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 ATLANTA, Aug. 5 /PRNewswire/ -- Scientific-Atlanta, Inc., (NYSE: SFA) today reported that sales for the fourth quarter ended July 2, 1993 were $188.6 million, up 9 percent from last year's fourth quarter sales of $172.9 million. Net earnings for the fourth quarter were $9.5 million ($0.25 per share), up 23 percent, compared to $7.8 million ($0.22 per share) in the same quarter a year ago. Bookings of $232.1 million were up 33 percent over last year.
 Sales for the 1993 fiscal year were $730.6 million, up 26 percent from the prior year. Net earnings before accounting changes of $24.7 million ($0.66 per share) increased 52 percent. After accounting changes, net earnings were $20.0 million ($0.53 per share). This compared to $16.3 million ($0.46 per share) in 1992. Per share data has been restated to reflect the 3-for-2 stock split effected as a dividend issued in December 1992. Strong growth in Broadband sales and profits was the major contributor to the earnings improvement . Bookings totaled $770.2 million with backlog at fiscal year end of $272.6 million, both at record levels.
 The company continued to make progress in its margin improvement program announced last spring.
 During the quarter Scientific-Atlanta's Board of Directors announced the election of James F. McDonald as President and Chief Executive Officer. Mr. McDonald was most recently a general partner specializing in high technology companies with the investment firm of J. H. Whitney and Company. Previously, following a 21 year career with IBM Corporation, Mr. McDonald led the successful restructurings of Prime Computer Inc. and Gould Inc., serving as CEO at both companies.
 Commenting on the quarter's results, Mr. McDonald said, "Growing acceptance of our new systems and advanced technology products resulted in healthy sales increases in our Broadband businesses in the United States and abroad. We are particularly pleased at the rapid adoption throughout the world of the MPEG (Moving Pictures Experts Group) standard for digital video compression which helped us win a contract from Orbit Communications Company to build, operate and maintain one of the largest and most complex international television networks ever undertaken."
 Broadband fourth quarter sales and bookings improved significantly over the prior year in spite of the slow overall economic recovery as cable operators continued to adapt their systems to the dramatic technological changes currently underway in the industry. Some operators continue to express concern about the impact on their near term capital spending plans of certain provisions of the Cable Act, and the potential effect on cable equipment revenue is not known.
 Several major events in the fourth quarter are expected to have a significant long-term impact on the company:
 Scientific-Atlanta signed a $125 million ($65 million was booked in the fourth quarter) contract with Orbit Communications Company to provide a consumer digital video compression satellite network to distribute video programming throughout the Middle East and some European countries. The network will be launched in early 1994. Also during the quarter the European pay-TV channel, FilmNet , selected compression equipment from Scientific-Atlanta and NTL of the U.K. for the first operational use of broadcast-quality digital TV in Europe.
 U.S. West Communications selected Scientific-Atlanta to provide digital video compression equipment for its visionary voice, video and data broadband communications network in its 14-state telephone service region. Scientific-Atlanta will also provide addressable interdiction equipment to provide analog video services to the home. Interdiction technology allows network control to be administered from a central office for easy connects, disconnects and changes in service outside the home. Testing of video services in Omaha is scheduled for early 1994.
 Time-Warner Cable selected Scientific-Atlanta as the subscriber equipment supplier and integrator for its Full Service Network (FSN), the interactive electronic superhighway it will install in the Orlando area beginning late this year. In a separate announcement, Time-Warner ordered Scientific-Atlanta's advanced high-bandwidth distribution and fiber optic equipment for the network.
 Kaleida Labs, Motorola and Scientific-Atlanta signed a memorandum of intent to develop open-architecture interactive multimedia products for cable television. Kaleida, an independent firm, co-owned by Apple Computer, Inc. and IBM Corp., will supply ScriptX , its core technology, to Scientific-Atlanta for incorporation into next-generation digital compression home communications terminals, or set-tops. Motorola will provide microprocessor technology based
on its PowerPC architecture.
 Several leading suppliers of on-screen electronic program guides announced agreements with Scientific-Atlanta to include their services in its 8600x analog/digital home communications terminals. The suppliers are StarSight , TV Guide On Screen , United Video's Preview Express . The company demonstrated these at the National Cable Television Association (NCTA) annual trade show together with Your Choice TV and Zing interactive program services.
 Scientific-Atlanta and News Datacom, a subsidiary of Rupert Murdoch's News Corporation, announced plans to combine Scientific-Atlanta's MPEG digital compression system with News Datacom's smart-card technology to offer specific international customers a complete end-to-end security system for satellite, cable or broadcast delivery of video, audio , voice and data.
 DSC Communications Corp and Scientific-Atlanta announced a cooperation agreement for the delivery of advanced video and related services to network providers. The companies will develop joint proposals to potential customers to capitalize on emerging digital video compression technologies.
 The company introduced the industry's first PC-based Digital Storage and Retrieval System (DSR) for MPEG compressed video and audio program material. Immediate applications include digital ad insertion, movie-on- demand, retail kiosks and video education and training.
 The company began installation of an MPEG-based digital compression system for StarNet, Inc.'s AdStar, a delivery service which automates the distribution of national and regional spot advertising to multiple cable headends. The company completed shipment of digital video compression equipment for Viacom International Inc. to more than 2,000 hotel, motel and SMATV sites for the delivery of Showtime and The Movie Channel.
 Network Systems sales were up year to year. Several significant projects were announced during the quarter. Four Eastern European countries, the Ukraine, Belarus, Moldova and Slovenija, selected digital ready video satellite earth stations from Scientific-Atlanta, bringing to 21 the number of European Broadcasting Union member countries who have chosen Scientific-Atlanta equipment. The company will provide an extensive satellite technology upgrade to Thailand to improve existing telephone and data services, the latest in a series of satellite communications programs in Thailand. The company also announced that it will provide the Associated Press (AP) with a satellite distribution system to enable AP to distribute Scientific-Atlanta's SEDAT digital audio and high speed data system to thousands of radio stations in the United States, Mexico and Canada.
 Instrumentation performance was steady with increases in sales recorded year to year while bookings were flat compared to last year. The company announced the introduction of the first fully-automated trouble-call analysis system, Locate , which allows electric utilities to respond immediately to power outages without waiting for customers to report power failures. The company introduced the model AT9600, portable SONET transmission analyzer, the latest in a long line of high quality analyzer systems. Announcement was also made of a $7.9 million subcontract option from the U. S. Navy to support current production of the AN/SQQ-89 combat system as part of a Westinghouse team. The option adds five systems to the original order of ten awarded to Scientific-Atlanta in September, 1992. The company also announced completion of the first of 11 installations of the U.S. Navy's new anti-submarine Fast Time Analyzer System (FTAS) at the Naval Air Station, Brunswick, ME.
 Scientific-Atlanta Inc., is a world leader in broadband communications systems, cable television electronics, satellite-based communications networks and instrumentation for industrial, telecommunications and government applications.
 (In Millions, Except Per Share Data)
 Three Months Ended Twelve Months Ended
 July 2 June 26 July 2 June 26
 1993 1992 1993 1992
 Sales $ 188.6 $ 172.9 $ 730.6 $580.8
 Costs and expenses:
 Cost of sales 129.2 122.5 526.2 408.8
 Sales and admin. 31.8 27.9 114.0 102.1
 Research and develop. 15.0 14.0 60.2 52.3
 Interest expense 0.3 0.1 0.9 0.6
 Interest (income) (0.7) (1.0) (2.9) (4.4)
 Other (inc.) expense 0.3 (1.0) (0.7) (0.3)
 Total costs and exps. 175.9 162.5 697.7 559.1
 Earnings before inc.
 taxes and accounting
 changes 12.7 10.4 32.9 21.7
 Provision for income
 taxes 3.2 2.6 8.2 5.4
 Earnings before
 accounting changes 9.5 7.8 24.7 16.3
 Accounting changes --- --- (4.7) ---
 Net earnings $ 9.5 $ 7.8 $ 20.0 $ 16.3
 Earnings per common share and common equivalent share:
 Before accounting
 changes $ 0.25 $ 0.22 $ 0.66 $ 0.46
 Accounting changes --- --- (.13) ---
 Net earnings $ 0.25 $ 0.22 $ 0.53 $ 0.46
 Weighted avg. number
 of common shares and
 common equiv. shares
 outstanding 38.3 35.7 37.5 35.1
 Bookings $ 232.1 $ 174.0 $ 770.2 $605.5
 Share data has been restated to reflect the 3-for-2 stock split effected as a dividend issued in December 1992.
 The after-tax charge to earnings for accounting changes is the impact of the adoption of Financial Accounting Standards Number 106 "Postretirement Benefits," Number 112 "Postemployment Benefits" and Number 109 "Accounting for Income taxes," effective as of the first quarter of fiscal 1993.
 CONTACT: Bob Meyers of Scientific-Atlanta, 404-903-4608
 -0- 08/05/93


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Publication:PR Newswire
Date:Aug 5, 1993

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