American Power Conversion Reports 38 Percent Earnings Growth in First Quarter 1997
PR News Wire via Dow Jones
Revenues up 21.5 percent
APC entered new market segment with Symmetra(TM) Power Array(TM)
WEST KINGSTON, R.I. April 24 /PRNewswire/ -- American Power Conversion
Corporation (Nasdaq: APCC), the worldwide leader in power protection solutions,
today announced first quarter sales and earnings results for the three months
ended March 30, 1997.
Sales for the first quarter of 1997 were $172.0 million, up 21.5 percent from
$141.6 million for the first quarter of 1996. Earnings for the first quarter of
1997 were $21.0 million ($.22 per share), up 38 percent versus $15.2 million
($.16 per share)in the first quarter of 1996.
"We are very pleased with the earnings growth we continue to see in our
business," explained Rodger B. Dowdell Jr., president and CEO. "First quarter
earnings of $.22 per share were in line with the consensus estimate published by
First Call. Additionally, first quarter revenue growth was in line with our
guidance of 20 to 25 percent growth for the quarter, with domestic revenues up
29 percent and international revenues up 10 percent. While we did experience
some weakness in our international markets during the first quarter, we believe
the global business fundamentals that drive the uninterruptible power supply
(UPS) industry remain favorable for APC's long- term success," continued
Dowdell.
Product and Business Developments
"The past three months have been a very exciting period for APC," concluded
Dowdell. "Most notably during the quarter, we announced APC's first entry into
the above 5 kVA power protection market with the Symmetra Power Array."
Available in configurations up to 16kVA of power, Symmetra Power Array is an
entirely new category of power protection. "We have designed an innovative
system to bring scalability and redundancy to the UPS industry," added Dowdell.
"We focused on fulfilling the primary needs for power protection in the
datacenter customer set.
By combining high availability power protection with remote manageability,
predictive failure and proactive alerts, Symmetra is a complete solution for
today's data center.
"Also during the quarter, APC announced the acquisition of Systems Enhancement
Corporation, the Company's first acquisition. Based in St. Louis, MO, Systems
Enhancement has been developing and marketing power management software
solutions to the UPS market for the past seven years. The transaction was
valued at approximately $12.6 million in APC stock and was accounted for as a
pooling-of-interests.
"The addition of Systems Enhancement's resources to our business helps to
strengthen our overall offerings and development efforts in the power management
software arena," explained Dowdell. "As a whole, we highly value the added
benefit of maintaining software development in-house and believe it serves as a
significant value to our customers."
"In addition, APC continues to focus on building relationships with many
leading technology vendors," continued Dowdell. During the quarter the Company
began ProtectMe!(TM) with APC marketing campaigns with Dell Computer Corporation
and Quantex Microsystems, Inc., as well as a new sales and marketing
relationship with Acer Sertek in Taiwan.
Finally, APC continued to be the recipient of worldwide recognition during the
quarter. This included ComputerWorld's "Reseller Choice" award, Computer
Shopper's "Best UPS" award for the Back-UPS(R) Pro(TM), PC Bulgaria's "Editor's
Choice," inclusion in Dataquests' list of product "Sizzlers '97" in India and,
finally, for the sixth year in a row, APC was named "Best to Sell" by The VAR
magazine in the UK.
"Whether it is surge protection for a desktop PC or high-end power protection
and management solutions for clustered servers, APC is dedicated to providing
innovative and reliable industry-leading solutions for our customers," concluded
Dowdell.
Business Outlook
"Based on our first quarter results and our current business outlook, we
continue to believe that APC should be able to generate revenue growth for 1997
in the 20 to 25 percent range," explained Dowdell. "We have slightly revised
APC's expected quarterly revenue distribution for 1997 to approximate 20 percent
in Q1, 23 percent in Q2, 28 percent in Q3 and 29 percent in Q4. Because the
Company continues to identify opportunities to grow, we anticipate our operating
expenses will grow in line with revenues, or up to five percentage points
greater than revenue growth, in 1997. We continue, however, to remain very
focused on profitability in our business decisions. With respect to gross
margins, we anticipate them to remain in the low forty percent range. And,
finally, capital expenditures are estimated to grow $15 to $20 million,
primarily to support planned capacity expansions, above the $25 million of
capital spending incurred in 1996.
"These are forward-looking statements based on current expectations that
involve a number of risks and uncertainties including those which are described
below under the heading "Safe Harbor Provision." While the Company believes
that it has a reasonable prospect of achieving these results in 1997, it cannot
provide any assurance that these expectations will actually be met.
Safe Harbor Provision
Statements contained in this press release which are not historical factors
may constitute forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. All forward-looking statements are
subject to risks and uncertainties which could cause actual results to differ
from those projected. The factors that could cause actual results to differ
materially include the following: the timely development and acceptance of new
products such as the Symmetra Power Array; ramp up and expansion of
manufacturing capacity; general economic conditions and growth rates in the
power protection industry and related industries, including but not limited to
the PC, server and networking industries; competitive factors and pricing
pressures; changes in product mix; changes in the seasonality of demand
patterns; inventory risks due to shifts in market demand; component
constraints and shortages; risk of nonpayment of accounts receivable; and the
risks described from time to time in the Company's filings with the Securities
and Exchange Commission.
American Power Conversion (Nasdaq: APCC) is the worldwide leader in the
design, manufacture and marketing of power protection equipment, including surge
suppressors, uninterruptible power supplies (UPS), power conditioning equipment
and related software for computer and computer related equipment. APC reported
sales of $707 Million for the year ended December 31, 1996. The company is
headquartered in West Kingston, RI and its products are distributed worldwide.
Product lines include Back-UPS(R), Smart-UPS(R), Matrix-UPS(TM)
Symmetra(TM)PowerArray(TM), PowerShield(TM)UPS, Line-R(R) power conditioners,
SmartSlot UPS accessories, MasterSwitch(TM) PDUs, PowerChute(R) software,
PowerNet(R) SNMP adapters and software, SurgeArrest(R) surge suppressors,
ProtectNet(TM) data-line surge suppressors, and PowerManager(TM) power centers.
Call 800-877-4080 for more information about APC's award winning products and
services. Visit APC's web site at apcc.com for the latest products
and news from APC. American Power Conversion is an affirmative action/ equal
opportunity employer. All trademarks are the property of their owners.
AMERICAN POWER CONVERSION CORPORATION & SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED
(UNAUDITED)
MARCH 30, 1997 MARCH 31, 1996
NET SALES $171,989,284 $141,625,835
COST OF GOODS SOLD 95,801,409 83,440,749
GROSS PROFIT 76,187,875 58,185,086
MARKETING, SELLING, GENERAL
AND ADMINISTRATIVE 40,987,548 32,297,828
RESEARCH AND DEVELOPMENT 4,204,744 3,719,472
TOTAL OPERATING EXPENSES 45,192,292 36,017,300
OPERATING INCOME 30,995,583 22,167,786
OTHER INCOME (DEDUCTIONS), NET (374,251) 707,784
EARNINGS BEFORE INCOME TAXES 30,621,332 22,875,570
INCOME TAXES 9,646,000 7,663,000
NET EARNINGS $20,975,332 $15,212,570
EARNINGS PER SHARE $.22 $.16
WEIGHTED AVERAGE SHARES
OUTSTANDING 95,551,199 93,750,447
AMERICAN POWER CONVERSION CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
MARCH 30, 1997 DECEMBER 31,1996
(UNAUDITED)
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $151,097,432 $153,234,392
ACCOUNTS RECEIVABLE, NET 106,756,129 108,543,665
INVENTORIES 159,613,605 130,443,276
OTHER CURRENT ASSETS 9,935,249 11,609,549
DEFERRED INCOME TAXES 23,877,634 20,284,000
TOTAL CURRENT ASSETS 451,280,049 424,114,882
PROPERTY, PLANT & EQUIPMENT 127,831,966 114,352,587
LESS: ACCUM. DEPRECIATION 40,016,893 35,655,158
NET PROPERTY, PLANT &
EQUIPMENT 87,815,073 78,697,429
OTHER LONG TERM ASSETS 1,883,769 1,189,344
TOTAL ASSETS $540,978,891 $504,001,655
CURRENT LIABILITIES
ACCOUNTS PAYABLE $55,815,390 $41,586,761
ACCRUED EXPENSES 44,148,039 47,442,693 |
