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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 October 18, 2000, ANTEC Corporation and Nortel Networks, Inc.
announced that they had agreed to a transaction in which, among other things,
ANTEC acquire Nortel Neworks' ownership interest in Arris Interactive
L.L.C.
In connection with the transaction, ANTEC and a new holding company
will be filing a registration statement, which will contain a proxy
statement/prospectus of ANTEC, and other documents with the Securities and
Exchange Commission. 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
transaction. 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. Investors may obtain additional information
regarding the interests of such participants by reading the proxy
statement/prospectus when it becomes available.
The following is a transcript of a press release issued on October
18, 2000:
FOR IMMEDIATE RELEASE CONTACT: Jim Bauer
Investor Relations
(678) 473-2647
[email protected]
ANTEC ANNOUNCES THIRD QUARTER RESULTS
AND MAJOR ACQUISITION
DULUTH, Ga., Oct. 18 /PRNewswire/ -- ANTEC Corporation (Nasdaq:ANTC) today
announced financial results for third quarter of 2000. In a related release,
ANTEC and Nortel Networks also announced that ANTEC will acquire Nortel
Networks' ownership in their joint venture, Arris Interactive. This transaction
will result in a new company composed of the current ANTEC and the entire Arris
joint venture.
Revenues of $274.6 million were up 15.8% as compared to revenues of $237.2
million in the same quarter in 1999. However, earnings of $.20 per diluted share
for the quarter, net of a $3.4 million pre-tax market adjustment on the
Company's investment in Chromatis, were down 25.9% as compared to $.27 per
diluted share in the prior year due to slower than anticipated end of the
quarter order input for transmission equipment and shifts in product mix.
Although sales growth slowed in the quarter, backlog increased significantly up
by 72.5% to $221.5 million from $128.4 million at the end of the previous
quarter reflecting strong demand for ANTEC products. Bookings during the quarter
increased 30.7% to $365.6 million as compared to $279.8 million in the second
quarter. International sales increased to $24.6 million up 98.4% from $12.4
million in the same quarter in 1999.
"Although sales in our Optical & Broadband product area during the past quarter
declined from the levels that we expected," said Bob Stanzione, ANTEC President
& CEO, "we are pleased to see backlog taking a significant jump. Although
bookings reflect a positive trend, we also may be seeing a shift of capital
expenditures from basic network infrastructure to revenue generating investments
such as cable telephony as well as the usual seasonal fourth quarter slowdown.
Given these circumstances, we now anticipate earnings for the fourth quarter
2000 to be in the range of $.12 to $.16 per diluted share on revenue of
approximately $250 million. Preliminary proforma estimates for the combined
company in 2001 indicate that diluted cash EPS will be in
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the range of $1.10 to $1.20, which is neutral to slightly accretive as compared
to estimated ANTEC stand alone results."
"Most important for our shareholders to note is that the merger of ANTEC with
Arris Interactive so fundamentally changes the composition of ANTEC that we, in
essence, will form a new company with a new name, Arris, Inc., that possesses
deep research and development ("R&D") capabilities and a leading international
market position in cable telephony and internet solutions, as well as wide
product offerings in optical, RF and network powering for hybrid fiber-coax
("HFC") system operators worldwide," concluded Stanzione.
The company also noted that it had experienced growth in three of its four
product categories during the quarter. Details of sales, gross profits and R&D
in each of the four product categories are listed below (in thousands).
Quarter ended September 30, 2000
<TABLE>
<CAPTION>
Optical & Broadband Telephony & Outside Plant & Supplies &
Transmission Internet Access Powering Services
<S> <C> <C> <C> <C>
Sales $66,948 $86,853 $49,657 $71,095
Gross Profit $16,813 $12,725 $11,738 $11,041
R & D $ 4,850 0 $ 916 0
</TABLE>
Quarter ended September 30, 1999
<TABLE>
<CAPTION>
Optical & Broadband Telephony & Outside Plant & Supplies &
Transmission Internet Access Powering Services
<S> <C> <C> <C> <C>
Sales $70,629 $76,431 $34,577 $55,579
Gross Profit $18,934 $12,249 $ 7,617 $10,365
R & D $ 3,082 0 $ 1,077 0
</TABLE>
Quarter ended June 30, 2000
<TABLE>
<CAPTION>
Optical & Broadband Telephony & Outside Plant & Supplies &
Transmission Internet Access Powering Services
<S> <C> <C> <C> <C>
Sales $75,966 $85,403 $44,611 $70,135
Gross Profit $21,345 $12,374 $11,144 $11,463
R & D $ 4,917 0 $ 895 0
</TABLE>
ANTEC has scheduled a conference call to discuss third quarter financial results
and the details of the Arris transaction at 10:00am EST on Wednesday October 18,
2000. The call may be accessed by dialing 888-656-8983 for domestic participants
and 613-765-8303 for international participants and asking for the ANTEC
Conference Call or listening to a live webcast of the call on StreetFusion.com.
A conference call and analysts meeting to provide further guidance for full year
2001 will be scheduled at the ANTEC headquarters in Duluth, Georgia within the
next two weeks. Details regarding location and call-in numbers for the meeting
will be announced shortly.
ANTEC and the new holding company will be filing a registration statement, which
will contain a proxy statement/prospectus of ANTEC, and other documents with the
Securities and Exchange Commission. 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 free of charge at the SEC's web site,
www.sec.gov, or
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from ANTEC Investor Relations at 11450 Technology Circle, Duluth, Georgia 30097,
Attention: James A. Bauer.
ANTEC Corporation (www.antec.com) is an international communications technology
company serving the broadband information transport industries. ANTEC
specializes in the manufacturing and distribution of products for hybrid
fiber-coax broadband networks, as well as the design and engineering of these
networks. Headquartered in Duluth, Georgia, ANTEC has sales offices in Europe,
Asia/Pacific and Latin America; major offices in Duluth, Georgia and Englewood,
Colorado; and manufacturing facilities in Juarez, Mexico, El Paso, Texas, and
Rock Falls, Illinois.
Forward looking statements:
Certain information and statements contained in this press release constitute
forward looking statements with respect to the financial condition, results of
operations, and business of ANTEC. Statements that are based on current
expectations, estimates, forecasts, and projections about the markets in which
the Company operates and management's beliefs and assumptions regarding these
markets are forward looking statements. The Company cautions that any forward
looking statements made are not guarantees of future performance.
Statements made in this press release, including those related to:
- capital spending within the industry;
- earnings for the fourth quarter and projections for the year
2001;
- the Company's international market position;
- the Company's R&D capabilities; and
- gross profit within the product category disclosure;
are forward looking statements. These statements involve risks and uncertainties
that may cause actual results to differ materially from those set forth in these
statements. Among other things,
- capital spending is subject to such factors as general
economic conditions, availability and cost of capital, and
other demands for capital, which are difficult to predict with
any accuracy;
- expectations for the fourth quarter and the year 2001 do not
reflect actual results and are based on estimates and
preliminary assumptions that management believes to be
reasonable at this time, including the volume and product mix
of sales;
- international market position is dependent on global economic
conditions, foreign exchange and interest rate fluctuations,
as well as local content requirements and product approvals;
- the depth of our R&D capabilities is dependent on our ability
to fund new technology development and attract and retain
engineering talent; and
- the gross profit for the product category disclosure was
derived from estimates using standard product margins and an
allocation of manufacturing variances based on several
factors, including a percentage of product category sales.
In addition to the factors set forth elsewhere in this release, other
factors that could cause results to differ from current expectations include:
the impact of rapidly changing technologies;
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the impact of competition on product development and pricing; the ability of
ANTEC to react to changes in general industry and market conditions including
regulatory developments; rights to intellectual property, market trends and the
adoption of industry standards; consolidation within the telecommunications
industry of both the customer and supplier base; and the impact of any latent
Year 2000 issues. These factors are not intended to be an all-encompassing list
of risks and uncertainties that may affect the Company's business. Additional
information regarding these and other factors can be found in ANTEC's reports
filed with Securities and Exchange Commission. In providing forward looking
statements, the Company is not undertaking any obligation to update publicly or
otherwise these statements, whether as a result of new information, future
events or otherwise.
- ANTEC CORPORATION
- CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
- (In thousands, except share data)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Net sales $274,553 $ 237,216 $ 801,000 $ 578,806
Cost of sales 222,236 187,191 644,575 450,586
Gross profit 52,317 50,025 156,425 128,220
Operating expenses:
Selling, general and
administrative and
research and
development 34,772 28,477 99,411 80,453
Amortization of goodwill 1,230 1,236 3,688 3,709
36,002 29,713 103,099 84,162
Operating income 16,315 20,312 53,326 44,058
Interest expense 2,821 3,340 7,960 9,383
Other (income)
expense, net 170 (387) 635 (3,259)
(Gain) on LAN/
city transaction 0 0 (30,000) (60,000)
(Gain) Loss on
Chromatis transaction 3,414 0 (2,486) 0
Income before
income taxes 9,910 17,359 77,217 97,934
Income tax expense 3,741 6,583 31,410 40,541
Net Income $ 6,169 $ 10,776 $ 45,807 $ 57,393
Net income per
common share:
Basic $ 0.16 $ 0.29 $ 1.21 $ 1.58
Diluted $ 0.15 $ 0.27 $ 1.09 $ 1.38
Weighted average
common shares:
Basic 38,100 36,603 37,886 36,370
Diluted 39,849 43,907 44,629 43,401
</TABLE>
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Supplemental Income Statement Information:
During the third quarter 2000, the Company's investment in Chromatis was marked
to market resulting in a $3.4 million pre-tax write down. Excluding this market
adjustment on the investment in Chromatis, the second quarter special items
which accounted for $32.4 million of income before taxes consisting of the $30.0
million LANcity gain, the initial $5.9 million gain on the Chromatis investment
and a $3.5 million adjustment to the restructuring charge, as well as the
pension curtailment gain in the first quarter of 2000 and the initial gain on
the LANcity transaction from the first quarter 1999, selective financial results
would have been as follows:
<TABLE>
<S> <C> <C> <C> <C>
Gross profit $52,317 $50,025 $159,925 $128,220
Operating income $16,315 $20,312 $ 54,718 $ 44,058
Income before
income taxes $13,324 $17,359 $ 46,123 $ 37,934
Net income $ 8,115 $10,776 $ 28,019 $ 23,293
Net income per
common share:
Diluted $ 0.20 $ 0.27 $ 0.69 $ 0.60
Weighted average
common shares:
Diluted 44,641 43,907 44,629 43,401
</TABLE>
