SCIENTIFIC-ATLANTA REPORTS THIRD QUARTER RESULTS
SCIENTIFIC-ATLANTA REPORTS THIRD QUARTER RESULTS ATLANTA, May 11 /PRNewswire/ -- Scientific-Atlanta, Inc.
(NYSE: SFA) today reported that sales for the March quarter were $146.4 million, up 28 percent from the same quarter a year ago.
Net earnings of $4 million ($.17 per share) compared to earnings of $.5 million ($.02 per share) last year. Higher sales were the principal factor in the increase in quarterly earnings. New orders of $172.7 million were up 45 percent from last year. Order backlog was $230.7 million, up $25.8 million from last quarter. William E. Johnson, chairman and CEO, said: "We are very pleased with the strong performance in bookings and sales as well as the improvement in earnings relative to recent quarters and last year. "Improvements in new Broadband areas and Instrumentation led the way this quarter. In Broadband, growth was driven mainly by the results of our expansion in international markets and the new digital audio business rollout. These results and other events, such as the first actual PCN telephone call through a U.S. cable plant -- by Cox Enterprises with Scientific-Atlanta equipment -- and our first digital video compression system commitment, reaffirm our strong emphasis on R&D even during the cable market downturn and general recession. Domestic cable market performance was also improved, mainly by expanded earth station demand in anticipation of the shift to the new Galaxy V satellite later this year. While traditional domestic cable industry spending remains depressed due to capital restrictions and re-regulation uncertainties, there are some signs of additional distribution upgrade activity and re-evaluation of spending plans following the easing of restrictions on HLTs. Although it is still premature to declare a domestic cable market recovery, we continue to be confident that the need for system upgrades, new revenue sources and the need to meet competitive threats will lead to future capital spending increases. "In Instrumentation, strong overall performance improvement included booking large follow-on orders for a new generation of Navy sonar in which we have invested R&D over the last several years, as well as strong Control Systems performance." Broadband Communications Group Results for the third quarter improved, driven by success in international markets, the roll out of digital audio by cable systems and sales of earth station equipment. The company announced that it will provide equipment for a major cable build by Southwestern Bell International Holdings in the United Kingdom. Southwestern Bell is one of the largest cable television companies in the United Kingdom, with eight franchises containing more than 1.2 million homes. The company plans to complete construction in the franchises in seven years. Scientific-Atlanta will provide its new Model 8602 advanced set-top communications terminal and associated transmission equipment and distribution electronics. This, and other wins for the 8600 product family and other new products, strengthened Scientific-Atlanta's position as the leading cable equipment provider in the U.K. The successful rollout of the 8600 series, the industry's first set top terminal with on-screen features and communications capabilities, continued with over 600,000 delivered or committed. During the quarter, the company delivered its first Jerrold and Zenith compatible units. These units are designed to coexist in systems already regulated by set tops of these manufacturers and, thereby, permit smooth changeout or migration to Scientific-Atlanta 8600 products. The Digital Music Express (DMXSM) digital audio service continued its national rollout which began in September 1991. At the end of the third quarter, over 200 headends had been installed in U.S. cable systems. The service has received commitments from cable system operators representing approximately 25 million of the nation's 55 million cable households. The service is also planned to be made available to cable subscribers in Canada, Europe, and Asia. Additionally, a commercial service is being marketed to retail, hospitality, health care, professional offices and other businesses. The company began volume shipments during the quarter of the unique DMX-DJTM, two-way handheld remote which identifies the artist and music selection being played. In an area of new technology, Scientific-Atlanta and Cox Enterprises announced that they are jointly testing a device, manufactured by Scientific-Atlanta, which will allow personal communication networks (PCNs) to be connected through cable television plant. This new device, the Cable Microcell IntegratorTM (CMI) is being tested in San Diego where Cox Cable, a division of Cox Enterprises, owns and operates its largest cable TV system. On Feb. 12 Cox Enterprises Chairman James Kennedy made the first phone call in the nation over a cable system -- to FCC chairman Alfred Sikes. The CMI microcells are small, digital radio transceivers located throughout a cable TV system to provide high quality portable telephone service. Continental Cablevision selected Scientific-Atlanta's 80 channel single laser system, recently introduced to permit more targeted delivery of programming and advertising. This system allows Continental systems in New Hampshire and Massachusetts to provide 80 television channels on a single fiber with one laser, thus permitting these systems to narrowcast, or pinpoint, economically the delivery of special programs, services and ads to small pockets of as few as 500 subscribers. Examples are neighborhoods, hotels, college dormitories, hospitals, large companies or any group of similar subscribers. In an important development following the close of the quarter, Scientific-Atlanta and Mediatech, Inc. announced plans to install the industry's first operational digital compression satellite delivery and insertion system for TV advertising. Mediatech, headquartered in Chicago, is the industry leader in ad duplication and distribution services. Scientific-Atlanta will provide an end-to-end satellite digitally compressed ad delivery, storage and insertion system designed to reduce time and costs for TV advertising distribution while improving video quality. During the quarter Scientific-Atlanta became the first company to deliver a digital compression compatible product to the industry by beginning shipments of its new 9708 Integrated Receiver Decoder (IRD). The new compression ready IRD is compatible with today's analog B-MAC video networks and is fully upgradeable, via a plug-in module, to digital networking, providing business television networks with an easy and cost-effective migration to digital video. The BBC recently launched its new 24-hour news and information service known as World Service Television (WSTV) to Asia, utilizing Scientific-Atlanta's B-MAC encryption system to secure the signal between England and Hong Kong. The company also announced that its B- MAC system will be used by the Upjohn Company to assure the confidentiality of market and product information traveling across its multi-site business television network. Scientific-Atlanta also provided HDB-MAC, its high definition television transmission and encryption system, as part of an international demonstration of satellite transmitted HDTV before the American Society of Tropical Medicine and Hygiene. Network Systems Group Network Systems sales were strong, building on continued success in new international markets. The company announced a series of contracts to provide state-of-the-art digital/analog earth station systems to eight European Broadcast Union member countries which participate in the Eurovision television network. Scientific-Atlanta was selected to design, manufacture, supply and install equipment needed to upgrade the Eurovision network, which is currently based largely on microwave and terrestrial transmission links. Because many member countries want to use the new satellite equipment to broadcast the 1992 Olympics, Scientific-Atlanta is pursuing an aggressive installation schedule. In other significant developments, Iceland selected a 16-meter standard "A" satellite earth station from Scientific-Atlanta as an international telecommunications gateway for the transmission of voice, data and fax information. NorthwestTel purchased 10 large Scientific-Atlanta antennas to provide improved telephony and data service to vast areas of the eastern Arctic, and the company continued its marketing push into Eastern Europe with the sale of a 7-meter video earth station to HRT, Croatia Radio and Television. Scientific-Atlanta's Very Small Aperture Terminal (VSAT) two-way data business is providing a VSAT satellite network to Halliburton Company, a major diversified oil field services and engineering construction firm. Scientific-Atlanta's SkylinX.25 VSAT network will link nearly 200 Halliburton offices nationwide. Halliburton, one of the first VSAT users in the United States, selected Scientific- Atlanta to replace its existing private satellite network. Instrumentation Group Instrumentation performance continued strong, stimulated by several key awards for communications products and systems from government and commercial customers. The Group's Control Systems business continues to see strong utility interest in the new Universal Network Monitor (UNM) system with several orders for pilot programs received in the third quarter. The UNM provides utilities with a low-cost, two-way communications system for advanced monitoring and distribution automation functions. The company also announced the U.S. Navy has exercised two options to increase production of the AN/BQR-22A sonar system. The new awards, valued at $20 million, will provide for 41 additional systems bringing the total contract requirement to 85 sonar systems and spares totalling more than $50 million. The systems will be installed in U.S. Navy attack class and ballistic missile submarines through 1994. The company also booked initial orders for the SPS900, a commercial version of the sonar system. The Jet Propulsion Laboratory (JPL) in Pasadena, Calif., awarded a multi-year contract to Scientific-Atlanta for three ground stations to support the NASA Deep Space Network which provides tracking and communication for unmanned planetary spacecraft. The Scientific- Atlanta equipment will be used to receive and record data from satellites scheduled to be launched by Japan and the Commonwealth of Independent States. Scientific-Atlanta is the world's leading supplier of remote sensing ground stations and telemetry tracking systems. The company received a contract to provide a complete turnkey antenna measurement facility to the Martin Marietta Electronics Information and Missiles Group in Orlando, Fla. The system will be used to perform indoor engineering and production testing of the U.S. Army's Longbow fire control radar antenna and radome assembly. The company announced that antenna and radar cross section measurement equipment will be supplied under separate contracts to the U.S. Navy and Hazeltine Corporation. The company is providing the U.S. Naval Research Laboratory in Washington, D.C., with an anechoic chamber and compact range to test antennas and radar reflectivity of a variety of aircraft and other equipment. Equipment supplied to Hazeltine's communications and antenna systems laboratory will be used for antenna pattern measurements as well as radar cross section applications for production items and research and development projects. Instrumentation continued its international emphasis during the quarter with a contract from Korea Telecom to provide 75 digital transmission analyzers and support equipment. The test equipment will be used to support Korea Telecom's domestic network transformation from North America to International CCITT standards. Scientific-Atlanta, Inc. is a world leader in cable television electronics, satellite-based communications networks and instrumentation for industrial, government and telecommunications applications. SCIENTIFIC-ATLANTA, INC., AND SUBSIDIARIES SUMMARY DATA (In Thousands, Except Earnings Per Share) 9 mos. ended 3/27/92 3/29/91 Pct. Chg. Sales $407,892 $366,637 11 Earnings Before Income Tax $ 11,340 $ 13,551 -16 Net Earnings $ 8,505 $ 9,349 -9 Earnings Per Common Share and Common Share Equivalent $.37 $.42 -12 Weighted Average Number of Common Shares and Common Equivalent Shares Outstanding 23,286 22,518 3 New Orders Received $431,449 $383,387 13 3 mos. ended 3/27/92 3/29/91 Pct. Chg. Sales $146,385 $114,317 28 Earnings Before Income Tax $ 5,352 $ 694 --- Net Earnings $ 4,014 $ 478 --- Earnings Per Common Share and Common Share Equivalent $.17 $.02 --- Weighted Average Number of Common Shares and Common Equivalent Shares Outstanding 23,592 22,586 4 New Orders Received $172,696 $119,148 45 -0- 5/11/92 /CONTACT: Robert S. Meyers, vice president - corporate communications of Scientific-Atlanta, 404-903-4608/ (SFA) CO: Scientific-Atlanta, Inc. ST: Georgia IN: CPR SU: ERN
BN -- AT003 -- 8430 05/11/92 08:42 EDT
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|Date:||May 11, 1992|
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