Exhibit 99.1
NOT FOR IMMEDIATE RELEASE
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COMMSCOPE REPORTS RECORD SECOND QUARTER RESULTS
ORDERS OF $293 MILLION; REVENUE OF $241 MILLION; EARNINGS PER SHARE OF $0.42
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HICKORY, NC -- (JULY 19, 2000) CommScope, Inc. (NYSE: CTV), a world leader
in the manufacture of broadband and high-performance communication cables,
today announced record second quarter orders, sales and earnings per share
for the period ended June 30, 2000. Diluted earnings per share rose 27% to
$0.42 based on 56.2 million shares, compared to $0.33 per diluted share and
51.9 million shares in the second quarter of 1999. The change in diluted
shares primarily reflects the impact of the issuance of $172.5 million of
4% convertible debt in December 1999.
Sales for the second quarter increased 29% to $241.2 million, compared to
$186.9 million in the second quarter of 1999. This performance was
primarily driven by a strong increase in sales of broadband cable
domestically and robust international sales. Domestic sales rose 26% to
$180.4 million, up from $143.8 million in the second quarter of 1999.
International sales rose to $60.8 million for the current quarter, up 41%
year over year and up 21% sequentially.
Orders booked in the second quarter rose 32% to a new all-time record
$293.4 million, up from $222.4 million in the same period last year. Orders
reflect particular strength in worldwide demand for Hybrid Fiber Coaxial
(HFC) products.
Net income for the second quarter rose 30% to an all-time record of $22.3
million, up from $17.1 million in the second quarter of 1999.
"This is the fifth consecutive quarter of year-over-year sales and net
income growth exceeding 25% and we're optimistic about achieving comparable
sales growth rates for the second half of the year," said Frank M. Drendel,
Chairman and Chief Executive Officer. "While tight supply and rising cost
of key materials are expected for the remainder of the year due to surging
demand for HFC products, we continue to make progress on capacity and
material supply issues. In response to the rapid rise in the cost of
materials, we intend to raise prices for essentially all HFC-related cable
products by approximately 6% with implementation beginning in mid
September," Drendel added.
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OTHER SECOND QUARTER HIGHLIGHTS
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o CATV/Video sales worldwide increased to $181.9 million for the current
quarter, up 27% year over year and up 21% sequentially. International
sales rose 41% year over year primarily due to robust demand for HFC
products. Domestic CATV/Video sales rose 21% year over year.
"We believe that the ongoing global deregulation combined with recent
investments by Microsoft, AT&T-Liberty Media and others in overseas cable
systems will continue to create a global catalyst for cable's high capacity
broadband platform," Drendel stated. "Our recently announced agreement to
buy a Motorola manufacturing facility in Brazil is expected to provide a
solid foundation for supporting international growth."
o Wireless and Other Telecom sales rose 64% in the current quarter to
$34.5 million compared to sales of $21.1 million in the same period
last year. This performance was driven by both a strong increase in
other telecom sales and a robust increase in sales of Cell Reach(R)
wireless products. During the quarter, the company also established a
worldwide cable supply agreement with Motorola for wireless cable
products and reached agreement on expanding opportunities between the
companies for other broadband cable products.
o Local Area Network (LAN) sales rose to $24.9 million, up approximately
10% year over year. During the quarter, the company announced laser
certification for all of its multimode fiber products and announced a
strategic alliance with The Siemon Company.
o Gross margin for the second quarter was 26.7%, up approximately 100
basis points from the first quarter of 2000, despite cost increases.
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, cost and
availability of key raw materials, capacity expansion, price increases,
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 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,
regulatory changes affecting our industries worldwide economic conditions,
telecommunications industry capital spending, and other factors. The
cautionary statements contained in Exhibit 99 to CommScope's Form 10-Q for
the period ended March 31, 2000 are incorporated herein by reference.
Visit CommScope at our Web Site--www.commscope.com
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<TABLE>
<CAPTION>
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,
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2000 1999 2000 1999
--------------- --------------- -------------- ---------------
Net sales $ 241,244 $ 186,882 $ 445,183 $ 334,953
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<S> <C> <C> <C> <C>
Operating costs and expenses:
Cost of sales 176,863 137,022 328,449 248,258
Selling, general and administrative 20,080 17,330 38,477 31,899
Research and development 4,955 1,945 8,593 3,434
Amortization of goodwill 1,342 1,347 2,685 2,594
Total operating costs and expenses 203,240 157,644
378,204 286,185
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Operating income 38,004 29,238 66,979 48,768
Other income (expense), net 495 (17) 480 (7)
Interest expense (2,588) (2,567) (4,976) (5,365)
Interest income 53 111 445 250
--------------- --------------- -------------- ---------------
Income before income taxes 35,964 26,765 62,928 43,646
Provision for income taxes (13,671) (9,673) (23,908) (15,794)
--------------- --------------- -------------- ---------------
Net income $ 22,293 $ 17,092 $ 39,020 $ 27,852
=============== =============== ============== ===============
Net income per share:
Basic $ 0.44 $ 0.34 $ 0.76 $ 0.55
Assuming dilution (a) $ 0.42 $ 0.33 $ 0.74 $ 0.54
Weighted average shares outstanding:
Basic
51,151 50,650 51,046 50,527
Assuming dilution (a)
56,249 51,906 56,167 51,613
(a) Calculation of net income per share,
assuming dilution:
Net income (basic) $ 22,293 $ 17,092 $ 39,020 $ 27,852
Convertible debt add-back *
1,179 - 2,361 -
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Numerator (assuming dilution) $ 23,472 $ 17,092 $ 41,381 $ 27,852
=============== =============== ============== ===============
Weighted average shares (basic) 51,151 50,650 51,046 50,527
Dilutive effect of:
Stock options
1,518 1,256 1,541 1,086
Convertible debt *
3,580 - 3,580 -
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Denominator (assuming dilution)
56,249 51,906 56,167 51,613
=============== =============== ============== ===============
</TABLE>
* 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 six months
ended June 30, 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.
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CONTACTS:
PHIL ARMSTRONG BETSY LAMBERT, APR
INVESTOR RELATIONS MEDIA RELATIONS
(828) 323-4848 (828) 323-4873
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