Strong Dollar Affects Revenues at American Power Conversion
WARWICK, R.I., Apr. 22 (Providence Journal-Bulletin/KRTBN)--The strong
dollar overseas will have a negative impact on a portion of American
Power Conversion's revenues, according to the company president and
chief executive officer, Rodger B. Dowdell Jr.
APC, based in West Kingston, R.I., makes devices and software that
temporarily power computers and networks in the event of a power
failure.
As the dollar strengthens in foreign markets, companies get less money
for their products in those regions, in terms of U.S. dollars.
The dollar last week was worth 50 percent more than its historic lows
of 1995 compared with the yen. It has also soared almost 30 percent
against the mark during the same period.
"This past quarter, there's no doubt that we were affected by multiple
millions of dollars in translation impact due to currency
fluctuations," Dowdell said.
His comments came yesterday as a response to a question at the
company's annual shareholders' meeting, held this year in Warwick at
the Radisson Airport Hotel. About 400 attended.
After the meeting however, chief financial officer Donald Muir
clarified Dowdell's comments, saying that Dowdell was not speaking
about revenues for the first quarter. Financial results for the first
quarter are scheduled to be released on Thursday, after the market
closes.
What Dowdell meant was that there was an increase in the value of the
dollar overseas during the first quarter, and the company does business
overseas; therefore, APC, like other companies, does have
foreign-currency exposure, Muir said.
"We really can't talk about what that impact may be," he said.
About 42 percent of the company's 1996 revenues of $707 million were
from international sales. But only about 15 percent of the company's
total revenues are exposed to potential currency fluctuations, Muir
said. Most of APC's foreign contracts call for payment in U.S. dollars,
he said.
According to the company's annual report, currency exchange rates were
not material to the results of operations in 1994, 1995 and 1996.
Dowdell said the company tries to minimize exchange-rate fluctuations
by paying operating expenses in local currencies when possible.
At the meeting, shareholders voted on a shareholder proposal that was
included for the first time in the company's proxy statement.
Allen B. Williams, a retired stock broker from East Providence,
proposed expanding the number of APC board members from five to nine.
Williams was given two minutes to make his case; and when he went over
his allotted time, he was interrupted by Dowdell.
Williams then turned to the audience and asked, "Ladies and gentlemen,
do you want to hear any more?" There was some applause, and several
people said yes, and Williams was allowed to continue.
Williams didn't discuss his proposal, but instead addressed the fact
that the proxy statement didn't mention him by name or how many shares
of the company he owns.
Omitting that information was against rules set by the Securities and
Exchange Commission, he said, and prevented other shareholders from
contacting him to discuss his proposal.
He said that if others knew he owned 27,325 shares of APC, they would
have taken his proposal more seriously.
Investor-relations manager Deborah K. Grey said the company's outside
counsel is looking into whether the company broke any SEC rules by the
omissions.
"It was definitely not our intention to violate any rules," she said.
"If for some chance we did break a rule, we don't believe that it would
require a re-vote," she said.
That's because Williams' proposal was defeated by such a wide margin
-- 61 percent against to 6 percent for. The remainder of shareholders
didn't vote.
After the meeting, Williams said he wants to see board members added
that have a background in international trade because APC has a large
and growing interest in foreign markets.
Dowdell said he expects foreign revenues to account for two-thirds of
total revenues in five to 10 years. APC has some 2,800 employees
worldwide, including about 1,200 in Rhode Island. It manufactures its
products in Rhode Island, Ireland and the Philippines.
APC's stock closed yesterday at $21.25 a share, down 50 cents.
By Timothy C. Barmann
-0-
ON THE INTERNET:
Visit projo.com, the World Wide Web site of The Journal-Bulletin, at
projo.com
(c) 1997, The Journal-Bulletin, Providence, R.I. Distributed by
Knight-Ridder/Tribune Business News. APCC, END!A4?PJ-APC |
