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CommScope embarks on cost cutting plan, announces price hikes

CommScope Inc. today announced major cost-reduction initiatives at one of its plants in the U.S. and provided finan...


October 11, 2004  


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CommScope Inc. today announced major cost-reduction initiatives at one of its plants in the U.S. and provided financial guidance for the second half of 2004.

“We have made excellent progress with the integration of the Connectivity Solutions business purchased from Avaya Inc., but we face ongoing cost pressures and intense global competition,” said Frank Drendel, the company’s chairman and CEO.

“We will continue to take actions that we believe will reduce cost, improve operations and enhance our competitive position over the longer term. We also plan to increase prices for certain products in order to recover higher-than-expected costs of key raw materials.”

Connectivity Solutions Manufacturing, Inc., an indirect manufacturing subsidiary of CommScope, has adopted what the company described as organizational and cost-reduction initiatives at its Omaha, Neb. site.

The 2.4 million-square foot site is the largest production facility for SYSTIMAX ExchangeMAX and Integrated Cabinet Solutions products.

The facility was purchased from Avaya in conjunction with the purchase of the Connectivity Solutions business on Jan. 31.

CommScope also announced price increases of 3-9% of all its major product groups due to escalating material costs, particularly for plastics, polymers and metals. The increases will take effect beginning in January.

The company expects third quarter revenues to be approximately US$307-$311 million and gross margin to be approximately 24.7-25.2% of sales.