WEST KINGSTON, R.I., July 24 /PRNewswire/ -- American Power Conversion
Corporation (Nasdaq: APCC) (APC) today announced sales and earnings for the
period ended June 29, 1997.
Sales for the second quarter of 1997 were $203.6 million, up 26 percent
from $161.4 million for the quarter ended June 30, 1996. Earnings for the
second quarter of 1997 were $26.6 million ($.28 per share) up 39 percent from
$19.1 million ($.20 per share) for the second quarter of 1996.
For the six months ended June 29, 1997, sales were $375.6 million, up
24 percent from $303.1 million for the first six months of 1996. Earnings for
the six months ended June 29, 1997 were $47.6 million ($.50 per share) up
39 percent from $34.3 million ($.37 per share) for the first six months of
1996.
"We are very pleased with APC's second quarter and year-to-date revenue
and earnings growth performance," commented Rodger B. Dowdell, Jr., president
and CEO. "Our second quarter revenue growth rate was healthy worldwide. We
were particularly encouraged by the sequential improvement in the growth rate
of our international business, which grew approximately 34 percent versus
last year's second quarter, following a modest 10 percent year-over-year
growth performance reported in the first quarter of 1997." For the second
quarter, APC reported North American revenue growth of 22% versus last year's
second quarter.
APC's second quarter operating profit grew 36 percent to $37.7 million or
18.5 percent of sales. This marked an improvement of 130 basis points versus
last year's second quarter and 50 basis points versus the first quarter of
1997. Second quarter gross margin improved 320 basis points versus last year
and 60 basis points sequentially to 44.9 percent of sales, while operating
expenses increased 190 basis points versus last year and ten basis points
sequentially to 26.4 percent of sales. APC's second quarter 1997 ending
inventory balance of $159.6 million was reduced sequentially, as a percentage
of sales, by 15 percentage points from 93 percent in the first quarter to
78 percent in the second quarter. Accounts receivable, measured in days sales
outstanding, improved sequentially by seven days to 50 days, down from 57 days
at the end of the first quarter of 1997. The Company's second quarter 1997
cash position was $142.8 million, a decrease of $8.3 million sequentially, due
in part to a reduction in accounts payable of $17.6 million. These changes
yielded a sequential improvement in APC's current ratio of current assets to
current liabilities from 3.9 to one in the first quarter to 4.6 to one in the
second quarter of 1997. The Company continues to be free of any long-term
debt.
"Our balance sheet remains extremely healthy and very liquid as we
continue to focus on both working capital and total asset management,"
concluded Dowdell. APC's second quarter return on total assets improved four
percentage points sequentially to 20 percent up from 16 percent in the first
quarter of 1997.
Product, Business and Organizational Developments
"The need to provide customers with the most reliable solution possible is
a common theme in the technology industry," said Dowdell. "By providing 'best
of breed' power protection solutions, APC is working with many of the
industry's leading vendors to achieve greater application reliability. We are
pleased to see a growing number of manufacturers recommending or reselling APC
solutions to their customers," continued Dowdell.
On the desktop level, Gateway Computer began bundling APC's Back-UPS
Pro(R) 650 with select versions of its G6-233M PC offering. Gateway and APC
are participating in joint marketing campaigns to promote the two companies
efforts to reduce downtime for the PC user.
In the server market, the APC-Dell relationship has been expanded to offer
APC Smart-UPS(R) products standard on several Dell PowerEdge server products.
The two companies are working together on joint advertising and marketing
campaigns to grow awareness of these solutions designed to increase user
reliability.
In Taiwan, APC has announced that the award-winning PowerChute(R) plus
power management software has been selected by Acer Computer International as
the Uninterruptible Power Supply (UPS) software of choice for Acer's Easy
Build offerings. Acer Easy Build, including APC PowerChute plus, will be
available on all Acer Altos Client Server systems operating in the Windows NT
and Novell Network environments.
"Overall, we are pleased with the growing global recognition of the need
for power protection and the selection of APC as the brand of choice,"
commented Dowdell. "As a Company, APC is positioned as the best power
protection company to partner with in the industry. APC can provide the
necessary investment, products and reputation to make these types of programs
a success. Similarly, APC will expand this type of benefit to the greater
than 5 kVA market space in the third quarter when the Company begins shipping
the new Symmetra(TM) Power Array(TM). This exciting new product brings
scalability, redundancy and user serviceability to the UPS industry."
Finally, as a strategic business objective, APC strives for continuous
process improvement in its operations. As an integral element of this
strategy, APC has recently established several decentralized operating
divisions segmented along market access and solution delivery lines of
business. These profit divisions will report to general managers and, while
focusing on specific markets, geographies and products, will be part of a
family of interrelated APC businesses with shared corporate visions and
objectives. There are three market access divisions based on geographic
segmentation. These divisions include: the Americas (North and Latin
America), EMEA (Europe, Middle-East and Africa) and JPAA (Japan, Australia and
Asia Pacific). Additionally, five solution delivery divisions have been
established along product applications. These divisions include: Data Center
Solutions, Network Power Solutions, Desktop Power Solutions, Systems
Protection Solutions, and Network Enhancements.
"We believe these organizational changes will better position APC to
innovate and react more quickly to the dynamics of the power protection
industry," said Dowdell. "By empowering each division with decision making
capabilities and the necessary financial controls, we are confident that APC
will be better positioned to grow its business in 1997 and beyond."
Business Outlook
"Based on APC's second quarter results and the Company's current business
outlook, we continue to believe that APC is well positioned to generate full
year 1997 revenue and earnings per share growth in the 20 to 25 percent range,
which is consistent with the Company's guidance since the beginning of the
year. This assumes that we can maintain or slightly improve our operating
profitability during the second half of the year, which is currently running
at 18.5 percent of sales," concluded Dowdell.
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; mergers and
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 litigation; and the risks
described from time to time in the Company's filings with the Securities and
Exchange Commission.
American Power Conversion is the leader in the designing, manufacturing
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.
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. APC's press releases are also available through
Company News On-Call by fax, 800-758-5804, ext. 046187, or at
prnewswire.com
American Power Conversion is an affirmative action/ equal opportunity
employer. All trademarks are the property of their owners.
AMERICAN POWER CONVERSION CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
JUNE 29, 1997 DECEMBER 31, 1996
(UNAUDITED)
CURRENT ASSETS
CASH AND CASH EQUIVALENTS$142,804,622 $153,234,392
ACCOUNTS RECEIVABLE, NET 117,725,067 108,543,665
INVENTORIES 159,592,936 130,443,276
OTHER CURRENT ASSETS 13,375,087 11,609,549
DEFERRED INCOME TAXES 28,021,786 20,284,000
TOTAL CURRENT ASSETS 461,519,498 424,114,882
PROPERTY, PLANT & EQUIPMENT133,553,254 114,352,587
LESS: ACCUM. DEPRECIATION 44,058,294 35,655,158
NET PROPERTY, PLANT &
EQUIPMENT 89,494,960 78,697,429
OTHER LONG TERM ASSETS 1,640,487 1,189,344
TOTAL ASSETS $552,654,945 $504,001,655
CURRENT LIABILITIES
ACCOUNTS PAYABLE $38,170,673 $41,586,761
ACCRUED EXPENSES 48,710,971 47,442,693
INCOME TAXES PAYABLE 13,944,232 17,294,445
TOTAL CURRENT LIABILITIES 100,825,876 106,323,899
DEFERRED TAX LIABILITY 6,593,604 5,780,000
TOTAL LIABILITIES 107,419,480 112,103,899
SHAREHOLDERS' EQUITY
COMMON STOCK 952,378 944,174
ADDITIONAL PAID-IN CAPITAL 53,310,944 48,373,647
RETAINED EARNINGS 392,523,406 344,131,198
TREASURY STOCK (1,551,263) (1,551,263)
TOTAL SHAREHOLDERS' EQUITY445,235,465 391,897,756
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $552,654,945 $504,001,655
AMERICAN POWER CONVERSION CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED
(UNAUDITED)
JUNE 29, 1997 JUNE 30, 1996
NET SALES $203,619,548 $161,436,849
COST OF GOODS SOLD 112,209,228 94,098,786
GROSS PROFIT 91,410,320 67,338,063
MARKETING, SELLING,
GENERAL
AND ADMINISTRATIVE 48,294,017 36,112,221
RESEARCH AND DEVELOPMENT 5,391,492 3,506,576
TOTAL OPERATING EXPENSES 53,685,509 39,618,797
OPERATING INCOME 37,724,811 27,719,266
OTHER INCOME, NET 1,121,950 1,010,986
EARNINGS BEFORE
INCOME TAXES 38,846,761 28,730,252
INCOME TAXES 12,236,000 9,625,000
NET EARNINGS $26,610,761 $19,105,252
EARNINGS PER SHARE $0.28 $0.20
WEIGHTED AVERAGE
SHARES OUTSTANDING 96,076,477 94,243,830
AMERICAN POWER CONVERSION CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
FOR THE SIX MONTHS ENDED
(UNAUDITED)
JUNE 29, 1997 JUNE 30, 1996
NET SALES $375,608,832 $303,062,684
COST OF GOODS SOLD 208,010,637 177,539,535
GROSS PROFIT 167,598,195 125,523,149
MARKETING, SELLING,
GENERAL
AND ADMINISTRATIVE 89,281,565 68,410,049
RESEARCH AND DEVELOPMENT 9,596,236 7,226,048
TOTAL OPERATING EXPENSES 98,877,801 75,636,097
OPERATING INCOME 68,720,394 49,887,052
OTHER INCOME, NET 747,699 1,718,770
EARNINGS BEFORE
INCOME TAXES 69,468,093 51,605,822
INCOME TAXES 21,882,000 17,288,000
NET EARNINGS $47,586,093 $34,317,822
EARNINGS PER SHARE $0.50 $0.37
WEIGHTED AVERAGE SHARES
OUTSTANDING 95,928,434 93,938,528
SOURCE American Power Conversion
CONTACT: Deborah K. Grey, Investor Relations Manager, 401-789-5735 ext.
2994, dgrey@apcc.com or Donald M. Muir, CFO, 401-789-5735 ext. 2105 |
