-----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, S9SKOdsrsoVVFhpFA/CXljbn/MTX9h9YKZqPhY4eJ51L2F9I0xM4VxTTKWt/81EG ccMzYahPIJxEaGCHVrJnZQ== 0000950152-03-004584.txt : 20030425 0000950152-03-004584.hdr.sgml : 20030425 20030425100859 ACCESSION NUMBER: 0000950152-03-004584 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030424 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030425 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLEN TELECOM INC CENTRAL INDEX KEY: 0000003721 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 380290950 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06016 FILM NUMBER: 03663558 BUSINESS ADDRESS: STREET 1: 25101 CHAGRIN BLVD # 350 CITY: BEACHWOOD STATE: OH ZIP: 44122-5619 BUSINESS PHONE: 2167655818 FORMER COMPANY: FORMER CONFORMED NAME: ALLEN GROUP INC DATE OF NAME CHANGE: 19920703 8-K 1 l00563ae8vk.txt ALLEN TELECOM INC. 8-K ================================================================================ 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 24, 2003 -------------- ALLEN TELECOM INC. - -------------------------------------------------------------------------------- (Exact name of Registrant as specified in charter) Delaware 1-6016 38-0290950 - -------------------------------------------------------------------------------- (State of Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification Number) 25101 Chagrin Boulevard, Beachwood, Ohio 44122-5619 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code 216/765-5800 - -------------------------------------------------------------------------------- Not Applicable - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) ================================================================================ ITEM 5. OTHER EVENTS ------------ This Current Report on Form 8-K is being filed with the Securities and Exchange Commission by Allen Telecom Inc. for the purpose of providing the information set forth in the press release issued by Allen Telecom on April 24, 2003, a copy of which is filed as Exhibit 99.1 hereto and which is incorporated herein by this reference. ITEM 7. EXHIBITS -------- Exhibit 99.1 Press Release, dated April 24, 2003 2 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. ALLEN TELECOM INC. By: /s/ Laura C. Meagher ------------------------------- Laura C. Meagher General Counsel and Secretary Date: April 25, 2003 -------------- 3 ALLEN TELECOM INC. ------------------ EXHIBIT INDEX ------------- Exhibit Number Document - -------------- -------- 99.1 Press Release, dated April 24, 2003 4 EX-99.1 3 l00563aexv99w1.txt EXHIBIT 99.1 Exhibit 99.1 ALLEN TELECOM INC. 25101 Chagrin Boulevard, Cleveland, Ohio 44122-5687 / 216-765-5800 o FAX: 216-765-0410 [ALLEN TELECOM LOGO] NEWS RELEASE FOR IMMEDIATE RELEASE ALLEN TELECOM'S FIRST QUARTER EARNINGS RESULTS EXCEED EXPECTATIONS BEACHWOOD, OHIO, April 24, 2003 - Allen Telecom Inc. (NYSE: ALN) today reported its financial results for the first quarter ended March 31, 2003. Sales for the first quarter of 2003 were $110.9 million, an increase of 23.4% compared to $89.9 million in the first quarter of 2002. Diluted earnings per common share in the first quarter of 2003 were $.26, up significantly as compared to a reported loss of $0.02 per common share in the first quarter of 2002. Earnings were impacted in the first quarter of 2003 by $1.3 million of pre-tax costs from restructuring actions and costs related to the pending acquisition of the Company by Andrew Corporation. The Company also reported a one-time tax benefit of $2.0 million, which reduced its effective tax rate for the first quarter of 2003 to 17% from the expected rate of 35% for the remainder of 2003. Allen Telecom's total order backlog increased 13.5% from $140.4 million at December 31, 2002 to $159.3 million at March 31, 2003 and includes increases in almost all product lines, most notably in Base Station Subsystems and Components. The increase in backlog as of March 31, 2003 in the Company's geolocation business to $94.2 million is an increase of 8.2% from the quarter ended December 31, 2002. Robert G. Paul, President and Chief Executive Officer of Allen Telecom Inc., stated, "We are very pleased to be one of the few participants in our industry to report substantial growth in both revenues and profits in a most difficult time. The telecommunications industry continues to deal with declines in worldwide capital expenditures by carriers and original equipment manufacturers (OEMs), delays in the build-out of third generation (3G) networks, primarily in Europe, and the underlying economic uncertainty throughout the world. While the number of mobile wireless subscribers and the minutes of use continue to increase, the decline in capital expenditures by carriers is leading to increased congestion and quality issues in the existing networks. Therefore, while we cannot predict the ultimate timing of a turnaround in the telecommunications industry, we believe there continues to be a strong demand for wireless communications services and equipment and that the networks will need to be expanded and improved in the future. "We were very pleased by our gross margin improvement in the first quarter. Although pricing pressures continue, we benefited from a favorable product mix toward our more profitable products and the hard work at our divisions to reduce production and material costs. As compared to the fourth quarter of 2002, gross margins improved in all of our product lines. "Our balance sheet and working capital position continued to improve in the first quarter of 2003. We generated over $30 million in cash in the first quarter. For the first time in nine years we are in a positive net cash position as our $78 million cash balance exceeds our total debt. This is a dramatic difference from just one and one half years ago when we had a net debt position of over $150 million. "We are delighted with the continued progress of our Geolocation Products line in the first quarter of 2003. Our Geometrix equipment can accurately determine the location of a wireless 911 caller and then forward the information to public safety agencies. According to the Cellular Telephone Industry Association, over 155,000 emergency 911 calls are made from mobile phones on a daily basis. Few public safety agencies have the systems and the equipment necessary to locate a mobile phone user dialing 911 if the person placing the call doesn't know or can't give his or her location. "Our Geometrix network-based location systems and equipment expanded their overall market leadership position among small, medium and large carriers. Sales of this product line increased 249% in the first quarter of 2003 to $43.6 million from $12.5 million in the first quarter of 2002 and exceeded our record fourth quarter 2002 shipments. So far in the month of April, we have received additional orders of $15.7 million for geolocation equipment for shipment in the third and fourth quarters of 2003. We have received orders from 10 customers and have installed geolocation systems in 131 markets in 29 states. "Our research and development expenditures increased in the first quarter which was in line with several new product and process initiatives at our Forem and Mikom divisions, including a digital repeater, a more integrated product portfolio and next generation product concepts. "Looking forward to the next quarter, we expect second quarter sales to be between $113 and $120 million. Our expectations are based on the continuing strength in our Geolocation Products line and improvement in most all other product lines resulting from an improved outlook at some of our OEM customers and to seasonal improvement with many of our products. Earnings per common share in the second quarter are expected to be between $.20 and $.30 per common share. "Allen Telecom and Andrew Corporation signed a definitive agreement on February 18, 2003 for Andrew to acquire Allen Telecom. The combination of these two companies, given their complementary product lines, would create a single company capable of providing global wireless infrastructure customers with an extensive product line, strategically located manufacturing plants and a sales base capable of servicing carriers and original equipment manufacturers throughout the world." 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 indoor and outdoor repeaters, in-building multi-band optical repeater 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 and third generation (3G) air interfaces. Grayson Wireless supplies network-based wireless caller geolocation systems for E911 and value added services, as well as measurement and signal processing systems for testing the performance of a wireless network. 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, success and timetable for new product development, including, products for 3G, E911 and power amplification; the cost and outcome of pending litigation, including, for example, a lawsuit filed by a competitor in the E911 geolocation business claiming infringement by the Company of intellectual property rights; the health and economic stability of the world and national markets; the cost and availability of capital and financing to the Company and its customers; loss or bankruptcy of one or more of the Company's customers, which could adversely affect the Company's ability to collect its accounts receivable; the uncertain timing and level of purchases of both current products and those under development for current and prospective customers of the Company's products and services; the effective realization of inventory and other working capital assets to cash; the impact of competitive products and pricing in the Company's markets; the impact of changes in the market value of pension fund assets held by the Company's defined benefit pension plans; the ability of the Company to generate future profits or to implement other tax planning strategies needed to utilize the Company's tax loss carry forwards; the changes in business conditions and/or changes in assumptions, which could result in goodwill impairment charges; the impact of U.S. and foreign government legislative/regulatory actions, including, for example, the scope and timing of E911 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; whether and when backlog will be converted to customer sales; and the impact, if any, on current or future sales, earnings or financial condition of the Company resulting from the previously announced agreement under which Andrew Corporation will acquire Allen Telecom. Allen Telecom Inc.'s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q may contain additional details concerning these 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 STATEMENT OF OPERATIONS (Amounts in Thousands, Except Per Share Data) Three Months Ended March 31, 2003 2002 --------- --------- (Unaudited) SALES $ 110,934 $ 89,869 Cost of sales (Note 1) (72,997) (68,702) --------- --------- Gross profit 37,937 21,167 Operating expenses: Selling, general and administrative expenses (Note 1) (17,079) (13,154) Research and development costs (Note 1) (8,000) (6,609) --------- --------- Operating income 12,858 1,404 Net interest expense (1,169) (2,366) --------- --------- Income (loss) before taxes and minority interest 11,689 (962) (Provision) benefit for income taxes (Note 2) (2,042) 340 --------- --------- Income (loss) before minority interest 9,647 (622) Minority interest (27) (20) --------- --------- Net income (loss) 9,620 (642) Dividends on preferred stock (968) -- --------- --------- Income (loss) applicable to common shareholders $ 8,652 $ (642) ========= ========= INCOME (LOSS) PER COMMON SHARE: Net income (loss): Basic $ .28 $ (.02) ========= ========= Diluted $ .26 $ (.02) ========= ========= Weighted average common shares: Basic 30,570 30,300 Diluted 37,470 30,300 ALLEN TELECOM INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in Thousands) March 31, December 31, 2003 2002 -------- -------- (Unaudited) ASSETS Cash and equivalents $ 78,751 $ 48,420 Receivables 100,661 105,463 Inventories 107,506 100,474 Other current assets 13,074 28,569 -------- -------- Total current assets 299,992 282,926 Fixed assets 38,236 38,214 Goodwill 139,136 139,126 Other assets 65,423 69,772 -------- -------- TOTAL ASSETS $542,787 $530,038 ======== ======== LIABILITIES Notes payable and current maturities of long-term obligations $ 12,938 $ 13,277 Accounts payable 47,238 54,003 Accrued expenses 46,634 36,192 Income taxes 9,592 14,600 -------- -------- Total current liabilities 116,402 118,072 Long-term debt 64,300 64,084 Other liabilities 24,080 23,628 -------- -------- TOTAL LIABILITIES 204,782 205,784 REDEEMABLE CONVERTIBLE PREFERRED STOCK 50,000 50,000 STOCKHOLDERS' EQUITY 288,005 274,254 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $542,787 $530,038 ======== ======== Note 1: In the first quarter 2003, the Company incurred $840 thousand of restructuring charges ($.02 per basic and diluted common share after related tax effect) in connection with headcount reductions at its Base Station Subsystems and Components product line in North America, as well as its Repeater and in-building Coverage product line in Europe. Of these restructuring charges, $20 thousand were included in Cost of sales, $205 thousand in Selling, general and administrative expenses and $615 thousand in Research and development costs. In addition, the Company incurred $500 thousand, included in Selling, general and administrative expenses ($.01 per basic and diluted common share after related tax effect), relating to transaction costs in connection with the previously announced planned merger with Andrew Corporation. Note 2: The Company recorded a one-time net tax benefit of approximately $2.0 million (or $.06 and $.05, per basic and diluted common share, respectively) in the first quarter of 2003 resulting primarily from favorable European tax legislation. This net tax benefit reduced the effective tax rate for the first quarter 2003 to 17.5% from an expected ongoing rate of 35% for the full year 2003. Note 3: Segment information for the Company is as follows (amounts in thousands): Three Months Ended March 31, - -------------------------------------------------------------------------------- 2003 2002 - -------------------------------------------------------------------------------- Sales to external customers: Wireless communications equipment: Geolocation products $ 43,618 $ 12,490 Base station subsystems and components 32,890 33,707 Repeater and in-building coverage products 16,419 22,470 Base station and mobile antennas 14,244 16,626 -------------------------- Total wireless communications equipment 107,171 85,293 Wireless engineering and consulting services 3,763 4,576 - -------------------------------------------------------------------------------- Total sales $ 110,934 $ 89,869 - -------------------------------------------------------------------------------- Results of operations: Wireless communications equipment $ 14,995 $ 3,289 Wireless engineering and consulting services (461) (17) -------------------------- 14,534 3,272 General corporate expenses (1,676) (1,868) - -------------------------------------------------------------------------------- Operating income $ 12,858 $ 1,404 - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----