TELLABS INC
8-K, 1999-04-29
TELEPHONE & TELEGRAPH APPARATUS
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                          UNITED STATES
              SECURITIES AND EXCHANGE COMMISSION
                     WASHINGTON, D.C. 20549

                            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)        April 29, 1999


                          TELLABS, INC.
      (Exact name of registrant as specified in its charter)


 Delaware                          0-9692                36-3831568
(State or other jurisdiction    (Commission           (IRS employer
 of incorporation)               file number)          identification no.)


  4951 Indiana Avenue, Lisle, Illinois            60532
(Address of principal executive office)         (Zip Code)


Registrant's telephone number, including area code      (630) 378-8800


                              N/A
	 (Former name or former address, if changed since last report)
<PAGE>
Item 5.  Other Events

On April 29, 1999, Tellabs, Inc. (the "Company") issued its First Quarter
Report 1999 to stockholders through its website at www.tellabs.com.  
Incorporated into the First Quarter Report 1999 are links to the First
Quarter Earnings Release which includes the Results of Operations and
Condensed Consolidated Balance Sheet.

The First Quarter Report 1999 to stockholders and the First Quarter 
Earnings Release including Results of Operations and Condensed Consolidated
Balance Sheet are attached hereto as Exhibit 20.1 and Exhibit 99.2,
respectively, and are incorporated herein by reference.

Item 7.  Financial Statements and Exhibits

  (c) Exhibits
      Exhibit 20.1 - First Quarter Report 1999
      Exhibit 99.2 - First Quarter Earnings Release with Results of
                     Operations and Condensed Consolidated Balance Sheet
<PAGE>
                              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.


                                           TELLABS, INC
Date: April 29, 1999                By: /s Robert E. Swininoga
      --------------                    -----------------------
                                           Robert E. Swininoga
                                           Vice President and
                                           Principal Accounting Officer
<PAGE>
        Exhibit Index

Exhibit No.        Description
- -----------        -----------
   20.1            First Quarter Report 1999 
   99.2            First Quarter Earnings Release with Results of
                   Operations and Condensed Consolidated Balance Sheet

         		              First Quarter Report 1999

Fellow Stockholders:					                                   April 29, 1999

Frequent readers of these missives may experience a sense of deja vu while
reading this letter, as the company's first-quarter performance continued
the trends of revenue and earnings growth typical of the past several years.
No one is complaining - there's no lack of joy here simply because it's a
familiar story.

Revenue in the quarter amounted to $469.7 million, a record high for first-
quarter sales and a 43.4 percent increase over revenue of $327.5 million in
the first quarter a year ago. As usual, sales of the TITAN(r) family of
digital cross-connect systems led the way, increasing by 49 percent over
sales in the first quarter of 1998. Echo canceller sales were up 42 percent
during the quarter, bolstered in large part by the successful integration of
the former Coherent company. Sales of the MartisDXX(tm) system increased
21.2 percent, and we should note that our CABLESPAN(r) product met its sales
plan for the quarter. With all the activity in the cable industry these
days, perhaps this quarter's activity won't be a one-time event.

Net earnings for the quarter amounted to almost $104 million, 52 percent
above earnings in the first quarter a year ago. Earnings per share on a
diluted basis were 52 cents this quarter and 37 cents last year.

As noted, TITAN system sales were strong throughout the quarter, both for
the wideband TITAN 5500 system and the narrowband TITAN 532L system. The
announcement during the quarter of the Feature Package 6.0 enhancement for
the TITAN 5500 cross-connect doubles the size of that system and gives us
the largest digital cross connect system in captivity. The introduction of a
new TITAN element, the TITAN 4500GS Global Services Delivery platform, was
another milestone during this first quarter. This extension of the TITAN
product family addresses the needs of the global carriers of telecom traffic
by accommodating both North American and European transport protocols.

At our April 21 Annual Meeting of Stockholders, current Tellabs Directors
Brian J. Jackman, Stephanie Pace Marshall and William F. Souders were
re-elected to new three-year terms on the company's Board of Directors. To
the delight of most and, I suspect, the surprise of very few, Tellabs
announced a two-for-one split of its common shares. At the same time,
we talked in fuller detail about a stretch objective that goes by the
moniker "X3 by '03." This goal calls for Tellabs to triple annual sales by
the year 2003. As those of you who have been with us for a while will recall,
in October 1995 Tellabs people embraced a "$2B by 2K" objective to achieve
$2 billion in annual revenue by the year 2000. As it looks that we will
achieve that objective one year early, it's only appropriate that we set our
sights on the next target -- $6 billion in revenue by 2003. 
<PAGE>

Aside from the financial goals, there are a few other objectives we've set
for ourselves that are admittedly harder to measure but probably more
consequential in the long run. These include being better able to please our
customers, get products to market with speed, and collect on the results of
those efforts. Reducing days sales outstanding (DSO) is another of our
objectives - one on which good progress was made during the quarter. Customer
satisfaction, always near the top of our agenda, is our top priority,
something that we're taking on with a little more vengeance now. John Vaughan,
in a relatively new role as president of Tellabs Global Sales and Service,
will champion that cause. Reducing time-to-market, the interval between
product conceptualization and actual appearance in the marketplace, is an
issue that bedevils a lot of companies. Brian Jackman, Tellabs President of
Global Systems and Technology, is leading that effort for us. We'll keep you
informed as these initiatives continue to unfold.

Looking forward, we continue to be optimistic about the balance of the year.
The improving economic situation internationally and the robust economy in the
United States, evidenced by the continuing demand for such things as Internet
transport, Internet access and wireless services, augurs well for the
continuing growth of the telecom infrastructure. We think we've got the right
products to address that growth.

Sincerely,

/s Michael J. Birck

Michael J. Birck
President and
Chief Executive Officer

First Quarter Earnings Release (website link to this information which is 
attached hereto as Exhibit 99.2)
  Results of Operations 
  Condensed Consolidated Balance Sheet

Common Stock Market Data
Tellabs' common stock is listed on The Nasdaq Stock Market under the symbol
TLAB and appears in most daily newspaper stock tables as Telabs.  At
February 15, 1999, there were approximately 4,371 stockholders of record.
Tellabs is a component of the Nasdaq-100 Index and the Standard & Poor's 500
Index.

10-K Report
Stockholders may obtain without charge a copy of the Tellabs 1998 Form 10-K
as filed with the Securities and Exchange Commission upon request to:
Secretary
Tellabs, Inc.
4951 Indiana Avenue
Lisle, Illinois 60532 U.S.A.
Edgar Archives

For Tellabs investor relations contact:
Tom Scottino
+1.630.378.7504
[email protected]

Except for historical information, the matters discussed or incorporated by
reference in this document are forward-looking statements that involve risks
and uncertainties associated with competition, market growth, customer
acceptance and timely availability of products and features, as well as other
risks that may be detailed from time to time in the company's filings with
the Securities and Exchange Commission.  Tellabs' actual future results could
differ materially from those discussed here.  The company undertakes no 
obligation to revise or update these forward-looking statements to reflect
events or circumstances or to reflect the occurrence of unanticipated events.
<PAGE>
                    APPENDIX A

DESCRIPTION OF GRAPHIC AND IMAGE MATERIAL
- -----------------------------------------
Bar Graph of Gross Profit Margin (In Percentages)
Data Points: 1995-54.8%, 1996-57.3%, 1997-59.3%, 1998-58.6%, 1999-58.7%
             Results for 1999 are as of 4/02/99.

Bar Graph of Book Value per Share (Restated for Stock Splits in 1996 
and 1995)
Data Points: 1995-$2.44, 1996-$3.29, 1997-$5.14, 1998-$7.08, 1999-$7.54
             Results for 1999 are as of 4/02/99.

Bar Graph of Return on Equity (In Percentages)
Data Points: 1995-31.9%, 1996-23.0%, 1997-34.6%, 1998-34.5%, 1999-34.6%
             Results for 1999 are as of 4/02/99.

FOR IMMEDIATE RELEASE                             CONTACT: Peter A. Guglielmi 
04/14/99                                                       (630) 378-6111

	TELLABS BEGINS 25th YEAR WITH BEST FIRST QUARTER IN HISTORY

Lisle, Ill. - Telecommunications-equipment manufacturer Tellabs, Inc., announced
Wednesday that it began its 25th year of operation with the highest sales and
earnings for any first quarter in company history. It was the company's second-
best quarter, exceeded only by the all-time record sales and operating earnings
reported in the fourth quarter of 1998.

Sales for the first quarter, ended April 2, were $469,651,000, up 43.4 percent
from $327,502,000 a year earlier.

Net income for the first quarter was $103,718,000, up 52 percent from
$68,244,000 a year earlier. Earnings per share of common stock on a diluted
basis for the first quarter were 52 cents, compared with 37 cents for the first
quarter of 1998.

"Tellabs got off to a robust start in 1999, driven primarily by continuing
strong demand across our major product lines," said Tellabs President and CEO
Michael J. Birck. "Sales of our TITAN (r) digital cross-connect system family
exceeded last year's first-quarter level by 48.9 percent, driven by strong
demand for the SONET-based TITAN 5500 and 532L systems. MartisDXX (tm) system
sales were up 21.2 percent. Echo canceller sales, following strong growth at
the end of 1998, increased 42 percent, and CABLESPAN (r) system sales grew
meaningfully, as that product continues to gain acceptance in the
marketplace."
 
During the quarter, Tellabs announced the newest member of its TITAN transport
family, the TITAN 4500GS global services delivery system. This platform
delivers global services over SDH and SONET networks, and was designed in
close collaboration with major global super-carriers whose networks traverse
international boundaries. The system gives carriers new flexibility and
economies for delivering services (Frame Relay, ATM, Internet, digital private
line, cable data and telephony, or video) intact between a SONET environment
such as the United States or Canada and an SDH environment like Europe, Latin
America or the rest of the world. Availability of the TITAN 4500GS system is
expected in May 1999.
<PAGE>

"In addition to the TITAN 4500GS system and the AN2100 Gateway Exchange (tm),
introduced in late 1998, Tellabs looks forward to introducing two more major
new product platforms during 1999," Birck continued. "During the summer, we
expect to bring to field trial an optical networking system that uses DWDM
technology to address metropolitan service applications. Late in the year,
we expect to field-trial a large capacity, ATM-based, broadband transport
manager that complements our TITAN family of digital cross-connect systems."
Tellabs designs, manufactures, markets and services voice and data transport
and access systems. The company's products are used worldwide by the
providers of communications services. Tellabs stock is listed on the Nasdaq
Stock Market (TLAB). 

This news release contains forward-looking statements that involve risks and
uncertainties. Actual results may differ from the results discussed in the
forward-looking statements. Factors that might cause such a difference
include, but are not limited to, risks associated with introducing new
products, entering new markets, competitive response, and a downturn in the
telecommunications industry. For a more detailed description of the risk
factors, please refer to the company's SEC filings.

Tellabs, the Tellabs logo, TITAN and CABLESPAN are registered trademarks of
Tellabs Operations, Inc., in the United States and/or other countries.
AN2100 Gateway Exchange is a trademark of Tellabs Operations, Inc., in the
United States and/or other countries. MartisDXX is a trademark of Tellabs Oy
in Finland and/or in other countries.
<PAGE>

                               TELLABS, INC.
                            Results of Operations
                 (Dollars in thousands, except per-share data)
                                (Unaudited)


                               Three Months Ended
                               04/02/99	  	04/03/98
                               --------		  --------

Sales					                     $469,651		  $327,502
Cost of Goods Sold			           194,010     138,346
					                          --------		  --------
Gross Profit				                275,641     189,156

Operating Exp.
   Mktg. & G.A.				              66,452      48,474
   Research & Dev.			            62,112      43,306
   Goodwill Amort.			             1,473       1,476
					                          --------		  --------
Total Operating Exp.			         130,037      93,256

Operating Profit			             145,604		    95,900
Other Income (Expense) - Net	     8,053       5,202
					                          --------		  --------
Profit Before Tax			            153,657		   101,102

Taxes					                       49,939      32,858
					                          --------		  --------
Net Profit				                 $103,718		  $ 68,244
					                          ========		  ========
Earnings per Share
   Basic			                    $    .53	   $    .38
   Diluted				                 $    .52		  $    .37

Average Number of Shares
of Common Stock Outstanding
   Basic				                    195,044	  	 181,873
   Diluted				                  200,682		   186,947
<PAGE>

                            TELLABS, INC.
                 Condensed Consolidated Balance Sheet
                        (Dollars in thousands)
                             (Unaudited) 

                                            1999	           1998
                                        First Quarter     Year End
					                                   -------------     --------
Assets
Current Assets
   Cash and investments			                $  811,235	     $  642,645
   Accounts receivable, less allowance	      381,354         480,620
   Inventories				                           135,105	        122,424
   Other current assets			                     8,939	          7,002
					                                     ----------      ----------
     Total Current Assets		                1,336,633	      1,252,691

Property, Plant and Equipment	               410,869	        413,891
   Less accumulated depreciation            (166,850)	      (159,100)
					                                     ----------      ----------
					                                        244,019	        254,791

Goodwill				                                  51,446          55,559
Other Assets		                                81,645	         64,550
   				                                   ----------	     ----------
     Total Assets	                        $1,713,743	     $1,627,591
				                                      ==========      ==========

Liabilities
Current Liabilities
   Accounts payable		                     $   59,360	     $   63,083
   Accrued liabilities		                      89,223	         81,927
   Income taxes				                           57,386	         73,117
					                                     ----------      ----------
     Total Current Liabilities		             205,969	        218,127

Long-Term Debt			                              2,850	          2,850
Other Long-Term Liabilities		                 18,856	         18,164
Deferred Income Taxes			                      10,638	         11,853
				                                      ----------      ----------
     Total Liabilities			                    238,313	        250,994

Stockholders' Equity
Common Stock, $.01 Par Value	                  1,958	          1,945
Additional Paid-In Capital	                  230,204	        192,612
Cumulative Translation Adjustment	           (49,248)	        (9,207)
Unrealized Holding Gains on Securities	       17,974	         20,423
Retained Earnings			                       1,274,542	      1,170,824
				                                       ----------     ----------
     Total Stockholders' Equity	            1,475,430      1,376,597
                                           ----------     ----------
     Total Liab. and Stockholders' Equity  $1,713,743   	 $1,627,591
                                           ==========     ==========


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