Andrew Corporation2005 ANNUAL MEETING OF SHAREHOLDERS
Tuesday, February 8, 2005
Charles Nicholas Chairman of the Board
Today’s Agenda
• Business Meeting – Charles Nicholas
• Presentation – Ralph Faison, Chief Executive Officer
• Q&A
Board of Directors
Thomas A. Donahoe Gerald A. Poch
Ralph E. Faison Anne F. Pollack - Newly elected
Jere D. Fluno Glen O. Toney, Ph.D.
William O. Hunt John G. Bollinger - Retired
Charles R. Nicholas Phillip Wm. Colburn - Retired
Robert G. Paul Dennis L. Whipple - Retired
Purpose of Annual Meeting
• Elect nine Directors for the ensuing year
• Approve the adoption of a new Management Incentive Plan
• Approve the adoption of a new Long Term Incentive Plan
• Ratify the appointment of Ernst & Young LLP as ourindependent auditors for fiscal year 2005
Ralph Faison Chief Executive Officer
Certain statements are forward looking and we caution our stockholders and others that these statements involve certain risks and uncertainties. Factors that may cause actual results to differ from expected results include the company's ability to integrate acquisitions and to realize the anticipated synergies and cost savings, the effects of competitive products and pricing, economic and political conditions that may impact customers' ability to fund purchases of our products and services, the company's ability to achieve the cost savings anticipated from cost reduction programs, fluctuations in foreign currency exchange rates, the timing of cash payments and receipts, end user demands for wireless communication services, the loss of one or more significant customers and other business factors. Investors should also review other risks and uncertainties discussed in company documents filed with the Securities and Exchange Commission.
Safe Harbor Statement
Management Team
NETWORKSOLUTIONS
Group PresidentTerry Garner
ANTENNA AND CABLEPRODUCTS
Group PresidentJohn DeSana
BASE STATION SUBSYSTEMS
Group PresidentMickey Miller
SATELLITE COMMUNICATIONS
Group PresidentJude Panetta
WIRELESS INNOVATIONS
Group PresidentBob Hudzik
WORLDWIDE SALES & CORPORATEMARKETING
Group PresidentRoger Manka
Chief Financial OfficerMarty Kittrell
Vice President & Chief Human Resources Officer
Karen Quinn-Quintin
Chief Technology & Strategy Officer & Corp. Development
J.C. Huang
Vice President, GISJohn Dickson
President & CEO Ralph Faison
Fiscal 2004 Review
Highlights of Fiscal 2004
• Significant year-over-year operational and financial improvement
Fiscal 2004 sales grew 81% to a record $1.84 billion
Net income per share grew 150% to $0.20
• Completed relocation of certain Antenna and Cable Product Group lines
Reynosa, Mexico and Brno, Czech Republic manufacturing facilities
• Expanded our addressable market opportunityChannel Master LLC (broadband satellite)Yantai Fine Cable Company (broadband CATV)MTS Wireless Components (site deployment and services)ATC Tower Services (site deployment and services)
Continued Industry-Leading Growth
Pro forma combined sales with Allen Telecom (Andrew FY’03 = $1,015 million + Allen Telecom 10/1/02 to 7/15/03 = $379 million
$ IN
MIL
LION
S
$865$935$903
$708$781$766
$702$576
$512$379
$1,839
$1,394
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04
SALES
15.4% CAGR
Significant Year-Over-Year Improvement
* Non-GAAP - see appendix A – reconciliation of operating income** Non-GAAP - see appendix B – reconciliation of significant items impacting EPS results
$1,014
$1,839
FY'03 FY'04
23.0%
17.8%
FY'03 FY'04
4.2%
6.7%
FY'03 FY'04
$0.24
FY'03 FY'04
SALES Sales & Admin + R&D Operating Income* Earnings Per Share**
$0.44
Business Overview
Global Leader in RF Footprint SolutionsAntenna and
Cable Products$823 mil
Base Station Subsystems
$498 mil
Network Solutions$186 mil
Wireless Innovations
$123 mil
Satellite Communications
$209 mil
• Roughly 90% of sales are focused in wireless infrastructure
• Ranked #1 or #2 in each major product group
• Significant competitive advantages
• Improving operational and financial performance
FY’04Total Sales
$1.84 billion
$1.84 billion
±$400M - $600M
±$200M - $300M
±$100M
<$100M
• Global Sourcing of Components
• Global Manufacturing
• R&D Leadership
• Operating Leverage
• Financial Strength
Significant Economies of Scale Advantages
Address More of the RF Footprint Than Anyone Else
ANDREW RFS REMECKathrein Filtronic
Antenna andCable Products
Base Station Subsystems
Wireless Innovations
Network Solutions
Complete RFSubsystem
TruePositionPowerwave
Strong Weak
Mobile
Relationships With All Major OEMs and Operators
• Many relationships span 25+ years
• Able to support growth in all regions
• Well-positioned with Chinese OEMs
• Top 25 customers = 68% of sales
• Major OEMs = 41% of sales
• Lucent = only 10%+ customer
Sales by Region FY’04 Q1’05Americas 57% 54%EMEA 29% 33%Asia Pacific 14% 13%
Industry Trends
Underlying Industry Trends are Favorable
MINUTES OF USE (MOU) GLOBAL SUBSCRIBERS DATA USAGE
1.61.8 1.9
1.3
2.1
9.8
37.8
85.6
141.8
2.3
4.6
5.8
7.0
3.5
8.2
03 04 05 06 07 03 04 05 06 07
IN TR
ILLI
ON
S
IN B
ILLI
ON
S
IN TH
OUS
AN
DS (T
ERA
BYTE
S)
Source: Credit Suisse First Boston, Morgan Stanley estimates
03 04 05 06 07
% P
ERC
ENT
25%28%
30%32%
22%
GLOBAL PENETRATION
03 04 05 06 07
Major Industry Opportunities Driving GrowthWIRELESS INFRASTRUCTURE*
$39$41
$44$48
03 04 05 06
EV-DO vs. GSM/UMTSN. America
Upgrades to 3GW. Europe
Emerging Market Growth
(India, Africa)Emerging Market GrowthLatin America
Emerging Market GrowthE. Europe
Issuance of 3G Licenses
China
• Network upgrades
• Network expansion
• Focus on network quality of service
• Increased OEM outsourcing
• Improving operator cash flow models
* Source: Deutsche Bank Securities estimates
$ IN
BILL
ION
S
Five Major Product GroupsAntenna and Cable ProductsBase Station SubsystemsNetwork SolutionsWireless InnovationsSatellite Communications
Antenna and Cable Products Group
Key Products• #1 in RF cable
• #1 in microwave antennas
• #2 in base station antennas
Gross Margins
• Equal to the corporate average
Growth Opportunities
• Network upgrades and expansion
• Remote network optimization
• Site installation (services)
• Penetration of broadband cable TV
FY’04 Sales by Region
$823
$606
FY'03* FY'04
Historical Sales$ in millions
Base Station Antenna
Microwave Antenna
RF Cable
Asia Pacific
18%Americas
52%EMEA30%
* Results include acquisition of Allen Telecom since July 15, 2003
Base Station Subsystems GroupKey Products• #1 or #2 in merchant power amplifiers
• #2 in merchant filters
• Integrated product leader
• Combiners, Duplexers
• Pico Node-B
Gross Margins
• Below the corporate average
Growth Opportunities
• OEMs supporting network upgrades and expansion
• Increased OEM outsourcing of subsystem components
• Pico Node-B
Asia Pacific
18% Americas42%
EMEA40%
FY’04 Sales by Region
$498
$238
FY'03* FY'04
Historical Sales$ in millions
* Results include acquisition of Allen Telecom since July 15, 2003
Integrated Amplifier Transceiver
Multi-Carrier Power Amplifier
Filter
RF Transceiver
Network Solutions GroupKey Products
• #1 in network-based mobile location systems
• Test and measurement
• System design & optimization
• Advanced data collection
Gross Margins
• Above the corporate average
Growth Opportunities
• Global deployment of mobile location systems
• Enhanced network optimization
• Location-based services
Americas100%
FY’04 Sales by Region
Historical Sales$ in millions
$186
$44
FY'03* FY'04
Invex 3G
* Results include acquisition of Allen Telecom since July 15, 2003
Wireless Innovations GroupKey Products
• #1 in repeaters
• Distributed antenna systems
• Radiating cables
Gross Margins
• Above the corporate average
Growth Opportunities• Turnkey coverage solutions
• Dense urban environment distribution
• In-building applications
OpticalRepeater
EMEA60%
Americas28%
Asia Pacific
12%
FY’04 Sales by Region
$123
$42
FY'03* FY'04
Historical Sales$ in millions
RADIAX cable
BritecellMaster Unit
* Results include acquisition of Allen Telecom since July 15, 2003
Satellite Communications GroupKey Products• #1 in satellite antennas• Earth station satellite• Consumer DBS• Professional VSAT
Gross Margins
• Below the corporate average
Growth Opportunities
• Consumer and enterprise satellite
Asia Pacific
3%
Americas89%
EMEA8%
$209
$85
FY'03 FY'04
Historical Sales$ in millions
FY’04 Sales by Region
VSATDBS
Delivering Results
Highlights of First Quarter 2005
• Sales increased 15% year-over-year to $474 million
• Gross margin increased 110 basis points sequentially to 23.3%
• R&D and sales and administrative expenses declined to 16.4% of sales
• Operating income increased 102% year-over-year to $23 million
• Net income per share increased 350% year-over-year to $0.09
Positive Outlook for Andrew
• Underlying industry trends are favorable
• Positioned to grow faster than the overall market
• Continue driving operating margin improvements
• Capitalize on long-term stability and financial strength to generate significant cash flow
Andrew CorporationNasdaq: ANDW
Thank You
Appendix AReconciliation of Operating Income
Intangible amortization $(0.08) $(0.05) $(0.04) $(0.04)
Gain (loss) on sale of assets (0.02) 0.00 0.00 (0.02)
Restructuring charges (0.01) 0.00 (0.01) 0.00
Discontinued operations N/A (0.02) N/A N/A
Per share impact $(0.11) $(0.07) $(0.05) $(0.06)
1H’04 1H’03 Q2’04 Q1’04
$ in millions
FY'03 Q1'04 Q2'04 Q3'04 Q4'04 FY'04 Q1'05
Sales 1,014,486$ 410,771$ 447,146$ 492,998$ 487,834$ 1,838,749$ 474,074$
Operating income 25,899 11,327 18,324 31,203 2,327 63,181 22,929
Non-cash intangible amortization 19,222 9,421 9,581 9,583 9,488 38,343 7,740
Restructuring expense 9,222 694 2,768 719 6,951 11,132 1,838
Loss (gain) on sale of assets - 4,511 - - 7,055 11,566 -
Real estate transactions (12,216) - (1,402) - - (1,402) -
Adjusted operating income 42,127$ 25,953$ 29,271$ 41,505$ 25,821$ 122,820$ 32,507$
% of sales 4.2% 6.3% 6.6% 8.4% 5.3% 6.7% 6.9%
Appendix BSummary of Significant Items Impacting EPS Results
Intangible amortization $(0.08) $(0.05) $(0.04) $(0.04)
Gain (loss) on sale of assets (0.02) 0.00 0.00 (0.02)
Restructuring charges (0.01) 0.00 (0.01) 0.00
Discontinued operations N/A (0.02) N/A N/A
Per share impact $(0.11) $(0.07) $(0.05) $(0.06)
1H’04 1H’03 Q2’04 Q1’04
$ in millions
FY'03 Q1'04 Q2'04 Q3'04 Q4'04 FY'04 Q1'05
Net income per share 0.08$ 0.02$ 0.06$ 0.11$ -$ 0.20$ 0.09$
Non-cash intangible amortization 0.12 0.04 0.04 0.03 0.04 0.16 0.03
Restructuring expenses 0.05 - 0.01 - 0.03 0.04 -
Discontinued operations 0.03 - - - - - -
Preferred stock dividends 0.06 - - - - - -
Gain (loss) on sale of assets (0.10) 0.02 - - 0.03 0.04 -
Non-GAAP EPS* 0.24$ 0.08$ 0.11$ 0.14$ 0.10$ 0.44$ 0.12$ * Individual quarters may not equal FY total due to rounding