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Filed by: ANTEC Corporation
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: ANTEC Corporation
Commission File No: 000-22336
On November 1, 2000, ANTEC Corporation issued a press release and held
an analyst meeting to provide further guidance on its acquisition of Nortel
Neworks' ownership interest in Arris Interactive L.L.C. The following is the
slide show presented at the analyst meeting on November 1, 2000:
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ANTEC CORPORATION
(NASDAQ: ANTC)
ANALYST MEETING
Arris International
A new Company, a new Vision
Suwanee, Georgia -- November 1, 2000
Bob Stanzione, Pres & CEO, Larry Margolis, EVP & CFO
Jim Lakin, Arris, Pres & COO, Jim Bauer, Investor Relations
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THE NEW ANTEC
Forward looking statements: The statements in this presentation that use such
words as "believe", "expect", "intend", "anticipate", "contemplate", "estimate",
or "plan" or similar expressions are forward-looking statements. Our business is
dependent upon general economic conditions as well as competitive,
technological, and regulatory developments and trends specific to our industry
and customers. These conditions and events could be substantially different than
we believe or expect and these differences may cause our actual results to
differ materially from the forward-looking statements we have made or the
results, which could be expected to accompany such statements. Specific factors
which could cause such material differences include the following: Design or
manufacturing defects in our products which could curtail sales and subject us
to substantial costs for removal, replacement and reinstallation of such
products; manufacturing or product development problems that we do not
anticipate because of our relative experience with these activities; an
inability to absorb or adjust our costs in response to lower sales volumes than
we anticipate; unanticipated costs or inefficiencies from the ongoing
consolidation of certain of our activities; loss of key management, sales or
technical employees; decisions by our larger customers to cancel contracts or
orders as they are entitled to do or not to enter into new contracts or orders
with us because of dissatisfaction, technological or competitive changes,
changes in control or other reasons; and inability as a result of our relative
experience to deliver construction services within anticipated costs and time
frames which could cause loss of business, operating losses and damage claims.
The above listing of factors is representative of the factors which could affect
our forward-looking statements and is not intended as an all encompassing list
of such factors. In providing forward-looking statements we are not undertaking
any obligation to update publicly or otherwise these statements, whether as a
result of new information, future events or otherwise.
ANTEC
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SEC Statement
ANTEC and the new holding company, currently named Broadband Parent
Corporation, will be filing a registration statement, which will contain a
proxy statement of ANTEC and a prospectus of Broadband Parent Corporation, and
other documents with the Securities and Exchange Commission (SEC). Investors
and stockholders are urged to read the proxy statement/prospectus and any other
relevant documents filed with the SEC when they become available because they
will contain important information. Investors and stockholders will be able to
receive the proxy statement/prospectus and other documents filed by ANTEC and
the new holding company free of charge at the SEC's web site, www.sec.gov, or
from ANTEC Investor Relations at 11450 Technology Circle, Duluth, Georgia
30097, Attention: James A. Bauer. ANTEC and its directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of ANTEC in connection with the realignment. Information about
the directors and executive officers of ANTEC and their ownership of ANTEC
stock is set forth in the proxy statement for ANTEC's 2000 annual meeting of
stockholders held on May 4, 2000. Investors may obtain additional information
regarding the interests of such participants by reading the proxy
statement/prospectus when it becomes available.
ANTEC
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ANTEC
AGENDA
1. INTRODUCTION AND WELCOME BOB STANZIONE
- Agenda and objectives
- Transaction overview
2. FINANCIAL DISCUSSIONS LARRY MARGOLIS
- Stand alone & proforma guidance
- Product category guidance
3. ARRIS PRODUCT EVOLUTION PLANS JIM LAKIN
- CBR to IP and CMTS
- Converged Services Wireless
4. QUESTIONS AND ANSWERS ALL PARTICIPANTS
******************************
5. TOUR OF ARRIS FACILITY GA PARTICIPANTS
ANTEC
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ANTEC
ON OCTOBER 18TH, ANTEC AND NORTEL NETWORKS ANNOUNCED THAT ANTEC WAS BUYING
NORTEL'S INTEREST IN THEIR JOINT VENTURE COMPANY, ARRIS INTERACTIVE, LLP...
- ANTEC acquires Nortel's 81.25% interest in the JV for 33 million
shares of the new Arris stock plus $325M in cash
- The new Arris common stock outstanding will total 71.1 million
- Nortel will own 46.5% of the new Arris common shares
- Existing ANTEC shareholders will own the remainder of outstanding
shares
- The new company will be named Arris International
- Arris International will trade under NASDAQ symbol "ARRS."
- Headquarters of combined company will remain in Georgia
ANTEC
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ANTEC
THE NEW COMBINED COMPANY WILL BE MARKEDLY DIFFERENT FROM THE EXISTING ANTEC
WITH...
- 2001 proforma revenues of ~$1.6 to $1.7 billion
- Gross margins of approximately 30%
- International revenues expected to be in excess of $300 million
- Installed host digital terminal capacity of more than 12,000,000 lines
- An installed base of over 1,000,000 voice ports
- R&D investment of approximately $100 million annually
ANTEC
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ANTEC
STRATEGIC RATIONALE FOR TRANSACTION OFFERS ANTEC THE FOLLOWING POTENTIAL
BENEFITS...
- Provides direct access to the upside potential of evolution towards
converged networks.
- Simplifies and clarifies customer focus and approach to market.
- Nortel Networks becomes a significant shareholder.
- Maintains Nortel relationship via marketing agreements, stock
ownership and BOD participation.
ANTEC
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ANTEC
BY BRINGING ARRIS INTO ANTEC, SEVERAL KEY BENEFITS ARE ACHIEVED...
- Simplifies the approach to the market worldwide...
- Allows ANTEC to focus on local broadband access...
- Accelerates new product speed to market...
- Provides visibility into Arris business...
- Allows the unlocking of and appropriate market valuation...
ANTEC
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ANTEC
ARRIS INTERNATIONAL AS A NEW COMPANY CREATED FROM THE COMBINATION OF ANTEC AND
THE JOINT VENTURE, WILL BE UNIQUELY POSITIONED TO MEET INDUSTRY NEEDS FOR LOCAL
BROADBAND ACCESS.
- Ever increasing demand for bandwidth
- Competition in the local loop
- Requirement to create new revenue
ANTEC
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END TO END SOLUTIONS -
TOTAL SYSTEM SUPPORT
[This slide depicts the entire system of the HFC Network - from the Home to the
Headend. It includes pictures of the following parts and accessories: Taps,
Passives, Cable Modems, Voice Ports, Line Extender, Splitter, Pedestals,
Enclosures, TSP, Mini-Bridger, Optical Node, Fiber Loop, Splice Enclosures,
Track Link Software, Transmitter, 1550 TX, HDT, EDFA, RF MGMT, and CMTS.]
ANTEC
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FACILITIES
[Map of Facilities around the World]
ANTEC
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Financial Overview
ANTEC/Arris
November 1, 2000
ANTEC
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Financial Overview: ANTEC Stand Alone
ANTEC
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POSITIVE TRENDS IN Q3
WE OBSERVED A NUMBER OF POSITIVE TRENDS IN Q3:
- Overall sales grew 15% year-over-year versus 1999
- Backlog increased 72% to $221.5 million from $128.4 million in Q2
- Bookings increased 31% to $365.6 million from $280.0 million in Q2
- General focus on fast ROI products such as cable telephony
infrastructure
ANTEC
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CHALLENGES
AT THE SAME TIME, THE GENERAL BUSINESS ENVIRONMENT BECAME MORE DIFFICULT FOR
ANTEC AS THE COMPANY IS CURRENTLY CONSTITUTED:
- GENERAL SLOW DOWN IN NETWORK-UPGRADE EXPENDITURES
- Customers seem to be increasingly focused on harvesting
revenue from existing upgraded plant
- BUSINESS CYCLE PRESSURES
- Customers are more aggressively managing inventory levels in
anticipation of a tighter economic environment
ANTEC
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GUIDANCE FOR Q4
<TABLE>
<S> <C>
Revenue $240 - $260 million
Gross Margins 18% - 20%
Diluted EPS $0.12 - $0.16
Diluted Cash EPS $0.15 - $0.19
</TABLE>
ANTEC
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GUIDANCE FOR Q4
MANAGEMENT EXPECTS THE Q4 REVENUE MIX TO ROUGHLY APPROXIMATE THE Q3 REVENUE
MIX.
[Pie Chart entitled
"REVENUE PERCENTAGE BY PRODUCT CATEGORY - Q4 2000"]
ANTEC
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FULL YEAR RESULTS
BASED ON MANAGEMENT'S CURRENT EXPECTATION FOR Q4, ANTEC'S FULL YEAR RESULTS
SHOULD BE AS FOLLOWS:
<TABLE>
<S> <C>
REVENUE -$1.05 BILLION
GROSS MARGINS 18% - 20%
DILUTED EPS $0.80 - $0.85
DILUTED CASH EPS $0.90 - $0.95
</TABLE>
ANTEC
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GUIDANCE FOR 2001E
<TABLE>
<S> <C>
REVENUE $1.2 - $1.3 BILLION
GROSS MARGINS 18% - 20%
DILUTED EPS $1.00 - $1.10
DILUTED CASH EPS $1.10 - $1.20
</TABLE>
ANTEC
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BUSINESS MIX
MANAGEMENT ANTICIPATES THAT THE COMPANY'S REVENUE MIX FOR 2001E WILL APPROXIMATE
THE FOLLOWING:
PIE CHART ENTITLED
2001E Revenue Mix
Outside Plant
And Powering
(16-20%)
Cable Telephony &
Internet Access
(32-36%)
Optical and
Broadband
Transmission
(26-30%)
Supplies and
Services
(18-22%)
ANTEC
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Financial Overview: Pro Forma New Arris
ANTEC
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EXPECTED PRO FORMA PERFORMANCE - 2000E
ASSUMING THE PROPOSED TRANSACTION HAD CLOSED AT THE START OF CALENDAR 2000, PRO
FORMA NEW ARRIS RESULTS WOULD APPROXIMATE THE FOLLOWING:
<TABLE>
<S> <C>
REVENUE $1.3 - $ 1.4 BILLION
GROSS MARGINS 28% - 31%
DILUTED EPS $(0.00) - $(0.05)
DILUTED CASH EPS $1.00 - $ 1.10
</TABLE>
ANTEC
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EXPECTED PRO FORMA PERFORMANCE - 2001E
MANAGEMENT EXPECTS THE TRANSACTION TO BE MODESTLY ACCRETIVE IN 2001 VERSUS
CURRENT STAND ALONE PROJECTIONS FOR ANTEC.
PRO FORMA RESULTS - 2001
<TABLE>
<S> <C>
REVENUE $ 1.6 - $ 1.7 BILLION
GROSS MARGINS 28% - 31%
DILUTED EPS $0.05 - $ 0.10
DILUTED CASH EPS $1.10 - $ 1.20
</TABLE>
ANTEC
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PRO FORMA CAPITALIZATION
THE NEW ARRIS IS EXPECTED TO BE CAPITALIZED AT A RELATIVELY CONSERVATIVE LEVEL
OF APPROXIMATELY 3.25X DEBT/LTM EBITDA.
NEW ARRIS - EXPECTED CAPITALIZATION
<TABLE>
<S> <C>
CASH Approx. $15M
CONVERTIBLE DEBT $115M
BANK/INSTITUTIONAL DEBT $430 - $460M
BASIC SHARES OUTSTANDING $71.1M
DEBT/LTM EBITDA 3.0 - 3.25X
LTM EBITDA/INTEREST Approx. 4.0X
</TABLE>
ANTEC
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ASSUMPTION UNDERLYING PRO FORMA PROJECTIONS
THE PRO FORMA PROJECTIONS PRESENTED HERE REFLECT A NUMBER OF ASSUMPTIONS.
- Transaction accounted for as a purchase, with approximately
$820 million of goodwill created
- $430 - 460 million of new debt funded at approximately LIBOR
plus 3.25
- Existing 4.5% Convertible Notes remain outstanding
ANTEC
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Summary
[BAR GRAPH IS FOR ESTIMATED REVENUE, GROSS MARGIN AND DILUTED CASH EPS
FOR 2000 AND 2001]
ANTEC
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Business Mix
Management anticipates that the Company's revenue mix for 2001E on a pro forma
basis will approximate the following:
Pie Chart Entitled
2001E Pro Forma Revenue Mix
[Pie Chart]
ANTEC
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Arris Interactive: #1 Market Position
Slide shows a map of the world and lists the following information about
customers, locations and initial contract date:
- Black Hills Fibercomm, South Dakota, Q3 99
- AT&T, 8 cities, from Sept. 98
- Cox, Orange Co., CA, October 97
- Cox, San Diego, CA, June 98
- Cox, Phoenix, AZ, Sept. 98
- Time Warner, Rochester, NY, October 96
- AT&T, Hartford, CT, October 96
- Eastlink, Canada, Q3 99
- Cox, Hartford, CT, January 98
- Cox, Omaha, NE, December 97
- TBA, Midwest, Q3 99
- Otelco, Alabama, Q1, 99
- Cablevision, Long Island, NY - July 97, Norwalk, CT.
Feb. 99
- Ironton Tel., Pennsylvania, Q2 98
- Jones, Mid-Atlantic, Q4 97
- Globe, Newnan, GA, March 98
- Knology, 5 cities Southeast, July 97, Q1 98, Q4 98
- VTR TeleFonica, Santiago, Chile, June 97
- CBTC, Sao Paulo, Brazil, August 99
- Cablevision, Bariloche, Argentina, December 99
- Castell, Netherlands, Q1 99
- TSS, Germany, Q4 98
- Priority, Austria, Q4 98
- SPTA, Spain, Q4 98
- CTC, Spain, Q1 99
- Retecal, Spain, Q1 99
- Jupiter Communications, Suginami, Japan, July 97
- Titus Communications, Kashiwa, Japan, July 97
- Bayantel, Manila, Philippines, July 99
Over 1,000,000 lines in service
34 cities in service
25 operators in service
>50% Share
ANTEC
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Arris Interactive
Jim Lakin
President & COO
ANTEC
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Cornerstone Data Deployment
600 sites including:
Rogers, Videon, Time Warner, AT&T, MediaOne, Jones, Cablevision, Cox, Roadrunner
Adelphia, Armstrong, Sigecom, GTE, Black Hills, 21st Century, UPC, Chello
[map of the world depicting sites where Cornerstone has been deployed]
Over 800,000 cable modems shipped
ANTEC
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Cornerstone Cable Telephone Deployments
Over 1,000,000 Lines in Service
Bar graph depicting the number of Cornerstone
Cable lines in service during January, March,
May, July, September and November during 1997,
1998, 1999 and 2000. Each bar is also split by
area as follows: NTNA, Europe, CALA, Asia Pac,
Antec - AT&T, Antec - non-AT&T
ANTEC
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ARRIS BROADBAND LOCAL ACCESS
PRODUCT PORTFOLIO
NOVEMBER 1, 2000
ANTEC
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Cornerstone Today & Tomorrow
Broadband Local Access
Slides depicts the system set-up for each of the following products --
Cornerstone(R) Voice, Cornerstone(R) Data and Cornerstone(R) Voice
over IP.
ANTEC
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Cornerstone Voice
A Wide Range of Solutions for All Markets
Illustration showing the following products connecting with a Host Digital
Terminal: 2 Line Voice Port, 4 Line Voice Port, Payphone Voice Port, Indoor
Voice Port, 12 Line Multi-line Voice Port, Modular Multi-line Voice Port.
ANTEC
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Packet Port Evolution
Terminals for Broadband Local Access
Illustration showing an arrow pointing to the left entitled "Increasing
Convergence of Services" and showing (from left to right) a Voice Port and a
Cable Modem, then a Packet Port, then a Converged Services Portal and a
Voice-Enabled Cable Modem.
ANTEC
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CORNERSTONE DATA HEADEND EVOLUTION
Illustration showing an arrow pointing from left to right entitled "Voice over
IP Demands, Increasing Bandwidth per Subscriber & Increasing Reliability." Also
shows the following products from left to right: CMTS 1000, IP Access
System/Current Carrier Grade Headend, Multiservice Access System/2001 Carrier
Grade Headend and MiniFiber Node with dCMTS/Distributed Headend.
ANTEC
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PROTECTING THE CUSTOMERS' INVESTMENT
LEVERAGING THE INSTALLED BASE
Illustration depicting the technical system setup for Cornerstone Voice Port(R),
Cornerstone Packet Port (R) and Cable Modems & Set-top Boxes.
ANTEC
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Managing the Network
Cornerstone CPS 2000
A carrier class VoIP network management system
[Illustration of a computer and various accessories]
ANTEC
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PACKET PORT HOME NETWORKING
Illustration of a home with various computer system configurations
Options: 802.11B HomeRF Bluetooth
ANTEC
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CONVERGED SERVICES PORTAL
Other Access Applications
- Fiber
- Wireless
- MMDS
- Satellite
ANTEC
