ADC updated its financial guidance and unveiled plans to realign its business operations with areas of strategic focus in light of “the uncertainties presented by the current macroeconomic environment. ”
ADC currently expects sales from continuing operations for fiscal year 2008 to be in the range of $1.470-$1.495 billion. Previous annual guidance provided on Sept. 4, 2008 reflected ADC’s earlier expectation that fiscal 2008 sales would be in the range of $1.500-$1.520 billion. ADC now expects to have 11%-13% year-over-year sales growth for fiscal year 2008, which would result in a 21%-22% five-year compound annual growth rate since 2003.
Due to changes in sales volume and other factors, ADC’s gross margins in 2008 are now expected to be approximately 34% for the full year compared to previous guidance of approximately 35%.
ADC also announced plans to divest the company’s EMEA Professional Services business and to discontinue certain unprofitable outdoor wireless product families in its Network Solutions business unit. The company is also streamlining the organizational structure of its Global Connectivity Solutions business unit to better align with customer needs and marketplace trends and to reduce costs.
“ADC remains firmly committed to delivering long-term value to our shareholders despite the uncertain macroeconomic environment,” said Robert E. Switz, chairman, president and CEO of ADC. “While we are altering our short-term outlook and planning for moderately lower revenues in fiscal year 2009 based upon lower industry forecasts, it is important to recognize that ADC has a strong balance sheet and continues to generate positive operating income and cash flows. We also maintain a strong position in the high-growth segments of fiber-based and wireless communications networks.http://www.adc.com
