Categories
Business Wire

DSC reports 1996 fourth quarter and full-year results

DSC reports 1996 fourth quarter and full-year results

DALLAS–(BUSINESS WIRE)–Jan. 23, 1997–

Quarterly orders and revenues reach all-time high

DSC Communications Corporation announced today operating results for the fourth quarter and year ended Dec. 31, 1996.

Revenue for the 1996 fourth quarter was $390.6 million, the highest in the company’s history, an increase of $16.7 million from $373.9 million in the 1995 period. Net income for the 1996 fourth quarter was $17.5 million, or $0.15 per share, compared to $49.4 million, or $0.42 per share, in the same period of 1995.

For the full year, revenue was $1,380.9 million compared to $1,422.0 million in 1995. Net income for 1996, excluding $96 million of special charges recorded in the 1996 third quarter, was $52.0 million, or $0.44 per share, compared to $192.7 million, or $1.63 per share, recorded in 1995. The special charges related to a reduction in the carrying value of certain assets. Including the special charges, the company recorded a net loss of $7.6 million, or $0.06 per share, for 1996.

Revenue growth in the 1996 fourth quarter was due to increased deliveries of access products and international transmission equipment. Deliveries of the industry-leading Litespan(R) products were up more than 13 percent in the fourth quarter compared to the 1995 fourth quarter. The company’s Danish operation, which develops high-end optical transport and network management systems, saw deliveries increase more than 80 percent in the 1996 quarter from the preceding year’s same period.

Operating income was $30.8 million in the 1996 fourth quarter, compared to $67.2 million in the same 1995 period. This reduction was due to a shift in the mix of products sold which lowered the gross margin to 38.5 percent compared to 46.8 percent in the 1995 fourth quarter. The reduced 1996 fourth quarter gross margin was due in large part to an overall decline in switch revenue as a percentage of total company revenue, from 43 percent in the 1995 fourth quarter to 38 percent in the most recent fourth quarter. The corresponding increase in lower margin access and transmission revenue likewise impacted the gross margin percentage in the quarterly comparisons.

DSC chairman and chief executive officer, James L. Donald, commented, “We are pleased to have finished 1996 with a strong fourth quarter revenue performance. Our record revenues during the quarter were largely due to increased demand for our Litespan-2000 digital loop carrier product and improved sales from our European optical transmission business.

“Although the first three quarters in 1996 were disappointing, we ended the year with record quarterly revenues, orders and backlog. Improvement in our Danish operation’s product sales was particularly heartening. During 1996 it achieved sequential quarterly revenue gains, culminating with record quarterly revenue in the fourth quarter.

“Looking forward, we see growing global opportunities and have positioned the company to take advantage of them. In 1997 we will continue to address these opportunities with new product introductions from our United States and European operations complementing our existing portfolio of telecommunications solutions. We will also expand our global manufacturing presence. In 1996 we opened a new facility in Costa Rica and plan to begin operations at still another location, in Ireland, during the current year.

“We believe that our product and manufacturing expansion efforts position the company to take advantage of the increasing opportunities presented by the global deregulation of the telecommunications markets and the increased demand from developing countries for advanced telecommunications services. We are guardedly optimistic for 1997 and look forward to reporting on our progress.”

DSC Communications Corporation is a leading designer, developer, manufacturer and marketer of digital switching, transmission, access and private network system products for the worldwide telecommunications marketplace.

Litespan-2000 is a registered trademark of DSC Communications Corporation.

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995:

Except for the historical information contained herein, the matters discussed herein, including the matters relating to future performance, are forward-looking statements that are dependent upon a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These risks and uncertainties include the timely availability and acceptance of new products, the impact of competitive products and pricing, changes in market conditions, the impact of changes in regulation or technology, and the other risk factors identified in the company’s S.E.C. filings. -0-

DSC COMMUNICATIONS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three Months Ended Twelve Months Ended

December 31, December 31,

——————- ——————-

1996 1995 1996 1995

——– ——– ——– ——-

(unaudited)

Revenue $ 390,560 $ 373,891 $1,380,891 $1,422,018

Cost of revenue

Special charges related

to inventories and

associated assets — — 82,500 —

Other 240,358 198,794 843,247 736,119

———- ———- ———- ———-

240,358 198,794 925,747 736,119

———- ———- ———- ———-

Gross profit 150,202 175,097 455,144 685,899

———- ———- ———- ———-

Operating costs and expenses:

Research and product

development 54,767 47,269 210,091 189,751

Selling, general and

administrative 62,147 57,809 233,576 207,188

Special charges for excess

facilities and equipment — — 13,500 —

Other operating costs 2,510 2,810 10,020 9,542

———- ———- ———- ———-

Total operating costs

and expenses 119,424 107,888 467,187 406,481

———- ———- ———- ———-

Operating income (loss) 30,778 67,209 (12,043) 279,418

Interest income 5,237 7,910 24,146 27,147

Interest expense (6,549) (6,994) (26,355) (18,599)

Other income (expense), net (1,163) 3,728 2,066 1,984

———- ———- ———- ———-

Income (loss) before

income taxes 28,303 71,853 (12,186) 289,950

Income taxes 10,755 22,411 (4,631) 97,270

———- ———- ———- ———-

Net income (loss) $ 17,548 $ 49,442 $ (7,555) $ 192,680

========== ========== ========== ==========

Income (loss) per share $ 0.15 $ 0.42 $ (0.06) $ 1.63

========== ========== ========== ==========

Average shares used in

computation 118,702 118,398 116,514 118,126

DSC COMMUNICATIONS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

December 31, December 31,

1996 1995

———– ————

Assets

Cash and cash equivalents $ 155,101 $ 258,565

Marketable securities 178,938 310,699

Receivables 411,947 277,006

Inventories 343,566 303,962

Other current assets 113,326 70,315

———- ———-

Total current assets 1,202,878 1,220,547

———- ———-

Property and equipment, net 403,596 370,522

Capitalized software development

costs 51,634 43,821

Cost in excess of net assets of

businesses acquired, net 146,025 155,102

Other assets 121,522 75,283

———- ———-

Total assets $1,925,655 $1,865,275

========== ==========

Liabilities and Shareholders’ Equity

Short-term debt $ 906 $ 83,438

Accounts payable and accrued

liabilities 398,944 365,046

Current portion of long-term debt 33,072 33,098

———- ———-

Total current liabilities 432,922 481,582

———- ———-

Long-term debt 274,602 210,441

Noncurrent liabilities 70,495 49,173

Shareholders’ equity 1,147,636 1,124,079

———- ———-

Total liabilities and

shareholders’ equity $1,925,655 $1,865,275

========== ==========

COPYRIGHT 1997 Business Wire

COPYRIGHT 2004 Gale Group