Andrew Corporation Reports 9% Increase in Total Sales for First Quarter Fiscal 2006.WESTCHESTER Westchester is the name of some places in the United States of America:
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): First Quarter Fiscal 2006 Financial Highlights --Wireless Infrastructure sales increased 14% to $486 million --Satellite Communications sales decreased 41% to $29 million --Gross margin increased to 22.7% --Net income was $0.09 per share, including $0.02 per share of significant items --Cash flow used in operations was $1.8 million compared to cash flow used in operations of $10.9 million in the prior year quarter --Repurchased 1.6 million shares of common stock at an average price of $11.00 per share --Entered into additional purchase commitments for copper that cover approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 90% of estimated fiscal 2006 production requirements Andrew Corporation, a global leader in communications systems In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. and products, reported total sales of $515 million for its first quarter ended December December: see month. 31, 2005, up 9% compared to the prior year quarter, and higher than the company's previous estimate of $480 million to $510 million in total sales. Wireless Infrastructure sales increased 14% versus the prior year quarter due to global wireless network upgrades and expansion. Satellite Communications sales decreased 41% versus the prior year quarter due to an anticipated decline for certain 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 programs. Total orders increased 6% to $481 million versus the prior year quarter due mainly to a 13% increase in Wireless Infrastructure orders. Total 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. declined 24% to $232 million due mainly to a reduction in E-911 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 equipment as network operators satisfy regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. . "Demand trends continued to be favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. as wireless operators upgraded and expanded existing networks around the globe," said Ralph Faison, president and chief executive officer, Andrew Corporation. "Our globally diversified diversified (di·verˑ·s customer base and industry-leading product portfolio enables the company to participate in multi-year build cycles ranging from deployment services to hardware infrastructure to network optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. . New products introduced over the last several quarters for 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. ) antennas and integrated base station subsystems 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. are generating increased demand from our customers worldwide, capturing market share and expanding 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 opportunity." First quarter net income was $14.8 million or $0.09 per share, compared to net income of $2.9 million or $0.02 per share in the year ago quarter. First quarter net income included intangible amortization of $5.1 million or $0.02 per share, a tax benefit related to 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 foreign earnings of $1.9 million or $0.01 per share and a loss on sale of assets of $1.5 million or $0.01 per share. The prior year quarter included a warranty An assurance, promise, or guaranty by one party that a particular statement of fact is true and may be relied upon by the other party. Warranties are used in a variety of commercial situations. In many instances a business may voluntarily make a warranty. provision related to a defective defective adj. not being capable of fulfilling its function, ranging from a deed of land to a piece of equipment. (See: defect, defective title) component used in certain base station subsystems products of $19.8 million or $0.07 per share, intangible amortization of $7.6 million or $0.03 per share, a favorable tax settlement benefit related to the reversal reversal n. the decision of a court of appeal ruling that the judgment of a lower court was incorrect and is reversed. The result is that the lower court which tried the case is instructed to dismiss the original action, retry the case, or is ordered to change its of previously accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. taxes of $2.6 million or $0.02 per share and 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 $1.8 million or $0.01 per share. "Our first quarter results reflect positive operational improvement and a strong financial start to the fiscal year," said Faison. "We increased gross margin to 22.7% despite significantly lower sales of E-911 geolocation equipment and higher commodity costs. We believe that declining sales of E-911 geolocation equipment have begun to flatten out Verb 1. flatten out - become flat or flatter; "The landscape flattened" flatten change form, change shape, deform - assume a different shape or form splat - flatten on impact; "The snowballs splatted on the trees" sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen and that forward purchase commitments for copper have mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. the risk of rising copper commodity costs for fiscal 2006. Our filter product line in China delivered record volume shipments in December and we see further operational improvements across the company, which we anticipate will enable us to deliver on our high single-digit to low double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: target by the end of fiscal 2006." The following table is a summary of certain significant items impacting the comparability of earnings per share amounts for the three months ended December 31, 2005 and December 31, 2004. To calculate the per share impact of items, an underlying effective tax rate on operations of 30.0% and 178 million 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 for the first quarter fiscal 2006 were used and 37.5% and 161 million diluted shares outstanding were used for the first quarter fiscal 2005.
Three Months Ended
December 31,
Summary of Significant --------------------------
Items Impacting Results 2005 2004
----------------------- ------------ ------------
Intangible amortization $(0.02) $(0.03)
Restructuring charges (0.00) (0.01)
Loss on sale of assets (0.01) -
------------ ------------
Sub-total (0.03) (0.04)
------------ ------------
Repatriation benefit 0.01 -
Tax settlement - 0.02
Warranty provision - (0.07)
------------ ------------
Total $(0.02) $(0.09)
============ ============
The top 25 customers represented 68% of sales compared to 69% in the prior quarter and 68% in the year ago quarter. Major original equipment manufacturers (OEMs) accounted for 38% of sales compared to 37% in the prior quarter and 41% in the year ago quarter. Lucent Technologies was the largest customer for the quarter at 11% of sales, while Cingular Wireless declined to 10% of sales due mainly to a significant decline for E-911 geolocation equipment. Ericsson Er·ics·son , John 1803-1889. American engineer and inventor who built the first ironclad warship, the Monitor (1862), which engaged the Confederate Merrimack in a famous naval battle of the Civil War (March 9, 1862). and Siemens (Siemens AG, Munich, Germany, www.siemens.com) A leading European electrical and electronics firm founded in 1847. Siemens has more than 430,000 employees in nearly 200 countries, and more than 50,000 professionals are engaged in research and development. each represented more than 5% of the company's sales for the quarter. RESULTS BY MAJOR REGION AND SEGMENT
Three Months Ended
December 31,
-------------------
% %
Sales by Region ($ in millions) 2005 2004 Change Total
------------------------------ --------- --------- --------- ---------
Americas $298 $254 17 57
Europe, Middle East, Africa
(EMEA) 152 158 (4) 30
Asia Pacific 65 62 5 13
--------- --------- --------- ---------
Total $515 $474 9% 100%
========= ========= ========= =========
Sales in the Americas A·mer·i·cas , the See America. increased 17% versus the prior year quarter due mainly to growth in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. for Antenna and Cable Products, Base Station Subsystems and Wireless Innovations supporting network upgrades and expansion, partially offset by lower sales of Satellite Communications and Network Solutions. EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. declined 4% from the prior year quarter due mainly to lower Base Station Subsystem sales in Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). and unfavorable foreign currency exchange rates due mainly to a stronger dollar against the euro. Asia Pacific increased 5% versus the prior year quarter due mainly to increased demand in India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. for Antenna and Cable Products supporting network expansions.
Three Months Ended
December 31,
-------------------
Sales by Segment % %
($ in millions) 2005 2004 Change Total
-------------------------- --------- --------- --------- ---------
Antenna and Cable Products $291 $232 25 56
Base Station Subsystems 124 117 6 24
Network Solutions 22 35 (37) 4
Wireless Innovations 49 41 20 10
Satellite Communications 29 49 (41) 6
--------- --------- --------- ---------
Total $515 $474 9% 100%
========= ========= ========= =========
Antenna and Cable Products increased 25% versus the prior year quarter due mainly to significant growth in base station antennas, radio frequency (RF) cable supporting network expansion and coverage requirements, and the inclusion of sales from the acquisition of ATC ATC Air Traffic Control ATC Average Total Cost ATC Certified Athletic Trainer ATC At the Center (Hartford, Maine retreat center) ATC Applied Technology Council ATC All Things Considered Tower Services in December 2004. Base Station Subsystems sales increased 6% versus the prior year quarter due mainly to higher power Higher power is a term used in a 12-step program, such as Alcoholics Anonymous, to describe "a power greater than yourself." Although many participants equate their higher power with God, a belief in God or in formal religion is not mandatory; the higher power is intended as a amplifier sales and new product introductions in North America, partially offset by lower overall sales in Western Europe and China. Network Solutions declined 37% versus the prior year quarter due mainly to an anticipated decline in sales of E-911 related geolocation equipment in North America. Wireless Innovations increased 20% due mainly to an increase in operator needs for distributed coverage solutions in North America and Western Europe. Satellite Communications declined 41% due mainly to the company's planned reduction of involvement in certain consumer broadband satellite programs.
Three Months Ended
December 31,
-------------------------
Operating Income (Loss) by Segment
($ in millions) 2005 2004
---------------------------------- ------------ ------------
Antenna and Cable Products $42 $38
Base Station Subsystems 3 (24)(a)
Network Solutions 2 16
Wireless Innovations 9 7
Satellite Communications (3) (1)
------------ ------------
Sub-Total $53 $36
------------ ------------
Unallocated Sales and Administrative
Costs (26) (24)
Intangible Amortization (5) (8)
Gain (loss) on Sale of Assets (1) -
------------ ------------
Total Operating Income $21 $4
============ ============
(a) Includes a $19.8 million warranty
provision related to a defective
component used in certain base
station subsystems products.
Antenna and Cable Products 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 due mainly to a 25% increase in segment sales and a modest benefit from the recent price increase on certain cable products, partially offset by higher commodity costs. Base Station Subsystems operating income increased versus the prior year quarter due mainly to a 6% increase in segment sales, a more favorable mix of products and lower filter product line transition costs. The prior year quarter included a $19.8 million warranty provision related to a defective component used in certain base station subsystems products. Network Solutions operating income declined versus the prior year due mainly to a decline for E-911 geolocation product. Geolocation sales declined to $13 million in the first quarter compared to $27 million in the prior quarter and $30 million in the prior year quarter. Wireless Innovations operating income increased versus the prior year quarter due mainly to a 20% increase in segment sales. Satellite Communications operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. increased versus the prior year quarter due mainly to a 41% decline in segment sales. FIRST QUARTER FINANCIAL SUMMARY Gross margin was 22.7%, compared with 22.4% in the prior quarter and 19.2% in the prior year quarter. The prior quarter gross margin included $4.2 million of favorable benefits related to an adjustment of VAT VAT See: Value-added tax VAT See value-added tax (VAT). reserves and recoveries from third parties. Excluding these items, gross margin was 21.6% for the prior quarter. The prior year quarter included a $19.8 million warranty provision. Excluding this charge, gross margin was 23.4% in the prior year quarter. Gross margin, excluding items, increased 110 basis points versus the prior quarter due mainly to a favorable mix within Base Station Subsystems, lower filter product line transition costs and a modest benefit related to a recent price increase on cable products, partially offset by a significant decline in E-911 geolocation sales and increased commodity costs relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc copper. The company entered into additional purchase commitments for copper that now cover approximately 57 million pounds or 90% of anticipated fiscal 2006 requirements. The average price paid for copper under commitment is approximately $1.61 per pound. During the first quarter, the company made further progress towards relocating its filter product line manufacturing, despite a temporary labor disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. at its Shenzhen Shenzhen (shĕn`jŭn`), city (1994 est. pop. 695,600), S Guangdong prov., China, on the South China Sea, N of Hong Kong. Designated a special economic zone in 1979, the city's spectacular economic growth led China to create over a dozen more , China manufacturing facility. The Shenzhen manufacturing facility produced record volume shipments in December and the company believes it is on track to complete the transition by mid- mid- pref. Middle: midbrain. 2006. Research and development expenses were $28.0 million or 5.4% of sales in the first quarter, compared to $26.9 million or 5.7% of sales in the prior year quarter. Research and development expenses increased due mainly to support for new product introductions. Sales and administrative expenses increased to $61.7 million or 12.0% of sales in the first quarter, compared to $51.0 million or 10.8% of sales in the year ago quarter. Sales and administrative expenses increased in absolute dollars and as a percentage of sales due mainly to higher sales, major implementations of global IT systems, compliance costs, the acquisitions of ATC Tower Services in December 2004 and Xenicom in January January: see month. 2005 and equity based compensation, which includes $1.0 million from the initial impact of stock option expensing. Intangible amortization decreased to $5.1 million in the first quarter, compared to $7.6 million in the prior year quarter due mainly to a reduction of amortized costs associated with the acquisition of Allen Al·len , Edgar 1892-1943. American anatomist who is noted for his studies of hormones and for the discovery (1923) of estrogen. Telecom in July July: see month. 2003. It is anticipated that total intangible amortization will be approximately $18 million in fiscal 2006, compared to $22 million in fiscal 2005. Other expense decreased to $2.7 million compared to $3.5 million in the prior year quarter due primarily to foreign exchange gains related to a stronger dollar versus the euro. The reported tax rate for the first quarter was 19.9%, reflecting an underlying effective tax rate on operations of 30.0% and the recording of a $1.9 million benefit related to repatriation of foreign earnings. During the quarter, the company's operations benefited from a favorable geographic mix shift of earnings to lower tax jurisdictions and a rate benefit from the permanent reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of earnings in China. The repatriation benefit relates to the approval during the first quarter of a plan to repatriate repatriate To bring home assets that are currently held in a foreign country. Domestic corporations are frequently taxed on the profits that they repatriate, a factor inducing the firms to leave overseas the profits earned there. up to $55 million of qualifying dividends qualifying dividends The dividends that meet Internal Revenue Service regulations for exclusion or partial exclusion from federal income taxation. For example, corporations are permitted to exclude a portion of all of the qualifying dividends received from from foreign subsidiaries 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 and the reversal of certain deferred tax liabilities related to the portion of these distributions representing previously undistributed Adj. 1. undistributed - (of investments) not distributed among a variety of securities undiversified - not diversified earnings of the company's Chinese Chinese, subfamily of the Sino-Tibetan family of languages (see Sino-Tibetan languages), which is also sometimes grouped with the Tai, or Thai, languages in a Sinitic subfamily of the Sino-Tibetan language stock. subsidiaries. Average diluted shares outstanding increased to 178 million compared to 161 million in the prior year quarter due mainly to the accounting effects of outstanding convertible debt. The company repurchased 1.6 million shares of common stock during the quarter at an average price of $11.00 including commissions and fees. The company repurchased 3.2 million shares over the last two quarters and has approximately 9.8 million shares available for repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. under an existing authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: repurchase program. BALANCE SHEET AND CASH FLOW HIGHLIGHTS Cash and cash equivalents were $163 million at December 31, 2005, compared to $189 million at September September: see month. 30, 2005. Cash and cash equivalents decreased from the prior quarter due mainly to the repurchase of 1.6 million shares of common stock and annual incentive plan payouts for fiscal 2005. 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 $464 million and days' sales outstanding Days' sales outstanding Average collection period. (DSOs) were 76 days at December 31, 2005, compared to $471 million and 76 days at September 30, 2005. Inventories were $365 million and inventory turns were 4.4x at December 31, 2005, compared to $353 million and 4.6x at September 30, 2005. Total debt outstanding and debt to capital were $311 million and 16.8% at December 31, 2005, compared to $303 million and 16.3% at September 30, 2005. Debt to capital increased primarily due to the repurchase of 1.6 million common shares. Cash used from operations was $1.8 million in the first quarter, compared to cash used from operations of $10.9 million in the prior year quarter. Capital expenditures were $12.3 million in the first quarter compared to $14.0 million in the prior year quarter. "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 improved compared to the prior year quarter, despite inventory builds related to the pending Orland Park, Illinois Orland Park is a village in Cook County, Illinois, United States; it also extends slightly into Will County. The population was 51,077 at the 2000 census, and estimated to be 55,461 as of 2005. manufacturing facility 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. and investments to support a higher level of customer service," said Faison. "The company's entire supply chain is being redeveloped to be more supportive supportive adjective Pertaining to a Pt management philosophy in which only the Sx of a particular condition are treated; supportive measures are often taken when no specific and/or effective therapy is available or accessible–eg, viral meningitis, or , flexible and responsive to our globally diversified customer base. We are committed to an improved supply chain and lower working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. that will provide further financial flexibility to pursue additional share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. , debt reduction and corporate development activity." SECOND QUARTER FISCAL 2006 OUTLOOK For the second quarter, sales are anticipated to range from $480 million to $510 million compared to $482 million in the prior year quarter, due mainly to higher Wireless Infrastructure sales, partially offset by an anticipated decline in sales of Satellite Communications products. The second fiscal quarter is historically a seasonally weaker quarter due mainly to lower sales of passive components such as antennas and RF cable. Gross margin rate is anticipated to be consistent with the prior quarter due mainly to lower filter product line transition costs, a modest benefit from the August 2005 price increase on Heliax cable products, relatively flat commodity costs and relatively flat sales of E-911 geolocation product. 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 modestly decrease on an absolute basis compared to the first quarter including approximately $1.0 million of stock option expense. Excluding the $1.9 million benefit related to repatriation of foreign earnings in the first quarter, the company anticipates the effective tax rate to be consistent with the first quarter due mainly to a favorable geographic mix shift of earnings and a rate benefit from the permanent reinvestment of earnings in China. Earnings per share are anticipated to range from $0.05 to $0.08, including intangible amortization costs of approximately $0.02 per share and before any potential restructuring charges. Average diluted shares are anticipated to be approximately 160 million due mainly to the accounting effects on outstanding convertible debt. Attached to this news release are preliminary unaudited financial statements for the first quarter fiscal 2006. Conference Call Webcast Andrew Corporation will host a conference call to discuss its first quarter fiscal 2006 financial results on Thursday Thursday: see week. , January 26, 2006, 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 Westchester, IL, is an S&P 500 company founded in 1937. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Some of the statements in this news release, including those under the caption "Second Quarter Fiscal 2006 Outlook", are forward-looking statements and we caution our stockholders and others that these statements involve certain risks and uncertainties. Forward-looking statements are based on currently available information. Factors that may cause actual results to differ from expected results include fluctuations in commodity costs, 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, including its 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 September 30, 2005. The company disclaims any obligation to revise these forward-looking statements or to provide any updates regarding information contained in this release resulting from new information, future events or otherwise. Non-GAAP Financial Measures This news release contains certain non-GAAP financial measures, which are financial measures of Andrew's performance that exclude or include amounts thereby differentiating these measures from the most directly comparable amounts presented in the financial statements that are calculated and presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Andrew believes that these non-GAAP measures improve the comparability of the financial results between periods. Below are reconciliations, of the non-GAAP financial measures used in this news release, for earnings per share and gross margin to the most directly comparable GAAP measures.
Three Months Ended
December 31,
--------------------------
2005 2004
------------ ------------
Reported GAAP Diluted Net Income per Share $0.09 $0.02
Intangible amortization 0.02 0.03
Restructuring charges 0.00 0.01
Loss on sale of assets 0.01 -
Repatriation benefit (0.01) -
Tax settlement - (0.02)
Warranty provision - 0.07
------------ ------------
Adjusted Diluted Net Income per Share $0.11 $0.11
============ ============
Three Months Ended
Dec. 31, % of Sept. 30, % of Dec. 31, % of
2005 Sales 2005 Sales 2004 Sales
--------- --------- --------- --------- --------- --------
Reported
GAAP Gross
Profit $117,006 22.7 $116,164 22.4 $91,160 19.2
Warranty
provision - - (3,200) (0.6) 19,800 4.2
VAT reserve
adjustment - - (1,000) (0.2) - -
--------- --------- --------- --------- --------- --------
Adjusted
Gross
Profit $117,006 22.7% $111,964 21.6% $110,960 23.4%
========= ========= ========= ========= ========= ========
UNAUDITED - PRELIMINARY
ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
Three Months Ended
December 31
-----------
2005 2004
------------ ------------
Sales $514,699 $473,837
Cost of products sold 397,693 382,677
------------ ------------
Gross Profit 117,006 91,160
Operating Expenses
Research and development 27,959 26,871
Sales and administrative 61,704 51,029
Intangible amortization 5,119 7,550
Restructuring (501) 1,838
Loss on sale of assets 1,461 -
------------ ------------
95,742 87,288
Operating Income 21,264 3,872
Other
Interest expense 3,769 3,708
Interest income (881) (1,706)
Other expense (income), net (154) 1,516
------------ ------------
2,734 3,518
Income Before Income Taxes 18,530 354
Income taxes (benefit) 3,687 (2,624)
------------ ------------
Net Income 14,843 2,978
Preferred Stock Dividends - 117
------------ ------------
Net Income Available to
Common Shareholders $14,843 $2,861
============ ============
Basic and Diluted Net Income per Share $0.09 $0.02
============ ============
Average Shares Outstanding
Basic 160,210 160,927
Diluted 178,140 161,325
Orders Entered $481,345 $453,010
Total Backlog $231,844 $304,914
PRELIMINARY
ANDREW CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
December 31 September 30
2005 2005
------------ ------------
ASSETS (UNAUDITED)
Current Assets
Cash and cash equivalents $163,400 $188,780
Accounts receivable, less allowances
(Dec. 2005 - $11,598; Sept. 2005 - $12,240) 464,330 471,097
Inventories 364,775 353,402
Other current assets 63,106 63,578
------------ ------------
Total Current Assets 1,055,611 1,076,857
Other Assets
Goodwill 862,532 862,083
Intangible assets, less amortization 50,113 56,753
Other assets 88,589 83,772
Property, Plant and Equipment
Land and land improvements 22,012 21,693
Buildings 130,689 131,335
Equipment 540,055 533,317
Allowance for depreciation (464,479) (454,783)
------------ ------------
228,277 231,562
------------ ------------
TOTAL ASSETS $2,285,122 $2,311,027
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $222,559 $230,620
Accrued expenses and other liabilities 104,574 112,596
Compensation and related expenses 45,532 52,002
Restructuring 12,072 13,432
Notes payable and current portion of long-
term debt 42,368 26,966
------------ ------------
Total Current Liabilities 427,105 435,616
Deferred Liabilities 49,695 49,255
Long-Term Debt, less current portion 269,071 275,604
STOCKHOLDERS' EQUITY
Common stock (par value, $.01 a share:
400,000,000 shares authorized: 159,321,588
shares issued at Dec. 31. 2005 and 162,476,513
shares issued at Sept. 30, 2005, including
treasury) 1,625 1,625
Additional paid-in capital 678,358 676,262
Accumulated other comprehensive income 9,077 19,720
Retained earnings 885,431 870,588
Treasury stock, at cost (3,154,955 shares at
Dec. 31, 2005 and 1,557,030 shares at Sept.
30, 2005) (35,240) (17,643)
------------ ------------
Total Stockholders' Equity 1,539,251 1,550,552
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,285,122 $2,311,027
============ ============
UNAUDITED - PRELIMINARY
ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Three Months Ended
December 31
-----------
2005 2004
------------ ------------
Cash Flows from Operations
Net Income $14,843 $2,978
Adjustments to Net Income
Depreciation 13,860 14,392
Amortization 5,119 7,550
Restructuring costs (1,360) (3,308)
Loss on sale of assets and other (28) (91)
Change in Operating Assets / Liabilities
Accounts receivable 2,429 (11,277)
Inventories (14,002) 2,109
Other assets (3,756) (17,049)
Accounts payable and other liabilities (18,886) (6,244)
------------ ------------
Net Cash Used for Operations (1,781) (10,940)
Investing Activities
Capital expenditures (12,346) (14,036)
Acquisition of businesses, net of cash
acquired - (7,872)
Investments (1,722) -
Proceeds from sale of businesses and
investments - 9,494
Proceeds from sale of property, plant and
equipment 1,238 553
------------ ------------
Net Cash Used for Investing Activities (12,830) (11,861)
Financing Activities
Long-term debt payments (6,920) (8,158)
Notes payable borrowings (payments), net 16,138 9,064
Preferred stock dividends - (117)
Payments to acquire treasury stock (17,600) -
Stock purchase and option plans 3 184
------------ ------------
Net Cash (Used for) From Financing
Activities (8,379) 973
Effect of exchange rate changes on cash (2,390) 12,201
------------ ------------
Change for the Period (25,380) (9,627)
Cash and Equivalents at Beginning of Period 188,780 189,048
------------ ------------
Cash and Equivalents at End of Period $163,400 $179,421
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