Tektronix Reports Results for the Fourth Quarter and Full Year of Fiscal 2007
Sales for Fiscal Year Top $1.1B
PRNewswire-FirstCall
BEAVERTON, Ore.

Tektronix, Inc. today reported net sales of $298.5 million and net earnings from continuing operations of $28.0 million or $0.35 per share for the fourth quarter ended May 26, 2007. This compares with net sales of $289.3 million and net earnings from continuing operations of $31.9 million or $0.37 per share for the same period last year. Excluding acquisition-related costs, business realignment costs, share-based compensation, and one-time items, non-GAAP net earnings from continuing operations were $35.6 million or $0.45 per share for the fourth quarter as compared with $36.4 million or $0.43 per share for the same period last year.

"Sales were up 3% over last year and were our highest in six years. Gross margins were strong and drove our best earnings per share this year," said Rick Wills, Tektronix Chairman and CEO. "Orders were down 7% impacted by a very difficult comparison to last year's fourth quarter."

Instruments business orders were up 3% and sales were up 10% from last year. Orders were strong in all geographies except Japan which declined in the quarter. "Orders were especially good in our two newer product categories -- signal sources, where we successfully launched our new AWG5000 and in spectrum analyzers where demand continues to be exceptionally strong," continued Wills.

Orders in the Communications business were down 26% year-over-year although they improved 17% sequentially. "Orders were again impacted by continued weakness in the overall market and by a difficult comparison to this quarter last year where we had several large strategic network management wins," commented Wills. Sales were down 17% over last year on lower orders and a sequential increase in backlog.

"This was another great quarter for new products in the Instruments business with the introduction of the MSO4000, a new family of mixed signal oscilloscopes which represents an expansion of our leading oscilloscope offering and sets a new performance benchmark for this class of product. In addition, we introduced the AWG5000 -- an extension of our recently introduced arbitrary waveform generator platform that uniquely addresses digital RF technologies," said Wills. "In the Communications business, we expanded our VoIP monitoring solution to offer active test capability and the ability for service providers and cable companies to extend VoIP management services to their enterprise customers. In addition, we continued to execute our strategy with the addition of several new customers."

Full Year Results

For the fiscal year ended May 26, 2007, Tektronix reported net sales of $1.105 billion and net earnings from continuing operations of $87.3 million or $1.07 per share. This compares with net sales of $1.040 billion and net earnings from continuing operations of $90.9 million or $1.08 per share for the prior fiscal year. Excluding acquisition-related costs, business realignment costs, share-based compensation, and one-time items, non-GAAP net earnings from continuing operations were $124.9 million or $1.53 per share for the fiscal year, as compared with $114.6 million or $1.36 per share for the prior fiscal year.

"This was a strong year for Tektronix in many ways. Our orders and sales were the highest in six years. Excluding share-based compensation, we saw very good earnings per share growth in fiscal 2007," said Wills. "Orders in our Instruments business were especially strong driven by our general purpose test products which grew over 15% year-over-year, and we introduced an unprecedented number of major products. In our Communications business, we grew sales 4% in a difficult market environment and continued to deliver market-leading solutions. Overall, we continued to take market share in virtually all of our product categories according to preliminary external market data."

"Looking forward, we believe we have the strongest portfolio of products in our history and a pipeline of future products that will continue to build our product leadership position. In spite of continuing challenges in the communications market we are also encouraged by the continued success we are having with communications customers and the market-leading solutions we offer to support the technology transition to next-generation, converged networks. And, we have a balanced focus on growth and on delivering value to our shareholders as we continue to execute on our proven business strategy," concluded Wills.

First Quarter Guidance

For the first quarter of fiscal 2008, the company expects net sales to be approximately $280 - $290 million. Earnings per share from continuing operations are expected to be between $0.36 and $0.40 before mostly non-cash acquisition-related costs, business realignment costs, one-time items and share-based compensation expense.

  Recent highlights include the following:

  New product introductions, including:

  -- The availability of the new MSO4000, an all-in-one tool for embedded
     design debug which sets a new benchmark for performance and usability
     for mixed signal oscilloscopes.  This new product family combines the
     capabilities of an advanced real-time oscilloscope and logic analyzer
     with the breakthrough Wave Inspector waveform search engine into one
     small and lightweight portable device.

  -- The introduction of the new AWG5000 Series of Arbitrary Waveform
     Generators -- the performance leading generator for testing mixed
     signal devices -- providing engineers with a signal generator for both
     baseband and IF test needs of digital RF technologies in a single
     instrument.

  -- The introduction of the PQA500 Picture Quality Analyzer, a new
     generation picture quality analysis tool for digital video test.
     Incorporating eight new Tektronix patents, the PQA500 provides the most
     complete suite of measurement and diagnostic tools for picture quality
     analysis including full support of high definition formats.

  -- The introduction of new capabilities for the MTS400 Series MPEG Test
     Systems, including enhanced support for IPTV, Video over IP and DTV
     which will significantly advance the development and deployment of
     next-generation video networks and services.

  -- The expansion of the Active Assurance active test solutions to
     include new active test probes and capabilities that enable service
     providers and cable companies to deploy, monitor and maintain VoIP
     services for their enterprise customers.

  -- The availability of the newest release of the Spectra2 diagnostic test
     solution with new IMS and converged network enhancements for network
     operators and equipment manufacturers developing platforms and service
     offerings for VoIP, IMS and converged networks.

  -- The enhancement of the RF Scout Interference Hunter tool's applications
     to include a radio frequency benchmarking capability, enabling
     competitive measurements of carrier network quality and coverage.

  Key customer wins, including:

  -- The decision by Telkomsel to extend its existing Tektronix test
     infrastructure to include a test platform comprising Tektronix'
     K1297-G35 and Spectra2 equipment to address mobile network element
     simulation and load testing before live network deployment.

  -- The expansion of Tektronix' association with Vodafone Italia to provide
     the Beamer customer experience management product for the network
     operator's 2.5G/3G mobile data services.

  -- The announcement that the China Academy of Broadcasting Science (ABS)
     standardized on new Tektronix instruments for its Digital TV and high
     definition standards development, compliance testing and certification.
     ABS is the broadcasting R&D institution of the Chinese government that
     defines and develops the nation's technical standards for FM radio,
     Digital Audio Broadcasting, satellite broadcasting, CATV and HDTV.

  Product awards, including:

  -- The RSA6100A Series Real-Time Spectrum Analyzers received the Editor's
     Choice Award in Electronic Engineering Times-China (EE Times-China)
     Annual Creativity in Electronics (ACE) Awards for the most significant
     technical solution in the past 12 months.  The editors evaluated
     224 products from 83 companies to determine which would best enable
     China's design engineers to develop advanced electronics.

  -- The new WFM 7120/7020/6120 video waveform monitors introduced at the
     National Association of Broadcasters (NAB) tradeshow in April were
     awarded a 2007 STAR (Super Technology Award Recipient).  The award
     selection is determined by the editorial staff of TV Technology
     magazine based upon a review of new products at the NAB2007 convention.

  In addition,

  -- Tektronix was named a recipient of Intel Corporation's Preferred
     Quality Supplier (PQS) award for outstanding performance in providing
     products and services deemed essential to Intel's success.

  -- Tektronix was named a finalist for the 2007 Vodafone Global Supplier
     Performance Awards which recognize suppliers who have demonstrated
     understanding of Vodafone's needs and delivered excellent service and
     value.

In addition, today Tektronix declared a quarterly cash dividend of $0.06 per share on the outstanding common shares of the Company, payable on July 30, 2007 to shareholders of record as of the close of market on July 6, 2007.

Tektronix will be discussing its fourth quarter results and future guidance on a conference call today, beginning at 1:30 p.m. Pacific. A live Webcast of the conference call will be available at http://www.tektronix.com/ir. A replay of the Webcast will be available at the same Web site for one year.

Tektronix presents non-GAAP measures of net earnings and net earnings per share from continuing operations that exclude the effects of acquisition-related costs, business realignment costs, share-based compensation and one-time items. The "Reconciliation of GAAP to Non-GAAP Results" reconciles net earnings in accordance with generally accepted accounting principles (GAAP) to the non-GAAP net earnings. Tektronix presents non-GAAP net earnings to help readers differentiate the results of ongoing activity from results that include acquisition-related costs, business realignment costs, share-based compensation and one-time items. Some of these items pertain to events that have not yet occurred and are not possible to ascertain with a reasonable degree of accuracy. Therefore, no reconciliation to GAAP for projected amounts is provided. In addition, in line with common industry practice and in order to enable comparability with other technology companies, guidance for non-GAAP net earnings excludes the effects of share-based compensation under FAS123R. Management of Tektronix uses these non-GAAP measures to evaluate the Company's results of operations and for forecasting purposes, as well as to compensate employees.

Statements and information in this press release that relate to future events or results (including the Company's statements and expectations regarding sales and earnings per share, markets, market position and market growth opportunities, strategic direction and the introduction of 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; current and future business conditions in the electronics, communications, computer and advanced technologies industries; changes in order rates and customer cancellations, including changes in seasonal buying habits and timing of large orders; competitive factors, including pricing pressures, loss of key employees, technological developments and new products offered by competitors; changes in product and sales mix, and the related effects on gross margins; customer acceptance of large orders with delayed acceptance criteria; the Company's ability to deliver a timely flow of competitive new products, and market acceptance of these products; risks related to the implementation of an upgrade to our information technology systems; the availability of parts and supplies from third-party suppliers on a timely basis and at reasonable prices; risks associated with compliance with the "Restriction of Hazardous Substances" worldwide regulatory provisions, including the associated conversion of current and future product designs and manufacturing processes to procure or produce lead-free products, and with export regulations; inventory risks due to changes in market demand or the Company's business strategies; 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. The first quarter of fiscal year 2008 includes an extra week.

About Tektronix

Tektronix is a leading supplier of test, measurement, and monitoring products, solutions and services for the communications, computer, and semiconductor industries -- as well as military/aerospace, consumer electronics, education and a broad range of other industries worldwide. With 60 years of experience, Tektronix enables its customers to design, build, deploy, and manage next-generation global communications networks, advanced and pervasive technologies. Headquartered in Beaverton, Oregon, Tektronix has operations in 19 countries worldwide. Tektronix' Web address is http://www.tektronix.com/.

                  Consolidated Statements of Operations

                                    Quarter Ended       Fiscal Year Ended
                                   May 26,  May 27,    May 26,     May 27,
  (In thousands, except per
   share amounts)                  2007      2006        2007       2006

  Net sales                      $298,514  $289,309  $1,105,172  $1,039,870
  Cost of sales                   117,102   115,151     444,032     418,428
    Gross profit                  181,412   174,158     661,140     621,442

  Research and development
   expenses                        50,586    49,570     199,889     183,414
  Selling, general and
   administrative expenses         93,379    84,329     341,131     302,344
  Business realignment costs        6,340     2,304       9,139       9,847
  Acquisition related costs and
   amortization                     1,849     1,618       7,912       8,567
  Loss (gain) on disposition of
   assets, net                        551    (1,514)      1,032      (1,433)

    Operating income               28,707    37,851     102,037     118,703

  Interest income                   3,746     4,224      16,649      13,585
  Interest expense                   (199)     (144)       (566)       (483)
  Other non-operating (expense)
   income, net                     (1,103)      535      (5,285)     (3,377)

    Earnings before taxes          31,151    42,466     112,835     128,428

  Income tax expense                3,112    10,558      25,564      37,536

    Net earnings from continuing
     operations                    28,039    31,908      87,271      90,892

  (Loss) gain from discontinued
   operations, net of income taxes    (95)      (47)      3,137       1,463

  Net earnings                    $27,944   $31,861     $90,408     $92,355

  Earnings per share:
    Continuing operations -
     basic                          $0.36     $0.38       $1.09       $1.09
    Continuing operations -
     diluted                        $0.35     $0.37       $1.07       $1.08

    Discontinued operations -
     basic                           $--       $--        $0.04       $0.02
    Discontinued operations -
     diluted                         $--       $--        $0.04       $0.02

    Net earnings - basic            $0.36     $0.38       $1.13       $1.11
    Net earnings - diluted          $0.35     $0.37       $1.11       $1.09

  Weighted average shares
   outstanding:
     Basic                         77,569    83,681      80,210      83,323
     Diluted                       79,011    85,365      81,815      84,381

  Cash dividend declared per share  $0.06     $0.06       $0.24       $0.24



                       Consolidated Balance Sheets

  (In thousands)                            May 26, 2007       May 27, 2006

  ASSETS
    Current assets:
      Cash and cash equivalents               $95,887            $215,587
      Short-term marketable
       investments                             87,873             121,346
      Trade accounts receivable, net          189,891             174,599
      Inventories                             176,267             156,351
      Other current assets                     72,380              69,002
        Total current assets                  622,298             736,885

    Property, plant and equipment, net        129,914             127,510
    Long-term marketable investments          174,307             103,839
    Deferred tax assets                        21,464                --
    Goodwill, net                             326,468             307,189
    Pension asset                              32,115             239,128
    Other long-term assets                    105,189             119,539
        Total assets                       $1,411,755          $1,634,090

  LIABILITIES AND SHAREHOLDERS'
   EQUITY
    Current liabilities:
      Accounts payable and accrued
       liabilities                           $137,135            $133,323
      Accrued compensation                     75,761              71,718
      Deferred revenue                         89,340              66,677
        Total current liabilities             302,236             271,718

    Deferred income taxes                        --                65,935
    Other long-term liabilities               120,002             108,868

    Shareholders' equity:
      Common stock                            539,470             540,718
      Retained earnings                       545,399             620,465
      Accumulated other comprehensive
       (loss) income                          (95,352)             26,386
        Total shareholders' equity            989,517           1,187,569
        Total liabilities and
         shareholders' equity              $1,411,755          $1,634,090

    Shares outstanding                         78,488              83,719



  Selected Additional Financial Data

                              Quarter Ended            Fiscal Year Ended
  (In thousands,
  except per share
  amounts)             %    May 26,    May 27,   %     May 26,     May 27,
                     Growth   2007      2006   Growth   2007        2006
  Orders Data:

  Orders              (7%) $302,700  $323,858   2%  $1,157,746  $1,129,963

    U.S.              (6%)  111,943   118,893   8%     431,533     400,708
    International     (7%)  190,757   204,965  (0%)    726,213     729,255

    Instruments
     Business          3%   225,865   219,832  11%     903,924     810,942
    Communications
     Business        (26%)   76,835   104,026 (20%)    253,822     319,021


  Sales Data:

  Net Sales            3%  $298,514  $289,309   6%  $1,105,172  $1,039,870

    U.S.              35%   127,570    94,204  14%     412,951     361,688
    International    (12%)  170,944   195,105   2%     692,221     678,182

    Instruments
     Business         10%   238,953   217,339   7%     843,660     788,773
    Communications
     Business        (17%)   59,561    71,970   4%     261,512     251,097


  Reconciliation of
   GAAP to Non-GAAP
   Results:

  Net earnings - GAAP       $27,944   $31,861          $90,408     $92,355
  Discontinued
   operations, net of
   income taxes                  95        47           (3,137)     (1,463)

  Net earnings from
   continuing
   operations                28,039    31,908           87,271      90,892

  Business
   realignment costs          6,340     2,304            9,139       9,847
  Acquisition related
   costs                      6,984     6,399           28,736      27,947
  Gain on sale of
   Nevada City
   property                    --      (1,635)            --        (1,635)
  Share-based
   compensation costs         6,873       --            22,722        --
  Increase to
   environmental
   reserves                    --         --             4,763        --
  Tax effect of above
   items                     (7,666)   (2,528)         (22,785)    (12,447)
  Tax impact from
   resolution of IRS
   Audit                     (4,956)      --            (4,956)       --

  Net earnings - non-
   GAAP                     $35,614   $36,448         $124,890    $114,604

  Diluted EPS - non-
   GAAP                       $0.45     $0.43            $1.53       $1.36


  Income Statement
   Items as a
   Percentage of Net
   Sales:

  Cost of sales                 39%       40%              40%         40%
  Research and
   development
   expenses                     17%       17%              18%         18%
  Selling, general
   and administrative
   expenses                     31%       29%              31%         29%
  Business
   realignment costs             2%        1%               1%          1%
  Acquisition related
   costs and
   amortization                  1%        1%               1%          1%
  Loss (gain) on
   disposition of
   assets, net                   0%       (1%)              0%          0%
  Operating income              10%       13%               9%         11%


  Capital
   Expenditures and
   Depreciation:

  Capital
   expenditures              $7,978    $6,834          $30,076     $36,283
  Depreciation and
   amortization
   expense                   $7,392    $7,128          $29,074     $27,977



  Balance Sheet:                       Quarter      Quarter        Quarter
                                        Ended        Ended          Ended
                                       May 26,     February 24,    May 27,
                                        2007          2007          2006

  Cash and Marketable Investments:
    Cash and cash equivalents         $95,887       $124,379      $215,587
    Short-term marketable
     investments                       87,873         61,632       121,346
    Long-term marketable
     investments                      174,307        159,597       103,839
       Cash and Marketable
        Investments                  $358,067      $345,608      $440,772

  Accounts receivable as a
   percentage of net sales               15.2%         17.4%         14.3%
  Days sales outstanding                 57.9          59.3          54.9
  Countback days sales outstanding       47.4          52.6          46.6

  Inventory as a percentage of net
   sales                                 14.4%         15.5%         12.4%
  Inventory turns                         2.7           2.6           3.2



                         Discontinued Operations

                                        Quarter Ended   Fiscal Year Ended
                                       May 26, May 27,   May 26,   May 27,
  (In thousands)                        2007    2006      2007      2006

  Loss on sale of VideoTele.com
    (less applicable income tax
      benefit of $0, $0,
      $1 and $1)                       $--     $--        $(1)      $(3)

  Gain (loss) on sale of optical
   parametric test business
    (less applicable income tax
      benefit (expense) of $1,
      $41, ($8) and  ($338))            (1)    (76)        15       629

  Gain (loss) on sale of Gage
    (less applicable income tax
      benefit (expense) of $0,
      ($2), $0 and ($408))               --      3         (1)      759

  Gain (loss) on sale of Color Printing
   and Imaging (less applicable income
   tax benefit (expense) of ($32),
   ($14), ($1,764) and ($42))            (94)    26      3,124        78

  (Loss) gain from discontinued
   operations, net of tax              $(95)  $(47)    $3,137    $1,463

First Call Analyst:
FCMN Contact: beth.p.woodward@tektronix.com

SOURCE: Tektronix, Inc.

CONTACT: media, Alisha Goff, +1-503-627-7075, alisha.goff@tektronix.com,
or analysts, Paul Oldham, +1-503-627-4027, paul.r.oldham@tektronix.com, both
of Tektronix, Inc.


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