-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q7AZA5P8+omqz5nVV+4Gh+HJbcYFcZHghcuSB0fW/PFYG0G8v5tGK8fdWgEKN/Uy Yjd3ZySULmfK8FuafpkbQg== 0000317771-97-000070.txt : 19970724 0000317771-97-000070.hdr.sgml : 19970724 ACCESSION NUMBER: 0000317771-97-000070 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970723 ITEM INFORMATION: Other events FILED AS OF DATE: 19970723 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TELLABS INC CENTRAL INDEX KEY: 0000317771 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 363831568 STATE OF INCORPORATION: DE FISCAL YEAR END: 1227 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-09692 FILM NUMBER: 97644443 BUSINESS ADDRESS: STREET 1: 4951 INDIANA AVE CITY: LISLE STATE: IL ZIP: 60532 BUSINESS PHONE: 6303788800 MAIL ADDRESS: STREET 1: 4951 INDIANA AVE CITY: LISLE STATE: IL ZIP: 60532 8-K 1 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) July 23, 1997 TELLABS, INC. (Exact name of registrant as specified in charter) Delaware 0-9692 36-3831568 (State or other jurisdiction (Commission (IRS employer of incorporation) file number) identification no.) 4951 Indiana Avenue, Lisle, Illinois 60532 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (630) 378-8800 N/A (Former name or former address, if changed since last report) 1 ITEM 5. OTHER EVENTS Tellabs, Inc. (the "Company") issued a letter to stockholders through the Company's website at www.tellabs.com discussing second quarter results. A copy of this letter is attached hereto as Exhibit 20.2 and incorporated herein by reference. Also attached hereto as Exhibit 20.3 is a copy of the Company's 1997 second quarter news release, which is incorporated into Exhibit 20.2. Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (c) Exhibits Exhibit 20.2 - Letter to Stockholders for Second Quarter (including graphs depicting comparisons of the Company's gross profit margin, book value per share, and return on equity for fiscal years 1993 - 1996 and year-to-date results for 1997 which have been omitted from this filing). Exhibit 20.3 - 1997 Second Quarter News Release 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. TELLABS, INC. July 23, 1997 s\ J. Peter Johnson ---------------- J. Peter Johnson Vice President, Controller and Chief Accounting Officer 2 EX-20.2 2 Exhibit 20.2 Fellow Stockholders July 18, 1997 Earlier this week, Tellabs reported its second quarter and mid-year financial results, and as has been the case for quite some time now, they were very positive. I would like to share with you some of the things associated with our recent performance in this letter. Before addressing such things, however, a bit of rationale is appropriate. If you have been a stockholder of ours for more than a year or so, you may have noticed that you haven't received printed quarterly reports of financials from us--or perhaps you didn't notice! Believing that the timeliness of printed reports reaching stockholders was questionable at best, we stopped mailing quarterly reports for a little over a year. Nowadays, however, the availability and ubiquity of electronic communication via the internet, one of the acknowledged drivers of our growth for some time now, provides a way of dealing with information in a far more timely manner, and at modest expense. We thus resume the distribution of quarterly reports, albeit in a rather different medium than heretofore. Tellabs' second quarter ended on June 27 with sales of $292.7 million, our highest quarterly sales total ever. A year ago, we reported second quarter sales of $189.5 million. Sales for the first half of the year also set records, amounting to $539.8 million, an increase of 49 percent over sales during the first half of last year of $361.7 million. Net income for the second quarter amounted to $58.8 million--not a record, but very close to one. Tellabs reported a loss in the second quarter last year, the result of a write-down of in-process R&D expenses associated with an acquisition during that quarter. Excluding the effect of that write-off, net income for the quarter just ended was up just under 66 percent from that of last year. Net income for the first six months of this year amounted to $121.8 million. (This includes an after-tax gain of $13.9 million on the sale during the first quarter of stock held as an investment.) If we exclude both the effects of the write-off and the stock sale, first half earnings this year increased 62 percent over those for 1996. On a per-share basis, second quarter earnings were 32 cents this year and--again excluding the write-off--19 cents last year. For the six-month period, earnings per share this year were 66 cents (7 cents of which resulted from the stock sale) and an "adjusted" 36 cents last year. As has been the case for quite some time now, sales of our flagship TITAN (a registered trademark of Tellabs Operations, Inc.) 5500 digital 1 cross-connect system were the primary driver of revenue, amounting to just under $150 million in revenue during the quarter. Such systems continue to be a very efficient way to provision, route and groom telecommunications services throughout North America, and as the telecommunications infrastructure continues to expand to meet growing service demands, the need for such capability continues to grow. In parts of the world outside North America, and particularly in Europe, our MartisDXX (a trademark of Tellabs Oy) digital multiplexer continues to be in demand, primarily for cellular and business data applications, accounting for continuing growth in those markets. Echo cancellers, too, continue to exhibit significant sales growth. These three product areas now account for most of our revenue. As one might expect, the significant growth we have experienced during the past few years has put some pressure on our facilities and infrastructure. We have begun to deal with that in a variety of ways. One is with new construction, including a sizable addition to our facility in Bolingbrook, Illinois, where we recently began occupying manufacturing space that more than doubles our capacity there. Adjacent office and laboratory space will be available for occupancy in the addition later this year. We are in the process of constructing a 150,000-square-foot manufacturing and product development facility in Helsinki, Finland, that will be available for occupancy early next year, and on June 30, we "turned the sod" for a new 130,000-square-foot office and manufacturing facility in Shannon, Ireland, scheduled for completion next year. These new facilities are all part of our commitment to satisfying needs of our customers in real time anywhere in the world. Early in the second quarter we added a significant component to our management team in the person of John Vaughan, who joined us as president of Tellabs International. John comes to us from our local service provider, Ameritech, where he was most recently corporate vice president of business unit development and strategy. John takes over the international reins from Peter Guglielmi, who for some time now has been responsible for "International" as well as serving as our chief financial officer. The addition of John to our strategic management team and to the international organization is a significant step for us. The second half of 1997 promises to be as exciting and demanding as any we've seen. Several new products will emerge from development, most notably a hardware and software extension to the TITAN 5500 system that will add optical ring management capability and SONET traffic management features to an already rich feature set. We also anticipate increased activity in the CABLESPAN (a registered trademark of Tellabs Operations, Inc.) product area as new features and real service demands are, at long last, now on the threshold. Prominent feature additions to both the MartisDXX and the echo canceller product lines are also in the 2 offing later this year, and even more next year, in keeping with our plan to maintain the attractiveness of these products well into the next century. We continue to be optimistic about the future of telecommunications, and of course about our prospects for growth in this robust and challenging industry. Thanks for looking in on us via the web, and for sharing some of the excitement with us. Sincerely, s\ Michael J. Birck - ----------------------- Michael J. Birck Chief Executive Officer Second Quarter Earnings Release (website link to this information which is attached hereto as Exhibit 20.3) Results of Operations Condensed Consolidated Balance Sheet Common Stock Market Data Tellabs' common stock is listed on The Nasdaq Stock Market under the symbol TLAB and appears in most daily newspaper stock tables as Telabs. At February 17, 1997, there were approximately 3,035 stockholders of record. Tellabs is a component of the Nasdaq-100 Index and the Standard & Poor's 500 Index. 10-K Report Stockholders may obtain without charge a copy of the Tellabs 1996 Form 10-K as filed with the Securities and Exchange Commission upon request to: Secretary Tellabs, Inc. 4951 Indiana Avenue Lisle, Illinois 60532 U.S.A. Edgar Archives For Tellabs investor relations contact: Tom Scottino 1.630.378.7504 Tom_Scottino@pcmail.tellabs.com 3 Except for historical information, the matters discussed or incorporated by reference in this letter are forward-looking statements that involve risks and uncertainties associated with competition, market growth, customer acceptance and timely availability of products and features, as well as other risks that may be detailed from time to time in the company's filings with the Securities and Exchange Commission. Tellabs' actual future results could differ materially from those discussed here. The company undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances or to reflect the occurrence of unanticipated events. 4 EX-20.3 3 NEWS RELEASE EXHIBIT 20.3 FOR IMMEDIATE RELEASE CONTACT: Peter A. Guglielmi 07/14/97 (630) 378- 6111 TELLABS REPORTS RECORD SALES AND HIGHER EARNINGS FOR SECOND QUARTER AND FIRST HALF OF 1997 Lisle, Ill. -- Telecommunications equipment manufacturer Tellabs, Inc., announced Monday record sales and higher earnings for the second quarter and the first half of 1997. Sales for the second quarter, ended June 27, were $292,701,000, higher than any previous quarter in the company's history and up 54.5 percent over sales of $189,473,000 in the similar period of 1996. This marks the 24th consecutive quarter in which Tellabs' sales surpassed prior-year levels. Sales for the first six months of the year were a record $539,824,000, up 49.2 percent compared with sales of $361,729,000 a year earlier. Net income for the quarter was $58,761,000, versus a second quarter net loss of $18,678,000 a year earlier when a $74,658,000 pre-tax write-off of in-process R&D ($54,100,000 net of tax) was taken in connection with an acquisition. Excluding the effect of the 1996 write-off, net income for the second quarter of 1997 increased 65.9 percent from the second quarter of 1996. Net income for the first six months of 1997 (including a pre-tax gain of $20,803,000 [$13,855,000 or 7 cents per share, after tax] on the sale of stock held as an investment) was $121,848,000, up from $12,449,000 a year earlier (including the effect of the write-off). Excluding the effects of the 1996 write-off and the 1997 stock sale, net income for the first half of 1997 increased 62.3 percent from the similar period in 1996. Earnings per share of common stock for the second quarter of 1997 were 32 cents, compared to a loss of 10 cents per share (or, excluding the effect of the write-off, earnings of 19 cents per share) for the second quarter of 1996. For the first six months of 1997, earnings per share were 66 cents (or 59 cents excluding the effect of the stock sale), compared with 7 cents (or 36 cents excluding the write-off) a year earlier. (All per-share amounts have been adjusted to reflect the effect of the two-for-one stock split that occurred on November 15, 1996.) "The second quarter followed a familiar pattern, as the company's flagship products experienced robust sales growth," said Tellabs President Michael J. Birck. "Our SONET-based TITAN (a registered trademark of Tellabs Operations, Inc.) 5500 digital 1 cross-connect system, the MartisDXX (a trademark of Tellabs Oy) system and echo cancellers each set all-time, quarterly sales records. Compared with last year's second quarter, TITAN 5500 sales increased 81.8 percent, MartisDXX sales grew 69.5 percent and echo canceller sales were up 88.9 percent." Late in the quarter, Tellabs broke ground for a new 130,000-square-foot facility in Shannon, Ireland. The expansion of the company's Irish operation is focused on the design, development and manufacture of advanced telecommunications products. The new facility is scheduled to open in mid-1998. Tellabs designs, manufactures, markets and services voice and data transport and network access systems. The company's products are used worldwide by the providers of communications services. Tellabs stock is listed on the NASDAQ stock market (TLAB). 2 TELLABS, INC. RESULTS OF OPERATIONS (Dollars in thousands, except per-share data) (Unaudited) Three Months Ended Six Months Ended 06/27/97 06/28/97 06/27/97 06/28/97 --------- --------- --------- -------- Net Sales $292,701 $189,473 $539,824 $361,729 Cost of Goods Sold 111,445 77,158 206,865 151,640 --------- --------- --------- -------- Gross Profit 181,256 112,315 332,959 210,089 Operating Exp. Mktg. & G.A. 55,850 39,264 101,424 72,877 Research & Dev. 37,532 24,890 70,768 46,492 Acquired R&D Write-off --- 74,658 --- 74,658 Goodwill Amort. 1,517 706 3,023 1,317 --------- --------- --------- -------- Total Oper. Exp. 94,899 139,518 175,215 195,344 Oper. Profit (Loss) 86,357 (27,203) 157,744 14,745 Interest/Other-Net 3,537 1,234 26,875 3,753 --------- --------- --------- -------- Profit (Loss) Before Tax 89,894 (25,969) 184,619 18,498 Income Taxes (Benefit) 31,133 (7,291) 62,771 6,049 --------- --------- --------- -------- Net Profit (Loss) $58,761 ($18,678) $121,848 $12,449 ========= ========= ========= ======== Earnings (Loss) per Share $0.32 ($0.10) $0.66 $0.07 ========= ========= ========= ======== Average Number of Shares of Common Stock Outstanding 186,356 184,284 186,006 184,162 3 TELLABS, INC. CONDENSED CONSOLIDATED BALANCE SHEET (Dollars in thousands) (Unaudited) 1997 1997 1996 2nd Qtr. 1st Qtr. Year End Assets --------- --------- -------- Current Assets Cash and investments $427,295 $329,452 $226,867 Accounts receivable, less allowance 171,126 161,870 167,928 Inventories 85,665 80,926 78,519 Other current assets 2,246 1,003 2,150 --------- --------- -------- Total Current Assets 686,332 573,251 475,464 Property, Plant, and Equipment 294,840 277,033 267,014 Less accumulated depreciation (114,278) (109,069) (104,254 --------- --------- -------- 180,562 167,964 162,760 Goodwill 65,749 68,206 64,785 Other Assets 41,398 36,079 40,814 --------- --------- -------- Total Assets $974,041 $845,500 $743,823 ========= ========= ======== Liabilities Current Liabilities Accounts payable $44,479 $37,947 $36,931 Accrued liabilities 98,912 70,783 71,258 Income taxes 24,646 34,190 23,435 --------- --------- -------- Total Current Liabilities 168,037 142,920 131,624 Long-Term Debt 4,083 4,115 2,850 Other Long-Term Liabilities 12,741 12,676 10,964 Deferred Income Taxes 5,869 6,334 7,109 --------- --------- -------- Total Liabilities 190,730 166,045 152,547 Stockholders' Equity Common Stock, $.01 Par Value 1,810 1,804 1,797 Additional Paid-In Capital 114,689 106,043 94,854 Cumulative Translation Adjustment (18,000) (11,912) 3,937 Unrealized Holding Gains on Securities 93,827 51,296 21,551 Retained Earnings 590,985 532,224 469,137 --------- --------- -------- Total Stockholders' Equity 783,311 679,455 591,276 --------- --------- -------- Total Liab. & Stockholders' Equity $974,041 $845,500 $743,823 ========= ========= ======== 4 -----END PRIVACY-ENHANCED MESSAGE-----