-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, baSzzLapIQFsp/u1IBiBVgaRvkvFWPLQvRL4m+AaSGdw+Hjk9Hql79JQR1Vej+0x olrPmV6OjFbHZAMX2ubH4g== 0000950144-95-001198.txt : 19950508 0000950144-95-001198.hdr.sgml : 19950508 ACCESSION NUMBER: 0000950144-95-001198 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950505 SROS: BSE SROS: CSE SROS: MSE SROS: NYSE SROS: PHLX FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCIENTIFIC ATLANTA INC CENTRAL INDEX KEY: 0000087777 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 580612397 STATE OF INCORPORATION: GA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05517 FILM NUMBER: 95534864 BUSINESS ADDRESS: STREET 1: ONE TECHNOLOGY PKWY SOUTH STREET 2: BOX 105600 CITY: NORCROSS STATE: GA ZIP: 30092 BUSINESS PHONE: 4049035000 FORMER COMPANY: FORMER CONFORMED NAME: SCIENTIFIC ASSOCIATES INC DATE OF NAME CHANGE: 19671024 10-Q 1 SCIENTIFIC ATLANTA FORM 10-Q DATED MARCH 31, 1995 1 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 31, 1995 ----------------------- OR - --- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXHANGE 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 (I.R.S. Employer incorporation or organization) Identification Number) One Technology Parkway, South Norcross, Georgia 30092-2967 (Address of principal executive offices) (Zip Code) 404-903-5000 (Registrant's telephone number, including area code) Indicate by check mark 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 ----- ----- As of April 28, 1995, Scientific-Atlanta, Inc. had outstanding 76,740,668 shares of common stock. 2 PART I - FINANCIAL INFORMATION SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
Three Months Ended Nine Months Ended ------------------------- --------------------------- March 31, April 1, March 31, April 1, 1995 1994 1995 1994 ---------- ------- --------- -------- SALES $ 313,510 $204,047 $ 823,204 $ 552,372 ---------- ------- -------- -------- COSTS AND EXPENSES Cost of sales 230,489 140,660 594,983 386,155 Sales and administrative 37,806 29,031 105,644 85,310 Research and development 22,859 17,164 62,621 43,942 Interest expense 165 230 583 898 Interest (income) (466) (661) (1,969) (2,258) Other (income) expense, net (387) 113 (1,588) 17,037 ---------- ------- -------- -------- Total costs and expenses 290,466 186,537 760,274 531,084 ---------- ------- -------- -------- EARNINGS BEFORE INCOME TAXES 23,044 17,510 62,930 21,288 PROVISION FOR INCOME TAXES Current 5,349 5,999 20,597 8,919 Deferred 2,024 (396) (460) (2,107) ---------- ------- -------- -------- NET EARNINGS $ 15,671 $ 11,907 $ 42,793 $ 14,476 ========== ======= ======== ======== EARNINGS PER COMMON SHARE AND COMMON EQUIVALENT SHARE PRIMARY $ 0.21 $ 0.16 $ 0.56 $ 0.19 ========== ======= ======== ======== FULLY DILUTED $ 0.21 $ 0.15 $ 0.56 $ 0.19 ========== ======= ======== ======== WEIGHTED AVERAGE NUMBER OF COMMON SHARES AND COMMON EQUIVALENT SHARES OUTSTANDING PRIMARY 76,403 77,120 76,001 77,136 ========== ======= ======== ======== FULLY DILUTED 76,403 77,143 76,001 77,158 ========== ======= ======== ======== DIVIDENDS PER SHARE PAID $ 0.015 $ 0.015 $ 0.045 $ 0.045 ========== ======= ======== ========
SEE ACCOMPANYING NOTES 2 of 10 3 SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL POSITION
In Thousands ------------------------------------ March 31, July 1, 1995 1994 --------------- ------------ (UNAUDITED) ASSETS CURRENT ASSETS Cash and cash equivalents $ 60,408 $ 123,387 Receivables, less allowance for doubtful accounts of $4,197,000 at March 31 and $3,839,000 at July 1 247,772 206,145 Inventories 226,611 136,813 Deferred income taxes 29,711 27,918 Other current assets 9,130 10,774 --------- -------- TOTAL CURRENT ASSETS 573,632 505,037 --------- -------- PROPERTY, PLANT AND EQUIPMENT, at cost Land and improvements 7,566 3,823 Buildings and improvements 35,093 28,890 Machinery and equipment 140,909 108,585 --------- -------- 183,568 141,298 Less-Accumulated depreciation and amortization 70,687 55,510 --------- -------- 112,881 85,788 --------- -------- COST IN EXCESS OF NET ASSETS ACQUIRED 7,127 7,689 --------- -------- OTHER ASSETS 38,514 41,705 --------- -------- TOTAL ASSETS $ 732,154 $ 640,219 ========= ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Short-term debt and current maturities of long-term debt $ 2,026 $ 6,487 Accounts payable 131,342 82,285 Accrued liabilities 101,037 95,505 Income taxes currently payable 9,340 17,989 --------- -------- TOTAL CURRENT LIABILITIES 243,745 202,266 --------- -------- LONG-TERM DEBT, less current maturities 1,040 1,088 --------- -------- OTHER LIABILITIES 36,731 41,219 --------- -------- STOCKHOLDERS' EQUITY Preferred stock, authorized 50,000,000 shares; no shares issued -- -- Common stock, $0.50 par value, authorized 350,000,000 shares; issued 76,689,864 at March 31 and 75,494,670 shares at July 1 38,345 37,747 Additional paid-in capital 156,688 141,179 Retained earnings 255,243 215,926 Accumulated translation adjustments 362 794 -------- -------- 450,638 395,646 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 732,154 $ 640,219 ======= ========
SEE ACCOMPANYING NOTES 3 of 10 4 SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
Nine Months Ended ------------------------------------ March 31, April 1, 1995 1994 ------------ ------------ NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: $ (16,744) $ 15,336 ------- ------- INVESTING ACTIVITIES: Purchases of property, plant, and equipment (45,299) (23,691) Proceeds from sale of investment in joint venture 4,214 -- Proceeds from sale of investment in ICT -- 11,174 Investments in joint ventures (2,560) (4,240) Other, net (1,573) 394 ------- -------- Net cash used by investing activities (45,218) (16,363) ------- ------- FINANCING ACTIVITIES: Net short-term borrowings (4,461) 1,395 Principal payments on long-term debt (48) (241) Dividends paid (3,427) (3,366) Issuance of common stock 6,919 4,300 ------- ------- Net cash provided (used) by financing activities (1,017) 2,088 ------- ------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (62,979) 1,061 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 123,387 103,536 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 60,408 $104,597 ======= ======= SUPPLEMENTAL CASH FLOW DISCLOSURES Interest paid $ 792 $ 807 ======= ======= Income taxes paid, net $ 25,321 $ 5,208 ======= =======
SEE ACCOMPANYING NOTES 4 of 10 5 NOTES: A. The accompanying consolidated financial statements include the accounts of the company 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 generally accepted accounting principles 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 the 1994 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. B. Earnings per share for the three and nine months ended March 31, 1995, has been computed based on the weighted average number of shares of common stock outstanding during each period. Earnings per share for the three and nine months ended April 1, 1994 has been computed based on the weighted average number of shares outstanding and equivalent shares derived from dilutive stock options. See Exhibit 11. C. Inventories consist of the following:
March 31, July 1, 1995 1994 -------- ------- (Unaudited) Raw materials and work-in-process $ 140,978 $ 94,890 Finished goods 85,633 41,923 -------- ------- Total inventory $ 226,611 $136,813 ======== =======
D. All share amounts have been restated to reflect the 2-for-1 stock split effected as a dividend issued on October 6, 1994. 5 of 10 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FINANCIAL CONDITION Scientific-Atlanta had stockholders' equity of $450.6 million and cash on hand was $60.4 million at March 31, 1995. Cash decreased $63.0 million during the nine months ended March 31, 1995, as expenditures for inventories, equipment and expansion of manufacturing capacity, including the construction of a manufacturing facility in Juarez, Mexico, exceeded cash generated from earnings. The current ratio of 2.4:1 at March 31, 1995, compared to 2.5:1 at July 1, 1994. At March 31, 1995, total debt was $3.1 million or less than 1 percent of total capital invested. Short-term debt consists of borrowings by the company's international operations to support their working capital requirements. The company is in the process of securing a long-term debt facility to provide funds to supplement those generated internally to support the growth of the company and the planned expansion of manufacturing capacity. The company does not believe it will use any of the long-term debt facility prior to the end of the fiscal year. RESULTS OF OPERATIONS Sales for the quarter ended March 31, 1995, were $313.5 million, up 54 percent from the prior year's sales of $204.0 million. Sales for the nine months ended March 31, 1995, were $823.2 million, up 49 percent over the comparable period of the prior year. During the three and nine months ended March 31, 1995, strong growth in sales of transmission and addressable converter products and deliveries of satellite equipment to Orbit Communications Company for its direct to home satellite services contributed to the year-to-year increases in sales. Sales of instrumentation products continue to be adversely affected by spending reductions in the defense industry. Gross margins of 26.5 percent and 27.7 percent for the three and nine months ended March 31, 1995, respectively, declined 4.6 and 2.4 percentage points from the comparable periods of the prior year. Gains from cost improvements in satellite networks and increased volumes in transmission and addressable converter products were offset by unfavorable exchange rate changes in Japanese yen, production startup costs, product mix and costs overruns on defense contracts. The company believes that gross margins may be negatively impacted in future periods by planned expansion of manufacturing capacity and the continued increase in sales of addressable converter products and Sega adapters which have lower margins than some of the company's other products. Continued strength of the yen would also adversely affect gross margins. Certain material purchases are denominated in Japanese yen and, accordingly, the purchase price in U.S. dollars is subject to change based on exchange rate fluctuations. Currently, the company has forward exchange contracts to purchase yen to hedge its purchase commitments for a period of approximately five months. Research and development costs increased $5.7 million, or 33 percent, and $18.7 million, or 43 percent, for the three and nine months ended March 31, 1995, respectively, over the comparable periods of the prior year due to increased research and development activity, particularly development of digital products. The company anticipates that spending during the last quarter of fiscal 1995 will continue to increase over the prior year at approximately the same rate as the first three quarters of fiscal 1995. Selling and administrative expense during the three and nine months ended March 31, 1995, increased 30 percent and 24 percent, respectively, over the comparable periods of the prior year. Increased expenses reflect costs associated with ongoing investments to support expansion into international markets, the introduction of new products and a build-up in the infrastructure of the company to handle the growth the company is experiencing. Other income of $1.6 million for the nine months ended March 31, 1995, included net gains from partnership activities, rental income, royalty income and other miscellaneous items. Other expense of $17.0 million for the nine months ended April 1, 1994, included a one-time charge related to the settlement of securities class action litigation of $17.5 million and rental income, gains from the sale of certain 6 of 10 7 assets, and other miscellaneous items of $0.5 million. There were no significant items in other income and expense during the third quarter of fiscal 1995 or 1994. The company's effective income tax rate was 32 percent for the quarter, unchanged from the prior year. Net earnings were $15.7 million and $42.8 million, respectively, for the three and nine months ended March 31 1995. Net earnings, before including the effect of the one-time charge for the legal settlement in the second quarter of fiscal 1994, were $11.9 million and $26.4 million, respectively, for the comparable periods of the prior year. Higher sales volume was the primary factor in the period-to-period increases. 7 of 10 8 PART II - OTHER INFORMATION Item 6 Exhibits and Reports on Form 8-K (a) Exhibits. EXHIBIT NO. DESCRIPTION ----------- ----------- [S] [C] 11 Computation of Earnings Per Share 27 Financial Data Schedule (for SEC use only) (b) No reports on Form 8-K were filed during the quarter ended March 31, 1995. 8 of 10 9 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. SCIENTIFIC-ATLANTA, INC. ------------------------ (Registrant) Date: May 5, 1995 /s/ Harvey A. Wagner ------------------------ --------------------------------- Harvey A. Wagner Senior Vice President, Finance Chief Financial Officer and Treasurer (Principal Financial Officer and duly authorized signatory of the Registrant) 9 of 10 EX-11 2 COMPUTATION OF EARNINGS PER SHARE 1 Exhibit 11 SCIENTIFIC-ATLANTA, INC., AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (IN THOUSANDS, EXCEPT PER SHARE DATA) EXHIBIT 11 (UNAUDITED)
Three Months Ended Nine Months Ended ------------------------------ ---------------------------- March 31, April 1, March 31, April 1, 1995(1) 1994 1995(1) 1994 ------------- ------------- ------------ -------------- WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 76,403 75,172 76,001 74,856 Add - Additional shares of common stock assumed issued upon exercise of options using the "treasury stock" method as it applies to the computation of primary earnings per share -- 1,948 -- 2,280 ------- -------- ------- -------- NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 76,403 77,120 76,001 77,136 Add - Additional shares of common stock assumed issued upon exercise of options using the "treasury stock" method as it applies to the computation of fully diluted earnings per share -- 23 -- 22 ------- -------- ------- -------- NUMBER OF SHARES OUTSTANDING ASSUMING FULL DILUTION 76,403 77,143 76,001 77,158 ======= ======== ======= ======== NET EARNINGS FOR PRIMARY AND FULLY DILUTED COMPUTATION $ 15,671 $ 11,907 $ 42,793 $ 14,476 ======= ======== ======= ======== EARNINGS PER COMMON SHARE AND COMMON EQUIVALENT SHARE PRIMARY $ 0.21 $ 0.16 $ 0.56 $ 0.19 ======= ======== ======= ======== FULLY DILUTED $ 0.21 $ 0.15 $ 0.56 $ 0.19 ======= ======== ======= ========
- ----------------------------- (1) In the three and nine months ended March 31, 1995, the dilutive effect of equivalent shares derived from dilutive stock options was less than 3 percent and, therefore, the equivalent shares have not been included in the computation of earnings per share. 10 of 10 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q FOR THE NINE MONTHS ENDED MARCH 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS JUN-30-1995 JUL-02-1994 MAR-31-1995 60,408 0 251,969 4,197 226,611 573,632 183,568 70,687 732,154 243,745 1,040 38,345 0 0 412,293 732,154 823,204 823,204 594,983 594,983 62,621 673 583 62,930 20,137 42,793 0 0 0 42,793 0.56 0.56
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