CommScope Announces Third Quarter 1997 Earnings

Sales of $147 Million, Orders of $163 Million, Pro forma EPS of $0.14
October 21, 1997 HICKORY, N.C.

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.

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

 

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