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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) :
October 21, 1997
Lucent Technologies Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
1-11639 22-3408857
(Commission File Number) (IRS Employer Identification No.)
600 Mountain Avenue, Murray Hill, New Jersey 07974
(Address of principal executive offices) (Zip Code)
(908) 582-8500
(Registrant's Telephone Number)
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Item 5. Other Events.
On October 21, 1997, the registrant issued the press release attached
hereto as Exhibit 99 reporting its earnings for the quarter and fiscal year
ended September 30, 1997.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The following Exhibit is filed with this report:
99 Press release dated October 21, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LUCENT TECHNOLOGIES INC.
Date: October 22, 1997 By /s/ James S. Lusk
Name: James S. Lusk
Vice President
and Controller
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Exhibit 99
News Release
[LUCENT TECHNOLOGIES LOGO]
Dan Coulter
908-582-7635 (office)
908-735-0297 (home)
Lynn Newman
908-582-5522 (office)
973-993-8033 (home)
LUCENT REPORTS RECORD 4TH QUARTER INCREASES OF 17.2 PERCENT FOR REVENUE AND 44.7
PERCENT FOR NET INCOME - EXCLUDING ONE-TIME CHARGES FOR OCTEL ACQUISITION
COMPANY ALSO REPORTS RECORD FISCAL YEAR INCREASES OF 13.2 PERCENT FOR REVENUE
AND 43 PERCENT FOR NET INCOME - EXCLUDING ONE-TIME CHARGES
FOR RELEASE TUESDAY, OCTOBER 21, 1997
MURRAY HILL, N.J. - Lucent Technologies today reported revenues
increased 17.2 percent in the quarter ended September 30, 1997, to $6.933
billion -- and net income increased 44.7 percent to $369 million, or 57 cents
per share, excluding one-time charges associated with the company's acquisition
of Octel Communications Corporation.
The company's revenues for the fiscal year ended September 30, 1997
were $26.360 billion, an increase of 13.2 percent over the previous 12 months.
For the 12 months ended September 30, 1997, Lucent's net income rose 43 percent
to $1.507 billion or $2.34 a share, excluding one-time charges associated with
the Octel acquisition. This compares to net income of $1.054 billion or $1.65
per share on a pro-forma basis* in the 12 months ended September 30, 1996,
excluding business restructuring and other charges taken in December, 1995.
Including charges associated with Octel, the company reported a loss
for the fourth quarter of $597 million or 92 cents per share. For the same
period last year, Lucent reported net income of $255 million, or 40 cents per
share on revenues of $5.918 billion. When the Octel charges are included for the
fiscal year ended September 30, 1997, Lucent earned net income of $541 million
or 84 cents per share.
"This is a great finish to our first fiscal year as an independent
company," said Richard McGinn, Lucent Technologies CEO and President. "We
believe these results demonstrate the enormous growth opportunities in the
communications industry, and that our focus on the industry's fastest growing
segments is paying off."
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Revenues for the company's core businesses** increased 19.4 percent in
the quarter. Revenues increased 17.8 percent for Systems for Network Operators;
21 percent for Business Communications Systems; 23.9 percent for Microelectronic
Products and 1.6 percent for Consumer Products, compared to the year-ago
quarter.
"Lucent is continually and quickly strengthening our business for
growth," said McGinn. "Just in the past few weeks we've completed our
acquisition of Octel, announced plans to acquire Livingston Enterprises, added
to our growing data networking portfolio for businesses and service providers,
and created the joint venture with Philips for the consumer terminal market. We
intend to continue that pace to address a rapidly changing - and fortunately for
us - rapidly growing industry."
REVIEW OF OPERATIONS
SYSTEMS FOR NETWORK OPERATORS
Revenues increased 17.8 percent over the year-ago quarter to $3.879
billion, led by sales of switching and wireless systems with associated
software. The continuing demand for second lines in businesses and residences --
for uses such as Internet services, data traffic and faxes -- contributed to the
group's increased quarterly revenues.
Domestic revenues increased approximately 14 percent for the final
quarter of 1997 in comparison to the same period in 1996, led by sales to
traditional service providers, and non-traditional customers including PCS
(personal communications services) wireless providers and competitive access
providers. International sales increased approximately 33 percent over the
year-ago quarter, including increases in the Caribbean/Latin American region,
the Europe/Mid-east/Africa region, and in China. International sales represented
approximately 24 percent of revenues for the quarter.
Comparing the 12 months ended September 30, 1997 to the comparable
year-ago period, the group's revenues increased 18.4 percent to $15.614 billion.
** This includes revenues from Lucent's Systems for Network Operators,
Microelectronic Products and Business Communications Systems businesses. It
excludes revenues from the company's Consumer Products business and from
Other Systems and Products.
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MICROELECTRONIC PRODUCTS
Revenues increased 23.9 percent over the year-ago quarter to $782
million, led by increased sales of customized chips for computing and
communications, including components for wireless telephones, local area
networks, data networking, and high-end computer workstations. Increased sales
of power systems and optoelectronic components also contributed to the
quarter-over-quarter increase.
Domestic revenues increased about 19 percent and international revenues
increased approximately 29 percent compared to the year-ago quarter. The
international increase was led by continued strength in the European and
Asia/Pacific regions. International revenues represented approximately 49
percent of revenue for the quarter.
Comparing the 12 months ended September 30, 1997 to the comparable
year-ago period, the group's revenues increased 19 percent to $2.755 billion.
BUSINESS COMMUNICATIONS SYSTEMS
Revenues increased 21 percent to $1.811 billion compared to the
year-ago quarter, with increases in both domestic and international sales.
The group's results were primarily driven by increased sales of the
DEFINITY(R) enterprise communications server, SYSTIMAX(R) Structured Cabling
Systems, messaging systems, integrated offers such as call centers, and higher
revenues from services contracts. Domestic revenues were up approximately 22
percent and international revenues increased approximately 18 percent versus the
year-ago quarter. International sales represented approximately 17 percent of
revenue -- with expanded sales in all international regions.
Comparing the 12 months ended September 30, 1997 to the comparable
year-ago period, the group's revenues increased 16.4 percent to $6.411 billion.
CONSUMER PRODUCTS
Revenues increased 1.6 percent over the year-ago quarter to $316
million. Since the beginning of the calendar year, the group has launched 26 new
products into the marketplace, contributing to the increased sales levels. Now
that its consumer products business has become part of Philips Consumer
Communications (PCC), Lucent will no longer report "consumer products" revenues,
but will report its share of the earnings from the venture as a component of
"other income."
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COSTS AND EXPENSES:
Gross margin for the quarter was 44.1 percent (excluding one-time
charges associated with the Octel acquisition), up from 43.5 percent in the
year-ago quarter.
Excluding the Octel charges, selling, general and administrative
expenses (SG&A) were 23.2 percent of revenues in the quarter, compared with 24.2
percent in the year-ago period. The SG&A expenses were reduced by a reversal of
business restructuring reserves of $105 million. SG&A expenses increased over
the prior quarter, primarily due to higher sales levels, investments in growth
initiatives, and implementation of SAP, an integrated software platform.
Research and development (R&D) expenses, excluding the Octel charges,
increased 22.4 percent over the year-ago quarter. This increase was primarily
due to a $127 million write down of Bell Labs assets, as well as increased
spending to support wireless infrastructure and microelectronics products. As a
percent of revenues, quarterly R&D spending, excluding the Octel charges,
increased one-half of one percentage point.
Lucent Technologies designs, builds and delivers a wide range of public
and private networks, communications systems and software, data networking
systems, business telephone systems, and microelectronic components. Bell
Laboratories is the research and development arm for the company.
# # #
* PRO-FORMA - The company's results for the 12 months ended September
30, 1996 are calculated on a pro-forma basis, as though the total
shares outstanding immediately following the IPO had been issued in
the first quarter of calendar year 1995. The company did not receive
the proceeds from the sale of IPO shares until April 1996.
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FOURTH QUARTER INCOME STATEMENT (UNAUDITED; MILLIONS OF DOLLARS, EXCEPT PER
SHARE AMOUNTS)
<TABLE>
<CAPTION>
For the Three Months Ended
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9/30/97 | 9/30/97(a) 9/30/96 Change(b)
<S> <C> | <C> <C> <C>
REVENUES 6,933 | 6,933 5,918 17.2%
COSTS 3,881 | 3,873 3,343 15.9%
GROSS MARGIN 3,052 | 3,060 2,575 18.8%
SELLING, GENERAL AND ADMINISTRATIVE 1,634 | 1,608 1,434 12.1%
RESEARCH AND DEVELOPMENT 835 | 835 682 22.4%
PURCHASED IN-PROCESS RESEARCH & DEVELOPMENT 945 | -- -- --
TOTAL OPERATING EXPENSES 3,414 | 2,443 2,116 15.5%
OPERATING INCOME (LOSS) (362) | 617 459 34.4%
OTHER INCOME, NET 51 | 51 37 37.8%
INTEREST EXPENSE 72 | 72 78 (7.7)%
INCOME (LOSS) BEFORE INCOME TAXES (383) | 596 418 42.6%
INCOME TAX EXPENSE 214 | 227 163 39.3%
NET INCOME (LOSS) (597) | 369 255 44.7%
NET INCOME (LOSS) PER COMMON SHARE (0.92) | 0.57 0.40 42.5%
SHARES OUTSTANDING (MILLIONS) 649.6 | 649.6 636.7 2.0%
EFFECTIVE TAX RATE (%) NM | 38.1% 39.0% (0.9)
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</TABLE>
NM = Not meaningful
(a) 1997 excludes one-time charges related to the Company's acquisition of
Octel including $945 million for purchased in-process research and
development costs, and 1996 excludes business restructuring and other
charges.
(b) Change between the three months ended September 30, 1997 excludes one-time
charges related to the Company's acquisition of Octel and the corresponding
1996 period.
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FISCAL YEAR 1997 INCOME STATEMENT (UNAUDITED; MILLIONS
OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
For the Twelve Months Ended
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9/30/97 | 9/30/97(a) 9/30/96(a) Change(b)
<S> <C> | <C> <C> <C>
REVENUES 26,360 | 26,360 23,286 13.2%
COSTS 14,898 | 14,890 13,500 10.3%
GROSS MARGIN 11,462 | 11,470 9,786 17.2%
SELLING, GENERAL AND ADMINISTRATIVE 5,784 | 5,758 5,645 2.0%
RESEARCH AND DEVELOPMENT 3,023 | 3,023 2,287 32.2%
PURCHASED IN-PROCESS RESEARCH AND |
DEVELOPMENT 1,024 | 79 -- --
TOTAL OPERATING EXPENSES 9,831 | 8,860 7,932 11.7%
OPERATING INCOME 1,631 | 2,610 1,854 40.8%
OTHER INCOME, NET 141 | 141 218 (35.3)%
INTEREST EXPENSE 305 | 305 293 4.1%
INCOME BEFORE INCOME TAXES 1,467 | 2,446 1,779 37.5%
INCOME TAX EXPENSE 926 | 939 725 29.5%
NET INCOME 541 | 1,507 1,054 43.0%
NET INCOME PER COMMON SHARE 0.84 | 2.34 1.65(c) 41.8%
SHARES OUTSTANDING (MILLIONS) 644.1 | 644.1 636.7(c) 1.2%
EFFECTIVE TAX RATE (%) 63.1% | 38.4% 40.8% (2.4)
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</TABLE>
(a) 1997 excludes one-time charges related to the Company's acquisition of Octel
including $945 million for purchased in-process research and development
costs, and 1996 excludes business restructuring and other charges.
(b) Change between the twelve months ended September 30, 1996 excludes one-time
charges related to the Company's acquisition of Octel and the corresponding
1996 period excludes business restructuring and other charges.
(c) Net income per share and shares outstanding for the twelve months are
calculated on a pro-forma basis, as though the total shares outstanding
immediately following the IPO had been issued in the first quarter of
calendar year 1995. The company did not receive the proceeds from the sale
of IPO shares until April 1996.
Weighted average earnings per share was $1.82 for the twelve months ended
September 30, 1996 using 578.1 million weighted average shares.
