fiscal 1999, six-month net income would have been $83
million or $0.30 per diluted share. These charges relate principally
to purchased in-process research and development expenses associated
with acquisitions and the restructuring of the former Wireless Systems
Group.
(b) Earnings per share and average common shares outstanding, for
both Basic and Diluted, have been adjusted for the two-for-one stock
split effective February 15, 2000.
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In Thousands)
ASSETS
April 30, October 31,
2000 1999
------------ -------------
CURRENT ASSETS:
Cash and cash equivalents $ 233,016 $ 143,523
Short-term investments 549,267 150,493
Accounts receivable 530,149 436,751
Inventories 315,459 243,882
Prepaid income taxes and
other assets 62,052 54,789
---------- -----------
Total current assets 1,689,943 1,029,438
PROPERTY AND EQUIPMENT, net 384,133 312,066
OTHER ASSETS, principally goodwill 351,595 331,025
---------- -----------
$ 2,425,671 $ 1,672,529
========== ===========
LIABILITIES AND SHAREOWNERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable $ 139,158 $ 119,212
Accrued liabilities 265,152 216,671
Accrued income taxes 219,395 41,919
Note payable and current
maturities of long-term debt 9,817 35,152
---------- -----------
Total current liabilities 633,522 412,954
LONG-TERM DEBT, less current
maturities 21,554 11,024
---------- -----------
Total liabilities 655,076 423,978
SHAREOWNERS' INVESTMENT
(306,685 and 300,346
shares outstanding) 1,770,595 1,248,551
---------- -----------
$ 2,425,671 $ 1,672,529
========== ===========
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