EXHIBIT 99.2
COMMSCOPE REPORTS SECOND QUARTER RESULTS
HICKORY, N.C., July 24 /PRNewswire/ -- CommScope, Inc. (NYSE: CTV), a
world leader in the manufacture of broadband and high-performance
communication cables, today announced second quarter results for the period
ended June 30, 2001. Earnings for the current quarter, excluding charges
related to impairment of certain assets, were $13.9 million, or $0.27 per
diluted share compared to $0.42 per diluted share in the second quarter of
2000. Including these charges, net income for the current quarter was $6.0
million, or $0.11 per diluted share.
Sales for the second quarter decreased 17% to $199.9 million, compared
to $241.2 million in the second quarter of 2000. Revenues reflect the
slowdown in telecommunications spending. Domestic sales were $156.0 million
in the current quarter, compared to $180.5 million in the second quarter of
2000. International sales were $43.9 million in the current quarter,
compared to $60.7 million in the same period last year.
Orders booked in the current quarter were $156.2 million, down 47%
from the $293.4 million booked in the second quarter of 2000.
Charges Taken during the Second Quarter
As previously stated, the Company has taken a number of steps to
manage cost and has been evaluating all aspects of its business. As a
result of its review, the Company recorded pretax charges of approximately
$12.6 million, or approximately $0.15 per diluted share, net of tax,
related to the impairment of certain assets. These adjustments include
equipment charges and a write-down of the Kings Mountain facility, which
was under construction. Equipment that was intended for the Kings Mountain
facility is expected to be redeployed overseas. The write-off of an
investment in an unconsolidated affiliate was also included in the charges.
Chairman and Chief Executive Officer Frank M. Drendel said, "In light
of the ongoing industry conditions, we have adjusted our manufacturing and
staffing plans to align CommScope with the realities of the current market.
Despite this challenging economic environment, we have maintained
production flexibility and service capabilities, paid down more than $30
million in debt this year and have remained profitable. We believe that we
have taken the right steps to position CommScope for long-term success."
Other Second-Quarter Highlights
* Despite strong shipments of fiber optic cable, Broadband/Video
sales worldwide decreased 11% year over year to approximately
$159.6 million for the current quarter. Domestic Broadband/Video
sales decreased approximately 4% year over year. International
sales were $43.9 million for the current quarter, down 28% year
over year. Sales of fiber optic cable grew to more than 15% of
total Company sales in the quarter.
* Local Area Network (LAN) sales rose 4% to $25.8 million in the
current quarter compared to $24.9 million in the same period last
year. LAN sales rose 7% sequentially.
* Wireless and Other Telecom sales were $14.5 million in the
current quarter, down from $36.5 million in the same period last
year, due primarily to lower sales of Other Telecom products
related to telephone central office applications. While sales of
Wireless products were also down year over year, sales increased
more than 10% sequentially.
* Total Company gross margin for the second quarter was
approximately 24.2%, down slightly sequentially and down
approximately 250 basis points from the second quarter of 2000.
The year over year decline in gross margin resulted primarily
from lower sales volumes and shifting product mix. Operating
margin in the second quarter was 5.8%. Excluding special charges,
operating margin was approximately 12.1%.
Conference Call Information
The Company plans to hold a telephonic conference call to discuss the
CommScope and Furukawa joint ventures and second quarter results today at
5:00 p.m. Eastern Time. To participate in the conference call, all
participants should dial 212-896-6010. Please plan to dial in about 10
minutes before the start of the call to facilitate a timely connection. A
simultaneous webcast and slide presentation of the conference call can be
accessed from the CommScope website at http://www.commscope.com or
http://www.videonewswire.com/COMMSCOPE/072401/ .
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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 19258169. The replay
will be available through Thursday, July 26, 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 Coax (HFC) applications and is a leading supplier of
high-performance fiber optic and twisted pair cables for LAN, wireless and
other communications applications.
This press release contains forward-looking statements regarding sales
and outlook that are based on information currently available to
management, management's beliefs and a number of assumptions concerning
future events. Forward-looking statements are not a guarantee of
performance and are subject to a number of uncertainties and other factors,
which could cause the actual results to differ materially from those
currently expected. The potential risks and uncertainties that could cause
actual results to differ materially include, but are not limited to, the
ability of the company to implement cost reductions in a timely manner and
the success of those actions, worldwide economic conditions,
telecommunications industry capital spending, expected demand from AT&T and
others, excess capacity, changes in cost and availability of key raw
materials, successful implementation of the bimetals 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. For a more detailed description of factors that could cause such a
difference, please see CommScope's filings with the Securities and Exchange
Commission. In providing forward-looking statements, the Company does not
intend, and is not undertaking any duty or obligation, to update these
statements as a result of new information, future events or otherwise.
CommScope, Inc.
Condensed Consolidated Statements of Income
(Unaudited--in thousands, except net income per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2001 2000 2001 2000
Net sales $199,899 $241,244 $417,259 $445,183
Operating costs and expenses:
Cost of sales 151,589 176,863 316,155 328,449
Selling, general and
administrative 20,579 20,080 42,545 38,477
Research and development 2,145 4,955 3,625 8,593
Amortization of goodwill 1,341 1,342 2,683 2,685
Impairment charges for fixed
assets and investments 12,615 - 12,615 -
Total operating costs and
expenses 188,269 203,240 377,623 378,204
Operating income 11,630 38,004 39,636 66,979
Other income (expense), net (306) 495 (131) 480
Interest expense (2,052) (2,588) (4,074) (4,976)
Interest income 217 53 375 445
Income before income taxes 9,489 35,964 35,806 62,928
Provision for income taxes (3,511) (13,671) (13,249) (23,908)
Net income $ 5,978 $ 22,293 $ 22,557 $ 39,020
Net income per share:
Basic $ 0.12 $ 0.44 $ 0.44 $ 0.76
Assuming dilution (a) $ 0.11 $ 0.42 $ 0.43 $ 0.74
Weighted average shares
outstanding:
Basic 51,385 51,151 51,350 51,046
Assuming dilution (a) 52,231 56,249 52,133 56,167
(a) Calculation of net income
per share, assuming
dilution:
Net income (basic) $ 5,978 $ 22,293 $ 22,557 $ 39,020
Convertible debt add-back
* -- 1,179 -- 2,361
Numerator (assuming
dilution) $ 5,978 $ 23,472 $ 22,557 $ 41,381
Weighted average shares
(basic) 51,385 51,151 51,350 51,046
Dilutive effect of:
Stock options 846 1,518 783 1,541
Convertible debt * -- 3,580 -- 3,580
Denominator (assuming
dilution) 52,231 56,249 52,133 56,167
* On December 15, 1999, the Company issued $172.5 million in convertible
notes, which are convertible into shares of common stock at a
converison rate of 20.7512 shares per $1,000 principal amount. The
effect of the assumed conversion of these notes was excluded from the
calculation of net income per share, assuming dilution, for the three
and six months ended June 30, 2001 because it would have been
antidilutive in both periods.
CommScope, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
(Unaudited)
June 30, December 31,
2001 2000
Assets
Cash and cash equivalents $ 17,908 $ 7,704
Accounts receivable, less allowance
for doubtful accounts of
$12,472 and $9,187, respectively 158,984 197,536
Inventories 53,531 63,763
Prepaid expenses and other current assets 3,687 3,364
Deferred income taxes 18,329 17,296
Total current assets 252,439 289,663
Property, plant and equipment, net 267,590 251,356
Goodwill, net of accumulated
amortization of $56,615 and $54,140,
respectively 153,981 156,685
Other intangibles, net of accumulated
amortization of $36,108 and $34,796,
respectively 12,657 13,969
Other assets 6,109 9,509
Total Assets $692,776 $721,182
Liabilities and
Stockholders' Equity
Accounts payable $ 23,358 $ 39,958
Other accrued liabilities 38,217 38,481
Current portion of long-term debt 2,551 2,120
Total current liabilities 64,126 80,559
Long-term debt, less current portion 192,866 225,316
Deferred income taxes 21,291 24,006
Other noncurrent liabilities 18,721 16,781
Total Liabilities 297,004 346,662
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $.01 par value;
Authorized shares: 20,000,000;
Issued and outstanding shares:
None at June 30, 2001 and
December 31, 2000 -- --
Common stock, $.01 par value;
Authorized shares: 300,000,000;
Issued and outstanding shares:
51,412,820 at June 30, 2001;
51,263,703 at December 31, 2000 514 513
Additional paid-in capital 178,138 175,803
Retained earnings 223,359 200,802
Accumulated other comprehensive loss (6,239) (2,598)
Total Stockholders' Equity 395,772 374,520
Total Liabilities and
Stockholders' Equity $692,776 $721,182
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SOURCE CommScope, Inc.
Web site: http://www.commscope.com
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http://www.videonewswire.com/COMMSCOPE/072401
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CONTACT: Phil Armstrong, Investor Relations, +1-828-323-4848, or
Betsy Lambert, APR, Media Relations, 828-323-4873, both of
CommScope