Exhibit 99.1
FOR IMMEDIATE RELEASE
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COMMSCOPE REPORTS RECORD THIRD QUARTER RESULTS;
EARNINGS OF $0.43 PER SHARE ON REVENUES OF $257 MILLION
HICKORY, N.C., Oct. 23 /PRNewswire/ -- CommScope, Inc. (NYSE:CTV), a
world leader in the manufacture of broadband and high-performance
communication cables, today announced record third quarter sales and
earnings per share for the period ended September 30, 2000. Diluted
earnings per share rose 13% to $0.43 based on 56.0 million shares, compared
to $0.38 per diluted share and 52.3 million shares in the third quarter of
1999. The change in diluted shares primarily reflects the impact of the
issuance of $172.5 million of 4% convertible debt in December 1999.
Sales for the third quarter increased 27% to $256.9 million, compared
to $202.3 million in the third quarter of 1999. This performance was
primarily driven by a strong increase in sales of broadband cable for
Hybrid Fiber Coaxial (HFC) applications. Domestic sales rose approximately
27% to $197.4 million, up from $156.0 million in the third quarter of 1999.
International sales rose to $59.5 million for the current quarter, up
approximately 29% year over year.
Orders booked in the third quarter rose 14% to $255.5 million, up from
$224.4 in the same period last year. Third quarter orders were affected
primarily by long lead times for HFC products.
Net income for the third quarter rose 16% to $23.0 million, up from
$19.7 million in the third quarter of 1999.
"Demand for our core coaxial and fiber-optic products remains robust,"
said Frank M. Drendel, Chairman and Chief Executive Officer. "Third quarter
HFC sales growth was excellent and we continue to expand our capabilities
to meet customer demand for enabling broadband cable technology."
Other Third Quarter Highlights
* CATV/Video sales worldwide increased to $197.8 million for the
current quarter, up 33% year over year and up 9% sequentially.
International sales rose 29% year over year primarily due to robust demand
for HFC products. Domestic CATV/Video sales rose 36% year over year, led by
more than a 50% increase in the sales of fiber-optic cable.
* CommScope announced several key milestones in its ongoing business
expansion. The Company closed on a previously announced purchase of a
former Motorola facility in Jaguariuna, Brazil. The Brazilian facility is
expected to provide more than 200,000 square feet of manufacturing space
when modifications are complete around mid-year 2001. The Company also
announced the grand opening of its 225,000 square foot distribution and
manufacturing facility in Sparks, Nevada.
"We are bullish about worldwide opportunities for HFC products and
continue to accelerate global capacity expansion to meet expected growth,"
said Drendel.
* Wireless and Other Telecom sales rose 24% in the current quarter to
$38.2 million compared to sales of $30.9 million in the same period last
year. The Company began production testing of its new wireless equipment at
the Cable Technology Center in Newton, North Carolina.
"Although wireless sales were not as strong as we would like during
the quarter, we continue to make progress," said Drendel. "We made
significant improvements to our performance-leading 1-5/8 inch Cell Reach
wireless cables and our products were approved for use by Motorola. In
addition, we have strengthened our sales team and are in the process of
establishing international capabilities to meet expected demand. We intend
to expand our commitment to this market and we remain optimistic about our
global opportunities for wireless products."
* Local Area Network (LAN) sales were $20.9 million, down
approximately 9% from the same period last year.
"Clearly, our LAN performance was disappointing. We are in the midst
of implementing a comprehensive performance improvement plan, including
management changes and a restructured organization. After these changes are
implemented in the fourth quarter, we believe that we can achieve modest
growth during 2001, while improving profitability."
* Total Company gross margin for the third quarter was approximately
25.8% and operating margin was approximately 15.4%.
Business Outlook
Based on current business conditions, the Company expects to report
diluted earnings per share between $0.40 - $0.44 for the fourth quarter
ending December 31, 2000. This range is consistent with the current analyst
estimates.
"Demand for CommScope's portfolio of HFC products has accelerated over
the past year," noted Drendel. "New revenue opportunities and increasing
competition are among the primary reasons our customers have upgraded their
broadband networks in the last mile of telecommunications. Assuming those
trends continue, we believe that we can achieve sales growth of at least
20% during calendar year 2001."
Conference Call Information
The Company plans to hold a telephonic conference call to discuss
third quarter results today at 5:00 p.m. Eastern Time. To participate in
the conference call, domestic and international callers should dial
212-346-7454. Please plan to dial in 10-15 minutes before the start of the
call to facilitate a timely connection. The live, listen-only audio of the
conference call will also be available on the Internet at:
http://www/videonewswire.com/COMMSCOPE/102300/.
If you are unable to participate in the call and would like to hear a
telephonic replay, you may dial 800-633-8284. International callers should
dial 858-812-6440 for the replay. The replay ID is 16411911. The replay
will be available through Wednesday, October 25, 2000. A webcast replay
will also be archived for a limited period of time following the conference
call via the Internet on CommScope's web site (http://www.commscope.com).
CommScope is the world's largest manufacturer of broadband coaxial
cable for Hybrid Fiber Coaxial (HFC) applications and is a leading supplier
of high- performance fiber optic and twisted pair cables for LAN, wireless
and other communications applications.
Statements in this press release which are other than historical facts
are intended to be "forward-looking statements" within the meaning of the
Securities Exchange Act of 1934, the Private Securities Litigation Reform
Act of 1995 and other related laws, and include, but are not limited to
those statements relating to sales and earnings expectations, expected
demand, capacity expansion, relative market position and outlook. While
CommScope believes such statements are reasonable, the actual results and
effects could differ materially from those currently anticipated. Factors
and risks that could cause such differences include, but are not limited to
telecommunications industry capital spending, changes in cost and
availability of key raw materials, successful implementation of the
bi-metals operation and other vertical integration activities, pricing and
acceptance of CommScope's products, successful expansion and related
operation of our facilities, effective implementation of our integrated
information system, developments in technology, industry competition,
ability of our customers to secure adequate financing, regulatory changes
affecting our industries, worldwide economic conditions, and other factors.
The cautionary statements contained in Exhibit 99 to CommScope's Form 10-Q
for the period ended June 30, 2000 are incorporated herein by reference. In
providing forward looking statements, the Company is not undertaking any
duty or obligation to update these statements publicly as a result of new
information, future events or otherwise.
CONTACTS:
Phil Armstrong Betsy Lambert, APR
Investor Relations Media Relations
(828) 323-4848 (828) 323-4873
Web Site: http://www.commscope.com
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CommScope, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED--IN THOUSANDS, EXCEPT NET INCOME PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended
September 30, September 30,
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2000 1999 2000 1999
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Net sales $ 256,873 $ 202,315 $ 702,056 $ 537,268
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Operating costs and expenses:
Cost of sales 190,608 147,782 519,057 396,040
Selling, general and administrative 20,105 16,830 58,582 48,729
Research and development 5,158 2,106 13,751 5,540
Amortization of goodwill 1,341 1,347 4,026 3,941
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Total operating costs and expenses 217,212 168,065 595,416 454,250
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Operating income 39,661 34,250 106,640 83,018
Other income (expense), net 12 (1) 492 (8)
Interest expense (2,635) (2,424) (7,611) (7,789)
Interest income 39 57 484 307
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Income before income taxes 37,077 31,882 100,005 75,528
Provision for income taxes (14,089) (12,144) (37,997) (27,938)
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Net income $ 22,988 $ 19,738 $ 62,008 $ 47,590
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Net income per share (Note 3):
Basic $ 0.45 $ 0.39 $ 1.21 $ 0.94
Assuming dilution $ 0.43 $ 0.38 $ 1.17 $ 0.92
Weighted average shares outstanding (Note 3):
Basic 51,229 50,775 51,106 50,611
Assuming dilution 55,972 52,273 56,108 51,861
Source: CommScope, Inc.