Andrew Corporation Reports Record Third Quarter Sales.

ORLAND PARK, Ill. -- Andrew Corporation (Nasdaq:ANDW)

--Record sales of $493 million increased 10% sequentially

--Net income of $0.11 per share meets high-end of guidance

--Gross margin improved 120 basis points sequentially to 25.9%

--Sixth consecutive quarter

Andrew Corporation (Nasdaq:ANDW), a global communications systems equipment supplier, today announced results for its third fiscal quarter ended June 30, 2004. All per share information discussed is presented on a fully diluted basis.

THIRD QUARTER RESULTS

Third quarter sales were $493.0 million, up 131% from $213.7 million in the year ago quarter and higher than previous guidance of $450 million to $480 million in sales. The increase in sales was primarily due to continued improved wireless infrastructure market demand and the acquisition of Allen Telecom in the fourth quarter of fiscal 2003. Net income was $17.7 million or $0.11 per share, compared to net income of $7.6 million or $0.08 per share in the year ago quarter.

Third quarter results include intangible amortization of $9.6 million or $0.03 per share and pre-tax restructuring charges of $0.7 million. The year ago third quarter included a gain from real estate transactions of $9.4 million or $0.10 per share, intangible amortization of $3.7 million or $0.03 per share and pre-tax restructuring charges of $0.5 million.

"We are very pleased to report results that exceeded our expectations, including record sales performance and operational gross margin improvement," said Ralph Faison, President and CEO of Andrew Corporation. "Andrew is strategically positioned to benefit from the long-term growth opportunities we see in wireless communications."

Sales for the nine months ended June 30, 2004 were $1.4 billion, up 102% from $669.6 million reported for the nine months ended June 30, 2003. Net income for the nine months ended June 30, 2004 was $31.7 million or $0.20 per share, compared to net income of $10.3 million or $0.10 per share for the nine months ended June 30, 2003.

The following table is a summary of significant items impacting the comparability of results for the third quarter of fiscal 2004 and year-to-date earnings per share amounts:

Summary of Significant                         Y-T-D    Y-T-D
Items Impacting Results      Q3 FY04  Q3 FY03   FY04     FY03
                            -------- -------- -------- --------
Intangible amortization      $(0.03)  $(0.03)  $(0.12)  $(0.08)
Restructuring charges          0.00     0.00    (0.02)    0.00
Gain (loss) on sale of
 assets                         N/A     0.10     0.01     0.10
                            -------- -------- -------- --------
Total                        $(0.03)   $0.07   $(0.13)   $0.02
                            ======== ======== ======== ========

Orders for the third quarter were a record $498 million, up 12% sequentially and 126% from the year ago quarter. "This marks our sixth consecutive quarter of book-to-bill ratio equal to or greater than one. Our visibility has not improved despite continued order growth; however, with the broadest RF product group and a globally diversified customer base, we remain confident in our ability to continue to outperform the wireless infrastructure industry," said Mr. Faison.

% Of
                                                        %         Q3
Sales by Region                   Q3 FY04   Q2 FY04   Change    Total
-------------------------------  --------  --------  --------  -------
Americas                          $287.1    $253.7        13%      58%
Europe / Middle East / Africa      133.4     133.2         -       27
Asia-Pacific                        72.5      60.2        20%      15
                                 --------  --------  --------  -------
Total                             $493.0    $447.1        10%     100%
                                 ========  ========  ========  =======

Sales increased 10% sequentially from the second quarter to $493.0 million. Sales in the Americas increased 13% sequentially driven by continued product demand in the broadband satellite market and wireless infrastructure sales in Latin America. Sales in EMEA were consistent with the prior quarter, whereas sales in Asia-Pacific increased 20% sequentially driven primarily by wireless infrastructure build-outs in China and India.

Sales increased sequentially across most major product groups. Antenna Product sales increased as a result of coverage requirements for network expansion and demand for certain new product lines within the broadband satellite market. Base Station Subsystems sales increased as a result of OEMs continuing to support increased operator capital expenditures for network upgrades and expansion. Base Station Subsystems is now providing products to nine major OEMs, compared to eight in the prior quarter. Cable Products sales increased as a result of network expansions and the acquisition of MTS Wireless Components in March 2004. Wireless Innovations' sales increased slightly versus the prior quarter due to increased need for coverage solutions. Network Solutions sales decreased modestly on a sequential basis due to the timing of geolocation hardware installations.

In the third quarter, Lucent Technologies was the only customer accounting for more than 10% of sales. The top 25 customers represented 71% of sales in the third quarter compared to 69% in the second quarter. Major OEMs accounted for 43% of sales in the third quarter, in-line with the prior quarter.

THIRD QUARTER FINANCIAL SUMMARY

Gross margin was 25.9%, compared with 24.7% in the prior quarter and 25.6% in the year ago quarter. Consistent with our previous guidance, gross margin showed operational improvement. During the quarter we made continued progress on relocating certain product lines within the Antenna Group to our two new manufacturing facilities. Manufacturing variances for new products in the broadband satellite market also improved during the quarter. These two positive improvements were partially offset by a lower margin product mix shift within Cable Products.

Research and development expenses were $29.3 million or 5.9% of sales, compared to $28.5 million or 6.4% of sales in the prior quarter and $18.9 million or 8.9% of sales in the year ago quarter. Research and development expenses decreased as a percentage of sales due primarily to a higher level of sales. Sales and administrative expenses were $56.9 million or 11.5% of sales, compared to $52.7 million or 11.8% of sales in the prior quarter and $32.8 million or 15.4% of sales in the year ago quarter. Sales and administrative expenses increased primarily due to a higher level of sales, planned expenditures for the global deployment of IT systems and additional incentive compensation. Total operating expenses declined as a percentage of sales due primarily to higher sales and the effects of our cost savings and merger integration programs.

Intangible amortization was $9.6 million in the third quarter, compared to $9.9 million in the prior quarter and $3.7 million in the year ago quarter. It is anticipated that total intangible amortization will be approximately $39 million in fiscal 2004 and decline to approximately $22 million in fiscal 2005.

Interest expense was $3.5 million compared to $0.7 million in the year ago quarter due primarily to the sale of convertible notes in August 2003. The company's effective tax rate for the third quarter was 35.0%, consistent with the second quarter.

Total diluted shares increased from 159.6 million in the second quarter to 180.7 million in the third quarter, due primarily to the accounting effects on our convertible debt and the 1.7 million shares issued in conjunction with the acquisition of MTS Wireless Components in March 2004.

BALANCE SHEET AND CASH FLOW HIGHLIGHTS

Cash and cash equivalents were $164.8 million at June 30, 2004, compared to $200.9 million at March 31, 2004. Cash and cash equivalents declined due primarily to working capital requirements associated with higher sales, offsetting the cash flow from increased net income.

Accounts receivable were $428.3 million and days' sales outstanding (DSOs) were 76 days at June 30, 2004, compared to $391.9 million and 77 days at March 31, 2004. Inventories were $366.7 million and inventory turns were 4.0x at June 30, 2004, compared to $326.6 million and 4.1x at March 31, 2004.

"DSOs continue to be favorably impacted by a higher mix of sales in the Americas. However, inventory turns declined slightly versus the prior quarter due to duplicate manufacturing facilities and higher levels of inventory necessary to support a significant increase in sales," said Mr. Faison. "We anticipate that inventory turns will improve gradually over the next several quarters."

Total debt outstanding was $302.9 million at June 30, 2004, compared to $302.5 million at March 31, 2004. Total debt to capital decreased slightly to 16.7% at June 30, 2004, compared to 16.8% at March 31, 2004.

Cash used for operations was $18.7 million in the third quarter compared to cash flow from operations of $34.5 million in the prior quarter and cash flow from operations of $18.8 million in the year ago quarter. Capital expenditures of $18.2 million in the quarter consisted of investments in new facilities, IT systems and test equipment.

FOURTH QUARTER GUIDANCE

For the fourth quarter, sales are anticipated to range from $460 to $490 million and earnings per share to range from $0.04 to $0.07, including intangible amortization and restructuring costs of approximately $0.06 per share. Gross margins are anticipated to decline in the fourth quarter due to an adverse product and geographic mix shift. Research and development and selling and administrative expenses are expected to be relatively flat to modestly down on an absolute basis compared to the third quarter. The company anticipates a normalized tax rate of approximately 35% and diluted shares of approximately 181.0 million.

"We expect to complete the exit of our Dallas, Texas facility and relocation of Antenna Group product lines from our Lochgelly, Scotland facility during the fourth quarter. In addition, global IT implementations at several of the former Allen locations are expected to be complete by the end of calendar 2004," said Mr. Faison. "Our seasonality trends continue to evolve as Andrew's product mix has become more balanced between active- and passive-type components. Additionally, operator consolidation in North America is having a near-term impact on sales. However, the long-term underlying fundamental drivers of the wireless infrastructure industry continue to be positive and we are encouraged by global operator capital expenditure trends with a focus at the cell site level."

Attached to this news release are preliminary financial statements for the third quarter ended June 30, 2004.

Conference Call Webcast

Andrew Corporation will host a conference call to discuss its third quarter fiscal 2004 results on Monday, July 26, 2004 at 8:00 a.m. CDT. Interested investors can participate via a live webcast over the Internet at www.andrew.com. An audio replay of the conference call will be made available for 60 days following the event.

About Andrew

Andrew Corporation (Nasdaq:ANDW) designs, manufactures and delivers innovative and essential equipment and solutions for the global communications infrastructure market. The company serves operators and original equipment manufacturers from facilities in 33 countries. Andrew (www.andrew.com), headquartered in Orland Park, IL, is an S&P 500 company founded in 1937.

Forward Looking Statements

Some of the statements in this news release are forward looking statements 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 international exchange rates, the timing of cash payments and receipts, end use 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.

UNAUDITED -- PRELIMINARY

                          ANDREW CORPORATION
                 CONSOLIDATED STATEMENTS OF OPERATIONS
           (Dollars in thousands, except per share amounts)

                         Three Months Ended       Nine Months Ended
                               June 30                 June 30
                       ----------------------- -----------------------
                           2004        2003        2004        2003
                       ----------- ----------- ----------- -----------

Sales                    $492,998    $213,721  $1,350,915    $669,565
Cost of products sold     365,309     159,091   1,008,503     492,005
                       ----------- ----------- ----------- -----------
Gross Profit              127,689      54,630     342,412     177,560

Operating Expenses
Research and
 development               29,295      18,921      83,377      58,485
Sales and
 administrative            56,889      32,815     162,036     100,943
Intangible
 amortization               9,583       3,662      28,855      11,027
Restructuring                 719         472       4,181         677
                       ----------- ----------- ----------- -----------
                           96,486      55,870     278,449     171,132

Operating Income
 (Loss)                    31,203      (1,240)     63,963       6,428

Other
Interest expense            3,533         682      11,375       2,648
Interest income              (628)       (249)     (2,359)       (751)
Gain on real estate
 transactions                   -      (9,357)     (1,402)     (9,398)
Loss on sale of
 broadcast assets               -           -       4,511           -
Other expense
 (income), net                885        (362)      2,192      (1,211)
                       ----------- ----------- ----------- -----------
                            3,790      (9,286)     14,317      (8,712)
                       ----------- ----------- ----------- -----------
Income from Continuing
 Operations Before
 Income Taxes              27,413       8,046      49,646      15,140

Income Taxes                9,595        (371)     17,377       1,757
                       ----------- ----------- ----------- -----------
Income from Continuing
 Operations                17,818       8,417      32,269      13,383

Discontinued
 Operations, net of tax
 benefit                        -         788           -       3,118
                       ----------- ----------- ----------- -----------

Net Income                 17,818       7,629      32,269      10,265

Preferred Stock
 Dividends                    126           -         560           -
                       ----------- ----------- ----------- -----------

Net Income Available to
 Common Shareholders      $17,692      $7,629     $31,709     $10,265
                       =========== =========== =========== ===========

Basic and Diluted
 Income per Share from
 Continuing Operations      $0.11       $0.09       $0.20       $0.14
                       =========== =========== =========== ===========
Basic and Diluted Net
 Income per Share           $0.11       $0.08       $0.20       $0.10
                       =========== =========== =========== ===========
Average Shares
 Outstanding
  Basic                   160,655      98,330     159,272      98,315
  Diluted                 180,703      98,330     159,965      98,316


Orders Entered           $497,536    $220,196  $1,352,307    $656,020
Total Backlog            $336,466    $170,571    $336,466    $170,571


                              PRELIMINARY

                          ANDREW CORPORATION
                      CONSOLIDATED BALANCE SHEETS
                        (Dollars in thousands)

                                                   June     September
                                                 30, 2004    30, 2003
                                               ----------- -----------
ASSETS                                         (UNAUDITED)

Current Assets

Cash and cash equivalents                        $164,753    $286,269
Accounts receivable,  less allowances (Jun.
 2004 -- $10,570; Sept. 2003 -- $10,662)          428,305     326,282
Inventories                                       366,701     247,750
Other current assets                               43,664      29,131
                                               ----------- -----------
Total Current Assets                            1,003,423     889,432

Other Assets

Goodwill                                          892,404     821,398
Intangible assets, less amortization               73,808      93,086
Other assets                                       42,651      50,398

Property, Plant and Equipment

Land and land improvements                         22,435      20,926
Buildings                                         122,706     116,038
Equipment                                         493,713     469,296
Allowance for depreciation                       (411,370)   (387,341)
                                               ----------- -----------
                                                  227,484     218,919
                                               ----------- -----------
TOTAL ASSETS                                   $2,239,770  $2,073,233
                                               =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities

Accounts payable                                 $221,792    $124,646
Accrued expenses and other liabilities             74,403      58,893
Compensation and related expenses                  60,265      52,255
Restructuring                                      11,574      20,414
Notes payable and current portion of long-term
 debt                                              14,180      17,750
                                               ----------- -----------
Total Current Liabilities                         382,214     273,958

Deferred liabilities                               59,652      73,941
Long-term debt, less current portion              288,731     301,364

STOCKHOLDERS' EQUITY
Redeemable convertible preferred stock (par
 value, $50 a share: 130,414 shares
 outstanding at June 30, 2004 and 183,720
 shares outstanding at September 30, 2003)          6,521       9,186
Common stock (par value, $.01 a share:
 400,000,000 shares authorized: 160,900,657
 shares issued at June 30, 2004 and
 September 30, 2003, including treasury)            1,609       1,609
Additional paid-in capital                        665,033     649,667
Accumulated other comprehensive income (loss)       1,444     (14,115)
Retained earnings                                 837,144     805,435
Treasury stock, at cost (242,546 shares at
 June 30, 2004 and 2,608,290 shares at
 September 30, 2003)                               (2,578)    (27,812)
                                               ----------- -----------
                                                1,509,173   1,423,970
                                               ----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $2,239,770  $2,073,233
                                               =========== ===========


                       UNAUDITED -- PRELIMINARY

                          ANDREW CORPORATION
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (Dollars in thousands)

                                    Three Months       Nine Months
                                    Ended June 30      Ended June 30
                                 ------------------ ------------------
                                    2004     2003      2004     2003
                                 --------- -------- --------- --------
Cash Flows from Operations

Net Income                        $17,818   $7,629   $32,269  $10,265

Adjustments to Net Income

  Depreciation                     16,863   13,618    48,169   39,319
  Amortization                      9,583    3,662    28,855   11,027
  Other                               (43)  (9,357)   (1,535)  (9,398)

Restructuring and Discontinued
 Operations

  Restructuring costs              (7,444)  (3,714)  (16,848)  (9,649)
  Discontinued operations, net
   of taxes                             -      491         -    4,354

Change in Operating Assets/
 Liabilities

  Accounts receivable             (39,026)  (9,975)  (84,330)  40,523
  Inventories                     (36,552)   4,437   (94,425) (10,170)
  Other assets                      6,034    8,039   (10,278)  13,450
  Accounts payable and other
   liabilities                     14,038    3,924    98,228  (35,987)
                                 --------- -------- --------- --------
Net Cash (Used for)/From
 Operations                       (18,729)  18,754       105   53,734

Investing Activities

  Capital expenditures            (18,179)  (7,385)  (57,675) (22,004)
  Acquisition of businesses, net
   of cash acquired                     -        -   (23,227)    (114)
  Settlement of pre-acquisition
   litigation                           -        -   (29,000)       -
  Investments                           -        -    (6,500)       -
  Proceeds from sale of
   businesses and investments           -        -     3,000    7,286
  Proceeds from sale of
   property, plant and equipment      797    9,660     4,578   10,246
                                 --------- -------- --------- --------
Net Cash (Used for)/From
 Investing Activities             (17,382)   2,275  (108,824)  (4,586)

Financing Activities

  Long-term debt payments, net         33   (1,990)  (17,775)  (6,462)
  Notes payable payments, net         439  (22,500)      254  (56,190)
  Preferred stock dividends          (126)       -      (560)       -
  Payments to acquire treasury
   stock                                -        -    (2,472)       -
  Stock purchase and option
   plans                            1,163        -     2,901      111
                                 --------- -------- --------- --------
Net Cash From/(Used for)
 Financing Activities               1,509  (24,490)  (17,652) (62,541)

Effect of exchange rate changes
 on cash                           (1,500)   2,688     4,855    6,823
                                 --------- -------- --------- --------

Change for the Period             (36,102)    (773) (121,516)  (6,570)
Cash and Equivalents at
 Beginning of Period              200,855   79,074   286,269   84,871
                                 --------- -------- --------- --------
Cash and Equivalents at End of
 Period                          $164,753  $78,301  $164,753  $78,301
                                 ========= ======== ========= ========