ANTEC Announces First Quarter Results

Apr 25, 2001, 01:00 ET from ANTEC Corporation

    DULUTH, Ga., April 25 /PRNewswire/ -- ANTEC Corporation (Nasdaq:   ANTC)
 today announced financial results for first quarter of 2001.  Revenues were
 $212.8 million, an increase of 19.8% sequentially from the fourth quarter of
 2000, but down 17.1% as compared to $256.6 million in the first quarter of
 2000.  The Company noted that Cable Telephony & Internet Access sales during
 the quarter of $103.0 million, or approximately 48% of sales, were especially
 strong due to the deferral of sales originally scheduled for the fourth
 quarter of 2000 into the first quarter of 2001.  Earnings per diluted share
 produced a loss of ($0.12) per share, a $0.04 improvement, as compared to a
 loss of ($0.16) per share in the fourth quarter of 2000, and compares to
 earnings of $0.25 per share in the first quarter of 2000.  Excluding severance
 costs incurred, earnings would have been a loss of ($0.11) per diluted share
 and in line with consensus for the quarter.
     Gross margin for the quarter was 15.1% reflecting a product mix strongly
 favoring Cable Telephony & Internet Access sales (at distributor margins) as
 opposed to Optical and Broadband Transmission sales.  In addition, during the
 first quarter of 2001, lower revenues for network infrastructure products
 resulted in significant unabsorbed overhead in cost of goods sold.  Also
 negatively impacting gross margins during the first quarter were severance
 costs related to layoffs at the factory level in response to the market's
 lower demand, primarily for Optical & Broadband Transmission products.
     "The abrupt slowdown in spending that began in the fourth quarter of last
 year unfortunately has, as anticipated, continued into the first quarter of
 2001," said Bob Stanzione, ANTEC President & CEO.  "While purchases of cable
 telephony equipment did resume in the quarter, spending on other
 infrastructure products has not yet returned to past levels.  We continue to
 believe that underlying franchise requirements and our customer's need for new
 revenue sources will ultimately cause demand for ANTEC's broad range of HFC
 products to increase," continued Stanzione.  "Meanwhile, the downturn
 experienced in the last two quarters has been difficult, and we have reacted
 quickly to cut costs and reduce expense levels, including workforce reductions
 during the first quarter and the more significant reductions announced and
 implemented in early April.  We also continue to evaluate underperforming
 businesses and assets and will report on actions in these areas, including any
 related one-time charges as decisions are made.  This could be as early as the
 second quarter," said Stanzione.
     As announced on April 10, 2001, second quarter operating expenses will be
 negatively impacted by a pre-tax charge of approximately $5.0 million for
 estimated severance and related costs in connection with the workforce
 reduction program that reduced overall employment levels by approximately 400.
 The Company estimates that this reduction will result in approximately
 $10.0 million in annualized savings.
     "Our outlook for the second quarter remains similar to the results
 achieved in the first quarter after adjusting for the carryover of fourth
 quarter cable telephony revenues into the first quarter," said Larry Margolis,
 ANTEC EVP & CFO.  "We anticipate that revenues will be in the $180 to
 $200 million range for the second quarter of 2001.  Excluding the estimated
 costs of the force reductions announced on April 10, 2001 and any other
 charges which may be incurred in connection with our review of underperforming
 assets, we expect results per diluted share to be a loss of 10 to 15 cents.
 We are committed to lower our costs and expenses to be in line with current
 revenue levels and barring any further deterioration in our markets, we expect
 to return to profitability by the end of the year.  Nevertheless, until our
 industry in general sees a stabilization in demand, we believe it is
 inappropriate to provide any longer term guidance for full year 2001 results,"
 said Margolis.
     "Although the last two quarters have been very difficult for us and for
 our shareholders, it is still important to understand that the recently
 announced merger of ANTEC with Arris Interactive, LLC will dramatically change
 the nature of our business.  We will create a new company that possesses the
 leading worldwide market position in cable telephony, a wide product offering
 for HFC system operators and a much more diverse customer base," summarized
 Stanzione.  "We are very optimistic about the future and our unique end-to-end
 ability to meet our customers needs with innovative and high quality ANTEC
 product offerings."
     Details of sales, gross profits and R&D in each of the four product
 categories reported by the Company are listed below (in thousands).
 
                                     Quarter ended March 31, 2001
 
                  Optical & Broadband Cable Telephony Outside Plant  Supplies &
                     Transmission     & Internet           and       Services
                                        Access          Powering
 
     Sales                  $30,699      $103,004      $36,036       $43,049
     Gross Profit            $2,316       $16,218       $4,600        $8,957
     R & D                   $4,301            $0       $1,308            $0
 
 
                                      Quarter ended March 31, 2000
 
                  Optical & Broadband Cable Telephony Outside Plant  Supplies &
                     Transmission     & Internet           and       Services
                                        Access          Powering
 
     Sales                  $73,112       $81,556      $39,782       $62,121
     Gross Profit           $19,962       $12,354       $7,554       $11,410
     R & D                   $4,834            $0       $1,363            $0
 
 
 
                                      Quarter ended December 31, 2000
 
                  Optical & Broadband Cable Telephony Outside Plant  Supplies &
                     Transmission     & Internet           and       Services
                                        Access          Powering
 
     Sales                  $39,086       $54,192      $32,790       $51,662
     Gross Profit            $7,197        $8,809       $4,784        $8,666
     R & D                   $4,492            $0       $1,166            $0
 
     Sales to AT&T Broadband in the first quarter of 2001 were approximately
 $90.9 million or 42.7% of sales as compared to $119.7 million or 46.7% of
 sales in the first quarter of 2000.  Sales to AT&T Broadband in the fourth
 quarter of 2000 were approximately $50.1 million or 28.2% of sales.  As
 previously noted, the sequential and year-over-year revenue increases in Cable
 Telephony & Internet Access reflect the carryover of revenues anticipated in
 the fourth quarter of 2000 that were deferred to the first quarter of 2001.
 Reduced volumes in other product categories, as compared to the prior year,
 reflect the financial and market conditions that impacted the
 telecommunications industry infrastructure spending in general.
     ANTEC has scheduled a conference call to discuss first quarter 2001
 financial results at 4:30 pm EST on Wednesday April 25, 2001.  The call may be
 accessed by dialing (888) 868-9083 for domestic participants and asking for
 the ANTEC Conference Call or listening to a live webcast of the call on
 streetevents.com .
     ANTEC and the new holding company have filed a registration statement with
 the Securities and Exchange Commission, which contains a proxy
 statement/prospectus of ANTEC and other documents.  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 from ANTEC Investor Relations at
 11450 Technology Circle, Duluth, Georgia 30097, Attention:  James A Bauer.
     ANTEC Corporation (http://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; a major office in
 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:
 
     *  customer's demand and capital spending during the second half of
        the year;
     *  projected results for the second quarter 2001 and beyond;
     *  achieving both operating expense levels reflective of market conditions
        and projected savings from planned actions;
     *  gross profit within the product category disclosure; and
     *  the impact of combining of ANTEC with Arris Interactive, L.L.C.
 
 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,
 
     *  demand and spending within the industry are subject to such factors as
        general economic conditions, availability and cost of capital, as well
        as other demands for capital funds, which are difficult to predict
        accurately;
     *  projected results for the second quarter 2001 and beyond are based on
        preliminary estimates and assumptions which management believes to be
        reasonable at this time;
     *  because the market in which ANTEC operates is dynamic, expense levels
        expected to be achieved through actions taken and contemplated may not
        achieve the desired impact relative to changing market conditions and
        the success of those strategies will be dependent on the effective
        implementation of those plans while minimizing organizational
        disruptions;
     *  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; and
     *  the process of integrating an acquired business into ANTEC's current
        business is risky and may involve unforeseen operating difficulties
        including the diversion or dilution of management's time from ongoing
        development of the business; possible decline in employee morale and
        retention issues; and the need to integrate various management
        information systems.
 
     These factors are not intended to be an all-encompassing list of risks and
 uncertainties that may affect the Company's business.  In addition to the
 factors set forth elsewhere in this release, other factors that could cause
 results to differ from current expectations can be found in ANTEC's reports
 filed with Securities and Exchange Commission.  In providing forward-looking
 statements, the Company expressly disclaims any obligation to update publicly
 or otherwise these statements, whether as a result of new information, future
 events or otherwise.
 
 
                                 ANTEC CORPORATION
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                         (in thousands, except share data)
 
 
                                                       Three months ended
                                                            March 31,
                                                    2001                2000
 
     Net sales                                    $212,788            $256,571
     Cost of sales                                 180,697             205,291
          Gross profit                              32,091              51,280
     Operating expenses:
          Selling, general, administrative
           and development expenses                 35,205              30,731
          Amortization of goodwill                   1,229               1,229
                                                    36,434              31,960
     Operating (loss) income                        (4,343)             19,320
 
     Interest expense                                2,746               2,598
     Other expense, net                                254                 273
     Loss on marketable securities                     359                   0
     (Loss) income before income taxes              (7,702)             16,449
 
     Income tax (benefit) expense                   (3,202)              6,423
     Net (loss) income                             ($4,500)            $10,026
 
     Net (loss) income per common share:
     Basic                                          ($0.12)              $0.27
 
     Diluted                                        ($0.12)              $0.25
 
     Weighted average common shares:
     Basic                                          38,252              37,691
 
     Diluted                                        38,252              44,513
 
 
     Supplemental Information to the Statements of Operations:
     Excluding the effects of the pension curtailment gain in the first quarter
     of 2000, results for the first quarter of 2000 would have been:
 
     Gross profit                                                      $51,280
     Operating income                                                  $17,212
     Income before income taxes                                        $14,341
     Net income                                                         $8,691
 
     Net income per common share:
     Diluted                                                             $0.22
     Weighted average diluted shares                                    44,513
 
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SOURCE ANTEC Corporation
    DULUTH, Ga., April 25 /PRNewswire/ -- ANTEC Corporation (Nasdaq:   ANTC)
 today announced financial results for first quarter of 2001.  Revenues were
 $212.8 million, an increase of 19.8% sequentially from the fourth quarter of
 2000, but down 17.1% as compared to $256.6 million in the first quarter of
 2000.  The Company noted that Cable Telephony & Internet Access sales during
 the quarter of $103.0 million, or approximately 48% of sales, were especially
 strong due to the deferral of sales originally scheduled for the fourth
 quarter of 2000 into the first quarter of 2001.  Earnings per diluted share
 produced a loss of ($0.12) per share, a $0.04 improvement, as compared to a
 loss of ($0.16) per share in the fourth quarter of 2000, and compares to
 earnings of $0.25 per share in the first quarter of 2000.  Excluding severance
 costs incurred, earnings would have been a loss of ($0.11) per diluted share
 and in line with consensus for the quarter.
     Gross margin for the quarter was 15.1% reflecting a product mix strongly
 favoring Cable Telephony & Internet Access sales (at distributor margins) as
 opposed to Optical and Broadband Transmission sales.  In addition, during the
 first quarter of 2001, lower revenues for network infrastructure products
 resulted in significant unabsorbed overhead in cost of goods sold.  Also
 negatively impacting gross margins during the first quarter were severance
 costs related to layoffs at the factory level in response to the market's
 lower demand, primarily for Optical & Broadband Transmission products.
     "The abrupt slowdown in spending that began in the fourth quarter of last
 year unfortunately has, as anticipated, continued into the first quarter of
 2001," said Bob Stanzione, ANTEC President & CEO.  "While purchases of cable
 telephony equipment did resume in the quarter, spending on other
 infrastructure products has not yet returned to past levels.  We continue to
 believe that underlying franchise requirements and our customer's need for new
 revenue sources will ultimately cause demand for ANTEC's broad range of HFC
 products to increase," continued Stanzione.  "Meanwhile, the downturn
 experienced in the last two quarters has been difficult, and we have reacted
 quickly to cut costs and reduce expense levels, including workforce reductions
 during the first quarter and the more significant reductions announced and
 implemented in early April.  We also continue to evaluate underperforming
 businesses and assets and will report on actions in these areas, including any
 related one-time charges as decisions are made.  This could be as early as the
 second quarter," said Stanzione.
     As announced on April 10, 2001, second quarter operating expenses will be
 negatively impacted by a pre-tax charge of approximately $5.0 million for
 estimated severance and related costs in connection with the workforce
 reduction program that reduced overall employment levels by approximately 400.
 The Company estimates that this reduction will result in approximately
 $10.0 million in annualized savings.
     "Our outlook for the second quarter remains similar to the results
 achieved in the first quarter after adjusting for the carryover of fourth
 quarter cable telephony revenues into the first quarter," said Larry Margolis,
 ANTEC EVP & CFO.  "We anticipate that revenues will be in the $180 to
 $200 million range for the second quarter of 2001.  Excluding the estimated
 costs of the force reductions announced on April 10, 2001 and any other
 charges which may be incurred in connection with our review of underperforming
 assets, we expect results per diluted share to be a loss of 10 to 15 cents.
 We are committed to lower our costs and expenses to be in line with current
 revenue levels and barring any further deterioration in our markets, we expect
 to return to profitability by the end of the year.  Nevertheless, until our
 industry in general sees a stabilization in demand, we believe it is
 inappropriate to provide any longer term guidance for full year 2001 results,"
 said Margolis.
     "Although the last two quarters have been very difficult for us and for
 our shareholders, it is still important to understand that the recently
 announced merger of ANTEC with Arris Interactive, LLC will dramatically change
 the nature of our business.  We will create a new company that possesses the
 leading worldwide market position in cable telephony, a wide product offering
 for HFC system operators and a much more diverse customer base," summarized
 Stanzione.  "We are very optimistic about the future and our unique end-to-end
 ability to meet our customers needs with innovative and high quality ANTEC
 product offerings."
     Details of sales, gross profits and R&D in each of the four product
 categories reported by the Company are listed below (in thousands).
 
                                     Quarter ended March 31, 2001
 
                  Optical & Broadband Cable Telephony Outside Plant  Supplies &
                     Transmission     & Internet           and       Services
                                        Access          Powering
 
     Sales                  $30,699      $103,004      $36,036       $43,049
     Gross Profit            $2,316       $16,218       $4,600        $8,957
     R & D                   $4,301            $0       $1,308            $0
 
 
                                      Quarter ended March 31, 2000
 
                  Optical & Broadband Cable Telephony Outside Plant  Supplies &
                     Transmission     & Internet           and       Services
                                        Access          Powering
 
     Sales                  $73,112       $81,556      $39,782       $62,121
     Gross Profit           $19,962       $12,354       $7,554       $11,410
     R & D                   $4,834            $0       $1,363            $0
 
 
 
                                      Quarter ended December 31, 2000
 
                  Optical & Broadband Cable Telephony Outside Plant  Supplies &
                     Transmission     & Internet           and       Services
                                        Access          Powering
 
     Sales                  $39,086       $54,192      $32,790       $51,662
     Gross Profit            $7,197        $8,809       $4,784        $8,666
     R & D                   $4,492            $0       $1,166            $0
 
     Sales to AT&T Broadband in the first quarter of 2001 were approximately
 $90.9 million or 42.7% of sales as compared to $119.7 million or 46.7% of
 sales in the first quarter of 2000.  Sales to AT&T Broadband in the fourth
 quarter of 2000 were approximately $50.1 million or 28.2% of sales.  As
 previously noted, the sequential and year-over-year revenue increases in Cable
 Telephony & Internet Access reflect the carryover of revenues anticipated in
 the fourth quarter of 2000 that were deferred to the first quarter of 2001.
 Reduced volumes in other product categories, as compared to the prior year,
 reflect the financial and market conditions that impacted the
 telecommunications industry infrastructure spending in general.
     ANTEC has scheduled a conference call to discuss first quarter 2001
 financial results at 4:30 pm EST on Wednesday April 25, 2001.  The call may be
 accessed by dialing (888) 868-9083 for domestic participants and asking for
 the ANTEC Conference Call or listening to a live webcast of the call on
 streetevents.com .
     ANTEC and the new holding company have filed a registration statement with
 the Securities and Exchange Commission, which contains a proxy
 statement/prospectus of ANTEC and other documents.  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 from ANTEC Investor Relations at
 11450 Technology Circle, Duluth, Georgia 30097, Attention:  James A Bauer.
     ANTEC Corporation (http://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; a major office in
 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:
 
     *  customer's demand and capital spending during the second half of
        the year;
     *  projected results for the second quarter 2001 and beyond;
     *  achieving both operating expense levels reflective of market conditions
        and projected savings from planned actions;
     *  gross profit within the product category disclosure; and
     *  the impact of combining of ANTEC with Arris Interactive, L.L.C.
 
 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,
 
     *  demand and spending within the industry are subject to such factors as
        general economic conditions, availability and cost of capital, as well
        as other demands for capital funds, which are difficult to predict
        accurately;
     *  projected results for the second quarter 2001 and beyond are based on
        preliminary estimates and assumptions which management believes to be
        reasonable at this time;
     *  because the market in which ANTEC operates is dynamic, expense levels
        expected to be achieved through actions taken and contemplated may not
        achieve the desired impact relative to changing market conditions and
        the success of those strategies will be dependent on the effective
        implementation of those plans while minimizing organizational
        disruptions;
     *  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; and
     *  the process of integrating an acquired business into ANTEC's current
        business is risky and may involve unforeseen operating difficulties
        including the diversion or dilution of management's time from ongoing
        development of the business; possible decline in employee morale and
        retention issues; and the need to integrate various management
        information systems.
 
     These factors are not intended to be an all-encompassing list of risks and
 uncertainties that may affect the Company's business.  In addition to the
 factors set forth elsewhere in this release, other factors that could cause
 results to differ from current expectations can be found in ANTEC's reports
 filed with Securities and Exchange Commission.  In providing forward-looking
 statements, the Company expressly disclaims any obligation to update publicly
 or otherwise these statements, whether as a result of new information, future
 events or otherwise.
 
 
                                 ANTEC CORPORATION
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                         (in thousands, except share data)
 
 
                                                       Three months ended
                                                            March 31,
                                                    2001                2000
 
     Net sales                                    $212,788            $256,571
     Cost of sales                                 180,697             205,291
          Gross profit                              32,091              51,280
     Operating expenses:
          Selling, general, administrative
           and development expenses                 35,205              30,731
          Amortization of goodwill                   1,229               1,229
                                                    36,434              31,960
     Operating (loss) income                        (4,343)             19,320
 
     Interest expense                                2,746               2,598
     Other expense, net                                254                 273
     Loss on marketable securities                     359                   0
     (Loss) income before income taxes              (7,702)             16,449
 
     Income tax (benefit) expense                   (3,202)              6,423
     Net (loss) income                             ($4,500)            $10,026
 
     Net (loss) income per common share:
     Basic                                          ($0.12)              $0.27
 
     Diluted                                        ($0.12)              $0.25
 
     Weighted average common shares:
     Basic                                          38,252              37,691
 
     Diluted                                        38,252              44,513
 
 
     Supplemental Information to the Statements of Operations:
     Excluding the effects of the pension curtailment gain in the first quarter
     of 2000, results for the first quarter of 2000 would have been:
 
     Gross profit                                                      $51,280
     Operating income                                                  $17,212
     Income before income taxes                                        $14,341
     Net income                                                         $8,691
 
     Net income per common share:
     Diluted                                                             $0.22
     Weighted average diluted shares                                    44,513
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X17518574
 
 SOURCE  ANTEC Corporation