Scientific Atlanta Grows From DVR Sales

Filed in archive Announcements on April 27, 2005

Much of the news in advertising and digital television revolves around the impact of the digital video recorder (DVR). Here is the financial report of just one (albeit a large one) manufacturer. Note that at the bottom of their quarterly statistics, SA added almost half as many DVR's as TiVo has total in non-directtv households!

Digital TV equipment provider, Scientific-Atlanta, has released financial results for its fiscal third quarter:

� Sales totaled $489.5 million, representing an increase of $52.5 million, or 12%, from the year-ago quarter, and an increase of $47.8 million, or 11%, from the preceding quarter.

The company attributed the year-over-year increase in subscriber product sales to "the mix shift toward higher-end digital set-top products and higher sales of cable modems, partially offset by lower selling prices for all set-top models."

� Gross margin was 36.9% of sales, flat with the year-ago quarter and down by 20 basis points from the preceding quarter. The company attributed the decrease to "the continued decline of average selling prices."

� Earnings totaled $61.7 million, or $0.40 per share, up $7.8 million, or 14%, from the year-ago quarter, and up $3 million, or 5%, from the preceding quarter.

At the end of the quarter, the company's cash reserves and short-term investments totaled $1.453 billion, up $137.2 million from the end of the preceding quarter. Cash provided by operating activities during the quarter totaled $148.6 million.

The company shipped 496,000 DVR's during the quarter, representing a 62% increase from the year-ago quarter, and an 11% increase from the preceding quarter. Slightly more than half of those shipments were of high-definition DVR's.