News | May 7, 2007

Andrew Corporation To Sell Satellite Communications Business

Westchester, IL -- Andrew Corporation announced the company intends to sell its Satellite Communications business, which comprised 6% of the company's overall revenues for the second quarter. Andrew has received initial indications of interest from several potential buyers for its Satellite Communications business. The final terms of any divestiture transaction will be subject to board approval, and there can be no assurance as to the terms, timing or consummation of any such transaction.

The company reported total sales of $503 million and a net loss of $2.0 million, or $0.01 per share, for the second quarter fiscal 2007. Wireless Infrastructure sales increased 5% and gross margins improved compared to the prior year second quarter, despite continued challenges in the North American market and relocation and start-up costs associated with the new Joliet, Illinois facility. Higher income taxes contributed to the loss in the quarter, which compared to net income for the prior year second quarter of $3.6 million, or $0.02 per share.

"As we previously guided, the first half of our fiscal year has been challenging due to consolidation issues with two significant North American customers, volatile commodity costs and a number of important facility start-ups and relocations," said Ralph Faison, president and chief executive officer, Andrew Corporation. "While our revenue growth for the quarter was modest in our seasonally weakest quarter, we are pleased that we have been able to replace reduced revenues of over $130 million to those two customers in the first half of our fiscal year with significant increases in volume with other customers and in other geographies. We also have been able to recover a significant portion of our higher commodity costs incurred during the quarter."

"In addition, we have executed well on two significant facility relocations this year. Our new world-class cable facility in Joliet is in production, on budget and ahead of our expectations and our new factory in India is also in production and ramping up well, helping to serve the unprecedented demand we are experiencing in India. As we look ahead, we believe that Andrew is well-positioned to continue to be the supplier of choice on a global basis to serve the needs of wireless operators and infrastructure original equipment manufacturers (OEMs). While we believe that our North American business is starting to improve and should help drive a stronger second half, we remain cautious about our prospects in that geography if we do not see meaningful sequential improvement from the two customers where we have had significant weakness for the last two quarters. Finally, we continue to deliver on our goal of improving gross margins consistent with our previous guidance. We expect higher levels of business in the June and September quarters and anticipate improved operating leverage on that seasonal uptick."

"Over the last five years, we have reengineered Andrew's manufacturing footprint by transitioning most of our facilities to new state-of-the-art factories, in most cases to lower-cost labor locations. The company is well-positioned to benefit from operational efficiencies, as the restructuring of our global supply chain is largely behind us."

SOURCE: Andrew Corporation