FOR IMMEDIATE RELEASE
COMMSCOPE AND FURUKAWA RESTRUCTURE RELATIONSHIP --
CommScope Transfers Ownership in OFS BrightWave in Exchange for
7,656,900 Shares of CommScope Common Stock held by Furukawa;
Renews Optical Fiber Supply Agreement
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HICKORY, NC - (JUNE 15, 2004) -- CommScope, Inc. (NYSE: CTV) and The
Furukawa Electric Co. Ltd. (Tokyo: 5801) today announced that they have
restructured their relationship. CommScope has transferred all of its
equity ownership interest in OFS BrightWave, LLC to Furukawa in exchange
for 7,656,900 shares of CommScope common stock owned by Furukawa. CommScope
intends to hold these shares as treasury stock. As a result of the
transaction, CommScope no longer owns any equity interest in OFS
BrightWave.
In addition, CommScope and Furukawa have renewed their optical fiber supply
arrangement by entering into a new four-year supply agreement expiring June
2008. CommScope will continue to have access to a broad array of
technologically advanced optical fibers as well as a cross license for key
intellectual property.
"We thought that this was an appropriate time to re-evaluate our equity
ownership interest primarily due to changes in the global market for
optical fiber as well as the restructuring of OFS BrightWave," said
CommScope Chairman and CEO Xxxxx X. Xxxxxxx. "We believe that these are
win-win transactions for both companies and look forward to continuing our
strong, strategic relationship with Furukawa."
The transaction does not eliminate the existing $30 million loan, under a
revolving credit facility due to CommScope from OFS BrightWave, which is
scheduled to mature in 2006. Although advances to OFS BrightWave had a
carrying value of $12.0 million on CommScope's balance sheet as of March
31, 2004, CommScope has now fully impaired this asset primarily due to
market conditions for optical fiber and because CommScope will no longer
have equity ownership in OFS BrightWave.
CommScope expects to record a net pretax gain of approximately $121.3
million, or approximately $1.24 per diluted share, net of tax, as a
result of this transaction during the second quarter of 2004.
CONFERENCE CALL INFORMATION
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CommScope will host a conference call today at 9:00 a.m. (EDT) to discuss
this transaction. You are invited to listen to the conference call with
Xxxxx Xxxxxxx, Chairman and CEO; Xxxxx Xxxxxxx, President and COO; and
Xxxxxx Xxxxxxxxx, Executive Vice President and CFO.
To participate in the conference call, domestic and international callers
should dial 000-000-0000. Please plan to dial in 10-15 minutes before the
start of the call to facilitate a timely connection. If you are unable to
participate on the call and would like to hear a replay, you may dial
000-000-0000. International callers should dial 000-000-0000 for the
replay. The replay ID is 21198954. The replay will be available through
June 20th.
ABOUT COMMSCOPE
CommScope (NYSE: CTV - xxxx://xxx.xxxxxxxxx.xxx) is a world leader in the
design and manufacture of `last mile' cable and connectivity solutions for
communication networks. Through our SYSTIMAX(R) Solutions and Uniprise(TM)
brands we are the global leader in structured cabling systems for business
enterprise applications. We are also the world's largest manufacturer of
coaxial cable for Hybrid Fiber Coaxial (HFC) applications. Backed by strong
research and development, CommScope combines technical expertise and
proprietary technology with global manufacturing capability to provide
customers with high-performance wired or wireless cabling solutions.
FORWARD-LOOKING STATEMENTS
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This press release contains forward-looking statements regarding among
other things, financial items that are based on information currently
available to management, management's beliefs and a number of assumptions
concerning future events. Forward-looking statements are not a guarantee of
performance and are subject to a number of uncertainties and other factors
that could cause the actual results to differ materially from those
currently expected. The potential risks and uncertainties that could cause
actual results of CommScope to differ materially include, but are not
limited to, the ability of the Company to purchase accounting or
tax-related adjustments; any statements of belief and any statements of
assumptions underlying any of the foregoing; product demand and industry
excess capacity; changes or fluctuations in global business conditions;
competitive pricing and acceptance of our products; changes in cost and
availability of key raw materials, especially those that are available only
from limited sources; industry competition and the ability to retain
customers; possible disruption due to customer or supplier bankruptcy,
reorganization or restructuring; our ability to obtain financing and
capital on commercially reasonable terms; covenant restrictions and our
ability to comply with covenants in our debt agreements; successful
operation of our vertical integration activities; achievement of sales,
growth and earnings goals; ability to achieve reductions in costs; ability
to retain and attract key personnel; developments in technology;
intellectual property protection; product performance issues and associated
warranties; regulatory changes affecting us or the industries we serve; and
other factors. For a more complete description of factors that could cause
such a difference, please see CommScope's filings with the Securities and
Exchange Commission. In providing forward-looking statements, the Company
does not intend, and is not undertaking any duty or obligation, to update
these statements as a result of new information, future events or
otherwise.
CONTACT:
Xxxxxx Xxxxxxxxx Xxxxx Xxxxxxx
Investor Relations Corporate Communications
(000) 000-0000 (000) 000-0000
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