Andrew Corporation (NASDAQ:ANDW):

Second Quarter Fiscal 2007 Highlights

  • Total sales increased 4% to $503 million, compared to the prior year second quarter, a record second fiscal quarter for the company
  • Wireless Infrastructure sales increased 5% to $472 million, compared to the prior year second quarter
  • Gross margin was 20.8%, compared to 20.6% in the prior year second quarter. Excluding relocation and start-up costs associated with the new Joliet, Illinois facility, non-GAAP gross margin was 22.4%
  • Net loss was $0.01 per share, including $0.10 per share of significant expense items
  • The company repurchased 1 million shares of common stock at an average price of $10.34 per share
  • Cash flow from operations increased to $22 million, compared to $13 million in the prior year second quarter
  • Company updates financial guidance for fiscal 2007

Andrew Corporation, a global leader in communications systems and products, reported total sales of $503 million and a net loss of $2.0 million, or $0.01 per share, for the second quarter fiscal 2007. Wireless Infrastructure sales increased 5% and gross margins improved compared to the prior year second quarter, despite continued challenges in the North American market and relocation and start-up costs associated with the new Joliet, Illinois facility. Higher income taxes contributed to the loss in the quarter, which compared to net income for the prior year second quarter of $3.6 million, or $0.02 per share.

In addition, the company intends to sell its Satellite Communications business, which comprised 6% of the companys overall revenues for the second quarter. The company has received initial indications of interest from several potential buyers. The final terms of any divestiture transaction will be subject to board approval, and there can be no assurance as to the terms, timing or consummation of any such transaction.

As we previously guided, the first half of our fiscal year has been challenging due to consolidation issues with two significant North American customers, volatile commodity costs and a number of important facility start-ups and relocations, said Ralph Faison, president and chief executive officer, Andrew Corporation. While our revenue growth for the quarter was modest in our seasonally weakest quarter, we are pleased that we have been able to replace reduced revenues of over $130 million to those two customers in the first half of our fiscal year with significant increases in volume with other customers and in other geographies. We also have been able to recover a significant portion of our higher commodity costs incurred during the quarter.

In addition, we have executed well on two significant facility relocations this year. Our new world-class cable facility in Joliet is in production, on budget and ahead of our expectations and our new factory in India is also in production and ramping up well, helping to serve the unprecedented demand we are experiencing in India. As we look ahead, we believe that Andrew is well-positioned to continue to be the supplier of choice on a global basis to serve the needs of wireless operators and infrastructure original equipment manufacturers (OEMs). While we believe that our North American business is starting to improve and should help drive a stronger second half, we remain cautious about our prospects in that geography if we do not see meaningful sequential improvement from the two customers where we have had significant weakness for the last two quarters. Finally, we continue to deliver on our goal of improving gross margins consistent with our previous guidance. We expect higher levels of business in the June and September quarters and anticipate improved operating leverage on that seasonal uptick.

Over the last five years, we have reengineered Andrews manufacturing footprint by transitioning most of our facilities to new state-of-the-art factories, in most cases to lower-cost labor locations. The company is well-positioned to benefit from operational efficiencies, as the restructuring of our global supply chain is largely behind us.

The following table is a summary of significant items impacting the comparability of earnings per share amounts for the fiscal quarters ended March 31, 2007 and March 31, 2006. The per share impact of items for the current quarter is calculated on a pre-tax basis, as no tax benefit was recognized for losses in the U.S. and Italy. There were approximately 156 million shares outstanding during the quarter. For the prior year second quarter, an effective tax rate of 30.2% was used and there were approximately 160 million diluted shares outstanding.

Fiscal Quarter Ended

Summary of Significant (Expense)March 31,
Items Impacting Results2007  2006 
Intangible Amortization $(0.03) $(0.02)
Restructuring Charges (0.01) (0.01)
Litigation Expenses (0.01)
Orland Park Relocation & Joliet Start-Up Costs (0.05)
Total$(0.10) $(0.03)

Second Quarter Financial Summary

Wireless Infrastructure sales increased 5%, to $472 million, versus the prior year second quarter due to strong demand for antenna and cable products, which included the impact from the Precision Antennas and EMS Wireless acquisitions, the implementation of price increases on cable products and a favorable foreign exchange impact, which were partially offset by weaker sales of certain base station components.

Total orders of $503 million decreased 8% from the prior year second quarter due mainly to a reduction in orders for active products, which was partially offset by an increase in orders for antenna and cable products. Orders were down in the Americas, partially offset by strong orders in Asia Pacific across all product categories. Ending backlog was 6% lower at $285 million compared to the prior year second quarter, partially due to the completion of the first phase of an international geolocation project.

The company made significant progress in exiting its Orland Park facility and transitioning to its new Joliet, Illinois cable facility during the quarter. Approximately $8 million of relocation and start-up costs, including unabsorbed overhead for lost production and duplicate facilities, were incurred during the quarter, which reduced gross margin by approximately 160 basis points. Excluding these costs, non-GAAP gross margin was 22.4%, compared 20.6% in the prior year second quarter. Gross margin increased versus the prior year second quarter due to increased sales, improved recovery of raw material costs through price increases and operational improvements in most major product areas.

Operating income for the quarter was $8.9 million, or 1.8% of sales, compared to $8.6 million, or 1.8% of sales in the prior year second quarter. Excluding significant items, non-GAAP operating income for the quarter was $24.3 million, or 4.8% of sales, compared to $14.3 million, or 3.0% of sales, in the prior year second quarter.

Research and development expenses were $27.0 million, or 5.4% of sales, in the second quarter, compared to $26.8 million, or 5.6% of sales, in the prior year second quarter. Sales and administrative expenses increased to $62.4 million, or 12.4% of sales, in the second quarter, compared to $58.3 million, or 12.1% of sales, in the prior year second quarter. Sales and administrative expenses increased in absolute dollars and as a percentage of sales due mainly to costs associated with supporting sales growth in emerging markets, developing direct-to-carrier channels, impact from acquisitions and increased legal expenses for litigation related to a specific intellectual property matter.

Intangible amortization increased to $5.5 million in the second quarter, compared to $4.4 million in the prior year second quarter due primarily to amortization of intangible assets associated with the companys acquisitions of Precision Antennas and EMS Wireless. Other expenses decreased to $2.6 million in the second quarter, compared to $3.5 million in the prior year second quarter.

The reported tax rate for the second quarter was 131%, due primarily to losses in the United States and Italy for which the company cannot record current tax benefits. The concentration of significant losses in countries for which the company cannot record current tax benefits in the second quarter resulted in a higher tax rate for the quarter than is anticipated on a full year basis. The company currently anticipates the full year tax rate will be in the range of 44% to 46%. Due to these losses, the tax rate for the quarter increased versus a reported rate of 30.2% in the prior year second quarter.

Average shares outstanding decreased to approximately 156 million from approximately 160 million in the prior year second quarter primarily due to shares that have been repurchased by the company. During the second quarter of fiscal 2007, the company repurchased 1.0 million shares of common stock at an average price of $10.34, including commissions and fees. The company repurchased 4.4 million shares over the last twelve months and has approximately 5.4 million additional shares available for repurchase under an existing authorized repurchase program.

Company Announces Intent to Sell Satellite Communications Business

The company has retained an investment bank, CIBC World Markets Corp., to help explore strategic alternatives for its Satellite Communications business and intends to sell the business. During the last two quarters, we made meaningful progress in rationalizing and right-sizing this business and believe that we have positioned it for improved performance in the future, said Faison. In exploring strategic alternatives, we have received several indications of interest for Satellite Communications. As a result, we have decided to pursue a sale of the business. Similar to the recent sale of our broadband cable assets, which we completed subsequent to the end of the second quarter, this decision allows management to focus all of its time, attention and resources on our core wireless infrastructure products and solutions.

The final terms of any divestiture transaction are subject to board approval, and there can be no assurance as to the terms, timing or consummation of any such transaction.

If a sale of the Satellite Communications business had been completed as of the beginning of the second quarter of fiscal 2007, the company estimates its summary operating results would have been as follows:

Fiscal Quarter Ended
March 31, 2007

$ millions

As Reported
GAAP

  SatCom

Ex SatCom
Non-GAAP

Sales $ 503  $ 31  $ 472 
Gross Profit 105  102 
- % 20.8% 8.2% 21.7%
Operating Expenses 96  89 
Operating Income (Loss) (4) 13 
Net (Loss) Income per Share $(0.01) $(0.02) $0.01 

The company has provided additional financial details for the second quarter of fiscal 2007 in the tables below:

Results by Major Region, Reporting Segment and Customer Information

Fiscal Quarter Ended
March 31,
Sales by Region ($ in millions)2007  2006  % Change% Total
Americas $ 222  $ 264  (16) 44 
Europe, Middle East, Africa (EMEA) 189  155  22  38 
Asia Pacific 92  63  46  18 
Total$ 503  $ 482  100%

Sales in the Americas decreased 16% versus the prior year second quarter due mainly to a reduction in spending by two North American customers who were in the process of consolidating during the quarter. EMEA increased 22% from the prior year second quarter due to strength in Africa and the Middle East, approximately $14 million of additional revenue from the acquisition of Precision Antennas and a favorable impact of approximately $10 million resulting from a weaker U.S. dollar compared to European currencies. Asia Pacific increased 46% versus the prior year second quarter due mainly to growing demand in India, China, Japan and Korea from OEMs and operators supporting network expansions and upgrades.

Fiscal Quarter Ended
March 31,
Sales by Segment ($ in millions)2007  2006  % Change% Total
Antenna and Cable Products $ 319  $ 266  20  64 
Satellite Communications 31  31 
Total Antenna and Cable350  297  18  70 
Base Station Subsystems 81  120  (33) 16 
Network Solutions 25  27  (7)
Wireless Innovations 47  38  24 
Total Wireless Network Solutions153  185  (17) 30 
Total$ 503  $ 482  4% 100%

Antenna and Cable Products increased 20% versus the prior year second quarter due mainly to cable price increases, strong demand in EMEA and Asia Pacific across most product lines, and the impact from the acquisitions of Precision Antennas and EMS Wireless. Satellite Communications was flat compared to the prior year second quarter due to increased sales of earth station electronics and VSAT antennas, which were offset by lower direct-to-home satellite products sales. Base Station Subsystems sales decreased 33% versus the prior year second quarter due primarily to weakness in base station component sales to certain OEM customers who were in the process of consolidating and a decline in sales to certain North American operators. Network Solutions decreased 7% versus the prior year second quarter due mainly to a decline in geolocation equipment sales in North America, which was partially offset by a significant increase in international geolocation sales due to the completion of the first phase of a major project. Wireless Innovations increased 24% due mainly to strong repeater sales in all geographies.

Customer Information

The top 25 customers represented 70% of sales compared to 69% in the prior quarter and 67% in the prior year second quarter. Major OEMs accounted for 41% of sales compared to 41% in the prior quarter and 38% in the prior year second quarter. Ericsson represented more than 10% of the companys sales for the quarter and Alcatel-Lucent, Nokia, Siemens and Sprint Nextel each represented more than 5% of the companys sales for the quarter.

Fiscal Quarter Ended
March 31,
Operating Income (Loss) by Segment ($ in millions)2007  2006 
Antenna and Cable Products $ 44  $ 30 
Satellite Communications (4) (4)
Total Antenna and Cable40  26 
Base Station Subsystems (12)
Network Solutions 4 
Wireless Innovations 9 
Total Wireless Network Solutions1  15 
Sub-Total$ 41  $ 40 
Unallocated Sales and Administrative Costs (27) (28)
Intangible Amortization (5) (4)
Total Operating Income$ 9  $ 9 

Antenna and Cable Products operating income increased due mainly to a 20% increase in segment sales, price increases on certain cable products and the impact from the acquisitions of Precision Antennas and EMS Wireless. Satellite Communications operating loss was unchanged versus the prior year second quarter as higher gross margins were offset by modestly lower sales and higher research and development expenses. Base Station Subsystems experienced an operating loss compared with operating profit in the prior year second quarter due mainly to significant weakness in base station component sales to consolidating OEM customers in North America and EMEA and a decline in sales to certain North American operators, which were partially offset by sales growth in Asia Pacific and Latin America. In addition to the decline in sales, significantly lower overhead absorption and higher product rationalization costs also contributed to the operating loss. Network Solutions operating income decreased versus the prior year second quarter due mainly to a decline in geolocation equipment sales in North America, which was partially offset by a significant increase in international geolocation sales. Wireless Innovations operating income increased versus the prior year second quarter due mainly to a 24% increase in segment sales, improved gross margin and better product mix.

We are pleased with the operational improvements in most of our major product groups, despite continuing low volume in base station components, said Faison. As volume recovers, we expect to obtain better overhead absorption in that business. At the same time, our ongoing cost reduction and product rationalization process remains a top priority to get this business back to acceptable levels of profitability. While the year-to-date losses in this business were driven by very unusual factors, we are in the process of reviewing all of our product lines in Base Station Subsystems for ongoing strategic importance and acceptable levels of financial performance. In addition, a significant portion of the companys recorded goodwill is related to this business. We are analyzing all appropriate information to ascertain if there has been any material goodwill impairment and would promptly disclose any such material impairment.

Balance Sheet and Cash Flow Highlights

Cash flow from operations was $21.8 million in the second quarter, compared to $13.4 million in the prior year second quarter. Accounts receivable were $512 million and days sales outstanding (DSOs) were 90 days at March 31, 2007, compared to $535 million and 89 days at December 31, 2006. The increase in DSOs in the current quarter was primarily due to the geographic mix of sales. Inventories were $398 million and inventory turns were 4.0x at March 31, 2007, compared to $427 million and 3.8x at December 31, 2006. Inventories decreased and inventory turns improved compared to the prior quarter due partially to the planned inventory build in the prior quarter associated with the companys Orland Park, Illinois facility relocation to Joliet, Illinois.

Capital expenditures decreased to $13.3 million in the second quarter compared to $20.8 million in the prior year second quarter primarily due to the fact that the company is nearing completion of two significant cable and antenna facility moves.

Cash and cash equivalents were $127 million at March 31, 2007, compared to $100 million at December 31, 2006. Cash and cash equivalents increased from the prior quarter due mainly to an increase in cash flow from operations.

Total debt outstanding and debt to capital were $366 million and 19.5% at March 31, 2007, compared to $386 million and 20.3% at December 31, 2006. During the quarter, the company amended the operating lease agreement for its new Joliet, Illinois facility, which served to reduce the amount of debt previously recorded on the balance sheet by approximately $30 million.

Fiscal 2007 Outlook

The company is providing the following update to its annual guidance for fiscal 2007.

Sales are anticipated to range from $2.20 billion to $2.30 billion, excluding any significant rationalization of product lines or significant acquisitions. The companys guidance has not been adjusted for the possible sale of the Satellite Communications business due to the uncertainty related to the terms, timing or consummation of such a transaction. The company continues to expect gross margin expansion of at least 100 basis points for the full year versus the prior year on both a GAAP and non-GAAP basis, and anticipates another $0.05 per share in relocation and start-up costs to be incurred for the Joliet, Illinois facility in the third fiscal quarter.

At March 31, 2007, the company had fixed-price purchase commitments that covered approximately 20 million pounds of copper, or 62% of the companys estimated remaining fiscal 2007 requirements.

The company currently anticipates the effective tax rate for the year will be in the range of 44% to 46%, based on the anticipated full year results. The reported tax rate for future quarters may be volatile due to the mix of earnings and losses by taxing jurisdiction. The company expects substantial improvement in the tax rate in the second half of fiscal 2007, based on historical trends and anticipated higher levels of earnings and/or reduced losses in the United States and Italy.

Based on this revised guidance, GAAP earnings per share are now anticipated to range from $0.32 to $0.38 for the full year, including estimated intangible amortization expense of approximately $0.11 per share, estimated restructuring charges of approximately $0.07 per share, litigation expenses of approximately $0.02 per share, provision for a quality matter of approximately $0.01 per share, Orland Park relocation and Joliet start-up costs of $0.10 per share and an anticipated gain of approximately $0.06 per share related to the sale of the second of two parcels of land that comprise the Orland Park, Illinois manufacturing facility. These items are calculated on a pre-tax basis, as no tax benefit or expense is expected to be recognized for these items for the year. Excluding these items, non-GAAP earnings per share are now anticipated to range from $0.57 to $0.63 for the full year.

Attached to this news release is preliminary unaudited financial information for the second quarter fiscal 2007.

Conference Call Webcast

Andrew Corporation will host a conference call to discuss its second quarter fiscal 2007 financial results on Thursday, May 3, 2007, at 8:00 a.m. CDT. Investors can participate via a live webcast over the Internet at www.andrew.com. A replay of the audio webcast will be made available for 90 days following the event.

About Andrew

Andrew Corporation (NASDAQ:ANDW) designs, manufactures and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 35 countries. Andrew (www.andrew.com), headquartered in Westchester, IL, is an S&P MidCap 400 company founded in 1937.

Forward-Looking Statements

Statements in this news release that are not historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can often be identified by words such as may,will,should,would, expect,project,anticipate,intend,plan,believe,estimate,potential,outlook or continue, the negative of these terms or other similar expressions and include, among others, statements in the introduction and statements under the captions Second Quarter Financial Summary, Company Announces Intent to Sell Satellite Communications Business, Balance Sheet and Cash Flow Highlights and Fiscal 2007 Outlook. Forward-looking statements are based on currently available information and involve risks, uncertainties and assumptions, many of which are beyond the companys control, which could cause actual results to differ materially from those expected. Factors that may cause actual results to differ from expected results include fluctuations in commodity costs, the company's ability to integrate acquisitions and to realize the anticipated synergies and cost savings, the companys ability to consummate the intended divestiture of its SatCom business, including the terms and timing of any such transaction, the effects of competitive products and pricing, economic and political conditions that may impact customers' ability to fund purchases of our products and services, the company's ability to achieve the cost savings anticipated from cost reduction programs, fluctuations in foreign currency exchange rates, the timing of cash payments and receipts, end use demands for wireless communication services, the loss of one or more significant customers and other business factors. Further information on these and other risks and uncertainties is provided under Item 1A Risk Factors in the companys Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, which is incorporated herein by reference, and elsewhere in reports that the company files or furnishes with the SEC. The company cannot guarantee future results, levels of activity, performance or achievement. Recognize these forward-looking statements for what they are; do not rely on them as facts. This release speaks only as of its date, and the company disclaims any obligation to revise these forward-looking statements or to provide any updates regarding information contained in this release resulting from new information, future events or otherwise.

Non-GAAP Financial Measures

This news release contains certain non-GAAP financial measures, which are financial measures of Andrews performance that exclude or include amounts thereby differentiating these measures from the most directly comparable amounts presented in the financial statements that are calculated and presented in accordance with Generally Accepted Accounting Principles (GAAP). Andrew believes that these non-GAAP measures provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency of supplemental information used by management in its financial and operational decision making. Below are reconciliations of the non-GAAP financial measures used in this news release to the most directly comparable GAAP measures.

Fiscal Quarter Ended
March 31,

2007  2006 
Reported GAAP Net (Loss) Income per Share$ ( 0.01) $ 0.02 
Intangible Amortization 0.03  0.02 
Restructuring Charges 0.01  0.01 
Litigation Expenses 0.01 
Orland Park Relocation & Joliet Start-Up Costs 0.05 
Total Items0.10  0.03 
Adjusted (non-GAAP) Net Income per Share$ 0.09  $ 0.05 

The following table shows the Companys reconciliation of GAAP to non-GAAP gross margin for the fiscal quarter ended March 31, 2007 and March 31, 2006.

($ in thousands)
Fiscal Quarter Ended
March 31,
2007  2006 
GAAP Gross Profit$104,799  $99,417 
Gross Margin %20.8% 20.6%

Adjustment:

Orland Park Relocation & Joliet Start-Up Costs 8,027 
Gross Margin Impact-% 1.6%
Adjusted (non-GAAP) Gross Margin22.4% 20.6%

The following table shows the Companys reconciliation of GAAP to non-GAAP operating income for the fiscal quarter ended March 31, 2007 and March 31, 2006.

Fiscal Quarter Ended
March 31,
($ in thousands)2007  2006 
Reported GAAP Operating Income$ 8,884  $ 8,588 
% of Sales 1.8% 1.8%
Intangible Amortization 5,460  4,429 
Restructuring Charges 1,372  1,362 
Litigation Expenses 870 
Gain on Sale of Assets (331) (72)
Orland Park Relocation & Joliet Start-Up Costs 8,027 
Adjusted (non-GAAP) Operating Income$ 24,282  $ 14,307 
% of Sales 4.8% 3.0%

The following table shows the Companys reconciliation of GAAP to non-GAAP estimated earnings per share for the fiscal year ending September 30, 2007.

Forward-Looking
Fiscal Year Ending
September 30, 2007
Estimated GAAP Earnings Per Share $0.32 to $0.38

Adjustments:

Estimated Intangible Amortization Expense 0.11 
Estimated Restructuring Charges (1) 0.07 
Litigation Expenses 0.02 
First Quarter Provision for Quality Matter 0.01 
Orland Park Relocation & Joliet Start-Up Costs 0.10 
Anticipated Gain on Sale of Land (2)

(0.06)

Estimated Non-GAAP Earnings Per Share $0.57 to $0.63
 
 
(1) Primarily related to the restructuring of the filter product supply chain.
(2) Related to the sale of the second of two parcels of land which comprise the Orland Park, Illinois manufacturing facility.
UNAUDITED - PRELIMINARY
 
ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
 
 

Three Months Ended
March 31,

Six Months Ended
March 31,

2007  2006  2007  2006 
 
Sales$ 502,721  $ 481,653  $ 1,024,906  $ 996,352 
Cost of products sold 397,922  382,236  798,616  779,929 
Gross Profit104,799  99,417  226,290  216,423 
 
Operating Expenses
Research and development 26,979  26,792  54,288  54,751 
Sales and administrative 62,435  58,318  128,461  120,022 
Intangible amortization 5,460  4,429  11,331  9,548 
Restructuring 1,372  1,362  7,899  861 
(Gain) loss on sale of assets (331) (72) (516) 1,389 
95,915  90,829  201,463  186,571 
 
Operating Income8,884  8,588  24,827  29,852 
 
Other
Interest expense 4,383  4,139  8,506  7,908 
Interest income (1,330) (1,351) (2,595) (2,232)
Other (income) expense, net (452) 687  447  533 
2,601  3,475  6,358  6,209 
 
Income Before Income Taxes6,283  5,113  18,469  23,643 
 
Income taxes 8,241  1,544  22,974  5,231 
 
Net Income (Loss)$ (1,958) $ 3,569  $ (4,505) $ 18,412 
 
Basic Net Income (Loss) per Share$ (0.01) $ 0.02  $ (0.03) $ 0.12 
Diluted Net Income (Loss) per Share$ (0.01) $ 0.02  $ (0.03) $ 0.11 
 
Average Shares Outstanding
Basic 156,293  159,530  156,686  159,873 
Diluted 156,293  160,260  156,686  160,486 
 
 
 
Orders Entered$ 502,614  $ 548,852  $ 993,216  $ 1,030,197 
Total Backlog$ 285,413  $ 303,000  $ 285,413  $ 303,000 
PRELIMINARY
 
ANDREW CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 
 
March 31, September 30,
  2007  2006 
ASSETS(UNAUDITED)
Current Assets
Cash and cash equivalents $ 127,157  $ 169,609 

Accounts receivable, less allowances
 (March 2007 - $7,500; September 2006 - $7,112)

512,081  557,834 
Inventory 397,968  388,296 
Other current assets 56,272  37,282 
Assets held for sale 17,582 
Total Current Assets1,111,060  1,153,021 
 
Other Assets
Goodwill 913,436  882,666 
Intangible assets, less amortization 49,349  47,205 
Other assets 46,196  62,018 
 
Property, Plant and Equipment
Land and land improvements 23,166  22,578 
Buildings 143,033  160,244 
Equipment 582,710  566,482 
Allowance for depreciation (513,574) (485,293)
235,335  264,011 
   
TOTAL ASSETS$ 2,355,376  $ 2,408,921 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 242,641  $ 324,295 
Accrued expenses and other liabilities 115,172  115,952 
Compensation and related expenses 50,050  60,596 
Restructuring 8,563  6,167 
Income tax payable 7,041  5,433 
Notes payable and current portion of long-term debt 115,803  55,443 
Liabilities related to assets held for sale 4,263 
Total Current Liabilities543,533  567,886 
 
Deferred Liabilities48,719  43,382 
Long-Term Debt, less current portion250,251  290,378 
 
SHAREHOLDERS' EQUITY

Common stock (par value, $.01 a share:
 400,000,000 shares authorized:
 162,476,513 shares issued at
 March 31, 2007 and September 30, 2006,
 including treasury stock)

1,625  1,625 
Additional paid-in capital 686,403  684,868 
Accumulated other comprehensive income 62,579  37,743 
Retained earnings 831,793  836,298 

Treasury stock, at cost (6,811,695 shares
 at March 31, 2007 and 5,215,977 shares at
 September 30, 2006)

(69,527) (53,259)
Total Shareholders' Equity1,512,873  1,507,275 
   
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY$ 2,355,376  $ 2,408,921 
UNAUDITED - PRELIMINARY
 
ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
 
 

Three Months Ended
March 31,

Six Months Ended
March 31,

2007  2006  2007  2006 
 
Cash Flows from Operations
Net Income (Loss) $ (1,958) $ 3,569  $ (4,505) $ 18,412 
 
Adjustments to Net Income (Loss)
Depreciation 14,869  14,332  29,136  28,192 
Amortization 5,460  4,429  11,331  9,548 
Gain on sale of assets (331) (72) (516) (100)
Restructuring costs (1,851) (770) 1,874  (2,130)
Stock based compensation 2,738  1,944  5,454  4,045 
 
Change in Operating Assets and Liabilities
Accounts receivable 26,037  (6,123) 65,214  (3,694)
Inventory 40,090  1,117  21,669  (12,885)
Other assets (2,092) (2,362) (23,725) (6,118)
Accounts payable and other liabilities (61,140) (2,670) (110,624) (23,657)
Net Cash From (Used for) Operations21,822  13,394  (4,692) 11,613 
 
Investing Activities
Capital expenditures (13,269) (20,835) (33,231) (33,181)
Acquisition of businesses 956  (9,063) (48,670) (9,063)
Investments 5,220  5,220  (1,722)
Proceeds from sale of property, plant and equipment 10,190  539  10,580  1,777 
Net Cash From (Used for) Investing Activities3,097  (29,359) (66,101) (42,189)
 
Financing Activities
Long-term debt payments, net (569) (690) (26,305) (7,610)
Notes payable borrowings, net 10,273  1,701  69,867  17,839 
Payments to acquire common stock for treasury (10,336)(20,425) (17,600)
Stock purchase and option plans 167  3,016  167  3,019 
Net Cash (Used for) From Financing Activities(465) 4,027  23,304  (4,352)
 
Effect of exchange rate changes on cash2,330  3,476  5,037  1,086 
 
Increase (Decrease) for the Period26,784  (8,462) (42,452) (33,842)
Cash and Equivalents at Beginning of Period100,373  163,400  169,609  188,780 
Cash and Equivalents at End of Period$ 127,157  $ 154,938  $ 127,157  $ 154,938 

Contact Us

Andrew Corporation
Investor Contact:
Lisa Fortuna, +1 (708) 236-6507
lisa.fortuna@andrew.com
or
Andrew Corporation
News Media Contact:
Rick Aspan, +1 (708) 236-6568
publicrelations@andrew.com