Exhibit 99.1
FOR IMMEDIATE RELEASE
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COMMSCOPE REPORTS FOURTH QUARTER RESULTS;
Earnings of $0.43 Per Share on Revenues of $248 Million
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Hickory, NC -- (February 5, 2001) CommScope, Inc. (NYSE: CTV), a world
leader in the manufacture of broadband and high-performance communication
cables, today announced record fourth quarter sales and earnings per share
for the period ended December 31, 2000. Diluted earnings per share rose 10%
to $0.43 in this year's fourth quarter from $0.39 per diluted share,
including a one-time item, in the fourth quarter of 1999. Excluding a
one-time gain related to the issuance of convertible debt in December 1999,
diluted earnings per share grew 13%.
Sales for the fourth quarter increased 17% to $248.0 million, compared to
$211.6 million in the fourth quarter of 1999. This performance was
primarily driven by record sales of broadband cable for Hybrid Fiber
Coaxial (HFC) applications. Domestic sales rose approximately 12% to $186.1
million, up from $165.9 million in the fourth quarter of 1999.
International sales rose to $61.9 million for the current quarter, up
approximately 35% year over year.
Orders booked in the fourth quarter were $203.9 million and were affected
by a general slowdown in telecommunications capital spending, the
previously announced temporary reduction in spending at AT&T, tight credit
markets and normal seasonal patterns.
Net income for the fourth quarter rose approximately 12% to $22.9 million,
up from $20.5 million in the fourth quarter of 1999. Net income rose 14%
excluding the one-time gain of approximately $480 thousand, net of tax,
related to the issuance of convertible debt recorded during the fourth
quarter of 1999.
"The year 2000 was strong for CommScope," said Frank M. Drendel, Chairman
and Chief Executive Officer. "Total Company sales rose 27% to $950 million
and EPS rose 22% to $1.60 per diluted share. We began significant global
capacity additions for wired and wireless broadband products and made
meaningful progress on important vertical integration projects." Drendel
added, "While we expect demand to be uneven during the first half of 2001,
we remain confident about our long-term prospects for digital broadband
cable. We set an all-time record for HFC related sales during the fourth
quarter of 2000 and are moving forward with previously announced HFC
related capacity additions to better serve expected customer demand in the
second half of the year and beyond."
OTHER HIGHLIGHTS
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o CATV/Video sales worldwide increased 38% to an all-time record $203.7
million for the current quarter. International sales rose 35% year
over year primarily due to robust demand for HFC products. Domestic
CATV/Video sales rose 39% year over year, led by strong sales of
fiber-optic cable. CommScope's ability to deliver a comprehensive
portfolio of fiber-optic and coaxial cables in `last mile'
telecommunications applications is an attractive benefit for our
customers.
o For calendar year 2000, CATV/Video sales rose 32% to an all-time
record of $733.1 million. International sales rose 31% to an all-time
record of $232.4 million.
o CommScope announced that it had purchased approximately 85 acres in
Cleveland County, North Carolina for a new 200,0000 square foot
manufacturing facility equipped to produce broadband cable products.
Preliminary site preparation is underway and construction is expected
to begin within the next several months, with occupancy scheduled
during the second half of 2001.
o Wireless and Other Telecom sales were $29.6 million in the current
quarter, compared to $37.6 million in the same period last year. For
calendar year 2000, Wireless and Other Telecom sales rose 26% to
$131.6 million.
"Although Wireless and Other Telecom sales were not as strong as expected
during the second half of 2000, we made progress in several important
areas," said Drendel. "We improved our performance-leading Cell Reach(R)
wireless cables, broadened our product portfolio and began establishing
international capabilities to meet expected demand. We have substantially
completed the capacity additions at our Cable Technology Center in Newton,
North Carolina, which has enhanced our manufacturing efficiencies."
o Local Area Network (LAN) sales were $14.7 million in the current
quarter compared to $26.9 million in the same period last year. For
calendar year 2000, LAN sales were $85.3 million, down slightly from
the previous year.
"As previously announced, we are implementing a comprehensive performance
improvement plan for our LAN business. During the fourth quarter, we
changed the management team and restructured the LAN organization. We
continue to focus on reducing channel inventory, improving efficiency and
increasing the velocity of this business," Drendel noted.
o Total Company gross margin for the fourth quarter was approximately
27.4%, up nearly 160 basis points from the third quarter of 2000.
Operating margin was approximately 15.9%.
BUSINESS OUTLOOK
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Looking ahead to the first quarter of 2001, CommScope Executive Vice
President and Chief Financial Officer Jearld Leonhardt stated, "As has been
widely acknowledged, the challenging economic environment continues to
affect telecommunications capital spending. In addition, the AT&T slowdown
and the inability of certain customers to get financing have exacerbated
our seasonally slow first quarter. As a result, we have grown more cautious
regarding the near-term outlook and have taken appropriate steps to manage
costs, including temporary workforce reductions. Based on these conditions,
we expect first-quarter 2001 sales to be around the $225-$235 million range
and diluted earnings per share to be around the $0.32-$0.36 range."
CONFERENCE CALL INFORMATION
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The Company plans to hold a telephonic conference call to discuss fourth
quarter results today at 5:00 p.m. Eastern Time. To
participate in the conference call, all participants should dial
212-346-0199. Please plan to dial in about 10 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 at
http://www.videonewswire.com/COMMSCOPE/020501/.
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 17514365. The replay
will be available through Wednesday, February 7, 2001. 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
worldwide economic conditions, telecommunications industry capital
spending, expected demand from AT&T and others, 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 and other factors. The cautionary statements
contained in Exhibit 99 to CommScope's Form 10-Q for the period ended
September 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
######
CommScope, Inc.
Consolidated Statements of Income
(In thousands, except net income per share amounts)
Unaudited
Three Months Ended Twelve Months Ended
December 31, December 31,
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2000 1999 2000 1999
---------------- ------------- --------------- ---------------
Net sales $ 247,970 $ 211,646 $ 950,026 $ 748,914
---------------- --------------- --------------- ---------------
Operating costs and expenses:
Cost of sales 179,915 152,768 698,972 548,808
Selling, general and administrative 22,635 20,140 81,217 68,869
Research and development 4,668 2,792 18,419 8,332
Amortization of goodwill 1,341 1,447 5,367 5,388
---------------- --------------- --------------- ---------------
Total operating costs and expenses 208,559 177,147 803,975 631,397
---------------- --------------- --------------- ---------------
Operating income 39,411 34,499 146,051 117,517
Other income (expense), net (8) 744 484 736
Interest expense (2,603) (2,441) (10,214) (10,230)
Interest income 75 297 559 604
---------------- --------------- --------------- ---------------
Income before income taxes 36,875 33,099 136,880 108,627
Provision for income taxes (13,996) (12,612) (51,993) (40,550)
---------------- --------------- --------------- ---------------
Net income $ 22,879 $ 20,487 $ 84,887 $ 68,077
================ =============== =============== ===============
Net income per share:
Basic $ 0.45 0.40 $ 1.66 $ 1.34
Assuming dilution (a) $ 0.43 0.39 $ 1.60 $ 1.31
Weighted average shares outstanding:
Basic 51,248 50,841 51,142 50,669
Assuming dilution (a) 55,614 53,085 56,047 52,050
(a) Calculation of net income per share,
assuming dilution:
Net income (basic) $ 22,879 $ 20,487 $ 84,887 $ 68,077
Convertible debt add-back * 1,177 - 4,714 -
---------------- --------------- --------------- ---------------
Numerator (assuming dilution) 24,056 20,487 89,601 68,077
================ =============== =============== ===============
Weighted average shares (basic) 51,248 50,841 51,142 50,669
Dilutive effect of:
Stock options 786 2,244 1,325 1,381
Convertible debt * 3,580 - 3,580 -
---------------- --------------- --------------- ---------------
Denominator (assuming dilution) 55,614 53,085 56,047 52,050
================ =============== =============== ===============
* On December 15, 1999, the Company issued $172.5 million in
convertible notes, which are convertible into shares of common
stock at a conversion rate of 20.7512 shares per $1,000 principal
amount. The effect of the assumed conversion of these notes is
included in the calculation of net income per share, assuming
dilution, for the three months and twelve months ended December
31, 2000 because it is dilutive. The effect of the assumed
conversion of these notes was excluded from the computation of
net income per share, assuming dilution, for the three months and
twelve months ended December 31, 1999 because it would have been
antidilutive. For the three months and twelve months ended
December 31, 2000, the convertible debt add-back in the numerator
of the calculation represents after-tax interest expense and
amortization of deferred financing fees associated with this
convertible debt. The convertible debt dilution in the
denominator reflects the number of shares issuable upon
conversion, assuming 100% conversion of all convertible notes as
of the beginning of the year.
CommScope, Inc.
Consolidated Balance Sheets
(In thousands, except share amounts)
As of December 31,
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2000 1999
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ASSETS
Cash and equivalents $ 7,704 $ 30,223
Accounts receivable, less allowance for doubtful accounts of
$9,187 and $4,838, respectively 197,536 127,018
Inventories 63,763 40,208
Prepaid expenses and other current assets 3,364 2,376
Deferred income taxes 17,296 15,354
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Total current assets 289,663 215,179
Property, plant and equipment, net 251,356 181,488
Goodwill, net of accumulated amortization of
$54,140 and $48,777, respectively 156,685 162,075
Other intangibles, net of accumulated amortization of
$34,796 and $32,055, respectively 13,969 16,710
Other assets 9,509 7,083
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Total Assets $ 721,182 $ 582,535
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 39,958 $ 29,179
Other accrued liabilities 38,481 39,048
Current portion of long-term debt 2,120 --
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Total current liabilities 80,559 68,227
Long-term debt, less current portion 225,316 198,402
Deferred income taxes 24,006 20,346
Other noncurrent liabilities 16,781 14,216
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Total Liabilities 346,662 301,191
Commitments and contingencies -- --
Stockholders' Equity:
Preferred stock, $.01 par value; Authorized shares: 20,000,000;
Issued and outstanding shares: None at December 31, 2000 and 1999 -- --
Common stock, $.01 par value; Authorized shares: 300,000,000;
Issued and outstanding shares: 51,263,703 at December 31, 2000;
50,889,208 at December 31, 1999 513 509
Additional paid-in capital 175,803 166,875
Retained earnings 200,802 115,915
Accumulated other comprehensive loss (2,598) (1,955)
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Total Stockholders' Equity 374,520 281,344
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Total Liabilities and Stockholders' Equity $ 721,182 $ 582,535
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