EX-99.1 3 l94037aex99-1.txt EXHIBIT 99.1 EXHIBIT 99.1 [ALLEN TELECOM LOGO] FOR IMMEDIATE RELEASE ALLEN TELECOM ANNOUNCES FIRST QUARTER EARNINGS EXCEEDING CONSENSUS EXPECTATIONS BEACHWOOD, OHIO, April 22, 2002 - Allen Telecom Inc. (ALN: NYSE) reported today that earnings per common share for the first quarter ended March 31, 2002 were a loss of $.02 per common share. These earnings compare to income per common share of $.09 for the first quarter of 2001 and a loss per common share of $.12 for the fourth quarter of 2001. The loss for the fourth quarter of 2001 was $.07 before a restructuring charge of $.05 per common share. Each of these prior year quarters in 2001 included a charge for amortization of goodwill of approximately $.07 per common share, which is no longer included as a charge to earnings commencing with the adoption of new accounting rules beginning in the first quarter of 2002. Sales for the first quarter of 2002 were $89.9 million as compared to $108.5 million in sales for the first quarter of 2001 and $89.6 million in the fourth quarter of 2001. This 17% decline in sales as compared to the first quarter of 2001 was the result of significantly weaker sales for our Base Station Subsystems and Components and our Base Station and Mobile Antenna Products. The weaker sales in these product lines were offset, in part, by strong sales of our new product line, Geolocation Products, where sales were $12.5 million as compared to no sales in last year's first quarter. The magnitude of the weakness in our Base Station Subsystems and Components product line was partially offset by the acquisition of Bartley R. F. Systems late in 2001 which was included, for the first time, in our results for this year's first quarter. Total backlog at March 31, 2002 was $95.7 million, down 22.5% compared to the fourth quarter of 2001 as customers continue to defer making purchasing decisions and commitments. We have received orders from three new customers of our Grayson Wireless division's Geometrix(R) geolocation systems for deployment in 2002, and would also expect to book additional orders during the course of this year. Robert G. Paul, President and Chief Executive Officer of Allen Telecom Inc., stated: "The telecommunications industry continues to remain weak and many of our wireless operator customers in Europe and the U.S. have announced capital spending reductions and delays. Our OEM customers have experienced sales declines due to the same capital spending reductions by wireless operators and are projecting only modest improvements over the next three to six month period. Despite the current weakness in our business, we do expect to see a gradual and steady improvement in our weaker businesses during the balance of the year. "We are very pleased that we were able to complete our recent $50 million Convertible Preferred Stock offering in a very difficult equity market. This offering has allowed us to substantially reduce our outstanding debt and improve our liquidity. We have focused on generating cash through working capital reductions and limits on capital spending throughout the Company. During the first quarter we reduced debt levels by $49.5 million from year-end 2001 to March 31, 2002. In addition to raising funds through the offering, we were also successful in reducing our inventory levels in the first quarter of 2002 by more than $10 million, or 9%, after an even larger reduction in the fourth quarter of 2001. We plan to continue to reduce expenses and working capital while not disrupting our long-term strategic objectives. The closing of our Sparks, Nevada facility will be complete by the end of April, 2002 when its operations will be fully merged into the Bartley facility in Massachusetts. The projected cost savings of $4-5 million annually will begin to be realized in the second quarter. "We believe that based on the continued growth in mobile phone users and minutes of use as well as the introduction of third generation (3G) technology, the future for global wireless communications still remains strong despite the current environment. We have continued to invest in new technology and new products. One of the more exciting new products is within our Repeater and In-Building Coverage Products. MIKOM is in the process of rolling out pilot programs for a new distributed antenna/repeater system. This system is a multi-operator microcell-distributed antenna system for use in both 2G and 3G wireless communications systems for both indoor and outdoor network locations. "Looking forward, we expect second quarter sales to be relatively flat compared with the first quarter 2002 due to a short term reduction in geolocation sales, to be followed by increased sales in the third and fourth quarters of 2002 of Geolocation Products. During the second quarter we expect overall margins to continue to be under pressure as the increases in the sales of our lower margin base station components and base station antennas coincide with the lower sales of higher-margin geolocation products in the second quarter. We believe sales for the full year 2002 will exceed sales in 2001 and we expect to be profitable for the full year." Allen Telecom Inc. (http://www.allentele.com) is a leading supplier of wireless equipment to the global telecommunications infrastructure market. FOREM supplies sophisticated filters, duplexers, combiners, amplifiers and microwave radios to an array of OEM customers. MIKOM focuses on providing repeaters, in-building systems and other products that enhance both the coverage and the capacity of a wireless system. Tekmar Sistemi provides integrated low power fiber optic and cable distributed antenna systems for indoor coverage systems. Decibel Products and Antenna Specialists manufacture land based and mobile antennas in frequency bands that cover all of the traditional wireless networks. Grayson Wireless supplies measurement and signal processing systems for testing the performance of a wireless network, network-based wireless caller geolocation systems for E 911 and value added services. Comsearch offers program management, network planning, engineering, development and installation of wireless networks worldwide. Statements included in this press release, which are not historical in nature, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements regarding the Company's future performance and financial results are subject to a number of risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. Factors that could cause the Company's actual results to materially differ from forward-looking statements made by the Company, include, among others, the cost incurred, savings realized and timing of the integration of acquisitions, such as the integration of Bartley R.F. Systems and the consolidation of the Company's Nevada facility into Bartley's Amesbury, MA facility; the cost, success and timetable for new product development including, for example, products for 3G, E 911 and power amplification; the health, economic stability and relative currency valuations in world and national markets; the cost and outcome of litigation, including, for example, a lawsuit filed by a competitor in the E 911 geolocation business claiming infringement by the Company of intellectual property rights; the cost and availability of capital and financing to the Company and its customers; the uncertain timing and level of purchases by the limited number of the Company's customers of both current products and services, and those under development; the effective realization of inventory, receivables and other working capital assets to cash; the impact of competitive products and pricing in the Company's markets; the ability of the company to generate future U.S. profits or to implement other tax planning strategies needed to utilize the Company's tax loss carry forwards; the impact of U.S. and foreign government legislative/regulatory actions, including, for example, the scope and timing of E 911 geolocation requirements in the U.S. markets and spectrum availability and licensing for new wireless applications; the impact of future business conditions on the Company's ability to meet terms and conditions of the Company's borrowing agreements; the cost, timing and availability of personnel, facilities, materials and vendors required for the Company's current and future products; and whether and when backlog will be converted to customer sales. Allen Telecom Inc.'s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q may contain additional factors. For further information contact: Dianne B. McCormick Director, Investor Relations (216) 765-5855 (phone) (216) 765-0375 (fax) Dianne McCormick@allentele.com ------------------------------ ALLEN TELECOM INC. CONSOLIDATED STATEMENTS OF OPERATIONS (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
THREE MONTHS ENDED MARCH 31, ------------------------------------------- 2002 2001 ------------------- -------------------- SALES $ 89,869 $ 108,543 Cost of sales (68,702) (78,639) ----------- ----------- Gross profit 21,167 29,904 Operating Expenses: Selling, general and administrative expenses (13,154) (14,365) Research and development and product engineering costs (6,609) (6,900) Amortization of goodwill (Note 1) - (1,980) ------------- ------------ Operating income 1,404 6,659 Net interest expense (2,366) (2,595) ------------ ------------ (Loss) income before taxes and minority interest (962) 4,064 Benefit (provision) for income taxes 340 (1,585) ------------ ----------- (Loss) income before minority interest (622) 2,479 Minority interest (20) (42) -------------- ------------- NET (LOSS) INCOME $ (642) $ 2,437 ============ ========= NET (LOSS) INCOME PER COMMON SHARE, Basic and Diluted $ (.02) $ .09 ======= ====== Weighted average common shares outstanding: Basic 30,300 27,930 Diluted 30,300 28,350
Note 1: Effective January 1, 2002, the Company implemented the provisions of Statement of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets." This Statement changed the accounting for goodwill from an amortization method to an impairment only approach; accordingly, the company ceased amortizing goodwill beginning in the first quarter of 2002. This change improved the reported Net (Loss) Income Per Common Share by approximately $.07 per common share (basic and diluted). The following supplemental information is presented, on a proforma basis, for the consolidated results of operations for the first quarter of 2001, as compared with the first quarter 2002, adjusted to exclude amortization of goodwill in the first quarter of 2001 (amounts in thousands):
Three Months Ended March 31, -------------------------------------------------------------------------------------------------- 2002 2001 -------------------------------------------------------------------------------------------------- Reported net (loss) income $ (642) $ 2,437 Add back goodwill amortization (net of related income taxes) - 1,975 ---------------------------------------- Proforma net (loss) income $ (642) $ 4,412 ---------------------------------------- Reported (loss) earnings per common share (basic and diluted) $(.02) $.09 Effect of goodwill amortization - .07 ---------------------------------------- Proforma (loss) earnings per common share $(.02) $.16 --------------------------------------------------------------------------------------------------
Note 2: Segment information for the Company is as follows (amounts in thousands):
Three Months Ended March 31, -------------------------------------------------------------------------------------------------- 2002 2001 -------------------------------------------------------------------------------------------------- Sales to external customers: Wireless communications equipment: Base station subsystems and components $ 33,707 $ 59,423 Repeater and in-building coverage products 22,470 22,820 Base station and mobile antennas 16,626 20,520 Geolocation products 12,490 - ---------------------------------------- Total wireless communications equipment 85,293 102,763 Wireless engineering and consulting services 4,576 5,780 -------------------------------------------------------------------------------------------------- Total sales $ 89,869 $ 108,543 -------------------------------------------------------------------------------------------------- Results of operations: Wireless communications equipment $ 3,289 $ 10,262 Wireless engineering and consulting services (17) 158 ---------------------------------------- 3,272 10,420 Goodwill amortization - (1,980) General corporate expenses (1,868) (1,781) -------------------------------------------------------------------------------------------------- Operating income $ 1,404 $ 6,659 --------------------------------------------------------------------------------------------------
ALLEN TELECOM INC. CONSOLIDATED CONDENSED BALANCE SHEETS (AMOUNTS IN THOUSANDS)
MARCH 31, DECEMBER 31, 2002 2001 -------------- ----------------- (Unaudited) ASSETS Cash and equivalents $ 14,213 $ 16,368 Receivables 94,266 92,291 Inventories 113,276 124,026 Other current assets 27,218 25,245 --------- --------- Total current assets 248,973 257,930 Fixed assets 39,177 41,290 Goodwill 141,060 140,995 Other 70,357 71,741 ---------- ---------- TOTAL ASSETS $499,567 $511,956 ======== ======== LIABILITIES Notes payable and current maturities of long-term obligations $ 12,154 $ 12,318 Accounts payable 35,036 40,355 Accrued expenses 27,211 27,827 Income taxes 12,794 14,633 --------- --------- Total current liabilities 87,195 95,133 Long-term debt 91,206 140,530 Other liabilities 18,126 17,936 --------- --------- TOTAL LIABILITIES 196,527 253,599 REDEEMABLE CONVERTIBLE PREFERRED STOCK 50,000 - STOCKHOLDERS' EQUITY 253,040 258,357 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 499,567 $ 511,956 ========= =========