CommScope, Inc. (NYSE: CTV) today reported sales for the third quarter ended September 30, 1997 of $147 million, down slightly from sales of $149 million in the 1996 quarter. Order input in the 1997 quarter rose to $163 million versus $160 million for the 1996 quarter.

As previously announced, third quarter 1997 sales and order growth was affected by the competitive pricing environment, and sluggish international sales, primarily to the Australian market.

"Although international sales are experiencing a temporary slowdown, the underlying strength of the international markets should lead to improved sales growth during 1998," said Frank M. Drendel, Chairman and CEO.

Operating income for the third quarter of 1997 was $16 million compared to $27 million for the third quarter of 1996. Pro forma net income for the third quarter was $7 million ($0.14 per pro forma share) compared to $14 million ($0.29 per pro forma share) for the same period last year. Third quarter results were also affected by the previously announced impact of higher raw material costs.

Demand for LAN products continues to be very strong. "Over the last two months, we've significantly increased production of enhanced local area network (LAN) products. However, product transitions, including production of additional high-level LAN products, affected third-quarter results," Drendel stated.

"While we're disappointed with third-quarter results, we continue to believe that hybrid fiber coaxial (HFC) networks are the best and lowest cost infrastructure for high-speed Internet applications; therefore, we remain optimistic about our longer-term outlook," Drendel added.

NINE MONTH RESULTS

Sales for the nine months ended September 30, 1997 rose to $454 million, up 8 percent from the comparable period last year. Operating income was $65 million, compared to $72 million for the same period last year. Pro forma net income for the first nine months of 1997 was $32 million ($0.64 per pro forma share) compared to $37 million ($0.75 per pro forma share) for the same period in 1996.

CommScope is the world's largest manufacturer of coaxial cable and is a leading supplier of high-performance cables for LAN and other applications.

Statements in this press release are "forward-looking statements" within the meaning of the Securities Exchange Act of 1934, and include, but are not limited to, those statements relating to CommScope's relative market position, sales, margins and earnings. While CommScope believes such statements are reasonable, the actual results and effects could differ materially from those currently anticipated. Factors and risks that could cause such differences include, but are not limited to developments in technology, pricing and acceptance of CommScope's products, changes in raw material costs, industry competition, cable television industry capital spending, and other factors. The cautionary statements contained in Exhibit 99 to CommScope's Form 10-Q for the quarter ended June 30, 1997, are incorporated herein by reference.

Visit CommScope at our Web Site: www.commscope.com

                                 CommScope, Inc.
                         Consolidated Statements of Income
                     (Unaudited - in Thousands, Except Pro
                Forma Share and Earnings Per Share Information)


                                         Historical            Pro Forma (A)
                                     Three Months Ended     Three Months Ended
                                        September 30,          September 30,
                                    1997         1996      1997         1996

    Net Sales                     $147,269    $148,580   $147,269    $148,580

    Operating Costs and Expenses:
      Cost of sales                115,328     108,328    115,328     108,328
      Selling, general and
       administrative               12,732      10,848     12,732      10,848
      Research and development       1,642       1,272      1,642       1,272
      Amortization of excess
       of cost over fair value
       of net assets acquired        1,306       1,323      1,306       1,323
        Total operating costs
         and expense               131,008     121,771    131,008     121,771

    Operating Income                16,261      26,809     16,261      26,809

      Other income - net              (433)        507       (433)        507
      Interest expense - net        (3,849)     (2,422)    (4,510)     (4,600)

    Income Before Income Taxes      11,979      24,894     11,318      22,716

    Provision for income taxes      (4,555)     (9,455)    (4,304)     (8,627)

    Net Income                      $7,424     $15,439     $7,014     $14,089

    Pro Forma Common and Common
      Equivalent Shares
       Outstanding                                     49,403,466  49,200,000

    Pro Forma Earnings Per Share                            $0.14       $0.29

(A) - Pro forma information reflects (i) the number of common shares issued and common equivalent shares existing at the date of the spin-off, and (ii) at the beginning of each period presented, a net debt level of $275 million.

                     Consolidated Statements of Income
              (Unaudited - in Thousands, Except Pro Forma Share
                    and Earnings Per Share Information)

                                         Historical            Pro Forma (A)
                                      Nine Months Ended     Nine Months Ended
                                        September 30,         September 30,
                                      1997        1996     1997        1996

    Net Sales                      $454,434    $421,507 $454,434     $421,507

    Operating Costs and Expenses:
       Cost of sales                343,882     310,207  343,882      310,207
       Selling, general and
        administrative               37,412      31,284   37,412       31,284
       Research and development       4,470       3,901    4,470        3,901
       Amortization of excess
        of cost over fair value
        of net assets acquired        3,918       3,840    3,918        3,840
          Total operating costs
           and expenses             389,682     349,232  389,682      349,232

    Operating Income                 64,752      72,275   64,752       72,275

       Other income - net                52       1,122       52        1,122
       Interest expense - net        (9,115)     (7,398) (13,710)     (13,800)

    Income Before Income Taxes       55,689      65,999   51,094       59,597

    Provision for income taxes      (21,160)    (25,068) (19,419)     (22,635)

    Net Income                      $34,529     $40,931  $31,675      $36,962

    Pro Forma Common and Common
       Equivalent Shares Outstanding                  49,267,822   49,200,000

    Pro Forma Earnings Per Share                           $0.64        $0.75

(A) - Pro forma information reflects (i) the number of common shares issued and common equivalent shares existing at the date of the spin-off, and (ii) at the beginning of each period presented, a net debt level of $275 million.

 

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding CommScope's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.

 

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CommScope, Inc.
Phil Armstrong, 704-323-4848