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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 March 28, 2003

 

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 April 25, 2003, Scientific-Atlanta, Inc. had outstanding 148,991,442 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

     

Nine Months Ended

  
    

March 28, 2003

     

March 29, 2002

     

March 28, 2003

     

March 29, 2002

  

SALES

   

$

382,630

 

   

$

452,690

 

   

$

1,046,193

 

   

$

1,280,981

 

    
  
  
  

COSTS AND EXPENSES

                                    

Cost of sales

   

 

252,024

 

   

 

285,324

 

   

 

691,493

 

   

 

842,807

 

Sales and administrative

   

 

46,508

 

   

 

52,326

 

   

 

141,541

 

   

 

143,406

 

Research and development

   

 

35,728

 

   

 

37,505

 

   

 

112,351

 

   

 

110,702

 

Restructuring

   

 

3,555

 

   

 

3,788

 

   

 

14,790

 

   

 

22,525

 

Interest expense

   

 

—

 

   

 

376

 

   

 

710

 

   

 

592

 

Interest income

   

 

(4,695

)

   

 

(4,697

)

   

 

(16,377

)

   

 

(16,609

)

Other (income) expense, net

   

 

8,874

 

   

 

11,771

 

   

 

21,379

 

   

 

(4,541

)

    
  
  
  

Total costs and expenses

   

 

341,994

 

   

 

386,393

 

   

 

965,887

 

   

 

1,098,882

 

    
  
  
  

EARNINGS BEFORE INCOME TAXES

   

 

40,636

 

   

 

66,297

 

   

 

80,306

 

   

 

182,099

 

PROVISION FOR (BENEFIT FROM) INCOME TAXES

                                    

Current

   

 

3,645

 

   

 

38,950

 

   

 

30,848

 

   

 

77,174

 

Deferred

   

 

10,171

 

   

 

(16,436

)

   

 

(3,524

)

   

 

(15,124

)

    
  
  
  

NET EARNINGS

   

$

26,820

 

   

$

43,783

 

   

$

52,982

 

   

$

120,049

 

    
  
  
  

EARNINGS PER COMMON SHARE

                                    

BASIC

   

$

0.18

 

   

$

0.28

 

   

$

0.34

 

   

$

0.77

 

    
  
  
  

DILUTED

   

$

0.18

 

   

$

0.28

 

   

$

0.34

 

   

$

0.76

 

    
  
  
  

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING

                                    

BASIC

   

 

151,771

 

   

 

156,439

 

   

 

153,760

 

   

 

156,841

 

    
  
  
  

DILUTED

   

 

152,167

 

   

 

158,338

 

   

 

154,211

 

   

 

158,605

 

    
  
  
  

DIVIDENDS PER SHARE PAID

   

$

0.01

 

   

$

0.01

 

   

$

0.03

 

   

$

0.03

 

    
  
  
  

 

SEE ACCOMPANYING NOTES

 

 

2 of 21

SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(IN THOUSANDS, EXCEPT SHARE DATA)

(UNAUDITED)

 

    

March 28, 2003

   

June 28,

2002

  

ASSETS

                

CURRENT ASSETS

                

Cash and cash equivalents

   

$

342,733

   

$

376,429

 

Short-term investments

   

 

545,745

   

 

354,848

 

Receivables, less allowance for doubtful accounts of $6,853 at March 28 and $5,723 at June 28

   

 

192,898

   

 

261,149

 

Inventories

   

 

130,336

   

 

217,452

 

Deferred income taxes

   

 

43,185

   

 

47,908

 

Other current assets

   

 

14,906

   

 

50,608

 

    
  

TOTAL CURRENT ASSETS

   

 

1,269,803

   

 

1,308,394

 

    
  

PROPERTY, PLANT AND EQUIPMENT, at cost

                

Land and improvements

   

 

22,009

   

 

21,943

 

Building and improvements

   

 

82,670

   

 

78,464

 

Machinery and equipment

   

 

241,173

   

 

241,420

 

    
  
    

 

345,852

   

 

341,827

 

Less—Accumulated depreciation and amortization

   

 

140,656

   

 

119,407

 

    
  
    

 

205,196

   

 

222,420

 

    
  

GOODWILL

   

 

224,885

   

 

195,645

 

INTANGIBLE ASSETS

   

 

52,917

   

 

48,909

 

NON-CURRENT MARKETABLE SECURITIES

   

 

9,038

   

 

28,498

 

DEFERRED INCOME TAXES

   

 

28,439

   

 

29,861

 

OTHER ASSETS

   

 

60,638

   

 

80,900

 

    
  

TOTAL ASSETS

   

$

1,850,916

   

$

1,914,627

 

    
  

LIABILITIES AND STOCKHOLDERS’ EQUITY

                

CURRENT LIABILITIES

                

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

   

$

569

   

$

1,739

 

Accounts payable

   

 

151,743

   

 

170,308

 

Accrued liabilities

   

 

120,843

   

 

145,606

 

Income taxes currently payable

   

 

11,777

   

 

—

 

    
  

TOTAL CURRENT LIABILITIES

   

 

284,932

   

 

317,653

 

    
  

LONG-TERM DEBT, LESS CURRENT MATURITIES

   

 

9,076

   

 

8,600

 

OTHER LIABILITIES

   

 

149,542

   

 

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 March 28 and at June 28

   

 

82,496

   

 

82,496

 

Additional paid-in capital

   

 

511,118

   

 

530,712

 

Retained earnings

   

 

1,081,571

   

 

1,033,168

 

Accumulated other comprehensive income (loss), net of tax expense (benefit) of $10,294 at March 28 and $(121) at June 28

   

 

16,795

   

 

(197

)

    
  
    

 

1,691,980

   

 

1,646,179

 

Less—Treasury stock, at cost (16,163,255 shares at March 28

and 8,361,862 shares at June 28)

   

 

284,614

   

 

209,388

 

    
  
    

 

1,407,366

   

 

1,436,791

 

    
  

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   

$

1,850,916

   

$

1,914,627

 

    
  

 

SEE ACCOMPANYING NOTES

 

3 of 21

SCIENTIFIC-ATLANTA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

(UNAUDITED)

 

    

Nine Months Ended

  
    

March 28,

2003

     

March 29,

2002

  

NET CASH PROVIDED BY OPERATING ACTIVITIES

   

$

300,082

 

   

$

362,031