EX-99 3 tk907196ex991.txt EXHIBIT 991 Media Contact: Alisha Goff 503/627-7075 alisha.goff@tektronix.com Analyst Contact: John Gardner 503/627-5614 john.d.gardner@tektronix.com TEKTRONIX REPORTS STRONG RESULTS FOR THE THIRD QUARTER OF FISCAL 2004 POSTS STRONGEST QUARTER FOR SALES IN NEARLY THREE YEARS BEAVERTON, Ore., March 18, 2004 - Tektronix, Inc. (NYSE: TEK) today reported net sales of $243.5 million and net earnings from continuing operations of $43.9 million or $0.50 per share, for the third quarter ended February 28, 2004. This compares with net sales of $186.6 million and net earnings from continuing operations of $1.0 million or $0.01 per share, for the same period a year ago. Excluding business realignment and one-time items, net earnings from continuing operations were $29.1 million or $0.33 per share for the third quarter, as compared with $11.7 million or $0.13 per share for the same period last year. "We saw orders growth of 20% for the quarter driven by continued strength in the overall market and positive response to new products. Signal sources, oscilloscopes and logic analyzers were especially strong," said Rick Wills, Tektronix Chairman and CEO. "More importantly, it is our second quarter in a row in which we saw growth across all regions and most product lines, consistent with our belief that we are in the midst of the phased recovery." "There were several things of note in the quarter from an operational standpoint as well. We successfully implemented a state-of-the-art supply chain enterprise resource planning system with no impact to shipments - the team did a great job," continued Wills. "We also completed the sale of our Japanese headquarters building in connection with the planned move of our Tokyo headquarter operations to a newer leased facility." "In addition, Rohde and Schwarz, whose products we currently distribute in the US and Canada, will begin selling their products directly in those markets and we will not distribute their products after June 1, 2004. This relationship has been mutually beneficial, one that enabled Rohde and Schwarz to develop a presence in the United States and helped Tektronix develop customer relationships and a direct sales force in support of our strategy to expand our RF product -more- Tektronix Third Quarter 2004 Results.../2 offerings. While this will impact revenues next year, we do not expect it to have a negative impact on earnings." "This was a great quarter for Tektronix in many respects. We continue to see elements of a phased recovery and continue to grow our four core product categories. The acceptance of new products in the quarter demonstrates this. We are gaining traction in our two new product categories -- these represent good, long-term opportunities for growth. And, as we saw this quarter, we have demonstrated our ability to grow earnings faster than revenues," concluded Wills. For the fourth quarter of fiscal 2004, the company expects sales to be approximately $230 - $240 million. Earnings per share from continuing operations are expected to be between $0.24 and $0.28. Highlights for the third quarter of fiscal 2004 include the following: . Tektronix launched the TDS5000B oscilloscope, with innovative features around ease-of-use, immediately following the close of the quarter. The TDS5000B Series significantly improves productivity and simplifies test activities by electrical engineers and technicians. . Tektronix announced its new RSA Series of real-time spectrum analyzers that provide the first complete measurement package for engineers developing cutting-edge Radio Frequency (RF) technologies, ranging from RF Identification (ID) tags to sophisticated radar applications. . The WCA200A Series, which belongs to Tektronix' portfolio of real-time spectrum analyzers was selected by the readers of EE-Evaluation Engineering as the Communications Test Product of the Year. . Tektronix added compliance testing of UMTS R5 to its K1297-G20 protocol tester, the industry's leading protocol test platform with the ability to address more than one thousand protocols. . Tektronix announced its MPEG Test Systems are now available in a new portable form factor for improved ease of use and with a high performance processor that provides greatly increased analysis speeds. . Tektronix' TDS7000B series was selected as one of 100 top products of 2003 by EDN Magazine and was also nominated for the 2003 Innovation of the Year Award. The TDS7704B was also named product of the year by Germany's Elektronic magazine. . The London-based Farm Group's latest facility, Uncle Post Production, installed Tektronix' WVR600 waveform rasterizers to provide advanced quality control editing and colorist resources for the influential London post production industry. In addition, today Tektronix declared a quarterly cash dividend of $0.04 per share on the outstanding common shares of the Company, payable on April 26, 2004 to shareholders of record as of the close of market on April 9, 2004. Tektronix will be discussing its third quarter results and future guidance on a conference call today, beginning at 1:30 p.m. Pacific Standard Time (PST). A live Webcast of the conference call -more- Tektronix Third Quarter 2004 Results.../3 will be available at www.tektronix.com/ir. A replay of the Webcast will be available at the same Web site through Friday, March 18, 2005. Tektronix presents pro forma measures of net earnings and net earnings per share from continuing operations that exclude the effects of business realignment and one-time items. The schedule provided on page six reconciles the results of operations in accordance with generally accepted accounting principles (GAAP) to the pro forma results of operations. Tektronix presents pro forma results of operations to help readers differentiate the results of ongoing operating activity from results that include business realignment costs and one-time items. Management of Tektronix uses these pro forma measures to evaluate the Company's results of operations and for forecasting purposes. Statements and information in this press release that relate to future events or results (including the Company's expectations as to sales, orders, earnings per share, expenses, market position, market growth opportunities and new products) are based on the Company's current expectations. They constitute forward-looking statements subject to a number of risk factors, which could cause actual results to differ materially from those currently expected or desired. Those factors include: worldwide geopolitical and economic conditions; business conditions in the electronics, communications, computer and advanced technologies industries, changes in order rates and customer cancellations, including changes in seasonal buying habits; competitive factors, including pricing pressures, technological developments and new products offered by competitors; changes in product and sales mix, and the related effects on gross margins; the Company's ability to deliver a timely flow of competitive new products, and market acceptance of these products; the availability of parts and supplies from third-party suppliers on a timely basis and at reasonable prices; inventory risks due to changes in market demand or the Company's business strategies; resolution of indemnities relating to certain acquisitions and divestitures; changes in effective tax rates; currency fluctuations; and the ability to develop effective sales channels. Further information on factors that could cause actual results to differ from those anticipated is included in filings made by the Company from time to time with the Securities and Exchange Commission, including but not limited to, annual reports on Form 10-K and the quarterly reports on Form 10-Q. About Tektronix Tektronix, Inc. is a test, measurement, and monitoring company providing measurement solutions to the communications, computer, and semiconductor industries worldwide. With more than 55 years of experience, Tektronix enables its customers to design, build, deploy, and manage next-generation global communications networks and advanced technologies. Headquartered in Beaverton, Oregon, Tektronix has operations in 19 countries worldwide. Tektronix' Web address is www.tektronix.com. -more- Tektronix Third Quarter 2004 Results.../4 Consolidated Statements of Operations
Quarter Ended Three Quarters Ended ---------------------------- ---------------------------- February 28, March 1, February 28, March 1, (In thousands, except per share amounts) 2004 2003 2004 2003 ------------ ------------ ------------ ------------ Net sales $ 243,506 $ 186,645 $ 662,865 $ 588,727 Cost of sales 102,326 87,177 290,740 289,634 ------------ ------------ ------------ ------------ Gross profit 141,180 99,468 372,125 299,093 Research and development expenses 32,772 26,416 93,277 74,660 Selling, general and administrative expenses 69,519 63,048 200,353 180,279 Equity in business venture's loss - - - 2,893 Business realignment costs 3,706 14,175 20,050 26,998 Acquisition related costs (credits), net (18,034) 795 (52,399) 2,627 Loss (gain) on sale of assets 741 (82) 741 (588) ------------ ------------ ------------ ------------ Operating income (loss) 52,476 (4,884) 110,103 12,224 Interest income 5,118 6,782 16,240 21,636 Interest expense (198) (1,221) (1,981) (4,550) Other non-operating income (expense), net 7,177 (316) 6,718 (2,262) ------------ ------------ ------------ ------------ Earnings before taxes 64,573 361 131,080 27,048 Income tax (benefit) expense 20,702 (686) 39,324 (3,845) ------------ ------------ ------------ ------------ Net earnings from continuing operations 43,871 1,047 91,756 30,893 Loss from discontinued operations, net of tax (258) (3,123) (1,780) (8,458) ------------ ------------ ------------ ------------ Net earnings (loss) $ 43,613 $ (2,076) $ 89,976 $ 22,435 ============ ============ ============ ============ Earnings per share from continuing operations - basic $ 0.52 $ 0.01 $ 1.08 $ 0.35 Earnings per share from continuing operations - diluted $ 0.50 $ 0.01 $ 1.06 $ 0.35 Loss per share from discontinued operations - basic and diluted $ - $ (0.04) $ (0.02) $ (0.10) Earnings (loss) per share - basic $ 0.51 $ (0.02) $ 1.06 $ 0.26 Earnings (loss) per share - diluted $ 0.50 $ (0.02) $ 1.04 $ 0.25 Weighted average shares outstanding - basic 84,921 86,750 84,724 87,826 Weighted average shares outstanding - diluted 87,682 86,945 86,676 88,071
- more - Tektronix Third Quarter 2004 Results.../5 Consolidated Balance Sheets
(In thousands) February 28, 2004 May 31, 2003 ------------------ ------------------ ASSETS Current assets: Cash and cash equivalents $ 162,347 $ 190,387 Short-term marketable investments 59,133 106,369 Trade accounts receivable, net 130,258 100,334 Inventories 94,752 92,868 Other current assets 55,554 83,816 Assets of discontinued operations - 7,938 ------------------ ------------------ Total current assets 502,044 581,712 Property, plant and equipment, net 111,599 127,985 Long-term marketable investments 473,848 415,606 Deferred tax assets 131,001 144,134 Goodwill, net 80,735 73,736 Other long-term assets 41,972 41,537 ------------------ ------------------ Total assets $ 1,341,199 $ 1,384,710 ================== ================== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 115,961 $ 101,753 Accrued compensation 76,469 58,193 Current portion of long-term debt 940 56,584 Deferred revenue 23,890 19,551 Liabilities of discontinued operations - 651 ------------------ ------------------ Total current liabilities 217,260 236,732 Long-term debt 9,746 55,002 Other long-term liabilities 233,558 313,750 Shareholders' equity: Common stock 250,763 223,233 Retained earnings 760,334 707,191 Accumulated other comprehensive loss (130,462) (151,198) ------------------ ------------------ Total shareholders' equity 880,635 779,226 ------------------ ------------------ Total liabilities and shareholders' equity $ 1,341,199 $ 1,384,710 ================== ================== Shares outstanding 85,061 84,844
- more - Tektronix Third Quarter 2004 Results.../6 SELECTED ADDITIONAL FINANCIAL DATA
Quarter Ended Three Quarters Ended --------------------------- --------------------------- (Dollars in thousands, % February 28, March 1, % February 28, March 1, except per share amounts) Growth 2004 2003 Growth 2004 2003 ------------ ------------ ------------ ------------ ------------ ------------ PRODUCT ORDERS AND SALES DATA: Orders 20% $ 213,234 $ 177,752 19% $ 646,955 $ 545,770 U.S. 12% 73,004 65,382 18% 255,936 217,805 International 25% 140,230 112,370 19% 391,019 327,965 Net Sales 30% $ 243,506 $ 186,645 13% $ 662,865 $ 588,727 U.S. 35% 94,142 69,776 7% 273,595 254,707 International 28% 149,364 116,869 17% 389,270 334,020 ---------------------------------------------------------------------------------------------------------------------------- BOOK TO BILL RATIO CALCULATION: Product Orders 213,234 177,752 646,955 545,770 Product Sales 226,580 174,505 614,432 551,131 Book to Bill ratio 0.94 1.02 1.05 0.99 ---------------------------------------------------------------------------------------------------------------------------- EFFECT OF BUSINESS REALIGNMENT AND ONE-TIME ITEMS: Net earnings from continuing operations $ 43,871 $ 1,047 $ 91,756 $ 30,893 Business realignment costs 3,706 14,175 20,050 26,998 Gain on sale of corporate equity securities (7,293) - (7,293) - Acquisition related costs (credits): Pension gain - - (36,741) - Net gain on assets held for sale (19,262) - (19,262) - Transition expenses 1,228 795 3,604 2,627 ------------ ------------ ------------ ------------ (18,034) 795 (52,399) 2,627 Tax effect of above items 6,846 (4,351) 11,893 (9,480) Reversal of tax reserve - - - (12,500) ------------ ------------ ------------ ------------ Net income excluding business realignment and one-time items $ 29,096 $ 11,666 $ 64,007 $ 38,538 Diluted earnings per share excluding business realignment and one-time items $ 0.33 $ 0.13 $ 0.74 $ 0.44 ---------------------------------------------------------------------------------------------------------------------------- INCOME STATEMENT ITEMS AS A PERCENTAGE OF NET SALES: Cost of sales 42% 47% 44% 49% Research and development expenses 13% 14% 14% 13% Selling, general and administrative expenses 28% 34% 30% 31% Equity in business venture's loss 0% 0% 0% 0% Business realignment costs 2% 8% 3% 5% Acquisition related costs (credits), net (7%) 0% (8%) 0% Loss (gain) on sale of assets 0% 0% 0% 0% Operating income (loss) 22% (3%) 17% 2% ---------------------------------------------------------------------------------------------------------------------------- CAPITAL EXPENDITURES AND DEPRECIATION: Capital expenditures $ 5,601 $ 3,953 $ 14,841 $ 11,571 Depreciation and amortization expense $ 6,721 $ 8,553 $ 20,997 $ 26,107 ----------------------------------------------------------------------------------------------------------------------------
Quarter Ended Year Ended February 28, 2004 May 31, 2003 ------------------ ------------------ BALANCE SHEET: Cash and Marketable Investments: Cash and cash equivalents $ 162,347 $ 190,387 Short-term marketable investments 59,133 106,369 Long-term marketable investments 473,848 415,606 ------------------ ------------------ Cash and Marketable Investments $ 695,328 $ 712,362 Accounts receivable as a percentage of annualized net sales 11.0% 12.3% Days sales outstanding 48.7 47.0 Average days sales outstanding 40.1 45.6 Inventory as a percentage of annualized net sales 9.4% 13.1% Inventory turns 4.5 3.7 ----------------------------------------------------------------------------------------------------------------------------
- more - Tektronix Third Quarter 2004 Results.../7 DISCONTINUED OPERATIONS:
Quarter Ended Three Quarters Ended ---------------------------- ---------------------------- February 28, March 1, February 28, March 1, (In thousands, except per share amounts) 2004 2003 2004 2003 ------------ ------------ ------------ ------------ Loss on sale of VideoTele.com (less applicable income tax benefit of $13, $64, $16 and $274) (23) (118) (28) (508) Loss from operations of VideoTele.com (less applicable income tax benefit of $0, $0, $0 and $1,413) - - - (2,624) Loss on sale of optical parametric test business (less applicable income tax benefit of $25, $0, $114 and $0) (47) - (213) - Loss from operations of optical parametric test business (less applicable income tax benefit of $0, $8,520, $0 and $9,295) - (15,824) - (17,264) Loss on sale of Gage (less applicable income tax benefit of $101, $0, $616 and $0) (188) - (1,145) - Loss from operations of Gage (less applicable income tax benefit of $0, $25, $212 and $500) - (181) (394) (1,062) Gain on sale of Color Printing and Imaging (less applicable income tax expense of $0, $7,000, $0 and $7,000) - 13,000 - 13,000 ------------ ------------ ------------ ------------ Loss from discontinued operations, net of tax $ (258) $ (3,123) $ (1,780) $ (8,458) ============ ============ ============ ============
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