American Power Conversion Announces Record Fourth Quarter Results Highlighted by Net Income Growth of 40 percent
PR Newswire - January 27, 2000 16:16
Fourth Quarter Revenue Up 22 Percent Full Year Revenue and Net Income Grow 19 Percent and 33 Percent, Respectively
WEST KINGSTON, R.I., Jan. 27 /PRNewswire/ -- Concluding a decade of record performance, American Power Conversion Corporation (Nasdaq: APCC) today reported record results for the fourth quarter and year end 1999.
Sales for the fourth quarter of 1999 were a record $388.7 million, up 22 percent from $318.9 million reported in the fourth quarter of 1998. Net income for the fourth quarter grew 40 percent year-over-year and was a record $66.5 million ($.34 per share) versus $47.5 million ($.24 per share) in the fourth quarter of 1998.
Sales for the twelve months ended December 31, 1999 were a record $1.337 billion, up 19 percent from $1.126 billion in 1998. Net income for the year was a record $206.2 million ($1.05 per share), an increase of 33 percent from $155.1 million ($.80 per share) in 1998. Net income for 1998 excludes a charge of approximately $7.6 million or $.04 per share for acquired research and development (R&D) expenses associated with the acquisition of Silcon A/S.
"We are very pleased with our fourth quarter and full year 1999 financial results," stated Rodger B. Dowdell Jr., APC president and CEO. "APC's fourth quarter revenue growth was strong across all application areas. Our desktop business, which is primarily made up of our surge and Back-UPS(R) products and represented approximately 30 percent of revenues in the fourth quarter, grew over 20 percent in the quarter. The networking and enterprise space, which comprises the balance of our revenues and consists primarily of Smart-UPS(R), Matrix-UPS(R), Symmetra(R) and Silcon(TM) hardware and service offerings, also had healthy growth of over 20 percent in the fourth quarter. We are particularly encouraged by the unit volume growth of APC's three-phase Silcon systems into enterprise and service provider accounts which increased over 60 percent year-over-year."
Geographically, APC's fourth quarter revenue growth on a year-over-year basis was 23 percent in the Americas (North and Latin America), 10 percent in Europe, the Middle East and Africa (EMEA) and 49 percent in Asia. Annually, the Americas grew 11 percent, EMEA 26 percent and Asia 48 percent.
"Our financial model is very solid as the Company has consistently delivered strong earnings growth in a very challenging global business environment," continued Dowdell. "The fourth quarter marked the 16th consecutive quarter that APC has met or exceeded consensus earnings per share (EPS) estimates published in First Call.
"As reflected in our year end balance sheet, the Company has never been in a stronger financial position than we are today," explained Dowdell. "We have continued to focus on prudent working capital management and improving our asset productivity and have seen very strong results."
APC's 1999 cash position increased 108 percent versus 1998 year end, reaching $456.3 million dollars, while inventories were reduced by 23 percent annually to $176.5 million.
(Note: Earnings per share data for 1998 reflect a two-for-one stock split effected May 28, 1999)
Business Update
"Since inception, technology and business innovation have been cornerstones of APC's success," said Dowdell. "Our approach to the data center and enterprise power protection market we recently entered has been no different and has resulted in a strong and growing position for APC solutions, particularly with Symmetra and Silcon hardware and services."
Just recently HarvardNet began to use APC for its three-phase UPS needs. "We believe that APC has the necessary products and services to support the UPS power requirement for our future data centers," said Dennis Lowney, HarvardNet's Director of Construction/Infrastructure. "We have selected APC as our primary vendor of choice and we are committed to use APC-Silcon UPS systems in all of our three-phase solutions for over 20 megawatts of UPS power."
"A good example of our innovation in this space is our recent receipt of a US patent for the technology in our Symmetra Power Array(TM)," continued Dowdell. "When introduced in 1997, this product was the industry's first Power Array and significantly raised the bar for performance in the data center market. To date, there is no competitive product shipping that offers comparable benefits to the end user as Symmetra, including redundancy, scalability, manageability and user-serviceabilty.
"Additionally, PC Magazine recognized the benefits of APC's Silcon DP300E series, naming it a finalist in the Network Infrastructure category of the publication's '1999 Technical Excellence Awards.' APC's Silcon DP300E was recognized along side IT leaders such as 3Com and Cisco which truly speaks to the technology of the product and the industry's recognition that power protection is an essential component of today's networking environment."
With the business Internet as its target, the Company announced earlier this month that it had been selected by Microsoft to develop UPS management support for Windows 2000. Microsoft leveraged APC's software expertise to develop two-tiered UPS management that is built into the Windows 2000 operating system. First, APC built basic support for most industry UPSs into Windows 2000. Additionally, the new operating system incorporates enhanced management functionality for customers using Windows 2000 and APC UPSs, enabling them to enjoy extensive UPS power management functionality via the operating system. This APC/Microsoft developmental relationship helps increase the overall reliability and availability of Windows 2000-based desktops, workstations and servers.
In addition to APC's long history of support and integration with the Windows environment, APC also gained recognition in the rapidly growing market for Linux solutions during the fourth quarter. APC's Linux-based power protection solutions were the first computer peripherals to receive the Red Hat Ready Logo. This certification means that APC's Back-UPS, Back-UPS Pro(R), and Smart-UPS have been tested to install and work properly with the Red Hat Linux operating system. This designation is the most recent announcement in a string of product announcements designed to provide comprehensive support for Linux operating systems users.
Business Outlook
"With the success of the past year behind us, we have entered the year 2000 with a great deal of business and financial momentum," concluded Dowdell. "We believe that the inherent driving factors in our business and our industry, including the global build out of Web infrastructure and the service provider market, continue to be healthy and that APC's position within the global marketplace has improved throughout 1999. Technologies driving the need for availability and uptime are prominent in the marketplace and APC is well positioned to capitalize on them. Therefore, we currently believe that the Company can meet the existing consensus EPS estimate published in First Call for the first quarter of $.24 per share, or 33 percent year-over-year growth, and meet or exceed the full year consensus EPS estimate of $1.24 per share."
The statements contained in the "Business Outlook" section are forward- looking statements based on current expectations that involve a number of risks and uncertainties including those described below under the heading "Safe Harbor Provision." While the Company believes that it has a reasonable prospect of achieving these results in 2000, 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 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 Silcon'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 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; changes in customer order patterns and product demand related to year 2000 purchasing issues; impact on the Company's business due to internal systems or systems of suppliers and other third parties adversely affected by year 2000 problems; the uncertainty of the litigation process including risk of an unexpected, unfavorable result of current or future litigation; 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) 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. |
