Friday February 9, 6:30 am Eastern Time
Press Release
Power-One Announces Revised 2001 Financial Outlook
CAMARILLO, Calif.--(BUSINESS WIRE)--Feb. 9, 2001--Power-One, Inc. (Nasdaq:PWER - news) today announced that it is revising its previously stated expectations for the year ending December 31, 2001.
During Power-One's conference call on January 24, 2001, the company provided guidance which took into account slowing business conditions at some of its largest customers, particularly Cisco Systems. Earlier this week, the company was alerted to a greater than previously expected inventory build-up throughout Cisco's supply chain. The company is also seeing inventory corrections at some of its other communications customers, though of a significantly smaller magnitude.
As a result, the company is revising guidance to 35%-40% year-over-year revenue growth, or to approximately $690 - $720 million, and $1.00 - $1.05 cash earnings per share for the year ending December 31, 2001. Specifically, based on current information, the company is comfortable with revenue forecasts of approximately $172 - $176 million and $0.26 - $0.27 cash earnings per share for the first quarter, and has reduced its expectations for the second quarter to approximately $140 -$150 million, and $0.17 - $0.19 cash earnings per share. The company expects to achieve revenue of approximately $180 - $195 million in the third quarter and $195 - $200 million in the fourth quarter of 2001, with cash earnings per share of $0.27 - $0.29 and $0.33 - $0.34, respectively.
Throughout 2000, due to its significant growth, the company was restricted in its ability to launch many planned cost savings programs in favor of executing its rapid growth and servicing its customers. Now the company has accelerated the launch of several of these cost reduction programs including moving production from higher cost manufacturing locations such as North America and Europe to more efficient areas such as the Dominican Republic and Asia.
These significant cost reduction opportunities are expected to begin taking effect in the second quarter most of which have not been included in any projections. In addition, Power-One announced that it has initiated aggressive actions to reduce its current inventory levels and continues to expect substantial improvements by the end of the second quarter.
``We believe the issues we are facing today are temporary,'' said Steve Goldman, chairman and chief executive officer of Power-One. ``Once the inventory situation is corrected by some of our key customers we should start seeing a resumption of stronger growth rates beginning in the third quarter. The fact that we continue to see the further penetration of Distributed Power Architecture (''DPA``) DC/DC products throughout our customer base gives us confidence about our opportunity to gain further market share and faster growth rates than the industry. In the past year, we have added a comprehensive third product line to our portfolio and are now even more broadly diversified in terms of our telecom customer base.''
``Our focus remains on new product introductions to accelerate our penetration rate and diversify our customer base so as to lessen our dependence on any single customer. We are on-track to introduce a record number of new products this year and are beginning to see design wins materialize with our DPA products targeted at a broadened base of new communications customers. We are very optimistic about our long-term growth potential and remain committed to powering the communications infrastructure,'' Goldman concluded.
Conference Call
Power-One will be holding a conference call today, February 9, 2001 at 8:00 a.m. PT. To participate in the call, please dial 877/679-9054 approximately 10 minutes prior to the start of the call. For a replay of the call, please dial 800/615-3210. The confirmation code for the call is 4988648.
About Power-One:
Power-One is a leading manufacturer of power conversion products designed primarily for communications infrastructure applications. DC rack power systems are sold directly to Internet service providers and telecom central offices. Embedded OEM power products include AC/DC and DC/DC products and are sold to manufacturers of datacom and telecom equipment. Power-One also supports key customers in the semiconductor-test capital equipment industry and other high-end industrial markets.
The company is comprised of the AC&DC Power Systems, High Density-Board Mounted Power, Compact Power Systems, Telecom Systems and Powec divisions.
Power-One, with headquarters in Camarillo, CA, has over 7,500 employees with manufacturing operations in Irvine, CA; Boston, MA; Mexico; Dominican Republic; Puerto Rico; Norway; Switzerland; Ireland; Slovakia; and China.
For information on Power-One and its products, visit the company's Web site at www.power-one.com.
This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as ``expect,'' ``believe,'' ``forecast'' and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Future results may be adversely affected by various factors including a general recession, a downturn in our principal customers' businesses and increased prices for components. See ``Risk Factors'' in the Company's 1999 Form 10-K and Registration Statement on Form S-3 (filed October 18, 2000) on file with the Securities and Exchange Commission for greater detail regarding factors that constitute cautionary statements with respect to such forward-looking statements, including certain risks and uncertainties, that could cause actual results to differ materially from those in such forward-looking statements. The Company undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.
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Contact:
Power-One
Ed Schnopp, 805/987-8741
or
Thomson Financial/Carson
Jill Fatzinger, 415/617-2565 (Investor Relations)
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