American Power Conversion and General Signal Agree to Enter into World-wide Patent License
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WEST KINGSTON, R.I., May 17 /PRNewswire/ -- American Power Conversion (Nasdaq: APCC) announced today that it has entered into an agreement in principle with General Signal Power Systems, Inc., the former parent company of Best Power, to license world-wide patent rights relating to uninterruptible power supply (UPS) technology. In return for the patent license, APC will pay General Signal a lump sum of $48 million in cash. Additionally, APC and General Signal have settled and agreed to dismiss with prejudice the patent infringement lawsuit filed by General Signal.
APC anticipates that the patent license will be a long-term asset on the Company's balance sheet at a value to be determined by an independent economic analysis. In the event that the purchase price exceeds the value assigned to the license, the difference will be recognized in the Company's income statement for the second quarter of 2000 as a one-time charge to earnings. The capitalized value of the license is expected to be amortized over the estimated future economic life of the underlying technology.
Excluding the impact of this potential one-time charge to APC's second quarter earnings, the Company remains comfortable with the current quarter consensus earnings per share estimate for the second quarter of $0.29 as published on First Call.
In its August 1999 lawsuit, General Signal alleged five claims of patent infringement and three claims of false advertising. In recent months, the court dismissed four of the five patent infringement claims and General Signal voluntarily dismissed with prejudice the false advertising claims.
Safe Harbor Provision
Statements contained in this press release, which are not historical facts, 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: APC's ability to successfully integrate ABL and Advance Power's operations; the timely development and acceptance of new products; ramp up, expansion and rationalization of global manufacturing capacity; general worldwide economic conditions; growth rates in the power protection industry and related industries, including but not limited to the PC, server, networking, telecommunications and enterprise hardware 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; the effects of any other possible acquisitions; component constraints and shortages; risk of nonpayment of accounts receivable; the uncertainty of the litigation process including risk of an unexpected, unfavorable result of current or future litigation including, without limitation, the pending Anthony F. Coppola litigation discussed in the Company's SEC filings; financial impact during any period of the Company's purchase of the license to certain patent rights under a worldwide patent license from General Signal Power Systems; and the risks described from time to time in the Company's filings with the Securities and Exchange Commission.
About American Power Conversion
Founded in 1981, American Power Conversion (Nasdaq: APCC), a Fortune 1000 company, is a leading provider of global, end-to-end power protection products and services, which include surge suppressors, uninterruptible power supplies (UPS), power conditioning equipment, related software, and professional and consulting services for Nonstop Networking(TM). APC's comprehensive solutions, which are designed for both home and corporate environments, improve the manageability, availability and performance of sensitive electronic, network, communications and industrial equipment of all sizes. APC, which is headquartered in West Kingston, Rhode Island, reported sales of $1.337 billion for the year ended December 31, 1999.
All trademarks are the property of their owners. Additional information about APC and its global end-to-end solutions can be found by accessing the APC World Wide Web site at www.apcc.com or by calling 800-877-4080.
For more information contact:
Media:
Jodi Kennedy, director of media relations, 401-789-5735, ext. 2158,
jkennedy@apcc.com
Investors:
Donald M. Muir, chief financial officer, 401-789-5735, ext. 2105
Deborah K. Grey, investor relations manager, 401-789-5735, ext. 2994,
dgrey@apcc.com
SOURCE American Power Conversion
CO: American Power Conversion; General Signal Power Systems, Inc.
ST: Rhode Island
IN: CPR FIN
SU: JVN LIC
05/17/2000 11:24 EDT prnewswire.com |
