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SCIENTIFIC-ATLANTA REPORTS FIRST QUARTER RESULTS

 SCIENTIFIC-ATLANTA REPORTS FIRST QUARTER RESULTS
 ATLANTA, Nov. 4 /PRNewswire/ -- Scientific-Atlanta, Inc.


(NYSE: SFA) today reported that sales for the first quarter ended Sept. 27 were $128 million, as compared to $128.4 for the same quarter a year ago.
 Net earnings were $2.3 million, compared with $5.5 million in the same quarter a year ago. Competitive pressures and higher marketing expenses contributed to the reduction in earnings. Net earnings in the same quarter a year ago included one-time gains from the sale of a product line and the settlement of claims. New orders were $122.8 million, down 5 percent. Order backlog at the end of the quarter was $203.3 million.
 "As we had anticipated, capital spending on new equipment by cable television operators continued to be depressed," said William E. Johnson, chairman and chief executive officer. "Conditions in our nation's capital markets have not yet improved, and CATV operators are still under financial pressure to delay purchases of new technology products to upgrade and modernize their operations. We expect this weakness to continue well into the next calendar year.
 "However, we continue to believe that fundamental market and competitive forces in the cable television industry will lead to renewed spending which will permit operators to grow revenues from new services, obtain franchise renewals, and meet pressures from consumers and potential competition for service and quality enhancements. Therefore, we are continuing our commitment to new products and market development investments. We are also pleased with ongoing progress in our Network Systems and Instrumentation businesses in spite of continued weak economic conditions."
 Broadband Communications sales and orders remained depressed as capital market conditions, particularly the designation by the federal government of borrowing by many cable operators as highly leveraged transactions (HLTs), limited access to sources of capital.
 During the quarter, Scientific-Atlanta's new technology products continued to achieve notable success, however. Operators began subscriber rollouts of the company's new model 8600 on-screen display set-top terminals. The 8600 represents a new generation of products. As an advanced subscriber communication system, the 8600 provides many consumer friendly features via on-screen displays. It serves as a new marketing tool for cable operators with its messaging capabilities ranging from targeted program advertising and promotion to program guide information to service call coordination. The product has been introduced in both international and domestic markets.
 Scientific-Atlanta continues to be a leader in the fast developing fiber optics marketplace. The company's new family of fiber optic transmitters, receivers and coaxial amplifiers makes possible cost effective, enhanced quality cable system upgrades and conversions. During the quarter, the company announced fiber optics orders from Cox Cable, Housatonic Cable Vision Co., Palmer Cablevision, Continental Cablevision and Scripps-Howard Cable, among others.
 During the quarter, the company began to deliver production tuners for its new digital music service in partnership with program provider International Cablecasting Technologies, Inc. (ICT). Scientific-Atlanta also announced that it purchased more than 3 million ICT shares, representing an 11 percent equity ownership in that company. According to Johnson, "ICT's Digital Music Express(SM) musical service to cable subscribers will provide substantial new revenue opportunities to cable and commercial markets." The service consists of 30 channels of CD standard music provided 24 hours per day without interruption. Scientific-Atlanta is the manufacturer of the DMX DM-2000TM digital audio tuner and DMX-DJTM hand held remote control unit which displays visual identification of each musical selection as it is played.
 Network Systems sales of international satellite networks and very small aperture terminals (VSAT) networks were strong during the quarter, registering a healthy increase over the prior year.
 Samart Telecoms Co., Ltd. of Thailand announced plans to install a new, one-way data broadcast network from Scientific-Atlanta to allow its customers such as banks and stock brokerages to broadcast timely information from a headquarters location to many remotely located branches. The network will incorporate Scientific-Atlanta's new transceiver system providing data transmissions at more flexible rates and greater satellite efficiency than previously available systems. Banca Serfin, one of Mexico's oldest and largest banking chains, announced that it will install a Scientific-Atlanta VSAT network to link its Mexico City headquarters with 172 of its branch banks throughout the country. The VSAT network will manage all of the two-way communications now carried by phone lines including ATM transactions, in-bank platform teller machine transactions and other centralized data management.
 During the quarter, Scientific-Atlanta announced construction of a new VSAT master station, or hub, near Toronto, Canada. The master station will operate as a network facility to provide data and video communications services to companies throughout Canada. Volkswagen Canada will be the first company serviced by the new hub.
 The company began volume shipments of its PRIMESTAR(TM) consumer satellite direct broadcast system (DBS) during the quarter. With several thousand units already installed, PRIMESTAR Partners is in the early stages of making its service available in many areas of the United States.
 Scientific-Atlanta will provide its B-MAC video scrambling system for the new HBO Ole movie service to South America. HBO, in a venture with Omnivision of Venezuela, will uplink the service from Caracas to PANAMSAT to cable TV headends and hotels throughout South America. HBO is the third major programmer on PANAMSAT to choose B-MAC in the past year, following the lead of ESPN and Turner Broadcasting. This means that all encrypted video programs on PANAMSAT are scrambled with Scientific-Atlanta's proprietary B-MAC technology.
 In another highlight, IDB Communications Group Inc. announced its intention to connect its satellite audio transmissions via Scientific-Atlanta's Spectrum Efficient Digital Audio Technology (SEDAT)TM. A proprietary audio compression technique, SEDAT has become the industry standard for satellite delivered digital audio broadcasts. IDB is a leading supplier of transmission and distribution services for domestic and international radio industries using satellite and fiber optics. Earlier, ABC and CBS Radio Networks selected SEDAT to increase satellite transmission capacity and transmit CD-quality audio to their network affiliates.
 Instrumentation sales were flat compared to the prior year while operating profits improved, reflecting the impact of consolidation efforts taken over the past year to reduce costs and increase operational efficiencies.
 The group introduced Scientific-Atlanta's new Mobile Tracking System designed to provide quick deployment of tracking equipment to control unmanned


vehicles or support other military and commercial tracking applications.
 In the international market, Scientific-Atlanta received a $1.2 million contract from DLR, a unit of the German Space Agency, for a transportable, 8-meter X-band remote sensing ground station. The unit will be used to receive transmissions from earth observation satellites such as ERS1, SPOT and LANDSAT. The mobile ground station will be used by a number of countries to receive satellite photos and data in support of agricultural and ecological programs. Scientific-Atlanta is the leading supplier of remote sensing ground stations and telemetry tracking systems worldwide.
 Scientific-Atlanta and Bell Atlantic Corporation entered into a joint agreement to bring to market the first cost-effective, integrated two-way information management system for the electric utility industry. The Universal Network Monitor (UNM), produced by Scientific-Atlanta's Control Systems division, is integrated with Bell Atlantic's Power AdvisorTM software to allow utility companies to automate monitoring of distribution system performance, voltage outages and feeder loading cost effectively as well as the status of devices such as regulator or capacitor banks. The new information management technology promises to change dramatically the way utilities and commercial customers manage energy from generation to consumption.
 The company received a contract from the U.S. Naval Research Laboratory to provide an antechoic chamber and a multi-use compact range to test antennas and the radar reflectivity of a variety of targets. Scientific-Atlanta will construct the antechoic chamber and install the compact range at the Naval Research Laboratory's Washington D.C. facility.
 The company was awarded a $5.7 million contract to supply the U.S. Army with helicopter rotor track and balance equipment (Rotor Analysis and Diagnostic Systems - Advanced Technology or RADS-AT). The order is the second of a three-year production contract initiated in June 1990. The first year production order of 538 systems was completed two months ahead of schedule, and approximately 200 of the systems were used in operations Desert Shield and Desert Storm. RADS-AT is a fully automatic in-flight system that continuously monitors helicopter rotor blade performance to reduce maintenance costs and helicopter down-time. In addition to military applications, RADS-AT is used commercially by Bell Helicopter, Textron, Sikorsky Aircraft and Westland Helicopters Ltd.
 Scientific-Atlanta Inc. a world leader in cable television electronics, satellite-based communications networks and instrumentation for industrial, telecommunications and government applications.
 SCIENTIFIC-ATLANTA, INC., AND SUBSIDIARIES
 SUMMARY DATA
 (In Thousands, Except Earnings Per Share)
 3 mos. ended 9/27/91 9/28/90 Pct. chg.
 Sales $128,001 $128,445 ---
 Earnings Before
 Income Tax $3,037 $8,021 -62
 Net Earnings $2,278 $5,534 -59
 Earnings Per Share $.10 $.25 -60
 Weighted Average
 Number of Common
 Shares
 Outstanding 22,705 22,454 1
 New Orders
 Received $122,799 $128,866 -5
 -0- 11/4/91
 /CONTACT: Robert S. Meyers, vice president - corporate communications of Scientific-Atlanta, 404-441-4608/
 (SFA) CO: Scientific-Atlanta, Inc. ST: Georgia IN: CPR SU: ERN BN-BR -- AT002 -- 0559 11/04/91 08:12 EST
COPYRIGHT 1991 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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