ARRIS Expects Unaudited Third Quarter 2005 Results To Be Above Previous Guidance; Plans To Implement SFAS 123R and Provides Prel
October 12 2005 - 7:28PM
PR Newswire (US)
SUWANEE, Ga., Oct. 12 /PRNewswire-FirstCall/ -- ARRIS
(NASDAQ:ARRS), a global telecommunications technology leader, today
announced that it anticipates its unaudited financial results for
the third quarter 2005 will be above the revenue and earnings
guidance that the Company provided on July 27, 2005. The Company
now expects that revenues for the third quarter 2005 will be in the
range of $197 to $201 million with net income per share in the
range of $0.16 to $0.18. These estimated results compare to
previous guidance of revenues of $180 to $190 million and $0.12 to
$0.15 net income per share. The improvement was driven by strong
demand across all product categories. Preliminary guidance for the
fourth quarter 2005, which reflects the usual seasonal budgetary
effects and year end inventory management activities by the
Company's customers, is for revenues in the range of $185 to $200
million with net income per share in the range of $0.15 to $0.18.
More detailed guidance for the fourth quarter 2005 and comments on
the future business outlook will be discussed when the Company
formally releases third quarter results after the market close on
October 26, 2005 and during a conference call with Company
management at 8:30am EDT on October 27, 2005. The Company also
announced that it expects to adopt the provisions of SFAS 123R in
the third quarter 2005 and anticipates recording a non-cash expense
of approximately $2 to $3 million in the third quarter. For
clarity, the Company highlighted that it historically has recorded
compensation expense under the provisions of APB 25 related to
restricted stock grants and option grants subject to variable
accounting. The amount of this compensation expense is detailed in
the notes to the Company's financial statements and in the second
quarter of 2005 this compensation expense was $1.2 million. The
Company intends to include the impact of the quarterly expense
associated with equity compensation under the provisions of SFAS
123R as a line item in its Supplemental Earnings Reconciliation
that it attaches to its quarterly earnings releases beginning in
the third quarter 2005. Further, the Company plans to update its
historic reconciliations to include the compensation expense
previously recorded under the provisions of APB 25 so as to provide
readers with relevant comparative information. These updates will
be available on the Company's website after the earnings release.
"We continue to be extremely pleased with the ongoing momentum of
our business," said David Potts, ARRIS EVP & CFO. "Although we
have not yet fully closed the books for the third quarter, it has
become apparent that our financial results are likely to exceed our
previous guidance and that fact, coupled with our decision to
implement provisions of SFAS 123R, caused us to decide to update
the market in advance of the previously scheduled earnings release
date. We also expect that backlog at the end of the third quarter
increased over the second quarter and we believe that the
intensification of competition in the information transport
industry and the accelerating demand for bandwidth provides a
catalyst for demand for ARRIS products. We plan to provide more
commentary on our results, guidance for the fourth quarter and
implementation of SFAS 123R on our October 27th conference call,"
concluded Potts. ARRIS provides broadband local access networks
with innovative next generation high-speed data and telephony
systems for the delivery of voice, video and data to the home and
business. ARRIS complete solutions enhance the reliability and
value of converged services from the network to the subscriber.
Headquartered in Suwanee, Georgia, USA, ARRIS has design,
engineering, distribution, service and sales office locations
throughout the world. Information about ARRIS' products and
services is found at http://www.arrisi.com/. Forward-looking
statements: Statements made in this press release, including those
related to: - preliminary third quarter 2005 revenues and earnings;
- preliminary fourth quarter 2005 revenues and earnings; -
preliminary third quarter 2005 order backlog; - preliminary
estimates of the impact of adopting SFAS 123R; - the general market
outlook and acceptance of ARRIS products; and - the timing of
improvements in industry conditions are forward-looking statements.
These statements involve risks and uncertainties that may cause
actual results to differ materially from those set forth in these
statements. Among other things, - projected results for the third
quarter 2005 and the fourth quarter of 2005 as well as the general
outlook for 2005 and beyond are based on preliminary estimates,
assumptions and projections that management believes to be
reasonable at this time, but are beyond management's control; -
because the market in which ARRIS operates is volatile, actions
taken and contemplated may not achieve the desired impact relative
to changing market conditions and the success of these strategies
will be dependent on the effective implementation of those plans
while minimizing organizational disruption; - several of the
substantial participants in our industry, including some of our
customers are in a weakened financial condition which could
directly or indirectly cause a reduced demand for our products or
other unexpected consequences, additionally, we cannot be certain
if or when the general uncertainty in our industry will stabilize
or improve. In addition to the factors set forth elsewhere in this
release, other factors that could cause results to differ from
current expectations include: the impact of rapidly changing
technologies; the impact of competition on product development and
pricing; the ability of ARRIS to react to changes in general
industry and market conditions including regulatory developments;
rights to intellectual property, market trends and the adoption of
industry standards; and consolidations within the
telecommunications industry of both the customer and supplier base.
These factors are not intended to be an all- encompassing list of
risks and uncertainties that may affect the Company's business.
Additional information regarding these and other factors can be
found in ARRIS' reports filed with the Securities and Exchange
Commission. In providing forward-looking statements, the Company
expressly disclaims any obligation to update publicly or otherwise
these statements, whether as a result of new information, future
events or otherwise. DATASOURCE: ARRIS CONTACT: Jim Bauer, Investor
Relations of ARRIS, +1-678-473-2647, or Web site:
http://www.arrisi.com/
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