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): February 8, 2000
TELTREND INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction
of Incorporation or Organization)
0-26114 13-3476859
(Commission File Number) (I.R.S. Employer Identification No.)
620 STETSON AVENUE
ST. CHARLES, ILLINOIS 60174
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (630) 377-1700
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ITEM 5. OTHER INFORMATION.
On February 8, 2000, Teltrend Inc. (the "Company") announced results
for its second quarter ended January 29, 2000. A copy of the press release is
attached as Exhibit 99.1 to this Form 8-K and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The exhibits filed herewith are listed in the Exhibit Index which
follows the signature page of this Current Report on Form 8-K.
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SIGNATURE
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.
Date: February 11, 2000
TELTREND INC.
By /s/ Theodor A. Maxeiner
-------------------------
Theodor A. Maxeiner
Controller
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<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
99.1 Press Release dated February 8, 2000.
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TELTREND REPORTS INCREASED SECOND QUARTER EARNINGS
ST. CHARLES, ILL. - (BUSINESS WIRE) - Feb. 8, 2000 - Teltrend Inc. (Nasdaq:
TLTN) today announced results for its second quarter ended January 29, 2000.
Earning for the quarter were $0.29 per diluted share versus $0.18 for the second
quarter of last year. This year's second quarter earnings per share includes
$0.05 related to the sale of Teltrend's UK-based router business in the fourth
quarter of last year. Without this gain, earnings this quarter were $0.24 per
diluted share, up 33% from last year's second quarter. Sales for the quarter
were $23.5 million compared to $24.4 million for the second quarter last year.
The lower year-to-year quarterly sales is primarily attributable to the
previously mentioned sale of Teltrend's UK-based router business.
Sales of Teltrend High-Capacity Products increased 22% from $12.6 million in the
second quarter of last year to $15.3 million this year. Channelized Products and
Conversion Products sales were lower, but the strong High-Capacity Products
performance resulted in a 6% year-to- year sales increase in the US segment of
Teltrend's business. US sales for the quarter were $21.5 million versus $20.3
million for the second quarter of last year.
Earnings for the six months, exclusive of the second quarter $0.05 adjustment
relating to the aforementioned sale of the router business, were $0.66 per
diluted share, a 12% increase over the first half of fiscal 1999. Including the
$0.05 adjustment, income for the six months was $0.71 per diluted share.
Sales for the six months totaled $49.5 million, compared to $54.6 million in the
prior year. The decrease was primarily due to the sale of the Packet Switched
Business and to the first quarter of fiscal 1999 having 14 weeks compared to 13
weeks in fiscal 2000.
The Company's cash and marketable securities increased from $27.8 million at the
end of this year's first quarter to $29.8 million at end of this year's second
quarter.
"Overall we're pleased with the results of our second quarter", said Howard L.
Kirby, Jr., Teltrend Chairman and CEO. "Year-to-year growth in our core
High-Capacity Products area was strong. And I'm pleased to report steady
progress in HDSL, particularly with the new 2-wire HDSL technology. Our
quarterly sales in HDSL are still small, at just over $1.0 million, but that's
up 150% from last year's second quarter.
"And customers remain very interested in our new ASTS(TM) system. We regard the
Teltrend ASTS system as the best choice for deployment of High-Capacity
services, irrespective of whether these services are provided by RBOC,
Independent Telco, or CLEC, and irrespective of whether provided via fiber
optic, HDSL, HDSL2 or repeatered T1 technology.
"Teltrend's ASTS system is a compact, economical system that replaces five
previous equipments: T1 distribution system, M13 multiplexer, performance
monitoring unit, digital test access unit, and protection switch. And very
importantly, ASTS plug-ins are plug-compatible with the existing Telco STS
infrastructure.
"Additionally, Teltrend HDSL2 units are interoperable with other
standards-compliant HDSL2 units like those produced by PairGain Technologies,
Inc. Teltrend is working closely with PairGain to become a competitive supplier
of full-functionality HDSL2 plug-in units for the
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PairGain enhanced WBS-3190 system. Teltrend is committed to being a provider of
plug-in HDSL2, HDSL4, and repeatered T1 units for competitive,
open-architecture, systems like the PairGain WBS-3190, as well as being a system
level supplier to this market with our ASTS system.
"By the way, any vendor can choose to offer plug-ins and/or systems using the
OSTS open architecture used in Teltrend's ASTS system. The OSTS specifications
used on the ASTS are available free of charge. You can view them on our Teltrend
web-site. Teltrend believes strongly in the OSTS open architecture, and we
believe the concept is being increasingly embraced by RBOCs, CLECs, and other
service providers."
Mr. Kirby continued, "In our Channelized products area, ISDN and DLC sales were
up 38% and 48% respectively year-to-year, but this was offset by declines in our
VF products and in DDS products. We believe the DDS decline, due mainly to a
change-over in DDS deployment technology, will be reversed later this year by
start-up of sales of Teltrend's new FastPort(TM) product. This product, which
allows the provisioning of long telephone lines for DDS service without the need
for costly removal of load coils, or the addition of costly repeaters, is under
test at all of the RBOCs, and we remain optimistic about its future. DDS is the
service of choice for full-period connection of medium-speed dedicated networks
like those employed for lottery networks, and we believe this is going to be a
good market for us for a long time to come.
"On the subject of our upcoming merger, Teltrend and Westell Technologies
announced last week that the waiting period for our proposed merger under the US
antitrust laws had expired. We plan to distribute a proxy statement next week
for our respective stockholder meetings regarding the merger, which we expect
will be held on March 16."
Certain of Mr. Kirby's statement in the previous paragraphs are forward looking.
These statements, identified by the use of phrases such as "interest", "we
regard", "we remain optimistic", "we believe", and "we plan" are based on
current expectations and involve risks and uncertainties. Consequently, actual
results could differ materially from the Company's expectations expressed in the
preceding paragraphs. The various factors that could cause actual results to
differ from the expectations include, but are not limited to: competition from
other, and in certain cases more established, manufacturers of similar products;
pricing pressure and other ramifications of the consolidation of some of the
Company's major customers; the inability to achieve market acceptance of new
products or products under development for a variety of reasons, including their
cost or the actual or perceived need for such products in the marketplace; the
failure of the Company's new products to pass the rigorous testing and
qualification process imposed by the Company's customers; the rapid pace with
which changes in technology industry standards and customer requirements occur
within the telecommunications business, and the adverse effect such changes and
the introduction of new products involving new technologies could have on the
Company's ability to sell its new and existing products.
Teltrend Inc., established in 1979 with over 500 employees worldwide, is
headquartered in suburban Chicago. Teltrend designs, manufactures and markets a
broad range of telecommunications and data communications products used by
businesses and telephone companies to provide voice and data services.
Teltrend's unique local telephone loop solutions,
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develop for HDSL, HDSL2, Fiber Optic, T1, ISDN, DDS, and DLC applications, allow
telephone companies to provide new and better services to their customers
without the need for costly infrastructure replacement. The Company's products
are sold to the Regional Bell Operating Companies, GTE, Sprint, and other U.S.
and International telephone companies as well as original manufacturers such as
Lucent, Nortel, and Cisco.
ASTS(TM) and FastPort(TM) are trademarks of Teltrend Inc.
TELTREND INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(In thousands, except net income per share data)
<TABLE>
<CAPTION>
For the Quarter Ended For the Six Months Ended
--------------------- ------------------------
January 29, 2000 January 30, 1999 January 29, 2000 January 30, 1999
<S> <C> <C> <C> <C>
$23,477 $24,436 $49,466 $54,634
Net sales Cost of sales 13,528 13,234 27,456 29,505
------- ------- ------- -------
Gross Profit 9,949 11,202 22,010 25,129
Operating expenses 8,158 9,437 16,727 19,665
Gain on disposal of
product line (495) - (495) -
---------- ---------
Income from operations 2,286 1,765 5,778 5,464
Other income (expense): 412 277 754 626
Interest income 47 (247) (9) (199)
---------- ---------- ------ -----
Other - net 459 30 745 427
--------- ----------- ----- ------
Income before income
taxes 2,745 1,795 6,523 5,891
Provision for income
taxes 950 685 2,260 2,251
---------- ----------- ---------- ------------
Net income $1,795 $1,110 $4,263 $3,640
======== ========= ========= ==========
Basic income per share of
common stock $.31 $0.19 $0.74 $0.60
========= ========= ========= ==========
Basic average common
shares outstanding 5,790 5,958 5,788 6,064
======== ======== ======== =========
Diluted income per share
of common stock $0.29 $0.18 $0.71 $0.59
======= ======= ======= ========
Diluted average common
shares outstanding 6,125 6,160 6,030 6,143
====== ====== ====== =======
</TABLE>
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<TABLE>
TELTREND INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
UNAUDITED
(In Thousands)
ASSETS January 29, 2000 July 31, 1999
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $21,054 $25,915
Marketable securities 8,768 -
Trade accounts receivable,
less allowance 12,834 13,758
Inventories 10,871 9,466
Deferred income taxes 2,267 2,267
Prepaid expenses
and other current assets 2,056 3,301
--------- --------
57,850 54,707
Property, plant and
equipment, net 9,590 9,877
Deferred income taxes 329 329
Intangible assets, net 1,383 1,479
Other assets, net 602 591
--------- ---------
Total Assets $69,754 $66,983
======= =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
- -------------------------------------------------------------------------------------------------------------
Current Liabilities
Accounts payable $5,002 $4,774
Accrued expenses 8,831 10,970
--------- ------
13,833 15,744
Stockholders' equity 55,921 51,239
------ ------
Total Liabilities and
Stockholders' Equity $69,754 $66,983
======= =======
</TABLE>
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