BEAVERTON, Ore., Dec. 16, 2004 - Tektronix, Inc. (NYSE: TEK) today reported net sales of $266.8 million and a net loss from continuing operations of $2.6 million or $0.03 per share for the second quarter ended November 27, 2004. This compares with net sales of $217.9 million and net earnings from continuing operations of $36.5 million or $0.42 per share for the same period last year. Excluding acquisition-related costs, business realignment and one-time items, net earnings from continuing operations were $34.4 million or $0.39 per share for the second quarter ended November 27, 2004, as compared with $19.3 million or $0.22 per share for the same period last year. Included in acquisition-related costs for the second quarter ended November 27, 2004 are non-cash expenses related to the acquisition of Inet Technologies, Inc., including the write-off of in-process research and development, amortization of acquisition-related items and other acquisition-related expenses. Included in acquisition-related credits for the same period last year is a non-cash gain resulting from the settlement of the historical defined benefit pension plan at our subsidiary in Japan.
"We are pleased with our performance this quarter. We saw solid order growth across most of our product lines and sales growth of over 20%. We were especially pleased with the performance of our general purpose products and the contribution from the acquisition of Inet Technologies," said Rick Wills, Tektronix Chairman and CEO. "Regionally, our order growth continued to be strongest in Asia/Pacific and Japan."
"We are now well into the integration of Inet Technologies, which we acquired on September 30 of this year," continued Wills. "The acquisition was a significant strategic step and will allow us to expand our addressable market."
"In addition, during the quarter we continued to grow our core business with the introduction of the TPS2000 digital storage oscilloscope with an industrial power application - marking our entrance into the industrial power market. And, we continued our investment in our adjacent product categories with the introduction of the RSA3408A, a dramatic advancement in real-time spectrum analysis, just after the close of the quarter."
For the third quarter of fiscal 2005, including Inet, the company expects net sales to be $250 - $260 million and earnings per share from continuing operations of $.26 to $.30, excluding one-time items and acquisition-related costs.
"In conclusion, we have had a great first half of the year with the acquisition of Inet and the resulting integration that is well underway; a very strong product flow that we expect to pick up even more over the coming quarters; strong sales growth and solid business results," concluded Wills.
Highlights
Recent highlights include the following:
- The introduction of the RSA3408A, a new high performance Real-Time Spectrum Analyzer providing real-time triggering and capture capabilities, and enhanced resolution yielding a 2000-fold improvement in the analysis of power and frequency changes over time.
- We also introduced an industry-leading product gained through the Inet acquisition, the Spectra2, that enables large scale communications networks to test and integrate VoIP.
- The purchase of several Digital Phosphor Oscilloscopes (DPO) by LG Electronics, a major electronic supplier worldwide, to achieve fast and detailed testing and accurate measuring with reliable quality for the latest digital TV designs.
- The selection by QLogic Corp., a leader in designing and developing storage area networking (SAN) infrastructure components, of Tektronix' Communications Signal Analyzer (CSA8200) system to drive development of 4 Gigabit per second (4G) Fibre Channel products and to support future development projects.
- The selection of the TDS6000B family of digital storage oscilloscopes by the editors and readers of EE Times and eeProductCenter as the Ultimate Product in the Test & Measurement category for the second quarter of 2004.
- The availability of the TPS2000 Series Digital Storage Oscilloscopes (DSOs) and a complementary industrial power application that will improve the productivity of industrial power designers and technicians by providing more of the capabilities they need within a single instrument.
- A partnership with Vqual Ltd., a UK-based video software developer, to develop and market software solutions that enable consumer electronics manufacturers, professional video equipment manufacturers, and mobile phone manufacturers to more rapidly bring to market devices, equipment and services that implement next generation video standards.
- The sponsorship of a team of Cornell University engineering faculty and students to build a unique and innovative autonomous off-road robotic vehicle for entry into the Defense Advanced Research Projects Agency (DARPA) Grand Challenge.
In addition, today Tektronix declared a quarterly cash dividend of $0.06 per share on the outstanding common shares of the Company, payable on January 24, 2005 to shareholders of record as of the close of market on January 7, 2005.
Tektronix will be discussing its second quarter results and future guidance on a conference call today, beginning at 1:30 p.m. Pacific Standard Time (PST). A live Webcast of the conference call will be available at www.tektronix.com/ir. A replay of the Webcast will be available at the same Web site for one year.
Forward-Looking Statements
Tektronix presents pro forma measures of net earnings and net earnings per share from continuing operations that exclude the effects of business realignment and one-time items. The "Reconciliation of Pro Forma Measures to GAAP" reconciles the results of operations in accordance with generally accepted accounting principles (GAAP) to the pro forma results of operations. Tektronix presents pro forma results of operations to help readers differentiate the results of ongoing operating activity from results that include business realignment costs and one-time items. Management of Tektronix uses these pro forma measures to evaluate the Company's results of operations and for forecasting purposes.
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, market position and market growth opportunities, and 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; business conditions in the electronics, communications, computer and advanced technologies industries, changes in order rates and customer cancellations, including changes in seasonal buying habits; competitive factors, including pricing pressures, technological developments and new products offered by competitors; changes in product and sales mix, and the related effects on gross margins; the Company's ability to deliver a timely flow of competitive new products, and market acceptance of these products; the availability of parts and supplies from third-party suppliers on a timely basis and at reasonable prices; inventory risks due to changes in market demand or the Company's business strategies; resolution of indemnities relating to certain acquisitions and divestitures; changes in effective tax rates; currency fluctuations; the ability to develop effective sales channels; and risks associated with the integration of Inet Technologies including realization of expected growth opportunities. 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 financial results tables for the quarter are available in the Second Quarter Fiscal 2005 Financial Report. The complete printable version of the press release and financial results are available in the Second Quarter Fiscal 2005 Report.
About Tektronix
Tektronix, Inc. is a test, measurement, and monitoring company providing measurement solutions to the communications, computer, and semiconductor industries worldwide. With more than 55 years of experience, Tektronix enables its customers to design, build, deploy, and manage next-generation global communications networks and advanced technologies. Headquartered in Beaverton, Oregon, Tektronix has operations in 19 countries worldwide. Tektronix' Web address is www.tektronix.com.
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