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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

Form 10-Q

(Mark-One)

For the quarterly period ended June 30, 2002.

OR

For the transition period from            to            

Commission file number 001-14617

ANDREW CORPORATION
(Exact name of Registrant as specified in its charter)

10500 W. 153^rd Street, Orland Park, Illinois 60462
(Address of principal executive offices and zip code)

(708) 349-3300
(Registrant's telephone number, including area code)

No Change
(Former name, former address and former fiscal year, if changed since last report)

        Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period as the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date.

        Common Stock, $.01 Par Value—98,081,793 shares as of August 9, 2002

INDEX
ANDREW CORPORATION

2

ANDREW CORPORATION
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)

See Notes to Consolidated Financial Statements

3

ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share amounts)

See Notes to Consolidated Financial Statements

4

ANDREW CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)

See Notes to Consolidated Financial Statements

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ANDREW CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A—BASIS OF PRESENTATION

        The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended June 30, 2002 are not necessarily indicative of the results that may be expected for the year ending September 30, 2002. For further information, refer to the consolidated financial statements and footnotes thereto included in the company's annual report on Form 10-K for the year ended September 30, 2001.

NOTE B—EARNINGS PER SHARE

        The following table sets forth the computation of basic and diluted earnings per share:

        Options to purchase 5,299,732 shares of common stock, at exercise prices ranging from $16.63—$38.17 per share, were not included in the computation of diluted earnings per share for the June 2002 because the options' exercise prices were greater than the average market price of the common shares. Options to purchase 4,430,744 shares of common stock, at exercise prices ranging from $17.81—$38.17 per share, were not included in the diluted earnings per share calculation for June 30, 2001 because the options' exercise prices were higher than the average market price of the common shares.

NOTE C—COMPREHENSIVE INCOME

        Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" requires the company to report foreign currency translation adjustments as well as the change in fair value of derivatives designated as hedges, as a component of other comprehensive income.

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Comprehensive income for the three months ended June 30, 2002 and 2001 amounted to $12,416,000 and $8,601,000, respectively. Comprehensive income for the nine months ended June 30, 2002 and 2001 amounted to $29,578,000 and $32,190,000, respectively.

NOTE D—ADOPTION OF NEW ACCOUNTING POLICIES

        At the beginning of fiscal year 2002, the company adopted the Financial Accounting Standards Board Statements of Financial Accounting Standards (FASB) No. 141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets. Under the new rules, goodwill will no longer be amortized but will be subject to annual impairment tests. Other intangible assets will continue to be amortized over their useful lives. Goodwill amortization included in sales and administrative expense in fiscal years 2001, 2000 and 1999 was $4.6 million, $4.0 million and $2.0 million, respectively. Goodwill amortization included in sales and administrative expense for the third quarter and first nine months of fiscal year 2001 was $1.2 million and $3.4 million, respectively. Upon adoption of this standard the company was required to perform an impairment test of goodwill. This test showed no impairment of goodwill. The adoption of the provisions for amortization of intangible assets did not impact the company's amortization of these assets. The following table discloses pro forma results for net income and earnings per share as if the non-amortization of goodwill provisions of FASB Statement No. 142 were adopted at the beginning of fiscal year 2001.

NOTE E—RECENTLY ISSUED ACCOUNTING POLICIES

        In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 143, Accounting and Reporting for Obligations Associated with the Retirement of Tangible Long-lived Assets and the Associated Asset Retirement Costs. In August 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 144, Accounting and Reporting for the Impairment or Disposal of Long-lived Assets. The company will adopt these accounting standards beginning in fiscal year 2003. In April 2002, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of Statement 13, and Technical Corrections. The statement modifies reporting of extinguishments of debt and amends accounting for leases. The company will adopt this accounting standard beginning in fiscal year 2003. The company does not expect that the adoption of these standards will have a material effect on the company's financial statements.

        In June 2002, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 146, accounting for costs associated with exit or disposal activities. The provisions of this statement will be effective for exit or disposal activities initiated after December 31, 2002, though the company may elect to adopt these provisions early.

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NOTE F—SALE OF EQUITY INVESTMENTS AND TELECOMMUNICATIONS COMPANY

        On December 4, 2001, the company completed the sale of its interest in a group of Russian telecommunications companies. The company received $50.3 million, net of $0.3 million of Russian withholding tax, for the sale of these investments. These investments were sold to Antel Holdings Ltd., a newly formed subsidiary of Group Menatep, a Russian financial holding company. The company sold the following investments: 49% of ZAO Rascom, 45% of ZAO Metrocom, 45% of MAcommnet, 64.4% of Magistral Telecom and 99.7% of ZAO MKS. As part of this transaction, the company also sold its wholly owned, U.S. based, international telecommunications carrier, Antel. This sale resulted in an $8.7 million pre-tax gain and an after-tax gain of $7.3 million or $.09 a share.

        The company guaranteed a line of credit with ABN-AMRO used by these ventures. As of September 30, 2001, the company had guaranteed $53.5 million, of which $47.3 million was outstanding. The company no longer guarantees borrowings for the ventures that were sold. The company still has investments totaling $3.9 million in telecommunication ventures. The company guarantees a $1.5 million line of credit used by these remaining ventures. As of June 30, 2002, $1.1 million was outstanding under this line of credit. The company is in the process of considering possible options that may involve the divestiture of all or a significant portion of these ventures.

NOTE G—AQUISITION OF BUSINESSES

        On June 4, 2002, the company completed its acquisition of Celiant Corporation. Celiant designs, manufactures and markets radio frequency (RF) power amplifiers for use in wireless communications networks for cellular, PCS, 2G and 3G base stations. The company paid $481.0 million for Celiant. This consisted of $203.1 million in cash, 16,278,805 shares of the company's stock valued at $266.6 million and $11.3 million of acquisition related costs. The 16,278,805 shares were valued at $16.38, the February 15, 2002 closing price, the last trading day before the merger agreement was signed. These 16,278,805 shares represent 16.6% of the company's total shares outstanding. The assets and liabilities of Celiant were recorded based upon a preliminary estimate of fair value. These estimates were determined by management and by an independent appraisal using currently available information. A preliminary allocation of the purchase price is as follows:

        Celiant's results of operations have been included with the company's since June 4, 2002. Pro forma results of operations assuming the acquisition of Celiant occurred on October 1, 2001 are as follows:

Three Months Ended June 30, 2002
(in thousands, except per share amounts)

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Nine Months Ended June 30, 2002
(in thousands, except per share amounts)

        The pro forma adjustments consist of interest expense net of applicable taxes and the non-deductible amortization of the intangible assets acquired in the Celiant acquisition. The company estimates that it would have had to borrow an additional $63.0 million in notes payable if it completed the Celiant acquisition on October 1, 2001. The calculation of the pro forma adjustments is as follows.

Pro Forma Adjustment Detail

        Celiant was formed by Lucent Technologies' contribution of its power amplifier business to Celiant. Celiant started operations on June 1, 2001. Prior to this, Celiant did not operate as a separate business unit of Lucent and thus did not produce separate financial statements. Because separate financial statements do not exist for Celiant, for periods prior to June of 2001, the company is unable to provide pro forma financial data for fiscal year 2001.

        In the third quarter of 2002, the company also completed two smaller acquisitions. On April 24, 2002, the company acquired Quasar Microwave Technology Ltd. for $14.9 million. Quasar Microwave Technology Ltd. is located in Devon, England and is a manufacturer of microwave and millimeter wave radio components. On April 15, 2002, the company acquired selected assets of Antenna Bad Blankenburg for $3.0 million dollars. Antenna Bad Blankenburg is located in Bad Blankenburg, Germany and is a manufacturer of telematics equipment for the auto industry. These acquisitions were accounted for using the purchase method of accounting and resulted in $11.6 million of goodwill and $4.4 million of intangible assets. Pro forma results of operations, assuming these transactions occurred at the beginning of the fiscal year, are not materially different from the reported results of operations.

NOTE H—SEGMENT

        The company manages its business as one operating segment. This segment serves commercial markets, including coaxial cable, terrestrial microwave systems, wireless accessories and other products and services.

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ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

        Sales for the quarter ended June 30, 2002 were $214.9 million, 12.3% lower than the same period last fiscal year and up 7.6% from the quarter ending March 31, 2002. With the exception of Europe, sales decreased in all major geographic areas compared to the third quarter of last year. These decreases were mostly due to the continued trend of weak telecom equipment spending. Sequentially, sales in the U.S. and Europe increased, while sales in Canada, Latin America, and the Asia-Pacific region declined.

        Wireless infrastructure sales were up from the previous quarter, with growth in both the U.S. and Europe. U.S. wireless infrastructure sales included one month of Celiant sales, which accounted for a majority of the U.S. increase. Compared to the third quarter of last year, wireless infrastructure sales were down as a whole, with growth only in Europe. A significant portion of this decrease was in China. Wireless infrastructure sales were exceptionally strong in China during the third and fourth quarters of 2001. Fixed telecommunication sales were down both sequentially and compared to last year, but did show strong growth in the European market compared to last quarter and the previous year. Sales in the broadcast and government market increased compared to last quarter and compared to last year, due to growth in the U.S. and Canada. Wireless accessories and telematics sales have increased significantly compared to the second quarter and compared to last year.

        On a product line basis, cable and cable accessories remained flat compared to the previous quarter. Compared to last year, European sales increased while sales in other regions declined. Terrestrial microwave sales increased sequentially during the quarter, but remained down when compared to the same period last year. Other antennas and support product sales increased for the current quarter, boosted by power amplifier sales resulting from the Celiant acquisition. Due to the Celiant acquisition the company expects that power amplifier sales and sales to Lucent Technologies will represent a significant portion of the company's total sales in the future. Compared to last year, there was strong growth in power amplifiers, government antennas, and broadcast products, but not enough to offset decreases in equipment shelters, earth station antennas, installation services, and telecom services.

        Sales for the nine months ended June 30, 2002, were $638.1 million, 16.9% lower than the same period last fiscal year. The same trend of decreased spending on wireless infrastructure and telecommunications networks that has negatively impacted the third quarter has negatively impacted the entire fiscal year of 2002. For the first nine months of fiscal year 2002, sales to the wireless infrastructure and fixed telecommunications network markets have decreased in all geographic regions. Sales to the broadcast and government market showed modest growth, largely due to strong sales of broadcast products in the U.S. in the first two quarters of the fiscal year. Wireless accessories decreased overall despite modest growth in telematics sales. From a product standpoint, coaxial cable and terrestrial microwave sales decreased in all geographic regions. Other antennas and support products decreased due to a reduction in equipment shelters, field services, earth station antennas and base station antennas. Other products included in this category, such as power amplifiers and broadcast products, grew significantly.

        Gross profit as a percentage of sales for the third quarter decreased to 26.3% from 30.1% for the third quarter of last year. Pricing pressure mainly drove the decrease in gross profit. Average product prices were 5% to 12% lower than last year. Product mix also had a slight negative impact on gross profit. These factors were somewhat offset by continued cost reductions and efficiency improvements. The Celiant acquisition had a slight negative impact on gross profit for the quarter. Currently, Celiant's gross profit margins are slightly lower than the overall gross profit margin of the company. Despite the increased pricing pressure the company was able to keep the gross profit percentage flat at the same

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26.3% as the second quarter largely due to improvements in manufacturing efficiencies and by cost reductions.

        Operating expenses for the third quarter decreased $2.1 million or 3.8% compared to last year. The decrease in operating expenses was driven by a 17.2% decrease in sales and administrative expenses and was partially offset by a $4.0 million or 35.6% increase in research and development. Celiant accounted for $2.1 million of the increase in research and development. The remaining $1.9 million increase was due to the company's increased spending on power amplifiers, base station antennas and repeaters. Sales and administrative expense decreased 17.2% or $7.4 million from last year. Excluding Celiant, sales and administrative expenses declined $9.0 million or 20.9% from last year. This decrease is due to the company's on going cost reduction efforts, which have resulted in decreases in headcount, salaries and discretionary spending. Third quarter selling and administrative expenses contain $0.4 million of severance costs relating to the company's cost reduction efforts. Also contributing to the decrease in administrative expenses were lower bonuses, profit sharing and the elimination of expense related to the company's Russian telecommunication ventures, which were sold in December 2001. The decrease in selling and administrative expenses was also due to the company adopting the non-amortization provisions of FASB Statement No. 142. Goodwill amortization included in administrative expenses was $1.2 million for the third quarter of fiscal year 2001. In the third quarter, the company started reporting intangible amortization separately. The majority of this amortization expense is due to the $42.8 million of intangible assets acquired in the Celiant acquisition.

        On a year to date basis, total operating expenses for the nine months ending June 30, 2002 decreased $11.0 million or 6.8%. This decrease was driven by a $19.0 million or 14.8% decrease in sales and administrative expense. Excluding the impact of Celiant, selling and administrative expenses have decreased 16.1% or $20.5 million. The company has taken steps throughout the year to reduce operating expenses, including staffing reductions, hiring freezes, an early retirement program and a reduction in discretionary spending. Year to date operating expenses include $1.9 million of severance related costs due to these staff reductions.    While these cost cutting efforts have reduced expenses, the company believes that more significant cost cutting efforts are necessary. The ongoing trend of weak capital expenditures in the wireless infrastructure and telecom markets have led the company to consider additional cost cutting efforts. On July 18, 2002 the company announced that it expects to incur charges ranging from $60 to $100 million as a result of these cost reduction efforts. The company has set a goal of reducing annual operating costs by $30.0 million through the possible consolidation of facilities, exiting non-strategic business units, and identifying further reductions in discretionary spending. The company anticipates finalizing these plans in the fourth quarter. While these restructuring efforts will negatively impact the company's short-term fi