Nice Quarter
Monday September 25, 4:22 pm Eastern Time
Press Release
SOURCE: Ault, Incorporated
Ault Incorporated Reports Fiscal Year 2001 First Quarter Sales Growth of 60 Percent; Record Sales for Third Quarter in a Row
Net Income Increases 207 Percent
MINNEAPOLIS, Sept. 25 /PRNewswire/ -- Ault, Incorporated (Nasdaq: AULT - news) reported net sales of $21.6 million for the first quarter of fiscal 2001 ended August 27, 2000, an increase of 60 percent from $13.5 million for the first quarter of fiscal 2000 ended August 29, 1999.
Net income for the first quarter of fiscal 2001 increased 207 percent to $651,000, or $0.14 per diluted share, compared with $212,000, or $0.05 per share for the same period last year.
Frederick M. Green, president and chief executive officer commented: ``Sales for the first quarter of fiscal 2001 were the highest for any three-month period in Ault's history. We are especially pleased with the Company's first quarter performance since it is usually the weakest quarter of the year. Our steadily growing sales have been paced in large measure by our expanding penetration of the high-growth broadband modem market. Ault is providing external power supplies to several of the largest OEMs of ADSL and cable modems. We are also providing external power solutions for an expanding range of other high-growth applications, including personal digital appliances, wireless communications equipment and flat panel displays. We are further encouraged by strongly growing sales to electronics manufacturers in Korea and Peoples' Republic of China (PRC). Increasing our sales base in the Asian electronics market has been one of our top priorities, and we continue to make substantial progress in this area. We are looking forward to strong earnings and sales growth during the rest of fiscal 2001.''
The positive impact of Ault's first quarter sales growth was partly offset by a reduction in the gross margin. As previously reported, margins continue to be affected by a growth in lower-margin linear power supplies used by Ault's XDSL customers. Significantly higher air and maritime freight costs have also contributed to the reduction in gross margin.
The Company is currently implementing a set of programs aimed at strengthening gross margins during the course of fiscal 2001. The Company's complete line of power supplies is being re-engineered with the goal of reducing manufacturing costs. In addition, a new global purchasing system will enable the Company to leverage its purchasing power for key electronic components. The Company is also passing through its higher charges when possible, a move that is not currently affecting business volumes.
As a percentage of sales, operating expenses declined to 17.6 percent in the first quarter, down from 24 percent in the first quarter of 1999. It is the company's goal to attain an operating expense percentage in the upper teens over the next few years.
The second quarter of fiscal 2001 ending November 27 is expected to be another strong period, marked by significant year-over-year increases in sales and earnings. Based on customer indications and order patterns, demand for power supplies by OEMs of broadband modems is expected to remain strong.
During the coming year, the Company also expects growing contributions from a range of other technology-related applications, including battery chargers for personal digital appliances and power supplies for flat panel displays, wireless systems and medical devices.
Ault will host a conference call on Tuesday, September 26, 2000, at 8:00 a.m. CT. Investors will have the opportunity to listen to the conference call over the Internet through Ault's web-site at aultinc.com and at streetevents.com
The conference call will be archived on both sites for 90 days for those who cannot listen to the live broadcast.
Ault is the largest independent manufacturer of external power conversion products based in North America. The Company is a leading supplier to original equipment manufacturers of broadband modems, wireless and wire line telecommunications infrastructure, computer peripherals and medical equipment.
Statements regarding Ault's anticipated future performance are forward-looking and therefore involve risks and uncertainties, including but not limited to: market conditions in the global electronics industry, buying patterns of major customers, competitive products and technologies, the ability to control expense growth, and other factors set forth in the Company's filings with the Securities and Exchange Commission.
Ault Incorporated & Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except amounts per share)
(Unaudited)
First Quarter Ended
August 27, August 29,
2000 1999
Net sales $21,642 $13,535
Cost of goods sold 16,918 9,959
Gross profit 4,724 3,576
Operating expenses 3,814 3,262
Operating income 910 314
Other income (expense) 75 (20)
Income before income taxes 985 294
Income taxes 334 82
Net income $651 $212
Earnings per share
Basic $0.15 $0.05
Diluted $0.14 $0.05
Common and equivalent shares outstanding:
Basic 4,455,432 4,427,558
Diluted 4,655,880 4,631,848
Ault Incorporated & Subsidiary
Consolidated Balance Sheets
(Dollars in thousands)
(Unaudited)
August 27, May 28,
2000 1999
Assets:
Current Assets
Cash & cash equivalents $2,221 $2,916
Trade receivables, less allowance for
doubtful accounts of $102,000 at
August 27, 2000; $94,000 at May 28, 2000 16,390 15,899
Inventories 15,110 14,260
Prepaid and other expenses 763 983
Deferred taxes 211 211
Total Current Assets 34,695 34,269
Other assets 1,417 1,450
Property, equipment and leasehold improvements 17,284 16,907
Less accumulated depreciation 6,584 6,370
10,700 10,537
Total assets $46,812 $46,256
Liabilities and stockholders' equity:
Current liabilities
Note payable to bank $2,934 $2,158
Accounts Payable 10,347 11,763
Other 3,144 2,640
Total current liabilities 16,425 16,561
Long-term debt, less current maturities 3,577 3,657
Retirement and severance benefits 297 233
Stockholders' equity:
Preferred stock, no par value, authorized
1,000,0000 shares; none issued -- --
Common shares, no par value, authorized
10,000,000 shares; issued and outstanding
4,473,432 on August 27, 2000; and
4,445,432 on May 28, 2000 20,334 20,275
Notes receivable arising from the sale
of common stock (145) (145)
Accumulated other comprehensive loss (611) (548)
Retained Earnings 6,935 6,223
26,513 25,805
$46,812 $46,256
For more information, contact Frederick M. Green, President and Chief Executive Officer, 763-592-1900, or Donald L. Henry, Vice President and Chief Financial Officer, 763-592-1900, both of Ault, Incorporated.
SOURCE: Ault, Incorporated
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