Exhibit 99.1
Media Contact: Alisha Goff
503/627-7075
alisha.goff@tektronix.com
Analyst Contact: Paul Oldham
503/627-4027
paul.r.oldham@tektronix.com
TEKTRONIX REPORTS RESULTS FOR THE
SECOND QUARTER OF FISCAL 2005
ACHIEVES SALES GROWTH OF OVER 20%
BEAVERTON, Ore., Dec. 16, 2004 - Tektronix, Inc. (NYSE: TEK) today reported net
sales of $266.8 million and a net loss from continuing operations of $2.6
million or $0.03 per share for the second quarter ended November 27, 2004. This
compares with net sales of $217.9 million and net earnings from continuing
operations of $36.5 million or $0.42 per share for the same period last year.
Excluding acquisition-related costs, business realignment and one-time items,
net earnings from continuing operations were $34.4 million or $0.39 per share
for the second quarter ended November 27, 2004, as compared with $19.3 million
or $0.22 per share for the same period last year. Included in
acquisition-related costs for the second quarter ended November 27, 2004 are
non-cash expenses related to the acquisition of Inet Technologies, Inc,
including the write-off of in-process research and development, amortization of
acquisition related items and other acquisition related expenses. Included in
acquisition-related credits for the same period last year is a non-cash gain
resulting from the settlement of the historical defined benefit pension plan at
our subsidiary in Japan.
"We are pleased with our performance this quarter. We saw solid order growth
across most of our product lines and sales growth of over 20%. We were
especially pleased with the performance of our general purpose products and the
contribution from the acquisition of Inet Technologies," said Rick Wills,
Tektronix Chairman and CEO. "Regionally, our order growth continued to be
strongest in Asia/Pacific and Japan."
"We are now well into the integration of Inet Technologies, which we acquired on
September 30 of this year," continued Wills. "The acquisition was a significant
strategic step and will allow us to expand our addressable market."
"In addition, during the quarter we continued to grow our core business with the
introduction of the TPS2000 digital storage oscilloscope with an industrial
power application - marking our entrance into the industrial power market. And,
we continued our investment in our adjacent
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Tektronix Second Quarter 2005 Results.../2
product categories with the introduction of the RSA3408A, a dramatic advancement
in real-time spectrum analysis, just after the close of the quarter."
For the third quarter of fiscal 2005, including Inet, the company expects net
sales to be $250 - $260 million and earnings per share from continuing
operations of $.26 to $.30, excluding one-time items and acquisition-related
costs.
"In conclusion, we have had a great first half of the year with the acquisition
of Inet and the resulting integration that is well underway; a very strong
product flow that we expect to pick up even more over the coming quarters;
strong sales growth and solid business results," concluded Wills.
Recent highlights include the following:
.. The introduction of the RSA3408A, a new high performance Real-Time
Spectrum Analyzer providing real-time triggering and capture capabilities,
and enhanced resolution yielding a 2000-fold improvement in the analysis
of power and frequency changes over time.
.. We also introduced an industry-leading product gained through the Inet
acquisition, the Spectra2, that enables large scale communications
networks to test and integrate VoIP.
.. The purchase of several Digital Phosphor Oscilloscopes (DPO) by LG
Electronics, a major electronic supplier worldwide, to achieve fast and
detailed testing and accurate measuring with reliable quality for the
latest digital TV designs.
.. The selection by QLogic Corp, a leader in designing and developing storage
area networking (SAN) infrastructure components, of Tektronix'
Communications Signal Analyzer (CSA8200) system to drive development of 4
Gigabit per second (4G) Fibre Channel products and to support future
development projects.
.. The selection of the TDS6000B family of digital storage oscilloscopes by
the editors and readers of EE Times and eeProductCenter as the Ultimate
Product in the Test & Measurement category for the second quarter of 2004.
.. The availability of the TPS2000 Series Digital Storage Oscilloscopes
(DSOs) and a complementary industrial power application that will improve
the productivity of industrial power designers and technicians by
providing more of the capabilities they need within a single instrument.
.. A partnership with Vqual Ltd., a UK-based video software developer, to
develop and market software solutions that enable consumer electronics
manufacturers, professional video equipment manufacturers, and mobile
phone manufacturers to more rapidly bring to market devices, equipment and
services that implement next generation video standards.
.. The sponsorship of a team of Cornell University engineering faculty and
students to build a unique and innovative autonomous off-road robotic
vehicle for entry into the Defense Advanced Research Projects Agency
(DARPA) Grand Challenge.
In addition, today Tektronix declared a quarterly cash dividend of $0.06 per
share on the outstanding common shares of the Company, payable on January 24,
2005 to shareholders of record as of the close of market on January 7, 2005.
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Tektronix Second Quarter 2005 Results.../3
Tektronix will be discussing its second quarter results and future guidance on a
conference call today, beginning at 1:30 p.m. Pacific Standard Time (PST).
A live Webcast of the conference call will be available at www.tektronix.com/ir.
A replay of the Webcast will be available at the same Web site for one year.
Tektronix presents pro forma measures of net earnings and net earnings per share
from continuing operations that exclude the effects of business realignment and
one-time items. The "Reconciliation of Pro Forma Measures to GAAP" reconciles
the results of operations in accordance with generally accepted accounting
principles (GAAP) to the pro forma results of operations. Tektronix presents pro
forma results of operations to help readers differentiate the results of ongoing
operating activity from results that include business realignment costs and
one-time items. Management of Tektronix uses these pro forma measures to
evaluate the Company's results of operations and for forecasting purposes.
Statements and information in this press release that relate to future events or
results (including the Company's statements and expectations regarding sales and
earnings per share, market position and market growth opportunities, and
introduction of new products) are based on the Company's current expectations.
They constitute forward-looking statements subject to a number of risk factors,
which could cause actual results to differ materially from those currently
expected or desired. Those factors include: worldwide geopolitical and economic
conditions; business conditions in the electronics, communications, computer and
advanced technologies industries, changes in order rates and customer
cancellations, including changes in seasonal buying habits; competitive factors,
including pricing pressures, technological developments and new products offered
by competitors; changes in product and sales mix, and the related effects on
gross margins; the Company's ability to deliver a timely flow of competitive new
products, and market acceptance of these products; the availability of parts and
supplies from third-party suppliers on a timely basis and at reasonable prices;
inventory risks due to changes in market demand or the Company's business
strategies; resolution of indemnities relating to certain acquisitions and
divestitures; changes in effective tax rates; currency fluctuations; the ability
to develop effective sales channels; and risks associated with the integration
of Inet Technologies including realization of expected growth opportunities.
Further information on factors that could cause actual results to differ from
those anticipated is included in filings made by the Company from time to time
with the Securities and Exchange Commission, including but not limited to annual
reports on Form 10-K and the quarterly reports on Form 10-Q.
About Tektronix
Tektronix, Inc. is a test, measurement, and monitoring company providing
measurement solutions to the communications, computer, and semiconductor
industries worldwide. With more than 55 years of experience, Tektronix enables
its customers to design, build, deploy, and manage next-generation global
communications networks and advanced technologies. Headquartered in Beaverton,
Oregon, Tektronix has operations in 19 countries worldwide. Tektronix' Web
address is www.tektronix.com.
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Tektronix Second Quarter 2005 Results.../4
Consolidated Statements of Operations
Quarter Ended Two Quarters Ended
--------------------------- ---------------------------
Nov. 27, Nov. 29, Nov. 27, Nov. 29,
(In thousands, except per share amounts) 2004 2003 2004 2003
- ------------------------------------------------------------ ------------ ------------ ------------ ------------
Net sales $ 266,828 $ 217,921 $ 517,293 $ 419,359
Cost of sales 103,425 96,084 205,371 188,414
------------ ------------ ------------ ------------
Gross profit 163,403 121,837 311,922 230,945
Research and development expenses 41,878 31,403 75,457 60,505
Selling, general and administrative expenses 76,320 68,309 141,386 130,834
Business realignment costs 244 11,718 2,283 16,344
Acquisition related costs (credits), net 38,021 (35,681) 38,808 (34,365)
Loss (gain) on disposition of assets 57 36 (1,834) -
------------ ------------ ------------ ------------
Operating income 6,883 46,052 55,822 57,627
Interest income 3,904 5,190 9,366 11,122
Interest expense (335) (661) (418) (1,783)
Other non-operating income (expense), net (1,067) 126 (3,291) (459)
------------ ------------ ------------ ------------
Earnings before taxes 9,385 50,707 61,479 66,507
Income tax expense 11,964 14,198 27,592 18,622
------------ ------------ ------------ ------------
Net earnings (loss) from continuing operations (2,579) 36,509 33,887 47,885
Loss from discontinued operations, net of income taxes (255) (22) (313) (1,522)
------------ ------------ ------------ ------------
Net earnings (loss) $ (2,834) $ 36,487 $ 33,574 $ 46,363
============ ============ ============ ============
Earnings (loss) per share:
Continuing operations - basic $ (0.03) $ 0.43 $ 0.40 $ 0.57
Continuing operations - diluted $ (0.03) $ 0.42 $ 0.39 $ 0.56
Discontinued operations - basic and diluted $ - $ - $ - $ (0.02)
Net earnings - basic $ (0.03) $ 0.43 $ 0.39 $ 0.55
Net earnings - diluted $ (0.03) $ 0.42 $ 0.39 $ 0.54
Weighted average shares outstanding:
Basic 87,020 84,553 85,401 84,625
Diluted 88,570 86,427 86,949 86,116
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Tektronix Second Quarter 2005 Results.../5
Consolidated Balance Sheets
(In thousands) November 27, 2004 May 29, 2004
- -------------------------------------------------- ----------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 152,562 $ 149,011
Short-term marketable investments 103,403 90,956
Trade accounts receivable, net 149,371 133,150
Inventories 122,860 102,101
Other current assets 67,791 69,812
----------------- ------------
Total current assets 595,987 545,030
Property, plant and equipment, net 117,247 105,310
Long-term marketable investments 300,643 463,878
Deferred tax assets 63,718 105,886
Goodwill, net 304,133 79,774
Other long-term assets 155,198 30,825
----------------- ------------
Total assets $ 1,536,926 $ 1,330,703
================= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 152,377 $ 134,048
Accrued compensation 73,466 89,212
Deferred revenue 43,737 25,247
----------------- ------------
Total current liabilities 269,580 248,507
Long-term liabilities 180,015 211,616
Shareholders' equity:
Common stock 520,283 257,267
Retained earnings 688,363 748,381
Accumulated other comprehensive loss (121,315) (135,068)
----------------- ------------
Total shareholders' equity 1,087,331 870,580
----------------- ------------
Total liabilities and shareholders' equity $ 1,536,926 $ 1,330,703
================= ============
Shares outstanding 89,304 84,179
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Tektronix Second Quarter 2005 Results.../6
SELECTED ADDITIONAL FINANCIAL DATA
Quarter Ended Two Quarters Ended
--------------------------- ---------------------------
(Dollars in thousands, % Nov. 27, Nov. 29, % Nov. 27, Nov. 29,
except per share amounts) Growth 2004 2003 Growth 2004 2003
- -------------------------------------------- -------- ------------ ------------ -------- ------------ ------------
PRODUCT ORDERS AND SALES DATA:
Orders 5% $ 234,900 $ 224,245 1% $ 439,188 $ 433,721
U.S. (9)% 85,011 93,264 (18)% 149,262 182,932
International 14% 149,889 130,981 16% 289,926 250,789
Total - excluding Rohde and Schwarz & Inet 7% 213,851 200,393 6% 418,231 394,963
Net Sales 22% $ 266,828 $ 217,921 23% $ 517,293 $ 419,359
U.S. 9% 104,205 95,326 17% 209,969 179,453
International 33% 162,623 122,595 28% 307,324 239,906
Total - excluding Rohde and Schwarz & Inet 21% 244,349 201,394 23% 473,616 385,773
BOOK TO BILL RATIO CALCULATION:
Product Orders $ 234,900 $ 224,245 $ 439,188 $ 433,721
Product Sales $ 245,600 $ 201,687 $ 477,100 $ 387,852
Book to Bill ratio 0.96 1.11 0.92 1.12
RECONCILIATION OF PRO FORMA MEASURES TO GAAP:
Net earnings (loss) from continuing
operations - GAAP $ (2,579) $ 36,509 $ 33,887 $ 47,885
Effect of :
Acquisition related costs (credits) 38,021 (35,681) 38,808 (34,365)
Non-cash expense for Inet inventory
step up adjustment to fair value 1,555 - 1,555 -
Business realignment costs 244 11,718 2,283 16,344
Gain on sale of Nevada City property - - (2,161) -
Tax effect of above items (2,799) 6,710 (2,999) 5,046
------------ ------------ ------------ ------------
Net earnings from continuing operations
- Pro Forma $ 34,442 $ 19,256 $ 71,373 $ 34,910
Diluted earnings per share - Pro Forma $ 0.39 $ 0.22 $ 0.82 $ 0.41
INCOME STATEMENT ITEMS AS A PERCENTAGE OF
NET SALES:
Cost of sales 39% 44% 40% 45%
Research and development expenses 16% 14% 15% 14%
Selling, general and administrative expenses 29% 31% 27% 31%
Business realignment costs 0% 5% 0% 4%
Acquisition related costs (credits), net 14% (16)% 8% (8)%
Loss (gain) on disposition of assets 0% 0% 0% 0%
Operating income 3% 21% 11% 14%
CAPITAL EXPENDITURES AND DEPRECIATION:
Capital expenditures $ 6,998 $ 5,028 $ 14,504 $ 9,240
Depreciation and amortization expense $ 7,200 $ 7,024 $ 13,878 $ 14,276
Quarter Ended Year Ended
November 27, May 29,
2004 2004
------------- ------------
BALANCE SHEET:
Cash and Marketable Investments:
Cash and cash equivalents $ 152,562 $ 149,011
Short-term marketable investments 103,403 90,956
Long-term marketable investments 300,643 463,878
------------- ------------
Cash and Marketable Investments $ 556,608 $ 703,845
Accounts receivable as a percentage of net sales 13.2% 12.7%
Days sales outstanding 50.9 52.6
Average days sales outstanding 48.2 46.2
Inventory as a percentage of net sales 10.5% 10.6%
Inventory turns 3.7 4.1
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Tektronix Second Quarter 2005 Results.../7
Discontinued Operations:
Quarter Ended Two Quarters Ended
---------------------------- ----------------------------
November 27, November 29, November 27, November 29,
(In thousands) 2004 2003 2004 2003
- ------------------------------------------------------- ------------ ------------ ------------ ------------
Loss on sale of VideoTele.com (less applicable
income tax benefit of $8, $0, $9 and $3) $ (14) $ - $ (15) $ (5)
Gain (loss) on sale of optical parametric test business
(less applicable income tax expense (benefit) of ($45),
$47, ($85) and ($89)) (86) 87 (158) (166)
Loss on sale of Gage (less applicable income
tax benefit of $83, $59, $75 and $515) (155) (109) (140) (957)
Loss from operations of Gage (less applicable income
tax benefit of $0, $0, $0 and $212) - - - (394)
------------ ------------ ------------ ------------
Loss from discontinued operations, net of income taxes $ (255) $ (22) $ (313) $ (1,522)
============ ============ ============ ============
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Tektronix Second Quarter 2005 Results.../8
RECONCILIATION OF PRO FORMA MEASURES TO GAAP
Quarter Ended Quarter Ended
November 27, 2004 November 29, 2003
--------------------------------------------- ---------------------------------
Adjustments Adjustments
-------------------- -----------
(In thousands, except per share amounts) GAAP Inet Other PRO FORMA GAAP PRO FORMA
- ------------------------------------------------- --------- --------- --------- --------- --------- ---------
Net sales $ 266,828 - - $ 266,828 $ 217,921 - $ 217,921
Cost of sales 103,425 (1,555) -(A) 101,870 96,084 - 96,084
--------- --------- --------- --------- --------- ----------- ---------
Gross profit 163,403 1,555 - 164,958 121,837 - 121,837
Research and development expenses 41,878 - - 41,878 31,403 - 31,403
Selling, general and administrative expenses 76,320 - - 76,320 68,309 - 68,309
Business realignment costs 244 - (244) - 11,718 (11,718) -
Acquisition related costs (credits):
Write-off of IPR&D 32,195 (32,195) - - - - -
Amortization of acquired intangible assets 3,926 (3,926) - - - - -
Amortization of stock option compensation 204 (204) - - - - -
Transition expenses 1,696 (972) (724) - 1,060 (1,060) -
Japan pension gain - - - - (36,741) 36,741 -
--------- --------- --------- --------- --------- ----------- ---------
Total acquisition related costs (credits) 38,021 (37,297) (724) - (35,681) 35,681 -
Loss on disposition of assets 57 - - 57 36 - 36
--------- --------- --------- --------- --------- ----------- ---------
Operating income 6,883 38,852 968 46,703 46,052 (23,963) 22,089
Other income, net 2,502 - - 2,502 4,655 - 4,655
--------- --------- --------- --------- --------- ----------- ---------
Earnings before taxes 9,385 38,852 968 49,205 50,707 (23,963) 26,744
Income tax expense 11,964 2,509 290 14,763 14,198 (6,710) 7,488
--------- --------- --------- --------- --------- ----------- ---------
Net earnings (loss) from continuing operations $ (2,579) 36,343 678 $ 34,442 $ 36,509 (17,253) $ 19,256
Earnings (loss) per share - diluted $ (0.03) $ 0.39 $ 0.42 $ 0.22
Weighted average shares outstanding - diluted 88,570 88,570 86,427 86,427
Two Quarters Ended Two Quarters Ended
November 27, 2004 November 29, 2003
--------------------------------------------- ---------------------------------
Adjustments Adjustments
-------------------- -----------
GAAP Inet Other PRO FORMA GAAP PRO FORMA
--------- --------- --------- --------- --------- ---------
Net sales $ 517,293 - - $ 517,293 $ 419,359 - $ 419,359
Cost of sales 205,371 (1,555) -(A) 203,816 188,414 - 188,414
--------- --------- --------- --------- --------- ----------- ---------
Gross profit 311,922 1,555 - 313,477 230,945 - 230,945
Research and development expenses 75,457 - - 75,457 60,505 - 60,505
Selling, general and administrative expenses 141,386 - - 141,386 130,834 - 130,834
Business realignment costs 2,283 - (2,283) - 16,344 (16,344) -
Acquisition related costs (credits):
Write-off of IPR&D 32,195 (32,195) - - - - -
Amortization of acquired intangible assets 3,926 (3,926) - - - - -
Stock option compensation 204 (204) - - - - -
Transition expenses 2,483 (972) (1,511) - 2,376 (2,376) -
Japan pension gain - - - - (36,741) 36,741 -
--------- --------- --------- --------- --------- ----------- ---------
38,808 (37,297) (1,511) - (34,365) 34,365 -
Loss (gain) on disposition of assets (1,834) - 2,161(B) 327 - - -
--------- --------- --------- --------- --------- ----------- ---------
Operating income 55,822 38,852 1,633 96,307 57,627 (18,021) 39,606
Other income, net 5,657 - - 5,657 8,880 - 8,880
--------- --------- --------- --------- --------- ----------- ---------
Earnings before taxes 61,479 38,852 1,633 101,964 66,507 (18,021) 48,486
Income tax expense 27,592 2,509 490 30,591 18,622 (5,046) 13,576
--------- --------- --------- --------- --------- ----------- ---------
Net earnings from continuing operations $ 33,887 36,343 1,143 $ 71,373 $ 47,885 (12,975) $ 34,910
Earnings per share - diluted $ 0.39 $ 0.82 $ 0.56 $ 0.41
Weighted average shares outstanding - diluted 86,949 86,949 86,116 86,116
(A) Non-cash expense for Inet inventory step up adjustment to fair value
(B) Gain on sale of Nevada City property
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