ADC's Third Quarter 2000 Results Continue Powerful Acceleration with Growth of Internet and Broadband Communications Networks.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--Aug. 17, 2000 Sales of $891 Million, Up 67%; Sales, Excluding Acquisitions, Up 71% to $827 Million; Two-for-One Split-Adjusted 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 $0.17, Up 143%, Before Non-recurring Charges; EPS, Before Acquisitions and Non-recurring Charges, Up 150% to $0.20 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 network equipment, software and integration services for broadband, multiservice networks, today announced all-time high sales of $891 million in the third quarter ended July 31, 2000, an increase of 67% over $535 million in the comparable quarter of 1999. Reported third-quarter results for 2000 and 1999 include acquisitions of PairGain Technologies and Altitun, which were both 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. . Reported results for 2000 also include the acquisitions of IBSEN Micro Structures and 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, which were both accounted for using the purchase method. Excluding these acquisitions, ADC's sales increased 71% to an all-time high of $827 million for the third quarter ended July 31, 2000. With all-time high sales in all three major product groups, strong growth in the third quarter of 2000 reflects 120% growth in Broadband Connectivity sales combined with 19% growth in Broadband Access See broadband and wireless broadband. and Transport sales and 35% growth in Integrated Solutions sales. International sales increased 59% to an all-time high of $191 million or 21% of total sales in this year's third quarter compared to 23% in the third quarter of 1999. 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. "We continue to exceed our growth expectations in 2000 as our customers' requirements to build and upgrade networks for Internet and broadband communications services is proving to be stronger than anticipated, " said William J. Cadogan, chairman and chief executive officer of ADC. "With significant capacity expansions, critical-mass acquisitions and new product platforms, ADC is well-prepared to satisfy our customers' increased demands for end-to-end bundles of network equipment, software and integration services to deliver high-speed Internet See broadband. , data, video and voice services to consumers and businesses." In the third quarter of 2000, ADC recorded a non-recurring charge of $115 million ($109 million after tax or $0.15 per split-adjusted, diluted share) for acquisition-related expenses and for purchased in-process research and development expenses in connection with the acquisitions of PairGain, Altitun, IBSEN and Centigram. In the third quarter of 1999, ADC recorded a non-recurring charge for purchased in-process research and development expenses of $58 million ($41 million after tax or $0.06 per split-adjusted, diluted share) in connection with the acquisitions of Spectracom and Pathway. Before non-recurring charges in 2000 and 1999, 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 172% to an all-time high of $190 million in the third quarter of 2000 compared to $70 million in the prior-year third quarter. Excluding acquisitions and before non-recurring charges, operating income increased 157% to an all-time high of $203 million in the third quarter of 2000. Before nonrecurring charges Nonrecurring Charge An expense occurring only once on a company's financial statement. Notes: An extraordinary item is an example of a nonrecurring charge. Also known as "nonrecurring item". in 2000 and 1999, net income in 2000 also a reached an all-time high of $127 million ($0.17 per split-adjusted, diluted share) increasing 165% in this year's third quarter over $48 million ($0.07 per split-adjusted, diluted share) in the third quarter of 1999. Excluding acquisitions and before non-recurring charges, net income increased 163% to an all-time high of $137 million ($0.20 per split-adjusted, diluted share) in the third quarter of 2000. On a financial reporting basis, which includes the impact of all acquisitions and non-recurring charges, net income was $19 million ($0.02 per split-adjusted, diluted share) in the third quarter of 2000 compared to $7 million ($0.01 per split-adjusted, diluted share) in the third quarter of 1999. A two-for-one stock split of ADC's common stock became effective on July 17, 2000. 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.
RECOGNITION OF ADC's PERFORMANCE AND POSITION In the seven month period ended July 31, 2000, ADC was the fourth best performing stock in the Standard & Poor's 500 Index growing 131% to $41.94. ADC was named one of the 10 Great Places to Work in Minnesota in the August 2000 edition of Corporate Report magazine. In June 2000, ADC was named for the first time in IndustryWeek's listing of The World's 1,000 Largest Manufacturing Companies. ADC's STRATEGIC INVESTMENTS CONTINUE TO GROW SIGNIFICANTLY As of July 31, 2000, ADC's strategic investments had a market value of $1.6 billion of which $1.5 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 cost basis of these investments was $313 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) and interWAVE Communications (Nasdaq: IWAV). ADC has investments in 10 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 July 31, 2000. These investments include 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 . (which completed its IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. on August 8, 2000 (Nasdaq: MNDO MNDO Modified Neglect of Differential Overlap MNDO Merchant Navy Discipline Organisation )), 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 and Northstar Photonics. ADC Ventures is ADC's venture capital fund focused on investing in emerging and start-up companies start-up company A new business. throughout the world who are engaged in developing high-performance broadband communications technologies. 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 third quarter of 2000 increased 120% to an all-time high of $524 million from $238 million in the comparable prior-year quarter. In the third quarter of 2000, all-time high sales were recorded for both fiber- and copper-connectivity systems/components supplemented with record third quarter sales of wireless components. Sales of fiber-optic systems/components totaled $150 million in the quarter, up 167% from the third 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'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, and the fast growth of new service providers, which is creating demand for connectivity to new and existing communication networks. Most Internet and public network traffic flows through ADC's market-leading Broadband Connectivity products. ADC continued the significant expansion of Broadband Connectivity's global production capacities with expansion programs during the quarter being planned and implemented 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. During the quarter, ADC announced an alliance with COLO Colo Colorado (old style state abbreviation) COLO Columbus, Ohio COLO Co-Location COLO Colonial National Historic Park (US National Park Service) COLO Cost Of Living Option .COM to provide ADC's industry leading connectivity products to COLO.COM's carrier-neutral co-location facilities. ADC also introduced its BroadWire(TM) 528 ADSL splitter See POTS splitter. , the industry's highest density splitter platform. This splitter is optimized for DSL/telephony line sharing, thus allowing subscribers to access voice and high-speed data services simultaneously over a single copper twisted pair A thin-diameter wire (22 to 26 gauge) commonly used for telephone and network cabling. The wires are twisted around each other to minimize interference from other twisted pairs in the cable (Alexander Graham Bell invented this and was awarded a patent for it in 1881). . This application is particularly important in the wake of the FCC's recent ruling mandating the sharing of copper local loop facilities among incumbent local exchange carriers ILEC, short for incumbent local exchange carrier, is a local telephone company in the United States that was in existence at the time of the break up of AT&T into the Regional Bell Operating Companies (RBOCs) also known as the "Baby Bells". (ILECs), competitive local exchange carriers (CLECs) and data local exchange carriers (DLECs). At the NAB 2000 Convention, ADC's ENVOY wideband (100 Mbps) digital audio and time code router was awarded both the Broadcast Engineering "Pick Hit" award and the Television Broadcast "Pick Of Show" award. These prestigious awards are made in recognition of innovative technology. In June 2000, ADC's Enteraprise(TM) Category 6 connecting hardware became the only product with independent verification to successfully pass the full Category 6 qualification test program for backwards compatibility backwards compatibility - backward compatibility and interoperability as proposed by major international standards committees. Broadband Access and Transport Broadband Access and Transport sales increased 19% to an all-time high $243 million compared to $205 million in the comparable prior-year quarter. Sales in the third quarter of 2000 increased from the prior-year third quarter primarily as a result of all-time high sales of cable telephony See cable telephone. systems, near-record third quarter sales of telephone transport and access systems combined with record third quarter sales in 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. Sales of Homeworx(TM) products increased 341% in the third quarter of 2000 compared to the comparable prior-year quarter as shipments continued to support AT&T Broadband's (MediaOne is being renamed under the AT&T brand) deployments of cable telephony services. During the third quarter of 2000, ADC began shipping Homeworx products to three new U.S. customers and recognized sales from a total of six U.S. customers and two international customers. In a deal valued up to $100 million, ADC's Avidia(R) System and customer premise devices were selected for deployment within riodata's broadband data network throughout Europe. riodata is an emerging provider of high-speed Internet services to business companies in Europe. During the DSL Forum The DSL Forum is a world wide consortium of about 200 companies which are part of the different divisions of the telecommunication and information technology sector. The DSL Forum was founded in 1994 and is used as a platform for companies that operate in the broadband market. Interoperability Showcase at SUPERCOMM 2000, ADC's Avidia 8000, the highest density integrated 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 access switch in its class, interoperated with live connections to 30 ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line modems from different manufacturers. 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, 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 and Austar United Communications, Australia's largest pay-TV operator, announced a strategic program to develop and deploy one of the largest MMDS (Multichannel Multipoint Distribution Service or Microwave Multipoint Distribution Service) A digital wireless transmission system that works in the 2.2-2.4 GHz range. broadband wireless See wireless broadband. systems, to date, in the world. The program intends to build two-way transmission facilities that provide high-speed Internet and telephony services with potential to reach more than 60 Australian towns and cities. ADC is expected to supply a bundle of products and services including its Axity(TM) Broadband Wireless Access System, as well as systems integration and implementation to Austar. In June 2000, Telinor Television, S. A. de C. V., a Mexican wireless pay-TV company, and ADC announced that Telinor plans to field trial ADC's Axity system to enable the delivery of two-way broadband data services to businesses. ADC's Axity system is also in previously announced trials with WorldCom and BellSouth. The Axity system enables communications service providers A Communications Service Provider or CSP is a company that transports information electronically. The term encompasses public and private companies in the wireline, wireless, Internet, cable, satellite, and managed services businesses. 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. During the quarter, ADC's Visionary(TM) DT Digital Television Transmitter was awarded "Best Transmitter" at the BroadcastAsia 2000 show. Integrated Solutions Integrated Solutions sales grew 35% to an all-time high of $124 million over $92 million in the comparable 1999 quarter. Sales increased from the prior-year third quarter as a result of all-time high sales of systems integration services and record third quarter sales of software systems. 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. During the quarter, ADC announced and completed the acquisition of Centigram Communications. This acquisition represents another significant step forward in ADC's mission to enable communications service providers to differentiate their broadband, multiservice offerings and increase their revenues with enhanced services applications. Convergent applications which facilitate the unification of data and voice services over Internet, wireless and wireline networks are expected to be strong drivers of market growth as communications service providers compete to win and retain customers. Centigram is a leading global provider of unified communications The real time redirection of a voice, text or e-mail message to the device closest to the intended recipient at any given time. For example, voice calls to desk phones could be routed to the user's cellphone when required. , Internet-enabled call management and wireless access protocol (WAP (1) (Wireless Access Point) See access point. (2) (Wireless Application Protocol) A standard for providing cellular phones, pagers and other handheld devices with secure access to e-mail and text-based Web pages. )-based messaging solutions for communications service providers. In July 2000, Siemens selected ADC's NewNet CALEAserver(TM) platform as the preferred law enforcement intercept delivery solution to be introduced to Siemens' EWSD EWSD Elektronisches WaehlSystem Digital (German: Electronic Worldwide Switch Digital) EWSD Electronic Worldwide Switch Digital (R) switch customers. The Siemens EWSD switch is one of the most deployed public switching systems Switching systems (communications) The assemblies of switching and control devices provided so that any station in a communications system may be connected as desired with any other station. in the world. Over 200 million ports have the Siemens EWSD technology. Initial deployment will be targeted at Siemens' EWSD customers including major RBOCs, long distance carriers, CLECs and IOCs (independent operating company operating company A business that engages in transactions with outsiders. ) throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . 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 for Law Enforcement Act) requires wireless and wireline telephone carriers to upgrade their networks to provide court-ordered intercepted call content and call identifying information to law enforcement agencies A law enforcement agency (LEA) is a term used to describe any agency which enforces the law. This may be a local or state police, federal agencies such as the Federal Bureau of Investigation (FBI) or the Drug Enforcement Administration (DEA). . ADC is a leading supplier of law enforcement intercept platforms and offers three distinct solutions: NewNet CALEAserver and NewNet CDCmanager(TM) for circuit-switched networks, and NewNet IP CALEAserver for packet-switched networks. During the quarter the following developments were announced for ADC's 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. -- ADC signed a global framework agreement with Compaq, covering the service assurance elements of the Singularit.e suite of 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. solutions. The agreement enables Compaq to offer products and services including network performance management, service level agreement tools and the recently launched network performance management for carrier-class IP solution. The alliance allows for closer integration of ADC's Singularit.e Metrica(R)/NPR with Compaq's TeMIP network management product. The combined offering provides a complete workflow process to locate, correlate and solve performance problems. To date, ADC and Compaq have worked together on a number of OSS projects. Operators who have benefited from the combined offering include Eplus (Germany), GTS GTS abbr. gas turbine ship (UK), CWC CWC Chemical Weapons Convention CWC Cricket World Cup CWC Central Wyoming College CWC Ceylon Workers' Congress (trade union; Sri Lanka) CWC Ceylon Workers Congress (Sri Lanka) (UK), Celcom (Malaysia) and Telefonica (Spain). -- PT Excelcomindo Pratama, Indonesia's third largest and fastest growing GSM operator, selected ADC's Singularit.e Interconnect Billing Platform to manage its national and international interconnect agreements. -- Bell Intrigna, a Canada-based CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) , selected ADC's Singularit.e Singl.eView(TM) application to accelerate its deployment of new products and services. An integrated customer management and convergent billing system, Singl.eView's open architecture and flexibility are easily integrated with other operational support systems (OSSs) platforms. Singl.eView's easy integration eliminates the need for time-consuming and costly custom coding. -- Smartcom, an Endesa-owned PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. operator based in Chile, contracted with ADC to supply its Singularit.e Metrica/NPR network performance solution. Smartcom is one of the four incumbent mobile carriers in Chile, and provides nationwide coverage with a 100% digital CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. network. Metrica/NPR will help Smartcom deliver high quality of service to both business and private users. -- Amena, a Spanish GSM 1800 operator, selected ADC's Singularit.e Metrica/NPR solution. Amena has deployed Metrica/NPR to analyze performance statistics from Ericsson, Siemens and Nokia network infrastructure elements. -- ADC also announced a strategic alliance with NightFire Software, pioneer of e-infrastructure solutions for broadband service deployment, to provide DSL service providers with a quick way to provision and bill for services. The companies will jointly market an integrated solution based on NightFire(R) SupplierExpress(TM) and CustomerExpress(TM) software and ADC's Singularit.e OSS. In May 2000, ADC and Telcordia Technologies Telcordia Technologies, formerly Bell Communications Research, Inc. or Bellcore, is a telecommunications research and development (R&D) company based in the United States and created on January 1 1984 as part of the 1982 Modification of Final Judgment that broke up announced a comprehensive alliance that combines software, hardware and consulting services for telecommunications service providers A Telecommunications Service Provider or TSP is a type of Communications Service Provider that has traditionally provided telephone and similar services. This category includes ILECs, CLECs, and mobile wireless companies. . Both companies will pool critical products and consulting services designed to speed delivery of new and enhanced services and technologies for emerging carriers. The easily customized solutions will be tailored for each customer from a suite of modular components. Telcordia will plan and design network architectures using their consulting services expertise and extensive suite of software applications coupled with complementary consulting services, hardware and software products from ADC. ADC and Telcordia will implement the solution set with their combined global workforce. NINE-MONTH RESULTS Sales for the nine months ended July 31, 2000 increased 49% to $2.3 billion compared to $1.5 billion in the nine-month period of 1999. Operating income, before non-recurring charges in 2000 and 1999, increased 92% to $389 million for the nine months of 2000 compared to a nine-month 1999 result of $203 million. Net income, before non-recurring credits and charges in 2000 and 1999, increased 92% to $261 million ($0.35 per split-adjusted, diluted share) in this year's nine-month period compared to $136 million ($0.22 per split-adjusted, diluted share), in the comparable period of 1999. In the third quarter of 2000, ADC completed the acquisitions of PairGain Technologies, Altitun, IBSEN Micro Structures and Centigram Communications. In connection with these events, ADC recorded a non-recurring charge of $115 million ($109 million after tax or $0.15 per split-adjusted, diluted share) in the nine-month period of 2000 for acquisition-related expenses and for purchased in-process research and development expenses. In the first nine months of 2000, ADC also recorded a non-recurring credit of $320 million ($192 million after tax or $0.26 per split-adjusted, diluted share) for a gain related to the sale of PairGain's microelectronics engineering group. In summing the credits and charges, the net non-recurring credit was of $83 million after tax ($0.11 per split-adjusted, diluted share) in the nine-month period of 2000. In the first nine months of 1999, ADC completed the acquisitions of Teledata Communications, Hadax Electronics, Phasor Phasor can refer to:
Excluding the acquisitions in the third quarter of 2000, nine-month sales increased 55% to $2.1 billion in 2000 over $1.3 billion in 1999 and net income, before non-recurring credits and charges, increased 112% to $287 million ($0.43 per split-adjusted, diluted share) in 2000 compared to $135 million ($0.24 per split-adjusted, diluted share) in 1999. On a financial reporting basis, which includes the impact of all acquisitions and non-recurring credits and charges, net income for the nine months of 2000 was $345 million ($0.46 per split-adjusted, diluted share) and net income in comparable period of 1999 was $48 million ($0.08 per split-adjusted, diluted share). Two times 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. About ADC ADC is The Broadband Company(TM). ADC's 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 homes and businesses. ADC (Nasdaq: ADCT) has annual sales of over $2.8 billion and employs more than 20,900 people worldwide. ADC's stock is included in the Standard & Poor's 500 Index and the Nasdaq-100 Index. Learn more about ADC Telecommunications ADC Telecommunications (NASDAQ: ADCT) is a communications company located in Eden Prairie, Minnesota, a southwest suburb of Minneapolis. History In 1935, Ralph Allison founded ADC Telecommunications in the basement of his south Minneapolis home, inventing ADC's very , Inc. at www.adc.com. Visit ADC's Investor Relations Investor relations The process by which the corporation communicates with its investors. site at www.adc.com/investor or to receive ADC's press releases by fax on demand call (888) 329-9823. 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. -0-
ADC TELECOMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(In Thousands, except per share amounts)
For the Three For the Nine
Months Ended Months Ended
July 31, July 31,
--------------- --------------
2000 1999 2000 1999
---- ---- ---- ----
NET SALES $ 891,022 $ 534,791 $ 2,255,516 $ 1,517,743
COST OF PRODUCT SOLD 441,606 287,665 1,163,319 811,651
-------- -------- --------- ---------
GROSS PROFIT 449,416 247,126 1,092,197 706,092
-------- -------- --------- ---------
EXPENSES:
Research and
development 78,807 58,518 229,267 172,235
Selling and
administration 172,914 113,173 453,770 315,248
Goodwill amortization 7,890 5,597 19,829 16,108
Non-recurring charges 114,986 58,250 123,813 118,577
-------- -------- --------- ---------
Total expenses 374,597 235,538 826,679 622,168
-------- -------- --------- ---------
OPERATING INCOME 74,819 11,588 265,518 83,924
OTHER INCOME
(EXPENSE), NET:
Interest 3,641 3,750 12,863 9,517
Other (913) (3,027) 322,424 (8,139)
-------- -------- --------- ---------
INCOME BEFORE
INCOME TAXES 77,547 12,311 600,805 85,302
PROVISION FOR
INCOME TAXES 59,042 5,588 256,135 37,735
-------- -------- --------- ---------
NET INCOME (a)$ 18,505 (b) $ 6,723 (a)$ 344,670 (b) $ 47,567
======== ======== ========= =========
AVERAGE COMMON
SHARES OUTSTANDING
(BASIC) (c) 706,789 659,813 701,745 602,265
======== ======== ========= =========
EARNINGS PER SHARE
(BASIC) (c) $ 0.03 $ 0.01 $ 0.49 $ 0.08
======== ======== ========= =========
AVERAGE COMMON
SHARES OUTSTANDING
(DILUTED) (c) 750,498 676,357 741,408 620,137
======== ======== ========= =========
EARNINGS PER SHARE
(DILUTED) (c)&(a) $ 0.02 (b) $ 0.01 (a) $ 0.46 (b) $ 0.08
======== ======== ========= =========
(a) Excluding $109 million and $(83) million, net of tax non-recurring
charges (credits) in the quarter and nine months ended July 31, 2000,
respectively, net income would have been $127 million and $261
million, respectively. Diluted earnings per common share would have
been $0.17 and $0.35, respectively. The charges are for
acquisition-related expenses and purchased in-process research and
development expenses. The credits relate to the gain on the sale of a
PairGain business group.
(b) Excluding $41 million and $88 million, net of tax non-recurring
charges in the quarter and nine months ended July 31, 1999,
respectively, net income would have been $48 million and $136 million,
respectively. Diluted earnings per common share would have been $0.07
and $0.22, respectively. These charges relate principally to purchased
in-process research and development expenses associated with
acquisitions and the restructuring of the former Wireless Systems
Group.
(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 Thousands)
ASSETS
July 31, October 31,
2000 1999
---------- -------------
CURRENT ASSETS:
Cash and cash equivalents $ 176,865 $ 230,045
Short-term investments 1,454,635 255,543
Accounts receivable 660,106 467,964
Inventories 422,238 284,167
Prepaid income taxes and
other assets 190,287 81,699
--------- ----------
Total current assets 2,904,131 1,319,418
PROPERTY AND EQUIPMENT, net 496,426 338,588
OTHER ASSETS, principally
goodwill 600,743 339,604
--------- ---------
$ 4,001,300 $ 1,997,610
========= =========
LIABILITIES AND SHAREOWNERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable $ 210,531 $ 130,479
Accrued liabilities 377,513 235,760
Accrued income taxes 459,841 41,919
Note payable and current
maturities of long-term debt 77,758 35,185
--------- ---------
Total current liabilities 1,125,643 443,343
LONG-TERM DEBT, less current
maturities 18,785 12,759
--------- ---------
Total liabilities 1,144,428 456,102
SHAREOWNERS' INVESTMENT
(709,025 and 662,425 shares
outstanding) 2,856,872 1,541,508
--------- ---------
$ 4,001,300 $ 1,997,610
========= =========
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