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Document Preview Cautionary Statements |
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Title: |
Cautionary Statements |
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Entities: |
ANADIGICS, Inc.; Analog Devices, Inc.; ATI Technologies Inc.; Charter Communications Inc.; Gemstar-TV Guide International Inc.; Juniper Networks, Inc.; Motorola, Inc. |
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Date: |
2004 |
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Size: |
Preview shows 14KB of 36KB total |
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Price: |
$39 |
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ID: |
#1095016 |
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EXHIBIT 99.1
CAUTIONARY STATEMENTS
General
From time to time, Scientific-Atlanta may publish, verbally or in written form, forward-looking statements relating to such matters as anticipated financial or operational performance, business prospects, technological developments, new products, research and development activities and similar matters. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. These Cautionary Statements are being made pursuant to the provisions of the Private Securities Litigation Reform Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act.
This Form 10-Q (or any other periodic reporting documents required by the Exchange Act) may contain forward-looking statements reflecting our current views concerning potential future events or developments. The words “may,” “will,” “should,” “could,” “continue,” “future,” “potential,” “believe,” “expect,” “anticipate,” “project,” “plan,” “intend,” “seek,” “estimate,” “predict” and similar expressions identify forward-looking statements. We caution investors that any forward-looking statements made by us are not guarantees of future performance and that a variety of factors, including those discussed below, could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed in our forward-looking statements. We describe in more detail below the risks and uncertainties which may affect the operations, performance, development and results of our business. We caution readers not to place undue reliance on any such forward-looking statement, which speak only as of the date the statement was made.
Uncertainties Related to the Digital Interactive Television Market. Our success is dependent upon the acceptance of digital interactive television products, such as digital set-top boxes or digital video recorders, or services, such as digital cable, high-speed data services, video-on-demand or high definition television, by end-user consumers and purchases by our cable operator customers from us to satisfy such consumer demand. Our high-end Explorer set-tops are designed to support these digital interactive television services, and our sales and results of operations could be materially adversely affected by the failure of digital interactive products and services to:
| • | appeal to enough end-user consumers; |
| • | be available at prices consumers are willing to pay; |
| • | function as expected; |
| • | be delivered in a timely fashion by our cable operator customers to consumers; or |
| • | effectively compete against direct-to-home satellite services, wireless television providers, telephone companies offering video programming and providers of high speed data transmission. |
Digital interactive television is an evolving business, and therefore there are many characteristics of this business that are not yet fully known by us. These characteristics include:
| • | sensitivity to the economy, |
| • | consumer demand for various types of interactive applications, |
| • | the proper pricing levels and models for various applications, |
| • | the likely level of penetration of digital services into the subscriber base, |
| • | the likely number of digital set-tops per household, |
| • | the customer churn rate to be expected, |
| • | the extent to which digital cable interactive services will successfully compete against direct-to-home satellite services, |
| • | international demand for the products, and |
| • | the extent to which demand will be variable. |
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Each of these business characteristics may have a material impact on the sales of our products.
Dependence on Principal Product Line. Sales of our Explorer digital set-tops constituted approximately 56 percent, 52 percent and 57 percent of Scientific-Atlanta’s total sales in fiscal years 2003, 2002 and 2001, respectively. We expect that sales of our Explorer set-tops will continue to account for a significant portion of our revenues for the foreseeable future. As a result, our financial performance will continue to depend in significant part on (1) whether there will be continued market acceptance of the Explorer digital set-top, including high-end set-tops with digital video recorder and/or high definition television capabilities, (2) our ability to broaden our customer base, for this product, and (3) the development and timing of the introduction of software applications for the Explorer network.
Our sales are also affected by the average selling price for Explorer digital set-tops, and our results of operation are affected by the gross margins on such products. The Explorer 8000 set-tops (which contain integrated hard drives and a single user interface for digital video recording capabilities) and high-definition television set-tops currently sell for a significantly higher average selling price than the average sales prices for our earlier generation set-top models. However, gross margins on newly introduced products, such as the Explorer 8000 set-tops and the high-definition television set-tops, are typically lower than the average margins for our products. The average selling price of digital set-tops declined approximately 12 percent in the first six months of fiscal year 2004 as compared to the first six months of fiscal year 2003. Although the price of individual models of digital set-tops may decline in the future, the average selling price of digital set-tops will vary based on the mix of models sold during the period. We continue to attempt to improve gross margins on our digital set-top products through cost reductions from product design, procurement and manufacturing. As a result, the mix of models of Explorer set-tops sold during the quarter, which we cannot predict, can affect our sales and results of operations for that quarter.
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