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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

(Mark One)

x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

 

     For the quarterly period ended December 27, 2002

 

OR

 

¨   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

 

     For the transition period from                      to                     

 

Commission file number 1-5517

 

 

SCIENTIFIC-ATLANTA, INC.

(Exact name of Registrant as specified in its charter)

 

Georgia

  

58-0612397

(State or other jurisdiction of

incorporation or organization)

  

(I.R.S. Employer

Identification Number)

 

5030 Sugarloaf Parkway

Lawrenceville, Georgia

  

30044

(Address of principal executive offices)

  

(Zip Code)

 

770-236-5000

(Registrant’s telephone number, including area code)

 

 

Indicate by check x 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 that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x  No  ¨

 

Indicate by check mark x whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes  x  No  ¨

 

As of February 7, 2003, Scientific-Atlanta, Inc. had outstanding 152,867,977 shares of common stock.

 

 

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(IN THOUSANDS, EXCEPT PER SHARE DATA)

(UNAUDITED)

 

    

Three Months Ended

     

Six Months Ended

  
    

December 27,

2002

     

December 28,

2001

     

December 27,

2002

     

Decembera 28,

2001

  

SALES

   

$

352,008

 

   

$

418,194

 

   

$

663,563

 

   

$

828,291

 

    
  
  
  

COSTS AND EXPENSES

                                    

Cost of sales

   

 

240,638

 

   

 

278,567

 

   

 

439,469

 

   

 

557,483

 

Sales and administrative

   

 

48,009

 

   

 

46,392

 

   

 

95,033

 

   

 

91,080

 

Research and development

   

 

36,808

 

   

 

35,550

 

   

 

76,623

 

   

 

73,197

 

Restructuring

   

 

2,566

 

   

 

18,737

 

   

 

11,235

 

   

 

18,737

 

Interest expense

   

 

247

 

   

 

133

 

   

 

1,097

 

   

 

216

 

Interest income

   

 

(5,817

)

   

 

(5,803

)

   

 

(11,682

)

   

 

(11,912

)

Other (income) expense, net

   

 

6,604

 

   

 

(14,955

)

   

 

12,118

 

   

 

(16,312

)

    
  
  
  

Total costs and expenses

   

 

329,055

 

   

 

358,621

 

   

 

623,893

 

   

 

712,489

 

    
  
  
  

EARNINGS BEFORE INCOME TAXES

   

 

22,953

 

   

 

59,573

 

   

 

39,670

 

   

 

115,802

 

PROVISION FOR (BENEFIT FROM) INCOME TAXES

                                    

Current

   

 

15,879

 

   

 

22,277

 

   

 

27,203

 

   

 

38,224

 

Deferred

   

 

(8,074

)

   

 

(1,859

)

   

 

(13,695

)

   

 

1,312

 

    
  
  
  

NET EARNINGS

   

$

15,148

 

   

$

39,155

 

   

$

26,162

 

   

$

76,266

 

    
  
  
  

EARNINGS PER COMMON SHARE

                                    

BASIC

   

$

0.10

 

   

$

0.25

 

   

$

0.17

 

   

$

0.49

 

    
  
  
  

DILUTED

   

$

0.10

 

   

$

0.25

 

   

$

0.17

 

   

$

0.48

 

    
  
  
  

WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING

                                    

BASIC

   

 

154,380

 

   

 

156,072

 

   

 

154,754

 

   

 

157,042

 

    
  
  
  

DILUTED

   

 

154,754

 

   

 

157,559

 

   

 

155,232

 

   

 

158,738

 

    
  
  
  

DIVIDENDS PER SHARE PAID

   

$

0.01

 

   

$

0.01

 

   

$

0.02

 

   

$

0.02

 

    
  
  
  

 

SEE ACCOMPANYING NOTES

 

2 of 20

 

SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(IN THOUSANDS, EXCEPT SHARE DATA)

(UNAUDITED)

 

    

December 27,

2002

   

June 28,

2002

  

ASSETS

                

CURRENT ASSETS

                

Cash and cash equivalents

   

$

396,545

   

$

376,429

 

Short-term investments

   

 

386,666

   

 

354,848

 

Receivables, less allowance for doubtful accounts of $7,629 at December 27 and $5,723 at

  June 28

   

 

248,471

   

 

261,149

 

Inventories

   

 

143,671

   

 

217,452

 

Deferred income taxes

   

 

55,397

   

 

47,908

 

Other current assets

   

 

29,051

   

 

50,608

 

    
  

TOTAL CURRENT ASSETS

   

 

1,259,801

   

 

1,308,394

 

    
  

PROPERTY, PLANT AND EQUIPMENT, at cost

                

Land and improvements

   

 

22,103

   

 

21,943

 

Building and improvements

   

 

81,970

   

 

78,464

 

Machinery and equipment

   

 

247,477

   

 

241,420

 

    
  
    

 

351,550

   

 

341,827

 

Less—Accumulated depreciation and amortization

   

 

138,584

   

 

119,407

 

    
  
    

 

212,966

   

 

222,420

 

    
  

GOODWILL

   

 

219,666

   

 

195,645

 

INTANGIBLE ASSETS

   

 

54,593

   

 

48,909

 

NON-CURRENT MARKETABLE SECURITIES

   

 

7,421

   

 

28,498

 

DEFERRED INCOME TAXES

   

 

28,804

   

 

29,861

 

OTHER ASSETS

   

 

67,964

   

 

80,900

 

    
  

TOTAL ASSETS

   

$

1,851,215

   

$

1,914,627

 

    
  

LIABILITIES AND STOCKHOLDERS’ EQUITY

                

CURRENT LIABILITIES

                

Short-term debt and current maturities of long-term debt

   

$

874

   

$

1,739

 

Accounts payable

   

 

117,363

   

 

170,308

 

Accrued liabilities

   

 

118,655

   

 

145,606

 

Income taxes currently payable

   

 

15,474

   

 

—  

 

    
  

TOTAL CURRENT LIABILITIES

   

 

252,366

   

 

317,653

 

    
  

LONG-TERM DEBT, LESS CURRENT MATURITIES

   

 

8,822

   

 

8,600

 

OTHER LIABILITIES

   

 

144,035

   

 

151,583

 

STOCKHOLDERS’ EQUITY

                

Preferred stock, authorized 50,000,000 shares; no shares issued

   

 

—  

   

 

—  

 

Common stock, $0.50 par value, authorized 350,000,000 shares;

  issued 164,992,376 shares at December 27 and at June 28

   

 

82,496

   

 

82,496

 

Additional paid-in capital

   

 

514,240

   

 

530,712

 

Retained earnings

   

 

1,056,244

   

 

1,033,168

 

Accumulated other comprehensive income (loss), net of tax expense (benefit) of $7,053 at December 27 and $(121) at June 28

   

 

11,507

   

 

(197

)

    
  
    

 

1,664,487

   

 

1,646,179

 

Less—Treasury stock, at cost (10,548,571 shares at December 27

  and 8,361,862 shares at June 28)

   

 

218,495

   

 

209,388

 

    
  
    

 

1,445,992

   

 

1,436,791

 

    
  

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   

$

1,851,215

   

$

1,914,627

 

    
  

 

SEE ACCOMPANYING NOTES

 

3 of 20

 

SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

 

 

   &nb