-----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, PbHt+EVlPBJyz78025TBM79SegFrCeYO6zn7C7Ya3cTTH8OIBPqC2dQA6ejK+WyX u9Bk9yFQ3xZFypuSLwi/XQ== 0000317771-99-000043.txt : 19990430 0000317771-99-000043.hdr.sgml : 19990430 ACCESSION NUMBER: 0000317771-99-000043 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990429 ITEM INFORMATION: FILED AS OF DATE: 19990429 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: 0101 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-09692 FILM NUMBER: 99604341 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 FORM 8-K 04/29/99 UNITED STATES 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) April 29, 1999 TELLABS, INC. (Exact name of registrant as specified in its 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) Item 5. Other Events On April 29, 1999, Tellabs, Inc. (the "Company") issued its First Quarter Report 1999 to stockholders through its website at www.tellabs.com. Incorporated into the First Quarter Report 1999 are links to the First Quarter Earnings Release which includes the Results of Operations and Condensed Consolidated Balance Sheet. The First Quarter Report 1999 to stockholders and the First Quarter Earnings Release including Results of Operations and Condensed Consolidated Balance Sheet are attached hereto as Exhibit 20.1 and Exhibit 99.2, respectively, and are incorporated herein by reference. Item 7. Financial Statements and Exhibits (c) Exhibits Exhibit 20.1 - First Quarter Report 1999 Exhibit 99.2 - First Quarter Earnings Release with Results of Operations and Condensed Consolidated Balance Sheet SIGNATURES 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 Date: April 29, 1999 By: /s Robert E. Swininoga -------------- ----------------------- Robert E. Swininoga Vice President and Principal Accounting Officer Exhibit Index Exhibit No. Description - ----------- ----------- 20.1 First Quarter Report 1999 99.2 First Quarter Earnings Release with Results of Operations and Condensed Consolidated Balance Sheet EX-20.1 2 EX-20.1 1ST QTR. REPORT 1999 First Quarter Report 1999 Fellow Stockholders: April 29, 1999 Frequent readers of these missives may experience a sense of deja vu while reading this letter, as the company's first-quarter performance continued the trends of revenue and earnings growth typical of the past several years. No one is complaining - there's no lack of joy here simply because it's a familiar story. Revenue in the quarter amounted to $469.7 million, a record high for first- quarter sales and a 43.4 percent increase over revenue of $327.5 million in the first quarter a year ago. As usual, sales of the TITAN(r) family of digital cross-connect systems led the way, increasing by 49 percent over sales in the first quarter of 1998. Echo canceller sales were up 42 percent during the quarter, bolstered in large part by the successful integration of the former Coherent company. Sales of the MartisDXX(tm) system increased 21.2 percent, and we should note that our CABLESPAN(r) product met its sales plan for the quarter. With all the activity in the cable industry these days, perhaps this quarter's activity won't be a one-time event. Net earnings for the quarter amounted to almost $104 million, 52 percent above earnings in the first quarter a year ago. Earnings per share on a diluted basis were 52 cents this quarter and 37 cents last year. As noted, TITAN system sales were strong throughout the quarter, both for the wideband TITAN 5500 system and the narrowband TITAN 532L system. The announcement during the quarter of the Feature Package 6.0 enhancement for the TITAN 5500 cross-connect doubles the size of that system and gives us the largest digital cross connect system in captivity. The introduction of a new TITAN element, the TITAN 4500GS Global Services Delivery platform, was another milestone during this first quarter. This extension of the TITAN product family addresses the needs of the global carriers of telecom traffic by accommodating both North American and European transport protocols. At our April 21 Annual Meeting of Stockholders, current Tellabs Directors Brian J. Jackman, Stephanie Pace Marshall and William F. Souders were re-elected to new three-year terms on the company's Board of Directors. To the delight of most and, I suspect, the surprise of very few, Tellabs announced a two-for-one split of its common shares. At the same time, we talked in fuller detail about a stretch objective that goes by the moniker "X3 by '03." This goal calls for Tellabs to triple annual sales by the year 2003. As those of you who have been with us for a while will recall, in October 1995 Tellabs people embraced a "$2B by 2K" objective to achieve $2 billion in annual revenue by the year 2000. As it looks that we will achieve that objective one year early, it's only appropriate that we set our sights on the next target -- $6 billion in revenue by 2003. Aside from the financial goals, there are a few other objectives we've set for ourselves that are admittedly harder to measure but probably more consequential in the long run. These include being better able to please our customers, get products to market with speed, and collect on the results of those efforts. Reducing days sales outstanding (DSO) is another of our objectives - one on which good progress was made during the quarter. Customer satisfaction, always near the top of our agenda, is our top priority, something that we're taking on with a little more vengeance now. John Vaughan, in a relatively new role as president of Tellabs Global Sales and Service, will champion that cause. Reducing time-to-market, the interval between product conceptualization and actual appearance in the marketplace, is an issue that bedevils a lot of companies. Brian Jackman, Tellabs President of Global Systems and Technology, is leading that effort for us. We'll keep you informed as these initiatives continue to unfold. Looking forward, we continue to be optimistic about the balance of the year. The improving economic situation internationally and the robust economy in the United States, evidenced by the continuing demand for such things as Internet transport, Internet access and wireless services, augurs well for the continuing growth of the telecom infrastructure. We think we've got the right products to address that growth. Sincerely, /s Michael J. Birck Michael J. Birck President and Chief Executive Officer First Quarter Earnings Release (website link to this information which is attached hereto as Exhibit 99.2) 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 15, 1999, there were approximately 4,371 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 1998 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@tellabs.com Except for historical information, the matters discussed or incorporated by reference in this document 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. APPENDIX A DESCRIPTION OF GRAPHIC AND IMAGE MATERIAL - ----------------------------------------- Bar Graph of Gross Profit Margin (In Percentages) Data Points: 1995-54.8%, 1996-57.3%, 1997-59.3%, 1998-58.6%, 1999-58.7% Results for 1999 are as of 4/02/99. Bar Graph of Book Value per Share (Restated for Stock Splits in 1996 and 1995) Data Points: 1995-$2.44, 1996-$3.29, 1997-$5.14, 1998-$7.08, 1999-$7.54 Results for 1999 are as of 4/02/99. Bar Graph of Return on Equity (In Percentages) Data Points: 1995-31.9%, 1996-23.0%, 1997-34.6%, 1998-34.5%, 1999-34.6% Results for 1999 are as of 4/02/99. EX-99.2 3 EX-99.2 1ST QTR. EARNINGS RELEASE FOR IMMEDIATE RELEASE CONTACT: Peter A. Guglielmi 04/14/99 (630) 378-6111 TELLABS BEGINS 25th YEAR WITH BEST FIRST QUARTER IN HISTORY Lisle, Ill. - Telecommunications-equipment manufacturer Tellabs, Inc., announced Wednesday that it began its 25th year of operation with the highest sales and earnings for any first quarter in company history. It was the company's second- best quarter, exceeded only by the all-time record sales and operating earnings reported in the fourth quarter of 1998. Sales for the first quarter, ended April 2, were $469,651,000, up 43.4 percent from $327,502,000 a year earlier. Net income for the first quarter was $103,718,000, up 52 percent from $68,244,000 a year earlier. Earnings per share of common stock on a diluted basis for the first quarter were 52 cents, compared with 37 cents for the first quarter of 1998. "Tellabs got off to a robust start in 1999, driven primarily by continuing strong demand across our major product lines," said Tellabs President and CEO Michael J. Birck. "Sales of our TITAN (r) digital cross-connect system family exceeded last year's first-quarter level by 48.9 percent, driven by strong demand for the SONET-based TITAN 5500 and 532L systems. MartisDXX (tm) system sales were up 21.2 percent. Echo canceller sales, following strong growth at the end of 1998, increased 42 percent, and CABLESPAN (r) system sales grew meaningfully, as that product continues to gain acceptance in the marketplace." During the quarter, Tellabs announced the newest member of its TITAN transport family, the TITAN 4500GS global services delivery system. This platform delivers global services over SDH and SONET networks, and was designed in close collaboration with major global super-carriers whose networks traverse international boundaries. The system gives carriers new flexibility and economies for delivering services (Frame Relay, ATM, Internet, digital private line, cable data and telephony, or video) intact between a SONET environment such as the United States or Canada and an SDH environment like Europe, Latin America or the rest of the world. Availability of the TITAN 4500GS system is expected in May 1999. "In addition to the TITAN 4500GS system and the AN2100 Gateway Exchange (tm), introduced in late 1998, Tellabs looks forward to introducing two more major new product platforms during 1999," Birck continued. "During the summer, we expect to bring to field trial an optical networking system that uses DWDM technology to address metropolitan service applications. Late in the year, we expect to field-trial a large capacity, ATM-based, broadband transport manager that complements our TITAN family of digital cross-connect systems." Tellabs designs, manufactures, markets and services voice and data transport and 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). This news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, risks associated with introducing new products, entering new markets, competitive response, and a downturn in the telecommunications industry. For a more detailed description of the risk factors, please refer to the company's SEC filings. Tellabs, the Tellabs logo, TITAN and CABLESPAN are registered trademarks of Tellabs Operations, Inc., in the United States and/or other countries. AN2100 Gateway Exchange is a trademark of Tellabs Operations, Inc., in the United States and/or other countries. MartisDXX is a trademark of Tellabs Oy in Finland and/or in other countries. TELLABS, INC. Results of Operations (Dollars in thousands, except per-share data) (Unaudited) Three Months Ended 04/02/99 04/03/98 -------- -------- Sales $469,651 $327,502 Cost of Goods Sold 194,010 138,346 -------- -------- Gross Profit 275,641 189,156 Operating Exp. Mktg. & G.A. 66,452 48,474 Research & Dev. 62,112 43,306 Goodwill Amort. 1,473 1,476 -------- -------- Total Operating Exp. 130,037 93,256 Operating Profit 145,604 95,900 Other Income (Expense) - Net 8,053 5,202 -------- -------- Profit Before Tax 153,657 101,102 Taxes 49,939 32,858 -------- -------- Net Profit $103,718 $ 68,244 ======== ======== Earnings per Share Basic $ .53 $ .38 Diluted $ .52 $ .37 Average Number of Shares of Common Stock Outstanding Basic 195,044 181,873 Diluted 200,682 186,947 TELLABS, INC. Condensed Consolidated Balance Sheet (Dollars in thousands) (Unaudited) 1999 1998 First Quarter Year End ------------- -------- Assets Current Assets Cash and investments $ 811,235 $ 642,645 Accounts receivable, less allowance 381,354 480,620 Inventories 135,105 122,424 Other current assets 8,939 7,002 ---------- ---------- Total Current Assets 1,336,633 1,252,691 Property, Plant and Equipment 410,869 413,891 Less accumulated depreciation (166,850) (159,100) ---------- ---------- 244,019 254,791 Goodwill 51,446 55,559 Other Assets 81,645 64,550 ---------- ---------- Total Assets $1,713,743 $1,627,591 ========== ========== Liabilities Current Liabilities Accounts payable $ 59,360 $ 63,083 Accrued liabilities 89,223 81,927 Income taxes 57,386 73,117 ---------- ---------- Total Current Liabilities 205,969 218,127 Long-Term Debt 2,850 2,850 Other Long-Term Liabilities 18,856 18,164 Deferred Income Taxes 10,638 11,853 ---------- ---------- Total Liabilities 238,313 250,994 Stockholders' Equity Common Stock, $.01 Par Value 1,958 1,945 Additional Paid-In Capital 230,204 192,612 Cumulative Translation Adjustment (49,248) (9,207) Unrealized Holding Gains on Securities 17,974 20,423 Retained Earnings 1,274,542 1,170,824 ---------- ---------- Total Stockholders' Equity 1,475,430 1,376,597 ---------- ---------- Total Liab. and Stockholders' Equity $1,713,743 $1,627,591 ========== ========== -----END PRIVACY-ENHANCED MESSAGE-----