Andrew Corporation Reports $482 Million in Sales and Record Orders of $507 Million.ORLAND PARK Or·land Park A village of northeast Illinois, a residential and manufacturing suburb of Chicago. Population: 53,300. , Ill. -- Andrew Corporation Andrew Corporation is an American multinational producer of communications devices. Andrew is a global designer, manufacturer, and supplier of communications equipment, services, and systems. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ANDW): --Total sales increased 8% year-over-year to $482 million --Wireless Infrastructure sales increased 13% year-over-year to $448 million --Record orders were $507 million, up 14% year-over-year, resulting in a book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can of 1.05 --Gross margin improved to 24.2%, excluding a previously announced $19.8 million warranty provision that reduced reported gross margin by 410 basis points --Net income per share was $0.02, including $0.11 per share of significant items impacting comparability --Cash flow from operations was $27 million --Received Supplier of the Year Award for 2004 from Nortel Networks (Nortel Networks Limited, Brampton, Ontario, www.nortelnetworks.com) A world leader in telecommunications products, which includes switching, wireless and broadband systems for service providers and carriers, telephones and systems for residential and business users, computer telephony --Received Best Supplier Award in Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. for 2004 from Siemens --Resolved outstanding legacy 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. --Acquired Xenicom for approximately $11 million in cash Andrew Corporation reported second quarter sales of $481.8 million, up 8% from $447.1 million in the year ago quarter. Higher sales were primarily due to a 13% increase in sales for Wireless Infrastructure, offset partially by lower sales for Satellite Communications. Orders for the second quarter were a record $507 million, up 14% versus the prior year quarter. The book-to-bill ratio was 1.05, reflecting the highest ratio since the third quarter of fiscal 2002. "Our sales were above the high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. of our guidance, as sales and order momentum increased in March," said Ralph Faison, president and chief executive officer, Andrew Corporation. Net income was $3.1 million or $0.02 per share, compared to net income of $10.2 million or $0.06 per share in the year ago quarter. As previously announced, the company recorded a charge of $19.8 million or $0.07 per share to cover costs above normal warranty provisions associated with abnormally high field failure rates for a specific component used in certain base station subsystem The Base Station Subsystem (BSS) is the section of a traditional cellular telephone network which is responsible for handling traffic and signaling between a mobile phone and the Network Switching Subsystem. product lines. Additionally, the company recorded a charge of $5.5 million or $0.02 per share for legal fees and settlement costs associated with two significant litigation matters that have been resolved. "We are satisfied with our progress in addressing the component situation and are continuing discussions with appropriate third parties," said Faison. "In addition, we are pleased to resolve two significant legacy litigation issues that were pending against the company." The most significant litigation matter was the arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the claim up to the indemnification Indemnification Used in insurance policy agreements as to compensation for damage or loss. In the context of corporate governance, Director Indemnification uses the bylaws and/or charter to indemnify officers and directors from certain legal expenses and judgements resulting from limit of $40 million, brought by the purchasers of the company's interest in certain Russian Russian associated in some way with Russia. Russian blue a breed of cats with short, dense, silver-tipped blue-colored coat and vivid green eyes. ventures in December December: see month. 2001. The arbitration panel arbitration panel A group of individuals charged with resolving a dispute between individuals and/or organizations. Arbitration panels to resolve investment disputes are sponsored by self-regulatory organizations such as NASD. dismissed this claim without liability to the company. The second significant matter was litigation pending against the company brought by the founders of Comtier, a company in which Andrew first invested in 1995. This litigation was settled on terms the company believes are favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. and specific details are not being disclosed. Second quarter net income was also affected by intangible amortization of $5.4 million or $0.02 per share, a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain of $1.0 million related to the sale of assets, and pre-tax restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $0.9 million. The year ago quarter included intangible amortization of $9.9 million or $0.04 per share, pre-tax restructuring charges of $2.8 million or $0.01 per share, and a pre-tax gain of $1.4 million related to the sale of assets. The company used an effective tax rate of 38.7% and 180.0 million shares to calculate the per share impact of items for the second quarter of fiscal 2005. The following table is a summary of significant items impacting the comparability of earnings per share amounts for the three months ended March 31, 2005, and March 31, 2004:
Three Months Ended
Summary of Significant March 31,
Items Impacting Results 2005 2004
----------------------- ---------------- ---------------
Intangible amortization $(0.02) $(0.04)
Restructuring charges (0.00) (0.01)
---------------- ---------------
Sub-total $(0.02) $(0.05)
---------------- ---------------
Warranty provision (0.07) N/A
Litigation (0.02) N/A
---------------- ---------------
Total $(0.11) $(0.05)
================ ===============
The top 25 customers represented 70% of sales compared to 68% in the prior quarter and 69% in the year ago quarter. Major original equipment manufacturers (OEMs) accounted for 41% of sales compared to 41% in the prior quarter and 43% in the year ago quarter. The largest customer for the second quarter was Lucent Technologies at 10.7% of sales. SALES BY MARKET SEGMENT AND MAJOR REGION
Three Months Ended
March 31, % %
------------------
Sales by Market Segment 2005 2004 Change Total
----------------------- --------- -------- ------ ------
Wireless Infrastructure $448 $396 13 93
Satellite Communications 34 51 (33) 7
--------- -------- ------ ------
Total $482 $447 8% 100%
========= ======== ====== ======
Wireless Infrastructure sales increased 13% versus the prior year quarter driven by an overall increase in demand from all major geographic regions. Satellite Communications sales decreased 33% versus the prior year quarter driven by an anticipated decline for certain products supporting the consumer broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). satellite market.
Three Months Ended
March 31, % %
------------------
Sales by Major Region 2005 2004 Change Total
--------------------- --------- -------- ------ ------
Americas $256 $254 1% 53%
Europe, Middle East, Africa 165 133 24 34
Asia Pacific 61 60 2 13
--------- -------- ------ ------
Total $482 $447 8% 100%
========= ======== ====== ======
Americas A·mer·i·cas , the See America. Antenna and Cable Products increased versus the prior year quarter driven by network expansion and coverage requirements in 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 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 inclusion of sales from the acquisitions of MTS (1) See Microsoft Transaction Server. (2) (Modular TV System) The stereo channel added to the NTSC standard, which includes the SAP audio channel for special use. 1. MTS - Message Transport System. 2. Wireless Components and ATC ATC Air Traffic Control ATC Average Total Cost ATC Certified Athletic Trainer ATC At the Center (Hartford, Maine retreat center) ATC Applied Technology Council ATC All Things Considered Tower Services. Wireless Innovations increased compared to the year-ago quarter driven by an increase in operator needs for distributed coverage solutions. Network Solutions declined versus the prior year quarter due to a reduction of geolocation Geolocation refers to identifying the real-world geographic location of an Internet connected computer, mobile device, or website visitor. Geolocation can be used to refer to the practice of assessing the location, or it can be used to refer to the actual assessed location or hardware installations. Satellite Communications declined due to a reduced level of involvement in certain consumer broadband satellite programs. "Following the close of the second quarter, we were informally notified by one of our customers that they have chosen a competitive solution for future E911 geolocation hardware," said Faison. "We believe that this decision may have been influenced by acquisition-related factors, more so than technology or performance issues. Assuming no cancellation of existing backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. with this customer, our outlook for the remainder of fiscal 2005 for geolocation and our priorities for Network Solutions remain essentially unchanged. Consistent with previous expectations, we anticipate that sales of geolocation products, within Network Solutions, will decline from slightly over $150 million in fiscal 2004 to approximately $115 million in fiscal 2005 and approximately $65 million in fiscal 2006, when on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" maintenance and support, Tier II and Tier III operators, and international opportunities are expected to drive the majority of sales." Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Middle East, Africa (EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. )
Sales increased 24% compared to the prior year quarter due mainly to Antenna and Cable Products and Wireless Innovations supporting network upgrades, expansion and distributed coverage requirements in Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). and emerging markets. EMEA sales also benefited from favorable foreign currency exchange rates due mainly to a weaker dollar against the euro. Asia Pacific Sales were relatively flat versus the prior year quarter. Higher sales in Antenna and Cable Products and Wireless Innovations supporting network upgrade, expansion and distributed coverage requirements in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. and China, were offset by a decline in Base Station Subsystems versus the prior year quarter due mainly to the timing of OEMs supporting network upgrades and the pending issuance of 3G licenses in China. RECENT HIGHLIGHTS --Introduced OneBase Macroshelf, an integrated base station transceiver (TRANSmitter reCEIVER) An electronic device or circuit that transmits and receives analog or digital signals. It comes in many forms; for example, a transponder on a satellite, a network adapter in the computer or the circuits in a cellphone. system (BTS BTS - Bug Tracking System ) based on open standards Specifications for hardware and software that are developed by a standards organization or a consortium involved in supporting a standard. Available to the public for developing compliant products, open standards imply "open systems;" that an existing component in a system can be replaced , that incorporates the entire RF path including RF transceiver, power amplifier Power amplifier The final stage in multistage amplifiers, such as audio amplifiers and radio transmitters, designed to deliver appreciable power to the load. , filter, combiner, and related hardware into a single unit. --Received Supplier of the Year Award for 2004 from Nortel Networks in recognition of the company's excellence and leadership in the attributes of value, velocity, and vision, which Nortel See Nortel Networks. uses to rank its strategic and preferred vendor partners. --Received Best Supplier Award in Brazil for 2004 from Siemens Communications in recognition of the company's superior performance in supply, quality, logistics and technology. --Acquired Xenicom for approximately $11 million in cash. Xenicom adds additional software capabilities to the Network Solutions Group and is focused on helping wireless operators manage and optimize optimize - optimisation 2G, 2.5G, and 3G wireless networks. "We continue to introduce innovative new products that extend our addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be market to support 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 and wireless operator customers. We anticipate that 15 to 20 new products will be accelerated in the June June: see month. quarter for introduction over the next several months based on specific customer demand. These products represent new categories of products for these customers and encompass leading edge remote electrical tilt (RET ret v. ret·ted, ret·ting, rets v.tr. To moisten or soak (flax, for example) in order to soften and separate the fibers by partial rotting. v.intr. To become so moistened or soaked. ) antenna and integrated products for base station subsystem components," said Faison. "Receiving three separate supplier of the year awards, including Lucent Technologies Supplier of the Year Award for 2004 in the first fiscal quarter 2005, continues to validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data our ability to offer advanced products and full system solutions as a strategic partner to our customers." SECOND QUARTER FINANCIAL SUMMARY Gross margin was 20.1%, compared with 23.3% in the prior quarter and 24.7% in the year ago quarter. Approximately 410 basis points of the gross margin decline versus the prior year was due to the $19.8 million pre-tax charge to cover additional costs above normal warranty provisions associated with abnormally high field failure rates for a specific component used in certain base station subsystem product lines. Excluding the charge for warranty provisions, gross margin was 24.2% for the second quarter. Gross margin, taking into account this exclusion, has increased significantly for the second quarter in a row due mainly to the completed relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of certain manufactured product lines within the Antenna and Cable Product Group, lower sales of Satellite Communications and an improving product mix in North America. Research and development expenses were $25.6 million or 5.3% of sales, compared to $28.5 million or 6.4% of sales in the year ago quarter. Research and development expenses decreased as a percentage of sales due mainly to higher sales leverage and a continued focus on project rationalization rationalization, in psychology: see defense mechanism. . Sales and administrative expenses were $58.3 million or 12.1% of sales, compared to $52.7 million or 11.8% of sales in the year ago quarter. Sales and administrative expenses increased versus the prior year quarter due to $5.5 million of legal costs associated with the settlement of outstanding legacy litigation. "Excluding charges for costs associated with the resolution of outstanding legacy litigation, total research and development and sales and administrative expenses declined in absolute dollars despite an 8% increase in sales, further demonstrating the strength of operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. in our business model," said Faison. Intangible amortization decreased to $5.4 million in the second quarter, compared to $9.9 million in the prior year quarter due mainly to a reduction of amortized costs associated with the acquisition of Celiant in June 2002. It is anticipated that total intangible amortization will decrease from $38.3 million in fiscal 2004, to approximately $23.0 million in fiscal 2005. Included in 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. is a $1.0 million gain from the sale of assets. Interest income increased to $1.4 million in the second quarter, compared to $1.0 million in the year ago quarter due mainly to $0.4 million of interest income associated with a favorable resolution of certain tax-related matters. Interest expense was $3.5 million in the second quarter compared to $4.0 million in the year ago quarter. The company's effective tax rate for the second quarter was 38.7%, higher than 35.0% in the prior year quarter due to a geographical mix shift of earnings. Average diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares outstanding increased to 162 million from 160 million in the year ago quarter due mainly to 1.7 million shares issued in conjunction with the MTS Wireless Components acquisition in March 2004. Effective March 14, 2005, the company exercised its right to cause the conversion of all the outstanding Series 7.75% Convertible Preferred Stock Convertible Preferred Stock Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Also known as "convertible preferred shares". into shares of Andrew Common Stock. Approximately 1.4 million shares of Common Stock were issued and dividends on the Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. will no longer be payable as of the effective date. BALANCE SHEET AND CASH FLOW HIGHLIGHTS Cash and cash equivalents were $172 million at March 31, 2005, compared to $189 million at September September: see month. 30, 2004. Cash and cash equivalents declined due mainly to the acquisition of Xenicom in January January: see month. 2005 for approximately $11 million in cash. Accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying were $472 million and days' sales outstanding Days' sales outstanding Average collection period. (DSOs) were 82 days at March 31, 2005, compared to $417 million and 74 days at September 30, 2004, and $392 million and 77 days at March 31, 2004. DSOs increased due mainly to a higher mix of international sales. Inventories were $358 million and inventory turns were 4.3x at March 31, 2005, compared to $351 million and 4.3x at September 30, 2004, and $327 million and 4.1x at March 31, 2004. Total debt outstanding was $302 million at March 31, 2005, compared to $299 million at September 30, 2004. Total debt to capital decreased to 16.2% at March 31, 2005, compared to 16.4% at September 30, 2004. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was $27.2 million in the second quarter, compared to cash flow from operations of $34.5 million in the year ago quarter. Capital expenditures were $18.4 million in the second quarter, compared to $19.9 million in the prior year quarter. THIRD QUARTER FISCAL 2005 GUIDANCE For the third quarter, sales are anticipated to range from $480 million to $510 million driven by improving trends in North America and global growth in Wireless Infrastructure. Gross margin is anticipated to modestly increase in the third quarter due mainly to operational improvements and a more favorable product mix, offset partially by higher raw material costs and ramp-up costs associated with multiple new product introductions. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. are anticipated to increase on an absolute basis compared to the second quarter, excluding the litigation costs incurred in the second quarter, due mainly to accelerated expenses for new product introductions and Sarbanes-Oxley compliance requirements Compliance requirements are a series of directives established by United States Federal government agencies that summarize hundreds of Federal laws and regulations applicable to Federal assistance (also known as Federal aid or Federal funds). . The company anticipates that it will incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. $3 million to $4 million of additional costs in the third quarter related to the accelerated introduction of new products. The company anticipates an effective tax rate of approximately 37.5%, which does not reflect the impact of any potential repatriation Repatriation The process of converting a foreign currency into the currency of one's own country. Notes: If you are American, converting British Pounds back to U.S. dollars is an example of repatriation. of cash under the American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Jobs Creation Act. Earnings per share are anticipated to range from $0.09 to $0.12, including intangible amortization and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs of approximately $0.02 per share. Average diluted shares are anticipated to be approximately 180 million due to the accounting effects of outstanding convertible debt. "Globally, the underlying trends for wireless infrastructure continue to be positive and we are seeing signs of improved activity in North America. We are accelerating the introduction of 15 to 20 new leading edge products based on specific customer demand and our second quarter results give us further confidence that we can demonstrate sales growth above the market, improved operational performance and increased cash flow from operations in the second half of fiscal 2005." Attached to this news release are preliminary financial statements for the second fiscal quarter ended March 31, 2005. Conference Call Webcast Andrew Corporation will host a conference call to discuss its second quarter fiscal 2005 financial results on Thursday Thursday: see week. , April 28, 2005 at 8:00 a.m. CT. Investors can participate via a live webcast over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.andrew.com. An audio replay of the conference call will be made available for 60 days following the event. About Andrew Andrew Corporation (NASDAQ:ANDW) designs, manufactures and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries. Andrew (www.andrew.com), headquartered in Orland Park, IL, is an S&P 500 company founded in 1937. Forward Looking Statements Some of the statements in this news release are forward looking statements and we caution our stockholders and others that these statements involve certain risks and uncertainties. Factors that may cause actual results to differ from expected results include the company's ability to integrate acquisitions and to realize the anticipated synergies and cost savings, the effects of competitive products and pricing, economic and political conditions that may impact customers' ability to fund purchases of our products and services, the company's ability to achieve the cost savings anticipated from cost reduction programs, fluctuations in foreign currency exchange rates, the timing of cash payments and receipts, end use demands for wireless communication services, the loss of one or more significant customers, and other business factors. Investors should also review other risks and uncertainties discussed in company documents filed with the Securities and Exchange Commission. Additionally, at certain times the company will use non-GAAP financial measures, which the company believes better describes the ongoing financial results and trends of the business. The required reconciliation of these measures to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures and a more detailed discussion of the reasons for using these measures are included in the company's Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. and press release filed therewith there·with adv. 1. With that, this, or it. 2. In addition to that. 3. Archaic Immediately thereafter. Adv. 1. and may be accessed from the company Web site at www.andrew.com.
UNAUDITED - PRELIMINARY
ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
Three Months Ended Six Months Ended
March 31 March 31
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Sales $481,828 $447,146 $955,902 $857,917
Cost of products sold 384,876 336,492 748,543 643,194
--------- --------- --------- ---------
Gross Profit 96,952 110,654 207,359 214,723
Operating Expenses
Research and development 25,577 28,459 52,448 54,082
Sales and administrative 58,315 52,654 109,344 105,147
Intangible amortization 5,388 9,851 13,128 19,272
Restructuring 948 2,768 2,786 3,462
(Gain) loss on sale of assets (1,033) (1,402) (1,033) 3,109
--------- --------- --------- ---------
89,195 92,330 176,673 185,072
Operating Income 7,757 18,324 30,686 29,651
Other
Interest expense 3,516 3,955 7,224 7,842
Interest income (1,367) (982) (3,073) (1,731)
Other expense, net 324 (543) 1,840 1,307
--------- --------- --------- ---------
2,473 2,430 5,991 7,418
--------- --------- --------- ---------
Income Before Income Taxes 5,284 15,894 24,695 22,233
Income taxes 2,045 5,563 6,714 7,782
--------- --------- --------- ---------
Net Income 3,239 10,331 17,981 14,451
Preferred Stock Dividends 115 119 232 434
--------- --------- --------- ---------
Net Income Available to Common
Shareholders $3,124 $10,212 $17,749 $14,017
========= ========= ========= =========
Basic Net Income per Share $0.02 $0.06 $0.11 $0.09
========= ========= ========= =========
Diluted Net Income per Share $0.02 $0.06 $0.11 $0.09
========= ========= ========= =========
Average Shares Outstanding
Basic 161,264 158,820 161,094 158,580
Diluted 161,593 159,590 161,499 159,114
Orders Entered $506,972 $445,706 $959,982 $854,771
Total Backlog $326,436 $335,698 $326,436 $335,698
PRELIMINARY
ANDREW CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 31 September 30
2005 2004
------------- -------------
ASSETS (UNAUDITED)
Current Assets
Cash and cash equivalents $172,099 $189,048
Accounts receivable, less allowances
(Mar. 2005 - $13,348; Sept. 2004 -
$13,798) 471,812 416,603
Inventory 358,358 351,082
Other current assets 56,283 34,190
------------- -------------
Total Current Assets 1,058,552 990,923
Other Assets
Goodwill 878,604 868,078
Intangible assets, less amortization 63,264 63,988
Other assets 84,119 92,590
Property, Plant and Equipment
Land and land improvements 23,496 22,607
Buildings 127,965 123,716
Equipment 514,352 496,739
Allowance for depreciation (432,669) (417,696)
------------- -------------
233,144 225,366
------------- -------------
TOTAL ASSETS $2,317,683 $2,240,945
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $212,277 $196,592
Accrued expenses and other liabilities 121,699 82,291
Compensation and related expenses 47,181 67,018
Restructuring 19,406 18,887
Notes payable and current portion of long-
term debt 24,829 14,051
------------- -------------
Total Current Liabilities 425,392 378,839
Deferred liabilities and minority interest 49,910 54,388
Long-term debt, less current portion 276,766 284,844
SHAREHOLDERS' EQUITY
Redeemable convertible preferred stock
liquidation preference $50 a share
(120,414 shares outstanding at
September 30, 2004) - 6,021
Common stock (par value, $.01 a share:
400,000,000 shares authorized:
162,436,202 shares issued at
March 31, 2005 and 161,015,917 shares
issued at September 30, 2004, including
treasury) 1,623 1,610
Additional paid-in capital 674,891 666,746
Accumulated other comprehensive income 33,888 12,363
Retained earnings 855,462 837,713
Treasury stock, common stock at cost
(23,124 shares at March 31, 2005 and
148,950 shares at September 30, 2004) (249) (1,579)
------------- -------------
Total Shareholders' Equity 1,565,615 1,522,874
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,317,683 $2,240,945
============= =============
UNAUDITED - PRELIMINARY
ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Three Months Ended Six Months Ended
March 31 March 31
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Cash Flows from Operations
Net Income $3,239 $10,331 $17,981 $14,451
Adjustments to Net Income
Depreciation 15,279 16,087 29,671 31,306
Amortization 5,388 9,851 13,128 19,272
Gain on sale of assets (241) (1,402) (332) (1,492)
Restructuring costs (1,882) (3,123) (5,190) (9,404)
Change in Operating Assets /
Liabilities
Accounts receivable (30,684) (6,441) (43,160) (45,304)
Inventory (8,439) (31,227) (5,790) (57,873)
Other assets (3,798) (11,674) (13,554) (16,312)
Accounts payable and other
liabilities 48,376 52,098 15,711 84,190
--------- --------- --------- ---------
Net Cash From Operations 27,238 34,500 8,465 18,834
Investing Activities
Capital expenditures (18,432) (19,923) (32,468) (39,496)
Acquisition of businesses (11,332) (29,000) (19,204) (52,227)
Investments - - - (6,500)
Proceeds from sale of
businesses and investments - - 9,494 3,000
Proceeds from sale of
property, plant and
equipment 1,799 3,232 2,352 3,781
--------- --------- --------- ---------
Net Cash (Used for) Investing
Activities (27,965) (45,691) (39,826) (91,442)
Financing Activities
Long-term debt payments, net (1,308) (6,117) (1,633) (17,808)
Notes payable borrowings
(payments), net - (11) 9,064 (185)
Preferred stock dividends (115) (119) (232) (434)
Payments to acquire common
stock for treasury - - - (2,472)
Stock purchase and option
plans 485 1,102 669 1,738
--------- --------- --------- ---------
Net Cash (Used for) From
Financing Activities (938) (5,145) 7,868 (19,161)
Effect of exchange rate
changes on cash (5,657) (2,925) 6,544 6,355
--------- --------- --------- ---------
Decrease for the Period (7,322) (19,261) (16,949) (85,414)
Cash and Equivalents at
Beginning of Period 179,421 220,116 189,048 286,269
--------- --------- --------- ---------
Cash and Equivalents at End of
Period $172,099 $200,855 $172,099 $200,855
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