ACT Manufacturing, Inc. Reports Record Third Quarter Results
HUDSON, Mass., Oct. 20 /PRNewswire/ -- ACT Manufacturing,
Inc. (Nasdaq: ACTM - news) today reported financial results
for the third quarter ended September 30, 1999.
For the three months ended September 30, 1999, net sales
increased 31 percent to a record $180,105,000 compared with
$137,452,000 for the same period in 1998. Excluding
$5,601,000 of merger costs associated with the acquisition of
CMC Industries, Inc. which was consummated on July 29, 1999,
net income would have been $3,853,000, or $0.28 per
share, for the three months ended September 30, 1999,
compared with net income of $1,219,000, or $0.09 per share,
for the third quarter of 1998. Including the merger costs,
net loss for the quarter was $1,748,000, or $0.13 per share.
For the nine months ended September 30, 1999, revenue
increased 7 percent to a record $483,571,000 compared with
$451,625,000 for the same period in 1998. Excluding the
$5,601,000 of merger costs, net income for the nine months
ended September 30, 1999 would have been $6,731,000, or $0.50
per share, compared with net income of $2,513,000, or $0.20
per share, for the first nine months of 1998. Including the
merger costs, net income was $1,130,000, or $0.08 per share,
for the nine months ended September 30, 1999.
Mr. John A. Pino, Chairman and Chief Executive Officer,
commented, ``The integration of CMC with ACT has progressed
ahead of our plans. Our customers have responded very
positively to the expanded global capability of ACT. In the
short time since we acquired CMC Industries, we have seen a
significant increase in business activity with both new and
existing customers. Some of these opportunities have already
crystallized into new and expanded business relationships.
``In addition, last week, we completed our acquisition of
certain assets of GSS/Array Technology, Inc. of San Jose,
California. We expect the selected customer relationships
assumed to enhance our revenue stream and position our
northern California operations as a center of high-end
technology and radio frequency excellence.'
Mr. Pino continued, ``Given the consolidation trend in our
industry, we plan to continue to evaluate opportunities to
enhance our scale, geographic presence, engineering
capabilities and service offerings through selective
acquisitions. We continue to feel positive about our future
opportunities, and our current customer forecasts for the
fourth quarter of 1999 continue to reflect expanded business.
We do not expect substantial gross margin expansion in the
fourth quarter of 1999 due to inefficiencies associated with
bringing on additional equipment capacity throughout the
Company as well as costs associated with the consolidation of
assets acquired from GSS/Array and the assimilation of
GSS/Array customers into our existing California operations.'
ACT Manufacturing, Inc., headquartered in Hudson,
Massachusetts, provides value-added electronics manufacturing
services for original equipment manufacturers in the networking
and telecommunications, computer, industrial and medical
equipment markets. The Company provides OEMs with complex
printed circuit board assembly primarily utilizing advanced
surface mount technology, mechanical and molded cable and
harness assembly, electro-mechanical subassembly, and total
system assembly and integration. The Company has operations
in Hudson, Mass.; Mansfield, Mass.; Lawrenceville, Ga.;
Corinth, Miss.; Santa Clara, Calif.; Huntsville, Ala.;
Dublin, Ireland; Hermosillo, Mexico; and Taipei, Taiwan.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act
of 1995 that are subject to risks and uncertainties that
could cause actual results to differ materially from those
anticipated, including statements concerning the effects of
the CMC merger and the GSS/Array asset acquisition, expected
synergies related to the merger and the asset acquisition,
expected financial and operating results, growth of the
customer base, revenue and shareholder value, future customer
shipments, and the plans and objectives of management. Those
risks and uncertainties include, among others: the risk of
not integrating the CMC business successfully; the inability
to achieve expected synergies; costs associated with the
merger; the inability to integrate the selected assets
acquired from GSS/Array or to achieve expected synergies; the
Company's ability to expand its customer base and grow its
operations through acquisition or otherwise; the effectiveness
of managing manufacturing processes; increased competition
and its effects on pricing, revenues and gross margins,
and the customer base; future customer demand; the Company's
ability to timely complete, configure and ship products; the
timely availability of components; the effect of Year 2000
problems or concerns on our operations, the operations of our
suppliers and customers; and demand for our customers'
products; and changes, reductions, delays or cancellations of
customer orders. In addition, ACT's business and results of
operations are subject to numerous additional risks and
uncertainties, including the short-term nature of customer
orders, customers' announcements and introduction of new
products or new generations of products, evolutions in the
life cycles of customers' products, inventory obsolescence,
interest rate and currency exchange rate movements, trends in
the electronics industry and changes or anticipated changes
in economic conditions. For a more detailed discussion of the
risks and uncertainties of ACT's business, please refer to
the Company's periodic reports and registration statements
filed with the Securities and Exchange Commission, including
the Company's Annual Report on Form 10-K for the period ended
December 31, 1998 and the Registration Statement on Form S-4
filed on June 23, 1999.
ACT MANUFACTURING, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
September 30, December 31,
1999 1998
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $4,308 $10,670
Accounts receivable, net 118,765 107,506
Inventory 115,592 65,612
Deferred tax asset 1,360 880
Prepaid expenses and other assets 4,467 4,204
Total current assets 244,492 188,872
PROPERTY AND EQUIPMENT -- net 34,985 32,279
INVESTMENT IN AND ADVANCE TO RELATED PARTY 6,584 7,284
GOODWILL-- net 5,940 6,224
OTHER ASSETS -- net 2,873 3,635
TOTAL $294,874 $238,294
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES:
Note payable bank $-- $18,111
Current portion of long-term debt 1,151 1,300
Current portion of other long-term liabilities 1,574 1,236
Accounts payable and accrued liabilities 117,506 81,661
Income tax payable 4,047 505
Deferred tax liability 253 --
Total current liabilities 124,531 102,813
LONG-TERM DEBT -- Less current portion 74,412 41,756
DEFERRED TAX LIABILITY 724 1,173
OTHER LONG-TERM LIABILITIES 3,826 1,092
STOCKHOLDERS' EQUITY
Common stock 130 128
Additional paid-in capital 77,251 74,960
Accumulated other comprehensive income (loss) (1,610) (180)
Retained earnings 15,610 16,552
Total stockholders' equity 91,381 91,460
TOTAL $294,874 $238,294
ACT MANUFACTURING, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Ended
September 30:
1999 1998
Net sales $180,105 $137,452
Cost of goods sold 165,283 127,923
Gross profit 14,822 9,529
Selling, general and administrative expenses 7,205 6,716
Merger costs 5,601 --
Operating income 2,016 2,813
Interest and other expense, net 1,228 820
Income before provision for income taxes 788 1,993
Provision for income taxes 2,536 774
Net income (loss) $(1,748) $1,219
Basic net income (loss) per common share $(0.13) $0.10
Diluted net income (loss) per common share $(0.13) $0.09
Weighted average shares outstanding -- basic 12,990 12,783
Weighted average shares outstanding -- diluted 12,990 13,018
Nine Months Ended
September 30:
1999 1998
Net sales $483,571 $451,625
Cost of goods sold 447,253 425,384
Gross profit 36,318 26,241
Selling, general and administrative expenses 21,807 19,454
Merger costs 5,601 --
Operating income 8,910 6,787
Interest and other expense, net 3,250 2,807
Income before provision for income taxes 5,660 3,980
Provision for income taxes 4,530 1,467
Net income $1,130 $2,513
Basic net income per common share $0.09 $0.20
Diluted net income per common share $0.08 $0.20
Weighted average shares outstanding -- basic 12,880 12,615
Weighted average shares outstanding -- diluted 13,500 12,881
SOURCE: ACT Manufacturing, Inc. |
