10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 28, 2003

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                      to                                     

Commission file number 1-5517

SCIENTIFIC-ATLANTA, INC.

(Exact name of Registrant as specified in its charter)

Georgia	58-0612397
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
5030 Sugarloaf Parkway Lawrenceville, Georgia	30044
(Address of principal executive offices)	(Zip Code)

770-236-5000

(Registrant’s telephone number, including area code)

Indicate by check x whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes x         No ¨

Indicate by check mark x whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes x No ¨

As of April 25, 2003, Scientific-Atlanta, Inc. had outstanding 148,991,442 shares of common stock.

PART I—FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

	Three Months Ended						Nine Months Ended
	March 28, 2003			March 29, 2002			March 28, 2003			March 29, 2002
SALES	$	382,630		$	452,690		$	1,046,193		$	1,280,981
COSTS AND EXPENSES
Cost of sales		252,024			285,324			691,493			842,807
Sales and administrative		46,508			52,326			141,541			143,406
Research and development		35,728			37,505			112,351			110,702
Restructuring		3,555			3,788			14,790			22,525
Interest expense		—			376			710			592
Interest income		(4,695	)		(4,697	)		(16,377	)		(16,609	)
Other (income) expense, net		8,874			11,771			21,379			(4,541	)
Total costs and expenses		341,994			386,393			965,887			1,098,882
EARNINGS BEFORE INCOME TAXES		40,636			66,297			80,306			182,099
PROVISION FOR (BENEFIT FROM) INCOME TAXES
Current		3,645			38,950			30,848			77,174
Deferred		10,171			(16,436	)		(3,524	)		(15,124	)
NET EARNINGS	$	26,820		$	43,783		$	52,982		$	120,049
EARNINGS PER COMMON SHARE
BASIC	$	0.18		$	0.28		$	0.34		$	0.77
DILUTED	$	0.18		$	0.28		$	0.34		$	0.76
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
BASIC		151,771			156,439			153,760			156,841
DILUTED		152,167			158,338			154,211			158,605
DIVIDENDS PER SHARE PAID	$	0.01		$	0.01		$	0.03		$	0.03

SEE ACCOMPANYING NOTES

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SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(IN THOUSANDS, EXCEPT SHARE DATA)

(UNAUDITED)

	March 28, 2003		June 28, 2002
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	342,733	$	376,429
Short-term investments		545,745		354,848
Receivables, less allowance for doubtful accounts of $6,853 at March 28 and $5,723 at June 28		192,898		261,149
Inventories		130,336		217,452
Deferred income taxes		43,185		47,908
Other current assets		14,906		50,608
TOTAL CURRENT ASSETS		1,269,803		1,308,394
PROPERTY, PLANT AND EQUIPMENT, at cost
Land and improvements		22,009		21,943
Building and improvements		82,670		78,464
Machinery and equipment		241,173		241,420
		345,852		341,827
Less—Accumulated depreciation and amortization		140,656		119,407
		205,196		222,420
GOODWILL		224,885		195,645
INTANGIBLE ASSETS		52,917		48,909
NON-CURRENT MARKETABLE SECURITIES		9,038		28,498
DEFERRED INCOME TAXES		28,439		29,861
OTHER ASSETS		60,638		80,900
TOTAL ASSETS	$	1,850,916	$	1,914,627
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Short-term debt and current maturities of long-term debt	$	569	$	1,739
Accounts payable		151,743		170,308
Accrued liabilities		120,843		145,606
Income taxes currently payable		11,777		—
TOTAL CURRENT LIABILITIES		284,932		317,653
LONG-TERM DEBT, LESS CURRENT MATURITIES		9,076		8,600
OTHER LIABILITIES		149,542		151,583
STOCKHOLDERS’ EQUITY
Preferred stock, authorized 50,000,000 shares; no shares issued		—		—
Common stock, $0.50 par value, authorized 350,000,000 shares; issued 164,992,376 shares at March 28 and at June 28		82,496		82,496
Additional paid-in capital		511,118		530,712
Retained earnings		1,081,571		1,033,168
Accumulated other comprehensive income (loss), net of tax expense (benefit) of $10,294 at March 28 and $(121) at June 28		16,795		(197	)
		1,691,980		1,646,179
Less—Treasury stock, at cost (16,163,255 shares at March 28 and 8,361,862 shares at June 28)		284,614		209,388
		1,407,366		1,436,791
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,850,916	$	1,914,627

SEE ACCOMPANYING NOTES

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SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

	Nine Months Ended
	March 28, 2003			March 29, 2002
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	300,082		$	362,031
INVESTING ACTIVITIES:
Proceeds from the settlement of a collar on a warrant to purchase shares of common stock		20,821			—
Purchases of short-term investments, net		(193,705	)		(23,741	)
Purchases of property, plant, and equipment		(19,518	)		(23,618	)
Acquisition of certain assets of Arris Group		(30,000	)		—
Acquisition of certain assets of ChanneLogics, Inc.		(1,600	)		—
Acquisition of BarcoNet, net of cash acquired		—			(143,286	)
Purchase of PowerTV shares		(4,580	)		—
Proceeds from sale of investments		2,880			—
Other		69			164
Net cash used in investing activities		(225,633	)		(190,481	)
FINANCING ACTIVITIES:
Issuance of common stock		2,294			3,591
Treasury shares acquired		(104,472	)		(183,993	)
Dividends paid		(4,579	)		(4,687	)
Principal payments on debt, net		(1,388	)		(23,219	)
Net cash used in financing activities		(108,145	)		(208,308	)
DECREASE IN CASH AND CASH EQUIVALENTS		(33,696	)		(36,758	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		376,429			563,322
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	342,733		$	526,564
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid during the period:
Interest	$	653		$	302
Income taxes paid (refunded), net	$	(17,081	)	$	43,803

SEE ACCOMPANYING NOTES

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SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(IN THOUSANDS)

(UNAUDITED)

	Three Months Ended					Nine Months Ended
	March 28, 2003		March 29, 2002			March 28, 2003		March 29, 2002
NET EARNINGS	$	26,820	$	43,783		$	52,982	$	120,049
OTHER COMPREHENSIVE INCOME (LOSS) NET OF TAX (1)
Unrealized gains (losses) on marketable securities, net (2)		1,003		(3,116	)		841		(5,716	)
Minimum liability adjustments on retirement plans		—		(2	)		—		60
Foreign currency translation adjustments		4,068		(2,264	)		10,880		(1,735	)
Changes in fair value of derivatives		217		(192	)		1,101		(546	)
COMPREHENSIVE INCOME	$	32,108	$	38,209		$	65,804	$	112,112

⁽¹⁾ Assumed 38 percent tax in fiscal years 2003 and 2002.

⁽²⁾ Net of reclassification adjustments of $-0- and $4,170 in the three and nine months ended March 28, 2003, respectively. No such adjustments were made in the three or nine months ended March 29, 2002.

SEE ACCOMPANYING NOTES

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NOTES:

(Amounts in thousands, except per share data)

A. The accompanying consolidated financial statements include the accounts of Scientific-Atlanta, Inc. (Scientific-Atlanta) and all subsidiaries after elimination of all material intercompany accounts and transactions. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These condensed financial statements should be read in conjunction with the consolidated financial statements and related notes contained in our fiscal year 2002 Annual Report on Form 10-K. The financial information presented in the accompanying statements reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the periods indicated. All such adjustments are of a normal recurring nature.

Amounts in the Consolidated Statements of Financial Position at June 28, 2002 contained in this Form 10-Q were derived from the Consolidated Statements of Financial Position contained in our fiscal year 2002 Annual Report on Form 10-K. Certain prior year amounts have been reclassified to conform to the current year presentation. Accruals for warranty obligations exceeding one year and the related deferred income taxes have been reclassified to Other Liabilities from Accrued Liabilities.

B. Basic earnings per share were computed based on the weighted average number of shares of common stock outstanding. Diluted earnings per share were computed based on the weighted average number of outstanding common shares and potentially dilutive shares.

Basic and diluted earnings per share are computed as follows:

Quarter Ended March 28, 2003	Net Earnings		Shares	Per Share Amount
Basic earnings per common share	$	26,820	151,771	$	0.18
Effect of dilutive stock options		—	396		—
Diluted earnings per common share	$	26,820	152,167	$	0.18

Quarter Ended March 29, 2002	Net Earnings		Shares	Per Share Amount
Basic earnings per common share	$	43,783	156,439	$	0.28
Effect of dilutive stock options		—	1,899		—
Diluted earnings per common share	$	43,783	158,338	$	0.28

Nine Months Ended March 28, 2003	Net Earnings		Shares	Per Share Amount
Basic earnings per common share	$	52,982	153,760	$	0.34
Effect of dilutive stock options		—	451		—
Diluted earnings per common share	$	52,982	154,211	$	0.34

Nine Months Ended March 29, 2002	Net Earnings		Shares	Per Share Amount
Basic earnings per common share	$	120,049	156,841	$	0.77
Effect of dilutive stock options		—	1,764		(0.01	)
Diluted earnings per common share	$	120,049	158,605	$	0.76

The following information pertains to options to purchase shares of common stock which were not included in the computation of diluted earnings per common share for the three months ended March 28, 2003 and March 29, 2002 because the option’s exercise price was greater than the average market price of the common shares:

	March 28, 2003		March 29, 2002
Number of options outstanding		15,828		9,863
Weighted average exercise price	$	39.97	$	52.55

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C. We account for stock option plans under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and the related interpretations. No compensation cost from the grant of options pursuant to stock option plans is reflected in net earnings, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net earnings and earnings per share if we had applied the fair value recognition provision of SFAS No. 123, “Accounting for Stock-Based Compensation,” to stock options granted.

	Three Months Ended				Nine Months Ended
	March 28, 2003		March 29, 2002		March 28, 2003		March 29, 2002
Net earnings as reported	$	26,820	$	43,783	$	52,982	$	120,049
Deduct:  Compensation expense, net of tax		15,708		17,520		50,766		49,768
Pro forma net earnings	$	11,112	$	26,263	$	2,216	$	70,281
Earnings Per Share
Basic
As reported	$	0.18	$	0.28	$	0.34	$	0.77
Pro forma	$	0.07	$	0.17	$	0.01	$	0.45
Diluted
As reported	$	0.18	$	0.28	$	0.34	$	0.76
Pro forma	$	0.07	$	0.17	$	0.01	$	0.44

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model and resulted in weighted average fair values of $8.05, $14.21, $8.05 and $14.33 with the following weighted average assumptions used for grants in the three months ended March 28, 2003 and March 29, 2002 and the nine months ended March 28, 2003 and March 29, 2002, respectively:

	Three Months Ended						Nine Months Ended
	March 28, 2003			March 29, 2002			March 28, 2003			March 29, 2002
Risk free interest rate		2.77	%		4.41	%		2.78	%		4.41	%
Expected term		5 years			5 years			5 years			5 years
Expected forfeiture rate		1	%		1	%		1	%		1	%
Volatility		79	%		76	%		79	%		76	%
Expected annual dividends	$	0.04		$	0.04		$	0.04		$	0.04

D. During the nine months ended March 28, 2003, we purchased 8,000 shares of our common stock at an aggregate cost of $97,303 pursuant to a program announced in July 2001 to buy back up to 8,000 shares and 559 shares at an aggregate cost of $7,169 pursuant to a program announced in February 2003 to buy back up to 10,000 shares.

During the nine months ended March 29, 2002, we purchased 7,925 shares of our common stock at an aggregate cost of $183,993 pursuant to a stock buyback program announced in March 2000. During the nine months ended March 29, 2002, we also acquired 112 shares of our common stock from the conversion of the right to receive common stock into the right to receive cash and 56 shares of our common stock from the payment in stock rather than cash by employees of tax withholding on restricted stock that vested during the nine months ended March 29, 2002.

E. Other (income) expense for the quarter ended March 28, 2003 included $6,830 of losses from other-than-temporary declines in the market value of investments in privately-held companies and marketable securities. Other (income) expense for the nine months ended March 28, 2003 included losses of $17,872 from other-than-temporary declines in the market value of investments in privately-held companies and marketable securities and $3,317 from the decline in the market value of short-term investments. These losses were partially offset by a net gain of $2,491 from the settlement of a collar on a warrant to purchase common stock of a public company and the related warrant. There were no other significant items in other (income) expense for the three or nine months ended March 28, 2003.

Other (income) expense of $11,771 for the quarter ended March 29, 2002 included losses of $13,762 related to other-than-temporary declines in the market value of investments in privately-held companies and $13,280 from the decline in the market value of a warrant to purchase common stock. These losses were partially offset by gains of $10,575 from a collar

on a warrant to purchase common stock and $6,842 from insurance proceeds. Other (income) expense of $4,541 for the nine months ended March 29, 2002 included gains of $2,920 and $10,686 from the appreciation in the market value of a warrant to purchase common stock and the related collar on the warrant, respectively, a gain of $6,842 from insurance proceeds and losses of $13,762 from the other-than-temporary declines in the market value of investments in privately-held companies.

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F. Inventories consist of the following:

	March 28, 2003		June 28, 2002
Raw materials and work-in-process	$	85,143	$	117,938
Finished goods		45,193		99,514
Total inventory	$	130,336	$	217,452

G. During the second quarter of fiscal year 2003, we acquired certain assets of the Network Technologies business of Arris Group (Arris) for $37,500, subject to adjustments. We made an initial cash payment of $30,000 during the quarter and expect to finalize the purchase price adjustments during the quarter ended June 27, 2003. We also acquired the software, technology and other assets of ChanneLogics, Inc. (ChanneLogics) for $1,600 of cash. The acquired assets were recorded at their estimated fair value at the date of acquisition. The initial $30,000 paid to Arris has been allocated to the assets acquired including $12,446 of goodwill and $10,830 of other intangible assets, primarily existing technology and customer base, which are being amortized over varying periods of up to four years. The purchase price of ChanneLogics has been allocated to the assets acquired including $539 of goodwill and $550 of other intangible assets, primarily existing technology, which are being amortized over varying periods of up to five years.

During the first quarter of fiscal year 2003, we acquired a portion of the shares held by the minority shareholders of PowerTV, Inc., a majority-owned subsidiary, for $4,580 of cash. The entire purchase price was recorded as goodwill.

During the quarter ended March 29, 2002, Scientific-Atlanta acquired approximately 98 percent of the equity securities of BarcoNet NV, a Belgium based manufacturer of cable television equipment, for a cash payment of $151,850. The remaining equity securities were acquired in April 2002 for a cash payment of $5,624, including acquisition expenses. The acquisition was accounted for under the purchase method of accounting and accordingly, the acquired assets and liabilities were recorded at their estimated fair value at the date of acquisition. The purchase price has been allocated to the assets acquired and liabilities assumed including $117,103 of goodwill and $26,388 of other intangible assets, primarily existing technology, which are being amortized over varying periods of up to seven years. The results of operations of BarcoNet were included in the Consolidated Statements of Earnings from the date of acquisition in January 2002.

The unaudited pro forma summary below presents certain financial information as if the BarcoNet acquisition had occurred as of June 30, 2001. The pro forma results have been prepared for comparative purposes and do not purport to be indicative of what would have occurred had the acquisition been made on the first day of our fiscal year. Additionally, these pro forma results are not indicative of future results.

	Nine Months Ended March 29, 2002
Sales	$	1,323,258
Net earnings from continuing operations		100,350
Loss from discontinued operations		(34,048)
Net earnings	$	66,302
Diluted earnings per share	$	0.42

The loss from discontinued operations resulted from the discontinuance of Internet services activities by BarcoNet in calendar year 2001.

H. In August 2002, we announced a reduction of our workforce by 400 positions, or approximately 6 percent of our total workforce, to align our costs with reduced sales levels. The workforce reduction was substantially completed by December 27, 2002. The positions eliminated were from manufacturing, engineering, marketing, sales, service and administrative functions. The restructuring also included the consolidation of certain office and manufacturing facilities. In addition, during the third quarter of fiscal year 2003, we reduced our workforce by approximately 120 positions, primarily in sales and other functions within the transmission business, and will reduce our workforce by an additional 30 positions in the fourth quarter of fiscal year 2003. As a result of these actions in fiscal year 2003 and an earlier restructuring announced in October 2001, we recorded restructuring charges of $14,790, primarily for severance, during the nine months ended March 28, 2003. During the nine months ended March 28, 2003, approximately 520 employees were terminated pursuant to these restructurings, and severance of approximately $14,992 was paid to terminated employees. We anticipate recording additional charges related to these restructurings that will total approximately $3,000 in the fourth quarter of fiscal year 2003.

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The following reconciles the beginning restructuring liability at June 28, 2002 to the restructuring liability at March 28, 2003:

	Contractual Obligations Under Cancelled Leases			Severance			Fixed Assets			Other			Total
Balance at June 28, 2002	$	5,202		$	4,553		$	—		$	—		$	9,755
Restructuring provision		1,034			12,994			377			2,286			16,691
Charges to the reserve and assets written off		(2,146	)		(14,992	)		(377	)		(2,320	)		(19,835	)
Other adjustments		(563	)		(1,338	)		—			—			(1,901	)
Balance at March 28, 2003	$	3,527		$	1,217		$	—		$	(34	)	$	4,710

I. We offer warranties of various lengths to our customers depending on the specific product and the terms of the agreements with the customer. Our standard warranties require us to repair or replace defective product returned to us during the warranty period at no cost to the customer. We record an estimate for warranty related costs based on our actual historical failure rates and repair costs at the time of sale. Historical failure rates and repair costs are reviewed and the estimated warranty liability is adjusted, if required, quarterly. Expenses related to unusual product warranty problems and product defects are recorded in the period the problem is identified.

We offer extended warranties on certain products. Revenue from these extended warranty agreements is deferred at the time of sale and recognized in future periods according to the terms of the warranty agreement. The warranty liability at March 28, 2003 consisted of $13,501 in Accrued Liabilities and $25,963 in Other Liabilities in the Consolidated Statement of Financial Position.

The following reconciles the beginning warranty liability at June 28, 2002 to the warranty liability at March 28, 2003:

Accrued warranty at June 28, 2002	$38,742
Reductions for payments	(16,624	)
Additions for warranties issued during the period	17,281
Other adjustments	65
Accrued warranty at March 28, 2003	$39,464

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FINANCIAL CONDITION

Scientific-Atlanta had stockholders’ equity of $1.4 billion, and cash on hand was $342.7 million at March 28, 2003. Cash decreased $33.7 million during the nine months ended March 28, 2003. Cash provided by operating activities for the nine months ended March 28, 2003 of $300.1 million included net earnings of $53.0 million, reductions in accounts receivable and inventory of $67.3 million and $95.6 million, respectively, and a federal income tax refund of $32.0 million related to the write-off of accounts receivable from Adelphia Communications Corporation (Adelphia) resulting from its filing for bankruptcy in June 2002. Net cash provided by operating activities also included $54.1 million of non-cash expenses for depreciation and amortization. These were partially offset by reductions in accounts payable and accrued expenses aggregating $46.6 million.

During the nine months ended March 28, 2003, we received a cash payment of $20.8 million from the settlement of a collar on a warrant to purchase shares of common stock of a public company. We also (1) increased short-term investments by $193.7 million, (2) acquired certain assets of the Network Technologies business of the Arris Group for $37.5 million, subject to adjustments, for which an initial cash payment of $30.0 million was made, (3) acquired property, plant and equipment for $19.5 million and (4) acquired a portion of the minority interest of shareholders of a majority-owned subsidiary, PowerTV, Inc., for $4.6 million. We expect to finalize the purchase price adjustments related to the acquisition of certain assets of the Network Technologies business during the quarter ended June 27, 2003. The Network Technologies business includes analog optics, nodes and radio frequency (RF) electronics products.

During the nine months ended March 28, 2003, we also purchased 8.6 million shares of our common stock at an aggregate cost of $104.5 million.

The current ratio of Scientific-Atlanta was 4.5:1 at March 28, 2003, up from 4.1:1 at June 28, 2002. At March 28, 2003, we had debt of $9.6 million, primarily mortgages on facilities we assumed in connection with the acquisition of BarcoNet during fiscal year 2002. We believe that funds generated from operations, existing cash balances and our available senior credit facility will be sufficient to support operations.

RESULTS OF OPERATIONS

Sales for the fiscal quarter ended March 28, 2003 were $382.6 million, down 15 percent from the comparable quarter of the prior year. Sales of subscriber products declined 4 percent from last year’s third quarter to $269.3 million. In the third quarter of fiscal year 2003, we sold 929 thousand Explorer^® digital set-tops, including 106 thousand Explorer 8000 home entertainment servers and 54 thousand high-definition set-tops, as compared to 879 thousand Explorer digital set-tops in the third quarter of the prior year. During the third quarter of fiscal year 2003, we sold 171 thousand WebSTAR^™ cable modems, down from 183 thousand in the comparable period of the prior year.

Sales of transmission products during the third quarter of fiscal year 2003 of $90.6 million declined 38 percent from the prior year. Transmission product sales declined, despite the addition of the businesses acquired from Arris, due to weak transmission related spending in most regions of the world.

During the quarter ended December 27, 2002, we reached an agreement with German cable partner ish GmbH & Co. KG (ish) related to work orders which had been suspended or cancelled during the fourth quarter of fiscal year 2002 and our exposure in accounts receivable and inventory related to ish. As part of this settlement, we received a cash payment of $22.0 million and notes receivable denominated at $19.0 million. In addition, we entered into an agreement to sell these notes receivable for $11.5 million. During the third quarter of fiscal year 2003, we received a cash payment of $12.8 million from the collection of the notes receivable and related accrued interest.

International sales in the third quarter of fiscal year 2003 were $77.3 million, down 5 percent from the prior year. Lower sales of transmission products and services, primarily in Europe, more than offset stronger international sales of subscriber products in Canada and satellite products in the Asia/Pacific region.

Sales for the nine months ended March 28, 2003 were $1,046.2 million, down 18 percent from the prior year. Sales of subscriber products were $693.1 million, down 18 percent from the prior year. We sold approximately 2.3 million digital set-tops during the nine months ended March 28, 2003, down from 2.6 million in the comparable period of the prior year. We sold approximately 461 thousand cable modems, up from approximately 394 thousand in the prior year. Sales of transmission products were $292.2 million, down 23 percent from the prior year.

International sales were $246.6 million, up slightly over the prior year, as the addition of international sales generated by BarcoNet more than offset declines in other areas of the business, particularly international sales of other transmission products.

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Gross margin was 34.1 percent of sales for the three months ended March 28, 2003, 2.9 percentage points lower than the comparable quarter of the prior year. The decline was primarily due to the higher level of shipments of new set-top models that currently have lower gross margins than the company average and lower sales volumes in the third quarter of fiscal 2003 as compared to the prior year. These items more than offset the benefit of cost reductions through procurement and the completion of the transfer of our Atlanta, Georgia manufacturing operations to Juarez, Mexico in the fourth quarter of fiscal year 2002.

Gross margin was 33.9 percent of sales for the nine months ended March 28, 2003, 0.3 percentage points lower than the prior year. The year-over-year decline was due to the same factors that affected the third quarter decline discussed above.

Sales and administrative expenses were $46.5 million and $141.5 million for the three and nine months ended March 28, 2003, respectively. Selling expenses in the three and nine months ended March 28, 2003 were lower than the prior year due to the impact of the restructurings announced in October 2001 and August 2002 and to the lower sales volume, which more than offset the addition of BarcoNet’s selling expenses in fiscal year 2003. Administrative expenses for the three months ended March 28, 2003 were lower than the prior year due primarily to the restructurings discussed below. Administrative expenses for the nine months ended March 28, 2003 were higher than the comparable period of the prior year due to higher amortization expense of intangible assets established with the acquisition of BarcoNet and certain assets of Arris and the addition of administrative expenses from BarcoNet.

Research and development expenses for the three and nine months ended March 28, 2003 were $35.7 million and $112.4 million, respectively. Research and development expenses for the three months ended March 28, 2003 were lower than the prior year due primarily to the restructurings discussed below. Research and development expenses for the nine months ended March 28, 2003 were higher than the comparable period of the prior year due primarily to research and development expenses at BarcoNet, offset in part by expense reductions related to the restructurings discussed below. Research and development efforts are focused on advanced models of digital set-tops, network software enhancements and upgrades, data products, satellite products and transmission products.

In August 2002, we announced a reduction of our workforce by 400 positions, or approximately 6 percent of our total workforce, to align our costs with reduced sales levels. The workforce reduction was substantially completed by December 27, 2002. The positions eliminated were from manufacturing, engineering, marketing, sales, service and administrative functions. The restructuring also included the consolidation of certain office and manufacturing facilities. In addition, during the third quarter of fiscal year 2003, we reduced our workforce by approximately 120 positions, primarily in sales and other functions within the transmission business, and will reduce our workforce by an additional 30 positions in the fourth quarter of fiscal year 2003. As a result of these actions in fiscal year 2003 and an earlier restructuring announced in October 2001, we recorded restructuring charges of $3.6 million and $14.8 million, primarily for severance, during the three and nine months ended March 28, 2003, respectively. We anticipate recording additional charges related to these restructurings that will total approximately $3 million in the fourth quarter of fiscal year 2003.

Interest expense was $0.7 million for the nine months ended March 28, 2003, up $0.1 million from the same period of the prior fiscal year. The year-over-year increase was due to the debt we assumed from BarcoNet as a result of the acquisition.

Other (income) expense for the quarter ended March 28, 2003 included $6.8 million of losses from the other-than-temporary declines in the market value of investments in privately-held companies and marketable securities. Other (income) expense for the nine months ended March 28, 2003 included losses of $17.9 million from other-than-temporary declines in the market value of investments in privately-held companies and marketable securities and $3.3 million from the decline in the market value of short-term investments. These losses were partially offset by a net gain of $2.5 million from the settlement of a collar on a warrant to purchase common stock of a public company and the related warrant. There were no other significant items in other (income) expense for the three or nine months ended March 28, 2003.

Other (income) expense of $11.8 million for the quarter ended March 29, 2002 included losses of $13.8 million related to other-than-temporary declines in the market value of investments in privately-held companies and $13.3 million from the decline in the market value of a warrant to purchase common stock. These losses were partially offset by gains of $10.6 million from a collar on a warrant to purchase common stock and $6.8 million from insurance proceeds. Other (income) expense of $4.5 million for the nine months ended March 29, 2002 included gains of $2.9 million and $10.7 million from the appreciation in the market value of a warrant to purchase common stock and the related collar on the warrant, respectively, a gain of $6.8 million from insurance proceeds and losses of $13.8 million from the other-than-temporary declines in the market value of investments in privately-held companies.

Earnings before income taxes were $40.6 million for the quarter ended March 28, 2003, down $25.7 million from the prior year due primarily to lower sales volume and lower gross margin as a percent of sales. The effective income tax rate for both periods was 34 percent. Net income for the quarter ended March 28, 2003 was $26.8 million, down $17.0 million from the prior year.

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Earnings before income taxes were $80.3 million for the nine months ended March 28, 2003, down $101.8 million from the prior year due primarily to lower sales volume and an increase of $4.1 million in losses from other-than-temporary declines in the market value of privately-held investments and marketable securities in the nine months ended March 28, 2003 as compared to the comparable period of the prior year. We also recorded a gain of $13.6 million from the appreciation in the market value of a warrant to purchase common stock and the related collar in the prior year which did not recur in the nine months ended March 28, 2003. These items were partially offset by a $7.7 million decline in restructuring charges in the nine months ended March 28, 2003 as compared to the comparable period of the prior year. The effective income tax rate for both periods was approximately 34 percent. Net income for the nine months ended March 28, 2003 was $53.0 million, down $67.1 million from the prior year.

GENERAL

Scientific-Atlanta continued to experience declines in sales this quarter and for the first nine months of fiscal year 2003 as compared to the prior year. We believe that our sales and results of operations have been affected by: (1) the low consumer confidence in the United States amid a slow economy and difficult economic and political conditions outside the United States, (2) continued significant declines in capital spending by our customers as credit markets have tightened and customer credit ratings have been lowered, (3) our customers’ competition from satellite providers, and (4) the declining financial condition of several of our customers and distributors. These trends have resulted in the failure of certain of our customers to: (1) pay for product that has shipped, (2) take delivery of orders they have previously placed and (3) raise additional capital to fund the purchase of equipment and services. Adelphia filed for bankruptcy in June 2002. During the first quarter of fiscal year 2003, Communications Dynamics, Inc., parent of TVC Communications (TVC), a distributor of our products in Latin America, filed for bankruptcy. If these trends continue, which we are not able to predict, our sales and results of operations could be adversely affected. We periodically assess the impact of these trends on our cost structure and reduce our costs, including, but not limited to, reductions in our workforce and consolidation of operations, to attempt to align such costs with our sales level.

In addition, our backlog has declined for the last four quarters from $772.5 million at March 29, 2002 to $339.9 million at March 28, 2003. Due to these declines in backlog, we are more dependent on the shipment of product from orders received during the quarter rather than from backlog to generate sales. Our increased dependence on the receipt of orders during each quarter to generate sales during that quarter and our continued limited visibility to the inventory our customers hold limit our ability to predict our sales volume for the quarter until the end of the quarter. Historically, our quarters tend to be back-end loaded with a larger portion of orders being received and sales being recognized for any quarter at or near the end of the quarter. However, our orders and sales during the third quarter of fiscal year 2003 were more linear than prior quarters. We are unable to predict the timing of orders or sales.

Bookings are orders we receive during the quarter that are eligible for inclusion in backlog. Our policy is to place in backlog orders for product scheduled for shipment within six months from the end of the reported quarter. Although we have a six-month bookings policy, we have the production capacity to respond quickly to customer demand. We believe that customers may have shortened their ordering cycles accordingly, thereby contributing to our decline in backlog.

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Critical Accounting Policies

Note 1 to the Consolidated Financial Statements in Form 10-K for fiscal year 2002 includes a summary of the significant accounting policies or methods used in the preparation of our Consolidated Financial Statements. Some of those significant accounting policies or methods require us to make estimates and assumptions that affect the amounts reported by us. We believe the following items require the most significant judgments and often involve complex estimates.

General

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates and judgments on historical experience and various other factors we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant estimates and assumptions relate to revenue recognition, the adequacy of receivable and inventory reserves, and accrued liabilities and other liabilities, principally relating to warranty provisions.

Revenue Recognition

Our principal sources of revenues are from sales of digital interactive subscriber systems, broadband transmission networks and content distribution networks. We recognize revenue when (1) there is an agreement with the customer, (2) product is shipped and title has passed, (3) the amount due from the customer is fixed and determinable, (4) collectibility is reasonably assured, and (5) we have no significant future performance obligation. At the time of the transaction, we assess whether the amount due from the customer is fixed and determinable and collection of the resulting receivable is reasonably assured. We assess whether the amount due from the customer is fixed and determinable based on the terms of the agreement with the customer, including, but not limited to, the payment terms associated with the transaction. We assess collection based on a number of factors, including past transaction history with the customer and credit-worthiness of the customer. If we determine that collection of an amount due is not reasonably assured, we defer recognition of revenue until collection becomes reasonably assured.

The standard terms and conditions under which we ship allow a customer the right to return product for refund only if the product does not conform to product specifications; the non-conforming product is identified by the customer; and the customer rejects the non-conforming product and notifies us within ten days of receipt. If an agreement contains a non-standard right of return, we defer recognizing revenue until the conditions of the agreement are met. From time to time, our agreements include acceptance clauses. If an agreement includes an acceptance clause, revenue is recorded at the time of acceptance.

Allowance for Doubtful Accounts

Management judgments and estimates are made in connection with establishing the allowance for doubtful accounts. Specifically, we analyze the aging of accounts receivable balances, historical bad debts, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms. Significant changes in customer concentration or payment terms, deterioration of customer credit-worthiness, as in the case of the bankruptcies of Adelphia and the parent of TVC, or weakening in economic trends could have a significant impact on the collectibility of receivables and our operating results. Generally, we do not require collateral or other security to support accounts receivable.

Inventory Reserves

We regularly review inventory quantities on hand and record a provision for excess and obsolete inventory based primarily on our estimated forecast of product demand and production requirements for the next twelve months. In addition, our industry is characterized by rapid technological change, frequent new product development and rapid product obsolescence that could result in an increase in the amount of obsolete inventory on hand. Any significant, unanticipated changes in demand or technological developments could have a significant impact on the value of our inventory and operating results.

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Non-Current Marketable Securities

Non-current marketable securities consist of investments in common stock, primarily technology companies, warrants of publicly traded companies and a collar on a warrant and are stated at market value. (The collar on the warrant held at June 28, 2002 was settled during the first quarter of fiscal year 2003.) We have market risks associated with the volatility in the value of our non-current marketable securities. All investments in common stock are classified as “available for sale” under the provisions of SFAS No. 115, and thus, changes in the fair value of these securities are not included in our Consolidated Statements of Earnings until realized. Unrealized holding gains and losses are included, net of taxes, in accumulated other comprehensive income. Realized gains and losses and declines in value judged to be other-than-temporary are included in other (income) expense. We periodically evaluate the carrying value of our investments in common stock to determine if declines in fair value are other-than-temporary. This evaluation requires judgment and is based on several factors including the market price of the security generally over the preceding six months, analysts’ reports on the security, the performance of the stock market index of the security and the overall economic environment. Unrealized gains and losses on the warrants and collar are included in other (income) expense.

We recorded losses of $6.9 million from the other-than-temporary declines in value of marketable securities during the nine months ended March 28, 2003. No such losses were recorded during the nine months ended March 29, 2002. At March 28, 2003, we had unrealized holding gains on marketable securities, net of tax, of $1.1 million.

Investments in Privately-Held Companies

Investments in privately-held companies consist primarily of securities of emerging technology companies for which readily determinable fair values are not available. These investments are carried at cost and are evaluated periodically to determine if declines in fair value are other-than-temporary. This evaluation requires judgment and is based on several factors including recent private offerings by the company, the performance of the stock market index of similar publicly traded securities and the overall economic environment. Declines in value judged to be other-than-temporary are included in other (income) expense. We recorded losses of $11.0 million and $13.8 million from the other-than-temporary declines in value of investments in privately-held companies during the nine months ended March 28, 2003 and March 29, 2002, respectively. Investments in privately-held companies of $12,478 were included in Other assets in the Consolidated Statements of Financial Position at March 28, 2003.

Warranty Costs

We offer warranties of various lengths to our customers depending on the specific product and the terms of the agreements with the customer. Our standard warranties require us to repair or replace defective product returned to us during the warranty period at no cost to the customer. We record an estimate for warranty related costs based on our actual historical failure rates and repair costs at the time of sale. We repair products in our manufacturing facilities as well as outsource warranty repairs. Expenses related to unusual product warranty problems and product defects are recorded in the period the problem is identified. A significant increase in product failure rates, in the costs to repair our products or in the amount of warranty repairs outsourced could have a significant impact on our operating results. The accrued warranty at March 28, 2003 was $39,464.

Recently Issued Accounting Pronouncements

The Financial Accounting Standards Board recently issued Statement of Financial Accounting Standards (SFAS) No. 146 “Accounting for Costs Associated with Exit or Disposal Activities”, SFAS No. 148 “Accounting for Stock-Based Compensation”, Interpretation No. 45 “Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”, Interpretation No. 46 “Consolidation of Variable Interest Entities” and Emerging Issues Task Force (EITF) No. 00-21 “Accounting for Revenue Arrangements with Multiple Deliverables”. We have accounted for restructuring costs during the third quarter of fiscal year 2003 in accordance with SFAS No. 146. The disclosure requirements of SFAS No. 148 have been included in our Notes to the Financial Statements. We are currently assessing the impact of Interpretations No. 45 and 46 and EITF No. 00-21.

Any statements in Management’s Discussion and Analysis of Financial Condition and Results of Operations that are not statements about historical facts are forward-looking statements. Such forward-looking statements are based upon current expectations but involve risks and uncertainties. Investors are referred to the Cautionary Statements contained in Exhibit 99.1 to this Form 10-Q for a description of the various risks and uncertainties that could cause Scientific-Atlanta’s actual results and

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experience to differ materially from the anticipated results or other expectations expressed in Scientific-Atlanta’s forward- looking statements. Such Exhibit 99.1 is hereby incorporated by reference into Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Scientific-Atlanta and Explorer are registered trademarks of Scientific-Atlanta, Inc.

WebSTAR is a trademark of Scientific-Atlanta, Inc. PowerTV is a registered trademark of PowerTV, Inc.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

(Amounts in thousands)

We are exposed to market risks from changes in foreign exchange rates and have a process to monitor and manage these risks. Scientific-Atlanta enters into foreign exchange forward contracts to hedge certain forecasted transactions, firm commitments and assets denominated in currencies other than the U.S. dollar. These contracts, which qualify as cash flow hedges, are designated as hedging instruments at inception, are for periods consistent with the exposure being hedged and generally have maturities of one year or less. Contracts are recorded at fair value. Changes in the fair value of derivatives are recorded in other comprehensive income until the underlying transaction affects earnings. The effectiveness of the hedge is based on a high correlation between the changes in its value and the value of the underlying hedged item. Any ineffectiveness is recorded through earnings in other (income) expense. There were no charges for ineffectiveness recorded during the first nine months of fiscal years 2003 or 2002. Our foreign exchange forward contracts do not significantly subject our results of operations to risk due to exchange rate fluctuations because gains and losses on these contracts generally offset losses and gains on the exposure being hedged.

Firmly committed purchase (sales) exposure and related hedging instruments at March 28, 2003 were as follows:

	Canadian Dollars	Euros
Firmly committed purchase (sales) contracts	8,100	(184	)
Notional amount of forward contracts	7,500	(184	)
Average contract amount (Foreign currency/United States dollar)	1.57	0.90

At March 28, 2003, we had unrealized gains of $137, net of tax expense of $52, related to these derivatives, which were included in accumulated other comprehensive income. Scientific-Atlanta has no derivative exposure beyond the first quarter of fiscal year 2004.

Unrealized gains and losses on foreign exchange forward contracts which do not meet the criteria for hedge accounting in accumulated other comprehensive income are recognized in other (income) expense. We recorded losses of $2,065 and $99 during the nine months ended March 28, 2003 and ended March 29, 2002, respectively, related to these contracts.

We have market risks associated with the volatility in the value of our non-current marketable securities, which consist of investments in common stock, primarily technology companies, warrants of publicly traded companies and a collar on a warrant and are stated at market value. All investments in common stock are classified as “available for sale” under the provisions of SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities,” and thus, changes in the fair value of these securities are not included in our Consolidated Statements of Earnings until realized. Unrealized holding gains and losses are included, net of taxes, in accumulated other comprehensive income. We recorded after-tax, unrealized holding gains of $841 in the first nine months of fiscal year 2003 and losses of $5,716 in the first nine months of fiscal year 2002. Realized gains and losses and declines in value judged to be other-than-temporary are included in other (income) expense. We recorded losses of $6,875 in the first nine months of fiscal year 2003 from the other-than-temporary decline in the market value of marketable securities. No such gains, losses or declines in value were recorded in the first nine months of fiscal year 2002.

Scientific-Atlanta holds warrants to purchase common stock that are recorded at fair value. We also entered into a collar with put and call options which was designed to limit our exposure to fluctuations in the fair value of one of the warrants. The warrants and the collar, which are included in Non-current marketable securities in the Consolidated Statements of Financial Position, were valued using the Black-Scholes pricing model. Fluctuations in the volatility of the market price of the common stock for which we hold a warrant, risk free rate of return and expiration date of the warrant impact the valuation. During the first nine months of fiscal year 2003, we recorded unrealized losses of $748 related to the decline in the fair value of the warrants and a realized gain of $2,491 from the settlement of the collar and related warrant to purchase common stock in a public company in other (income) expense. During the nine months ended March 29, 2002, we recorded gains of $2,920 and $10,686 from the appreciation in the market value of a warrant to purchase common stock and the related collar on the warrant, respectively.

We also have market risks associated with the volatility of our investments in privately-held companies, which consist primarily of securities of emerging technology companies. These investments are carried at cost and are evaluated periodically to determine if declines in fair value are other-than-temporary. Declines in value judged to be other-than-temporary are included in other (income) expense. We recorded losses of $10,996 and $13,762 in the first nine months of fiscal years 2003 and 2002, respectively, from other-than-temporary declines in the fair value of our investments in privately-held companies.

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ITEM 4. CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chairman of the Board, President, and Chief Executive Officer, James F. McDonald, and Senior Vice President, Chief Financial Officer and Treasurer, Wallace G. Haislip, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chairman of the Board, President and Chief Executive Officer and Senior Vice President, Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective in timely alerting them to material information relating to the company (including its consolidated subsidiaries) required to be included in our periodic SEC filings. There have been no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date Messrs. McDonald and Haislip completed their evaluation.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

On April 30, 2003, we were purportedly served with a complaint which seeks to add us as a co-defendant in the previously filed securities class actions against Charter Communications, Inc. in federal court in St. Louis, Missouri. The suits, which have been consolidated, were brought by investors in securities of Charter against Charter, a number of its present and former officers and Arthur Andersen LLP. The consolidated complaint, which alleges various purported securities laws violations by Charter and its management, also alleges that certain commercial transactions between Charter and Scientific-Atlanta relating to Charter’s purchase of digital set-top boxes and a marketing support arrangement purportedly resulted in violations of the anti-fraud provisions of the federal securities laws with respect to investors in Charter securities. The consolidated complaint has not been filed with the Court, and Scientific-Atlanta has been advised that such filing has been stayed by the Court pending transfer of all of the cases to the Missouri Court and a conference with the Court. The suit does not allege any impropriety by Scientific-Atlanta regarding its financial statements or its investors. Scientific-Atlanta intends to vigorously defend the claim.

As previously disclosed, a purported class action alleging violations of the federal securities laws by us and certain of our officers was filed in the United States District Court for the Northern District of Georgia on July 24, 2001. In connection with this securities class action, the U.S. District Court for the Northern District of Georgia certified for appeal on April 15, 2003 an issue raised by us in our motion for certification of interlocutory appeal, and stayed discovery in the securities class action pending resolution of such appeal.

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Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits.

Exhibit No.	Description
99.1	Cautionary Statements
99.2	Certification of Chief Executive Officer Regarding Periodic Report Containing Financial Statements Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.3	Certification of Chief Financial Officer Regarding Periodic Report Containing Financial Statements Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) No reports on Form 8-K were filed during the quarter ended March 28, 2003.

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 thereunto duly authorized.

Date:     May 9, 2003
SCIENTIFIC-ATLANTA, INC.                 (Registrant) By:     /s/ WALLACE G. HAISLIP Wallace G. Haislip Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and duly         authorized signatory of the Registrant)

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Certification of Chief Executive Officer Regarding Periodic Report

Containing Financial Statements Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, James F. McDonald, the Chief Executive Officer of Scientific-Atlanta, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Scientific-Atlanta, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 9, 2003

/s/    JAMES F. MCDONALD

Name:    James F. McDonald

Title:      Chairman of the Board, President and

Chief Executive Officer

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Certification of Chief Financial Officer Regarding Periodic Report

Containing Financial Statements Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Wallace G. Haislip, the Chief Financial Officer of Scientific-Atlanta, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Scientific-Atlanta, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

c) Presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

a) All significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: May 9, 2003

/s/  Wallace G. Haislip

Name:   Wallace G. Haislip

Title:     Senior Vice President, Chief Financial

     Officer and Treasurer

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EX-99.1

EXHIBIT 99.1

CAUTIONARY STATEMENTS

From time to time, Scientific-Atlanta may publish, verbally or in written form, forward-looking statements relating to such matters as anticipated financial or operational performance, business prospects, technological developments, new products, research and development activities and similar matters. In fact, this Form 10-Q (or any other periodic reporting documents required by the Exchange Act) may contain forward-looking statements reflecting our current views concerning potential future events or developments. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. These Cautionary Statements are being made pursuant to the provisions of the Private Securities Litigation Reform Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act. In order to comply with the terms of the “safe harbor,” we caution investors that any forward-looking statements made by us are not guarantees of future performance and that a variety of factors, including those discussed below, could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed in our forward-looking statements. The risks and uncertainties which may affect the operations, performance, development and results of our business are described in more detail below. The words “may,” “will,” “should,” “could,” “continue,” “future,” “potential,” “believe,” “expect,” “anticipate,” “project,” “plan,” “intend,” “seek,” “estimate” “predict” and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

Uncertainties Related to the Digital Interactive Television Market.    Our success is dependent upon the acceptance of digital interactive television products, such as digital set-top boxes or digital video recorders, or services, such as digital cable, high-speed data services and video-on-demand, by end-user consumers and purchases by our cable operator customers from us to satisfy such consumer demand. Our high-end Explorer^® set-tops are designed to support these digital interactive television services, and the failure of these products and services to appeal to enough end-user consumers or to be available at prices consumers are willing to pay, to function as expected or to delivered in a timely fashion by our cable operator customers to consumers could have an adverse material effect on our sales and results of operations.

Digital interactive television is an evolving business, and therefore there are many characteristics of this business that are not yet fully known by us. These characteristics include sensitivity to the economy, consumer demand for various types of interactive applications, the proper pricing levels and models for various applications, the likely level of penetration of digital services into the subscriber base, the likely number of digital set-tops per household, the customer churn rate to be expected, the extent to which digital cable interactive services will successfully compete against direct-to-home satellite services, international demand for the products and the extent to which demand will be seasonal. A declining economy may continue to adversely affect consumer purchases of new digital services, and thus purchases of our digital products by our cable operator customers, even if it does not impact monthly cable operator subscription revenues. Each of these business characteristics may have a material impact on the sales of our products.

Dependence on Key Customers.    Although the domestic cable television industry is comprised of thousands of cable systems, a small number of large cable television multiple system operators (MSOs) own a large portion of the cable television systems and account for a significant portion of the capital expenditures made by cable television system operators. Historically, a significant majority of our sales have been to relatively few customers. The following sets forth the customers that constituted at least 10 percent of our total sales during the preceding three fiscal years:

• Sales of products to AOL Time Warner, Inc. and its affiliates were 30 percent, 22 percent and 23 percent of our total sales in fiscal years 2002, 2001 and 2000, respectively.

• Sales of products to Charter Communications, Inc. and its affiliates were 14 percent, 20 percent and 14 percent of sales in fiscal years 2002, 2001 and 2000, respectively.

• Sales of products to Cox Communications, Inc. and its affiliates were 12 percent, 7 percent and 7 percent of sales in fiscal years 2002, 2001 and 2000, respectively.

• Sales of products to Adelphia Communications Corporation and its affiliates were 7 percent, 18 percent and 2 percent of sales in fiscal years 2002, 2001 and 2000, respectively.

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• Sales of products, consisting primarily of analog set-tops, to MediaOne and its affiliates during fiscal year 2000 were 7 percent of our total sales. Sales to AT&T Corporation were 3 percent of our total sales in fiscal year 2000. During fiscal year 2000, MediaOne merged with AT&T Corporation. Our sales to the combined entity have constituted 2 percent of our total sales during each of fiscal years 2002 and 2001. In November 2002, Comcast Corporation completed its combination with AT&T Broadband.

Sales of products to Charter Communications, Inc., Adelphia Communications Corporation and Cox Communications, Inc. did not individually constitute 10 percent or more of sales during the nine months ended March 28, 2003. During the three and nine months ended March 28, 2003, we shipped a significant amount of products to Cablevision Systems Corporation. Sales to Cablevision constituted more than 10 percent of our total sales in the three and nine months ended March 28, 2003. Our sales and results of operation could be affected by uncertainties relating to customer plans and commitments, changes in customer order patterns and uncertainties relating to deliveries of our products and services to our customers.

Our backlog has declined for the last four quarters from $772.5 million at March 29, 2002 to $339.9 million at March 28, 2003. Due to these declines in backlog, we are more dependent on the shipment of product from orders received during the quarter rather than from backlog to generate sales. Our increased dependence on the receipt of orders during each quarter to generate sales during that quarter and our continued limited visibility to the inventory our customers hold limit our ability to predict our sales volume for the quarter until the end of the quarter. Historically, our quarters tend to be back-end loaded with a larger portion of orders being received and sales being recognized for any quarter at or near the end of the quarter. We are unable to predict the timing of orders or sales.

Dependence on Financial Stability of Customers and Distributors.    Several of our customers and potential customers have encountered significant financial difficulties that have affected their ability to pay for product that has shipped, take delivery of orders they have previously placed or raise additional capital to fund the purchase of equipment and services.

• Adelphia, which accounted for 7 percent of our sales in fiscal year 2002 and 18 percent of our sales during fiscal year 2001, filed for bankruptcy in June 2002.

• During the first quarter of fiscal year 2003, Communications Dynamics, Inc., parent of TVC Communications, a distributor of our products in Latin America, filed for bankruptcy.

• During the fourth quarter of fiscal year 2002, Kabel NRW GmbH & Co. KG (KNRW), parent of a customer in Germany, ish GmbH & Co. KG (ish), was notified by its syndicate banks that an event of default had occurred under its Senior Credit Agreement. In addition, Callahan Nordrhein-Westfalen GmbH, parent of KNRW, initiated insolvency proceedings under German law in July 2002.

• Several of the largest European MSOs have publicly reported financial difficulties and/or announced financial restructurings.

If these trends continue, which we are not able to predict, our sales and results of operations may continue to be adversely affected.

Certain of our MSO customers have a significant amount of debt. As of December 31, 2002, the total debt of Charter Communications, Inc. was $18.7 billion, which Charter described as “significant” in its Form 10-K for the year ended December 31, 2002. As a result of current market conditions, customers with significant debt levels may have limited access to debt and equity markets at this time. Their difficulty in accessing these markets could impact their ability to obtain financing for operations and to fund planned capital expenditures.

In addition, MSOs have been measured historically by the investment community on earnings before interest, taxes, depreciation and amortization (EBITDA). Recently, we believe the focus has begun to shift toward the point at which the MSOs will produce positive free cash flow, which is generally defined as EBITDA reduced by capital expenditures, interest and dividends. MSOs have reduced and may continue to reduce their capital spending and existing debt to improve free cash flow. In addition, we believe the market enterprise value of several MSOs has recently declined and their debt level as a percent of total market enterprise value has increased. The debt ratings of several MSOs have also been downgraded. These conditions have impacted and may continue to impact MSOs’ ability in the near term to raise additional capital to fund the purchase of equipment and services. In turn, we believe that the conditions described above have adversely affected our sales and may continue to adversely affect our potential for sales of both our subscriber and transmission products to these customers, which sales we are not able to predict.

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Dependence on Principal Product Line.    Sales of our Explorer digital set-tops constituted approximately 52 percent, 57 percent, and 34 percent of Scientific-Atlanta’s total sales in fiscal years 2002, 2001 and 2000, respectively. We expect that sales of our Explorer set-tops will continue to account for a significant portion of our revenues for the foreseeable future. As a result, our financial performance will continue to depend in significant part on whether there will be continued market acceptance of the Explorer digital set-top and the development and timing of the introduction of software applications for the Explorer network.

Our sales are also affected by the average selling price for Explorer digital set-tops, and our results of operation are affected by the gross margins on such products. We expect declines in the average selling prices for Explorer digital set-tops will continue in the future for our mature models. We believe that the recently introduced Explorer 8000 set-tops (which contain integrated hard drives and a single-user interface for personal video recording capabilities) and high-definition television set-tops will sell for higher per unit prices and may favorably impact the average sales price for digital set-tops in the future. In addition, gross margins on newly introduced products are typically lower than the average margins for our products. As a result, the mix of models of Explorer set-tops sold during the quarter, which we cannot predict, can affect our sales and results of operations for that quarter.

Sales of digital set-tops are determined in large part by the number of new net digital subscribers added by our customers and the number of set-tops per home. The number of net digital subscriber additions is usually published quarterly by each MSO. Although we do not have full visibility to the new net digital subscriber additions by MSOs, we believe from those published reports that on an industry-wide basis the number of new net digital subscriber additions by MSOs declined during fiscal year 2002 in conjunction with lower overall capital spending by the MSOs. We are unable to predict future rates of net digital subscriber additions because this rate is dependent on a number of factors, including economic conditions, the effectiveness of the marketing efforts and programs of our customers, and the other factors set forth in the following paragraph. Declines in the net digital subscriber addition rates could have an adverse effect on our results. In addition, we have limited visibility to the inventories that the MSOs may have accumulated. A reduction in the MSO net digital subscriber addition rates could mean that these inventories will not be utilized as quickly as would otherwise be the case.

Dependence on the General Business and Economic Condition of the Cable Television Industry and Cable Television Capital Spending.    The majority of our revenues come from sales of systems and equipment to the cable television industry. Demand for these products depends primarily on capital spending by cable television system operators for constructing, rebuilding or upgrading their systems. The amount of this capital spending, and, therefore, our sales and profitability, may be affected by a variety of factors, including:

• general political and economic conditions in the United States and abroad, and existing and potential hostilities around the world,

• the continuing trend of cable system consolidation,

• the financial condition of domestic and international cable television system operators and their access to financing,

• competition from direct-to-home satellite, wireless television providers, telephone companies offering video programming and providers of high speed data transmission,

• technological developments that impact the deployment of equipment and

• new legislation and regulations, or regulatory uncertainties, affecting the equipment used by cable television system operators and their customers, such as uncertainties related to government regulation of basic cable or equipment rates or other terms of “digital must-carry,” “forced access,” common carrier and other FCC requirements.

There can be no assurance that cable television capital spending will increase from historical levels or that existing levels of cable television capital spending will be maintained. In addition, our sales and results of operations could continue to be adversely affected by (1) low consumer confidence in the United States amid a slow economy and difficult economic conditions outside the United States, (2) continued significant declines in capital spending by our customers as credit markets have tightened and customer credit ratings have been lowered, (3) our customers’ competition from satellite providers, and (4) the declining financial condition of several of our customers and distributors.

Competition.    Our products compete with those of a substantial number of companies worldwide.

• Our Explorer digital set-tops, digital headends, and related software products compete with products from a number of companies that provide products that compete directly and indirectly with our products. These include:

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o Companies that develop and sell substitute products that are distributed by direct broadcast satellite (DBS) service providers through retail channels. These products may be subsidized by DBS operators, and they may be sold together with services that are not available from cable operators. Although these products are not directly competitive with respect to sales of our products to our MSO customers, these substitute products are competitive with our MSO customers’ cable services and products, and affect the end-user consumer demand for our products.

o Companies that develop and sell products entirely of their own design and companies that license technology from us. It is possible that some of these directly competitive products could be sold through retail channels, and thus we may be subject to competition from a variety of companies with retail brands that are more familiar to consumers than ours.

o Companies that potentially may develop and sell products that compete with our products.

- The Federal Communications Commission (FCC) has mandated that digital tuners be incorporated into all television sets greater than 13 inches and all television receiving equipment such as VCRs and DVDs by July 1, 2007. Thus, television manufacturers may soon integrate into their products some of the technology that also is available in our set-top products.

- On December 19, 2002, fourteen consumer electronics companies and seven major cable operators announced that they had agreed to a Memorandum of Understanding (MOU) to establish a national “plug and play” standard between digital television products and digital cable systems. This agreement, if implemented, could enable consumers to receive certain one-way digital cable services without a set-top box.

- Other companies may have developed an alternative method of providing conditional access on cable networks that proposes to encrypt a portion of digital video stream. If these alternative conditional access methods prove to be technologically and commercially feasible, they may be adopted by our customers.

• Our cable modem products and our products that transmit signals from the cable operator to the end-user customer compete with products from a large number of companies.

In each of these current and future competitive scenarios, some of the competitors have significantly greater resources, financial and otherwise, than we do. We believe that our ability to compete in the industry has resulted from our marketing strategies, engineering skills, product features, product performance, ability to provide post-purchase services, ability to provide quality products at competitive prices, and broad coverage of the market by our sales personnel and the alternate channels of distribution we utilize.

International.    We have and expect to continue to make significant sales to customers outside the United States. Sales to customers outside the U.S. constituted 20 percent, 15 percent and 21 percent of our total sales for fiscal years 2002, 2001 and 2000, respectively. In addition, after our January 2002 acquisition of BarcoNet NV, which has extensive operations in Europe and Asia Pacific regions, and the transfer of our remaining Atlanta, Georgia manufacturing operations to our Juarez, Mexico facility in June 2002, we have and expect to continue to have significant international operations. As a result of our consolidation of our North American manufacturing operations to Juarez, we expect that approximately 85 percent of our in-house manufacturing will be performed in our Juarez facility. A majority of the parts and products that we obtain from outside suppliers are obtained from suppliers in the Asia-Pacific region. In addition, the outbreak of the Severe Acute Respiratory Syndrome (SARS) virus in the Asia-Pacific region has made, and may continue to make, doing business in this region more difficult due to limited ability to travel. Accordingly, our future sales and results of operations could be adversely affected by a variety of political, economic and other factors in various geographic regions, including foreign currency fluctuations, changes in a specific country’s or region’s political conditions or changes or continued weakness in economic conditions, trade protection measures, import or export licensing requirements or policies, global trade policies, the overlap of different tax structures, unexpected changes in regulatory requirements, and earthquakes.

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Reliance on Suppliers.    Our growth and ability to meet customer demands depend in part on the following factors, which may affect the operations, performance, development and results of our business:

• our ability to obtain timely deliveries of parts from our suppliers;

• the pricing and availability of equipment, materials and inventories; and

• performance issues with key suppliers and subcontractors.

From time to time, we could experience shortages of certain electronic components from our suppliers, and these shortages might have a material effect on our operations. We consider our sources of supply to be adequate. Significant suppliers include the following:

• STMicroelectronics, Micron Semiconductor Products, Inc. and Analog Devices, Inc. are our primary suppliers of a variety of semiconductor products, which are used as components in an array of products, including set-tops;

• Askey Corporation is our sole provider of our cable modem products;

• Cablevision Electronics Co., Ltd. and Zinwell Corporation, both Taiwanese companies, are our primary suppliers of taps. We also are part of a joint venture in Shanghai, China that provides us with taps;

• JDS Uniphase is our primary supplier of optical transmitters;

• Microcast, Inc. is our primary supplier of die-castings for RF distribution products; and

• Anadigics, Inc. is a provider of CATV integrated circuits for use in our RF distribution products.

For fiscal year 2003, we did not experience any significant material availability issues, and we do not expect to have significant material supply issues in the foreseeable future. However, a reduction, delay or interruption in supply or a significant change in price of one or more components could adversely affect our business, operating results and financial condition.

Rapid Changes in Technology and New Product Introductions.    The markets for our products are characterized by rapidly changing technology, evolving industry standards, frequent new product introductions and evolving methods of building and operating networks. Our future operating results may be adversely affected if we are unable to continue to develop, manufacture and market innovative products and services that meet customer requirements for performance and reliability on a timely basis. The process of developing our new high technology products is inherently complex and uncertain. The success of our existing and future products is dependent on several factors, including proper product definition, acceptable product cost, timely completion and introduction of new products, differentiation of new products from those of our competitors and market acceptance of these products. If our products are not updated to incorporate in a timely manner the latest technology, including but not limited to frequent silicon chip innovations, disk drive improvements and rapid technology advancement in the fiber optics transport industry, our products may become noncompetitive with respect to price and/or features, and our sales and results of operations may be adversely affected. We have in the past experienced delays in product development and introduction, and there can be no assurance that we will not experience further delays in connection with our current product development or future development activities. Delays in development, testing, manufacture and/or deployment of new products, including but not limited to new digital set-top products, could adversely affect our sales and results of operations. In addition, there can be no assurance that we will successfully identify new product opportunities, develop and bring new products to market in a timely manner and achieve market acceptance of our products or that products and technologies developed by others will not render our products or technologies obsolete or noncompetitive.

Intellectual Property.    We generally rely upon patent, copyright, trademark and trade secret laws to establish and maintain our proprietary rights in our technology and products. However, there can be no assurance that any of our proprietary rights will not be challenged, invalidated or circumvented, or that any such rights will provide significant competitive advantage. Third parties have claimed, and may claim, that we have infringed their current, or future, intellectual property rights. Any claims, with

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or without merit, could be time-consuming, result in costly litigation, cause product shipment delays, or require us to enter into royalty or licensing agreements, any of which could seriously harm our business, financial condition and results of operations.

There can be no assurance that such royalty or licensing agreements, if required, would be available on terms acceptable to us, if at all. Additionally, there can be no assurance that we will prevail in any intellectual property infringement litigation given the complex technical issues and inherent uncertainties in litigation. In the event an intellectual property claim against us was successful and we could not obtain a license on acceptable terms or license a substitute technology or redesign to avoid infringement, our business, financial condition and results of operations could be seriously harmed. Even if we prevail in litigation, the expense of litigation could be significant and could seriously harm our business, financial condition and results of operation. We are engaged in several lawsuits as plaintiff against Gemstar International Group Ltd. and affiliated companies alleging among other things violations of antitrust laws and misuse of certain patents, and requesting among other things declaration that certain Gemstar patents are invalid, unenforceable and not infringed. Such litigation is expensive and diverts management’s attention.

Industry Consolidation and Acquisitions.    There has been a trend toward consolidation in our industry. Our major competitor, General Instrument Corporation, was acquired by Motorola, Inc. in January 2000, and a significant customer, Time Warner Inc., was acquired by America Online, Inc. in January 2001. During November 2002, Comcast Corporation completed its combination with AT&T Broadband. We believe that this trend toward industry consolidation may continue as companies attempt to strengthen or hold their market positions in an evolving industry. These consolidations could adversely affect our sales and results of operations.

In addition, our industry is highly competitive, and as such, our growth is dependent upon market growth and our ability to enhance our existing products and services. Accordingly, one of the ways we may address the need to enhance products and services is through acquisitions of other companies. Since January 2002, we have acquired BarcoNet, ChanneLogics, Inc. and the Network Technologies business of Arris Group. These acquisitions and any future acquisitions may involve numerous risks, including the following: difficulties in integration of the operations, technologies and products of the acquired companies; the risk of diverting management’s attention from normal daily operations of the business; and the potential loss of key employees of the acquired company. Failure to manage growth effectively and successfully integrate acquisitions made by us could materially harm our business and operating results.

Compromise of Signal Security.    Our MSO customers rely on our conditional access system to protect content they transport through our subscriber network and media networks systems. If the security of either system were compromised, we may be required to implement system countermeasures that may include distribution of equipment to prevent such compromise, which could have a material adverse effect on our results of operations.

Stock Volatility and Securities Litigation.    The trading price of our common stock may be volatile. The stock market in general, and the market for technology companies in particular, has, from time to time, experienced extreme volatility that often has been unrelated to the operating performance of particular companies. These broad market and industry fluctuations may significantly affect the trading price of our common stock, regardless of our actual operating performance. The trading price of our common stock could be affected by a number of factors, including: changes in expectations of our future financial performance; changes in securities analysts’ estimates (or the failure to meet such estimates); announcements of technological innovations; customer relationship developments; conditions affecting our targeted markets in general; and quarterly fluctuations in our revenue and financial results.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted. On July 24, 2001, a purported class action alleging violations of the federal securities laws by us and certain of our officers was filed in the United States District Court for the Northern District of Georgia. Since then, several actions with similar allegations were filed and consolidated. A derivative suit and an ERISA action based on the same facts have also been filed. Such litigation is expensive and diverts management’s attention.

Uncertain Legal Environment.    We believe that we operate in an uncertain legal environment and that our legal environment is becoming increasingly litigious. In addition to the intellectual property, securities and other legal proceedings described in our SEC reports, recently we have been purportedly served with a complaint which seeks to add us as a co-defendant in the previously filed securities class actions in federal court in St. Louis, Missouri, against Charter Communications, Inc., a number of its present and former officers and Arthur Andersen LLP. This lawsuit alleges, in part, that certain marketing support arrangements between Charter and Scientific-Atlanta relating to Charter’s purchases of digital set-top boxes resulted in violations of the anti-fraud provisions of the federal securities laws with respect to Charter securities. Litigation is expensive and diverts management’s attention.

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EX-99.2

EXHIBIT 99.2

Certification of Chief Executive Officer Regarding Periodic Report Containing

Financial Statements Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, James F. McDonald, the Chief Executive Officer of Scientific-Atlanta, Inc. (the “Company”), in compliance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that, the Company’s Quarterly Report on Form 10-Q for the period ended March 28, 2003 (the “Report”) filed with the Securities and Exchange Commission:

• fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

• the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/    James F. McDonald

Name: James F. McDonald

Date: May 9, 2003

EX-99.3

EXHIBIT 99.3

Certification of Chief Financial Officer Regarding Periodic Report Containing

Financial Statements Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Wallace G. Haislip, the Chief Financial Officer of Scientific-Atlanta, Inc. (the “Company”), in compliance with 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certify that, the Company’s Quarterly Report on Form 10-Q for the period ended March 28, 2003 (the “Report”) filed with the Securities and Exchange Commission:

• fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

• the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Wallace G. Haislip

Name: Wallace G. Haislip

Date: May 9, 2003