<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
___ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-22336
ANTEC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3892082
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
2850 W. Golf Road
Rolling Meadows, IL 60008
(847)439-4444
(Address, including zip code and telephone number, including
area code, of registrant s principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes _X_ No ___
At April 30, 1996, there were 22,873,882 shares of Common Stock, $0.01 par
value, of the registrant outstanding.
<PAGE> 2
PART I. FINANCIAL INFORMATION
ANTEC CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---- ----
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,533 $ 979
Accounts receivable (net of allowance for
doubtful accounts of $2,139 in 1996 and
$1,956 in 1995) 104,444 106,547
Inventories, primarily finished goods 118,125 122,231
Other current assets 2,946 2,477
-------- --------
Total current assets 228,048 232,234
Property, plant and equipment, net 25,705 25,937
Goodwill (net of accumulated amortization
of $28,121 in 1996 and $26,877 in 1995) 170,571 171,815
Deferred income taxes, net 13,829 13,824
Other assets 13,047 13,108
-------- --------
$451,200 $456,918
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 64,562 $ 63,482
Accrued compensation, benefits and related taxes 15,737 15,899
Other current liabilities 23,362 22,395
-------- --------
Total current liabilities 103,661 101,776
Long-term debt 107,667 117,920
-------- --------
Total liabilities 211,328 219,696
Stockholders' equity:
Preferred stock, par value $1.00 per share, 5 million
shares authorized, none issued and outstanding --- ---
Common stock, par value $0.01 per share,
50 million shares authorized; 22.9 million shares
issued and outstanding in 1996 and 1995 229 229
Capital in excess of par value 217,138 217,013
Retained earnings 22,756 20,194
Cumulative translation adjustments (251) (214)
-------- --------
Total stockholders' equity 239,872 237,222
-------- --------
$451,200 $456,918
======== ========
</TABLE>
See accompanying notes to the consolidated financial statements.
2
<PAGE> 3
ANTEC CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share data)
<TABLE>
<CAPTION>
Three months ended
March 31,
---------
1996 1995
---- ----
<S> <C> <C>
Net sales $162,392 $158,847
Cost of sales 124,582 117,914
--------- ---------
Gross profit 37,810 40,933
Operating expenses:
Selling, general and
administrative expenses 28,380 28,420
Amortization of goodwill 1,244 1,181
----------- ----------
29,624 29,601
----------- ---------
Operating income 8,186 11,332
Interest expense and other, net 2,702 2,858
----------- ---------
Income before income taxes 5,484 8,474
Income tax expense 2,922 4,080
----------- ----------
Net income $ 2,562 $ 4,394
========== =========
Net income per common and
common equivalent shares:
Primary $ .11 $ .19
=========== ==========
Fully diluted $ .11 $ .19
=========== ==========
Weighted average common and
common equivalent shares:
Primary 23,531 23,085
========= ========
Fully diluted 23,531 23,189
========= ========
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE> 4
ANTEC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three months ended
March 31,
---------
1996 1995
---- ----
<S> <C> <C>
Operating activities:
Net income $ 2,562 $ 4,394
Adjustments to reconcile net income to
net cash provided (used) by operating activities:
Depreciation and amortization 3,077 2,815
Changes in operating assets and liabilities
net of effects of acquisitions:
Accounts receivable 2,103 (11,163)
Inventories 4,106 (19,071)
Accounts payable and accrued liabilities 1,919 13,339
Other, net (35) 113
------------ ----------
Net cash provided (used) by operating activities 13,732 (9,573)
Investing activities:
Purchases of property, plant and equipment (1,601) (4,908)
Acquisitions of and investments in businesses (444) (6)
------------ ------------
Net cash used by investing activities (2,045) (4,914)
----------- ---------
Net cash provided (used) before financing activities 11,687 (14,487)
Financing activities:
Borrowings 62,495 43,997
Reductions in borrowings (72,753) (29,754)
Proceeds from issuance of common stock 125 127
----------- ----------
Net cash provided (used) by financing activities (10,133) 14,370
--------- --------
Net increase (decrease) in cash and cash equivalents 1,554 (117)
Cash and cash equivalents at beginning of period 979 835
----------- ----------
Cash and cash equivalents at end of period $ 2,533 $ 718
========= =========
Supplemental cash flow information:
Interest paid during the period $ 2,038 $ 2,441
========= ========
Income taxes paid during the period $ 1,403 $ 1,532
========= ========
</TABLE>
See accompanying notes to the consolidated financial statements.
4
<PAGE> 5
ANTEC CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The accompanying consolidated financial statements should be
read in conjunction with the consolidated financial statements included in
ANTEC Corporation s (the Company or ANTEC ) Annual Report on Form 10-K for
the year ended December 31, 1995. The consolidated financial information
furnished herein reflects all adjustments (consisting of normal recurring
accruals) which are, in the opinion of management, necessary for a fair
presentation of the consolidated financial statements for the periods shown.
5
<PAGE> 6
ANTEC CORPORATION
MANAGEMENT S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COMPARISON OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
Net Sales. Net sales for the first three months of 1996 were $162.4
million as compared to $158.8 million for the first three months of 1995, an
increase of 2.2%. This increase includes international sales growth partially
offset by continued softness in the domestic cable TV market.
Gross Profit. Gross profit for the first three months of 1996 was
$37.8 million as compared to $40.9 million for the first three months of 1995,
a decrease of 7.6%. Gross profit as a percentage of net sales for the first
three months of 1996 was 23.3% as compared to 25.8% for the first three months
of 1995. The first quarter of 1995 results were favorably impacted by
additional service fees received in that quarter.
Selling, General and Administrative (SG&A) Expenses. SG&A expenses for
the first three months of 1996 were $28.4 million remaining flat compared to
$28.4 million for the first three months of 1995.
Interest Expense and Other, Net. Interest expense and other, net was
$2.7 million in the first three months of 1996 as compared to $2.9 million in
the first three months of 1995. This decrease primarily relates to decreased
debt levels resulting from an improved working capital position.
Net Income. Net income was $2.6 million for the first three months of
1996 as compared to $4.4 million for the first three months of 1995. This
decrease was due to the factors described above. Net income plus goodwill
amortization was $3.8 million in the first three months of 1996 in comparison
to $5.6 million in the first three months of 1995.
FINANCIAL LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1996, the Company had a balance of $105 million
outstanding under its credit facility. At March 31, 1996, the Company had
approximately $53 million of available borrowings under its credit facility.
The average interest rate on these borrowings was 7.5% at March 31, 1996. The
commitment fee on unused borrowings is approximately 1/4 of 1%.
6
<PAGE> 7
ANTEC CORPORATION
MANAGEMENT S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CON T.)
The Company s capital expenditures were $1.6 million and $4.9 million
in the three months ended March 31, 1996 and 1995, respectively. 1995 capital
expenditures consisted primarily of planned sales office and warehouse
improvements and expansion. The Company has no significant commitments for
capital expenditures at March 31, 1996.
As of March 31, 1996, approximately $4 million of the Company s 1995
non-recurring charge had yet to be utilized. It is currently anticipated that
the remaining balance will be expended by the end of 1996, except for amounts
related to long-term property lease commitments.
The Company s primary need for capital is to fund working capital
requirements, primarily accounts receivable and inventory. The accounts
receivable component of working capital tends to fluctuate closely with the
overall volume of sales activity. Reflecting sales fluctuations, the
investment in accounts receivable increased (decreased) approximately ($2.1)
million and $11.2 million in 1996 and 1995, respectively. The Company has
generally been able to adjust inventory levels according to anticipated
business activity. 1996 inventory levels decreased in the first quarter
resulting from the Company s continued efforts to control inventory levels.
Reflecting an anticipated increase in sales, investment in inventory increased
significantly in the three months ended March 31, 1995.
CASH FLOW
Cash flows provided (used) by operating activities were $13.7 million
and ($9.6) million for the three months ended March 31, 1996 and 1995,
respectively. 1996 reflects the Company s improved working capital position
resulting from its continued effort to control inventory. 1995 reflects an
increase in working capital investments required to support the increased sales
activity.
Cash flows used by investing activities were $2.0 million and $4.9
million for the three months ended March 31, 1996 and 1995, respectively. Both
periods include the impact of planned sales and warehouse improvements.
Cash flows provided (used) by financial activities were ($10.1)
million and $14.4 million for the three months ended March 31, 1996 and 1995,
respectively. Both periods reflect their respective trends in working capital
investments.
7
<PAGE> 8
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Stockholders of ANTEC Corporation
held May 7, 1996:
An election of seven directors was held, and the shares so
present were voted as follows for the election of each of the following:
<TABLE>
<CAPTION>
Number of Number of
Shares Voted For Shares Withheld
---------------- ---------------
<S> <C> <C>
Rod F. Dammeyer 20,889,068 262,186
John M. Egan 20,889,340 261,914
James L. Faust 20,890,411 260,843
John R. Petty 20,888,411 262,843
Samuel K. Skinner 20,889,273 259,673
Bruce Van Wagner 20,885,321 265,933
Mary Agnes Wilderotter 20,891,581 259,673
</TABLE>
An amendment to Company s Employee Stock Incentive Plan was
approved increasing the number of shares of Common Stock which
may be issued pursuant to that Plan from 1,925,000 shares to
3,225,000 shares:
<TABLE>
<CAPTION>
Number of Number of Number of
Shares Voted For Shares Against Shares Abstain
---------------- -------------- --------------
<S> <C> <C>
18,469,034 724,062 76,758
</TABLE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
8
<PAGE> 9
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, thereunto duly authorized.
ANTEC CORPORATION
Dated: May 13, 1996 By: /s/ Lawrence A. Margolis
----------------------------
Lawrence A. Margolis
Executive Vice President
(Principal Financial Officer,
duly authorized to sign on
behalf of the registrant)
9
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 2,533
<SECURITIES> 0
<RECEIVABLES> 104,444
<ALLOWANCES> 2,139
<INVENTORY> 118,125
<CURRENT-ASSETS> 2,946
<PP&E> 25,705
<DEPRECIATION> 28,121
<TOTAL-ASSETS> 451,200
<CURRENT-LIABILITIES> 103,661
<BONDS> 107,667
<COMMON> 229
0
0
<OTHER-SE> 239,643
<TOTAL-LIABILITY-AND-EQUITY> 451,200
<SALES> 162,392
<TOTAL-REVENUES> 162,392
<CGS> 124,582
<TOTAL-COSTS> 124,582
<OTHER-EXPENSES> 29,624
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,702
<INCOME-PRETAX> 5,484
<INCOME-TAX> 2,922
<INCOME-CONTINUING> 2,562
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,562
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
