EXHIBIT 99.1
FOR IMMEDIATE RELEASE CONTACT: Jim Bauer
Investor Relations
(678) 473-2647
jim.bauer@arrisi.com
ARRIS REVISES FIRST QUARTER 2003 GUIDANCE
DUE TO MANUFACTURING AND WEATHER DELAYS
ANNOUNCES CONFERENCE CALL DETAILS
DULUTH, GA. (MARCH 27, 2003) ARRIS (NASDAQ:ARRS) today provided revised guidance
for the ranges of first quarter 2003 revenue and earnings per share. Based upon
the most recent external factors discussed below the Company now expects revenue
in the range of $90 million to $100 million and earnings per share in the range
of $0.02 to $0.08 per share. Guidance is given in terms of GAAP net income per
share pursuant to recent SEC pronouncements as opposed to cash earnings. Cash
earnings would add amortization of approximately $8.7 million. The revised
earnings guidance includes the impact of the previously announced purchase of
the Nortel Networks Membership interest at a net discount of $28.5 million and
the previously announced write off of decommissioned customer relations software
of $2.3 million. Cash earnings per share excluding the items discussed above are
expected to be in the range of $(0.13) to $(0.19) per share.
"As we approach the end of the quarter, it has become apparent that a
combination of recent external factors will push substantial revenues expected
in the current quarter from both our Broadband and Supplies & Services product
groups into the June quarter," said Larry Margolis, ARRIS EVP & CFO. "Although
we may have been able to absorb the impact of some factors, the combined effects
cause us now to realize that revenues will fall short of the previous guidance
range. A number of factors are contributing to this anticipated shortfall.
First, in our Broadband product group, anticipated shipments will be delayed due
to recent manufacturing and component availability issues. Although these
problems have now been corrected, this disruption has caused as much as $20
million of anticipated shipments to be delayed into the second quarter.
"In addition," continued Margolis, "in our Supplies & Services group, the record
snow storm in Denver last week not only interfered with normal customer ordering
and our order entry processes due to the inability of employees to get to work,
but also damaged the roof of our TeleWire Supply headquarters facility and
caused a gas leak in the building. These problems forced the evacuation and
temporary closure of the Denver TeleWire Supply headquarters facility late last
week. Although the facility has now been reopened, order entry and shipments
were seriously disrupted at a critical point in time for the first quarter and
sales and customer orders which would normally have occurred in the first
quarter have been delayed. Weather conditions earlier in the quarter in the
northeastern
United States also caused a disruption and delay that affected sales for the
quarter. These combined weather related issues are estimated to have a $5
million adverse impact on first quarter revenues. In addition, unforeseen order
processing delays at one of our largest customers will push an additional
estimated $5 million of orders anticipated for the first quarter into the June
quarter. We expect most of the delayed shipments described above to be shipped
in the second quarter.
Finally, we had a backlog of approximately $6 million for Cabovisao, which we
are not shipping due to the previously disclosed uncertainty concerning their
financing status," concluded Margolis.
"Had these supply and weather problems not occurred so late in the quarter, we
believe we would have recovered sufficiently to come within our originally
announced guidance range, albeit at the lower end," said Bob Stanzione, Arris
President and CEO. "Our high-speed data, cable telephony and infrastructure
products continue to generate significant customer demand and; therefore, we
remain cautiously optimistic concerning the balance of the year. ARRIS will
formally announce first quarter 2003 results on April 23, 2003 and will provide
second quarter guidance at that time which we anticipate will be above current
market consensus revenue estimates."
ARRIS has scheduled a conference call to discuss its revised guidance at 8:30am
EDT on Friday March 28, 2003. The call may be accessed by dialing (888) 245-7013
and asking for the ARRIS Conference Call with Jim Bauer as the moderator. A
replay of the conference call will be available through Tuesday, April 1, 2003
at (877) 519-4471, PIN # 3840252. Please note that ARRIS will not accept any
calls related to this release during the period between the time of the release
and the completion of the scheduled conference call at 8:30am EDT on March 28,
2003.
Forward-looking statements:
Certain information and statements contained in this press release constitute
forward-looking statements with respect to the financial condition, results of
operations, and business of ARRIS. Statements that are based on current
expectations, estimates, forecasts, and projections about the markets in which
the Company operates and management's beliefs and assumptions regarding these
markets are forward-looking statements. The Company cautions that any
forward-looking statements made are not guarantees of future performance.
Statements made in this press release, including those related to:
- - achievement and timing of results based on management's actions;
- - first and second quarter and full year 2003 revenues and earnings;
- - the amounts of shippable backlog;
- - resolution of component supply problems; and
- - production capabilities
are forward-looking statements. These statements involve risks and uncertainties
that may cause actual results to differ materially from those set forth in these
statements. Among other things,
- - projected results for the first quarter 2003 and comments on the second
quarter and full year 2003 are based on preliminary estimates,
assumptions and projections that management believes to be reasonable
at this time, but are beyond management's control;
- - because the market in which ARRIS operates is volatile, actions taken
and contemplated may not achieve the desired impact relative to
changing market conditions and the success of these strategies will be
dependent on the effective implementation of those plans while
minimizing organizational disruption; and
- - several of the substantial participants in our industry are in a
weakened financial condition which could directly or indirectly cause a
reduced demand for our products or other unexpected consequences,
additionally, we cannot be certain if or when the general uncertainty
in our industry will stabilize or improve.
In addition to the factors set forth elsewhere in this release, other factors
that could cause results to differ from current expectations include: the impact
of rapidly changing technologies; the impact of competition on product
development and pricing; the ability of ARRIS to react to changes in general
industry and market conditions including regulatory developments; rights to
intellectual property, market trends and the adoption of industry standards; and
consolidations within the telecommunications industry of both the customer and
supplier base. These factors are not intended to be an all-encompassing list of
risks and uncertainties that may affect the Company's business. Additional
information regarding these and other factors can be found in ARRIS' reports
filed with the Securities and Exchange Commission. In providing forward-looking
statements, the Company is not undertaking any obligation to update publicly or
otherwise these statements, whether as a result of new information, future
events or otherwise.
ARRIS is a leading provider of innovative broadband local access networks and
high-speed data and telephony systems for the delivery of voice, video and data
to the home and business. From the network to the subscriber, ARRIS provides
complete solutions that add reliability and value. Headquartered in Duluth,
Georgia, USA, ARRIS has design, engineering, distribution, and sales office
locations throughout the world. Information about ARRIS products and services
can be found at www.arrisi.com.
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