Looking good!
American Power Conversion Reports Solid Second Quarter
Revenue and Net Income Gains
Net Income Increases 34 Percent
Three-phase Silcon(TM) Solution Sales Up 126 Percent
WEST KINGSTON, R.I., July 27 /PRNewswire/ -- American Power Conversion
Corporation (Nasdaq: APCC) today reported financial results for the second
quarter ended July 2, 2000.
Sales for the second quarter 2000 were $365.7 million, including $12.9
million in revenue from the Advance Power and ABL Electronics acquisitions, an
increase of 16 percent from $315.5 million for the quarter ended June 27,
1999. Net income for the second quarter 2000 was $57.6 million ($.29 per
share) up 34 percent from $42.8 million ($.22 per share) in the second quarter
of 1999. Net income results exclude both a charge to pre-tax earnings of
$30.4 million associated with the partial write-off of fully paid-up patent
licenses obtained during the second quarter by APC from General Signal Power
Systems, as well an after-tax loss of $0.9 million associated with the
acquisitions of Advance Power and ABL Electronics. Including the charge and
the impact of second quarter acquisitions, net income was $35.1 million ($.17
per share).
"During the second quarter, APC continued to produce solid year-over-year
and sequential revenue gains combined with high levels of profitability,"
commented Rodger B. Dowdell, Jr., APC's president and CEO. "The quarter's
results were highlighted by exceptional growth in our enterprise
uninterruptible power supply (UPS) solutions as well as continued strength in
Asia. Additionally, we made very strategic additions to our product portfolio
during the second quarter allowing us to expand our already strong solution
set for the rapidly growing power market for Internet and communications
infrastructure.
"The creation of APC's DC Network Solutions Division through the
acquisition of Advance Power, as well as the continued rapid expansion of our
three-phase Silcon UPS and Symmetra(R) Power Array(TM) solutions, continue to
solidify APC's role as a global, end-to-end, Nonstop Networking(TM) solution
provider. We have also recently expanded our Symmetra and Silcon offerings
with the introduction of the industry's only rack-mountable Power Array and
the availability of the 400 and 500 KW Silcon units in North America."
For the second quarter, enterprise application solutions represented 13.5
percent of total revenue, with three-phase Silcon revenue up 126 percent and
Symmetra revenue increasing 24 percent. The Company's networking solutions,
consisting primarily of Smart-UPS(R), Matrix-UPS(R) and accessories, grew 13
percent year-over-year and represented 57 percent of revenue, while APC's
desktop offerings, consisting primarily of SurgeArrest(R) surge protectors and
Back-UPS(R), were 29 percent of revenue in the quarter and grew 1 percent.
The acquisitions of Advance Power and ABL Electronics contributed $12.9
million of revenue during the quarter and are not included in the second
quarter application breakouts.
Geographically, Asia continued to lead all regions with a strong year-
over-year growth rate of 41 percent, growing 40 percent or greater for the
seventh consecutive quarter, and representing 15 percent of revenue. The
Americas (North and Latin America) posted solid year-over-year and sequential
gains growing 21 percent and 28 percent, respectively, and were 62 percent of
revenue. Finally, revenue in Europe, the Middle East and Africa (EMEA) was
down approximately five percent year-over-year versus the second quarter 1999.
On a constant currency basis, EMEA grew two percent versus the second quarter
1999.
"While EMEA revenue growth was impacted by continued IT industry softness
and unfavorable currency trends, we are in the process of evaluating our EMEA
sales and marketing efforts with the objective of improving our overall
execution in this key geography," continued Dowdell.
Business Outlook
"We are currently seeing and continue to expect solid growth from our
Asian region as well as continued success in winning enterprise solution
applications business with our three-phase Silcon solutions. Excluding the
impact of acquisitions, our outlook, based on the current tone of business and
internal forecasts, is an expectation of third quarter revenue percentage
growth in the range of mid-single digits to mid-teens versus the third quarter
of 1999. The acquisitions of Advance Power and ABL Electronics should add
approximately 5 percent in incremental revenue for the quarter, thus expanding
the revenue growth rate range to 10 to 20 percent. Excluding acquisitions,
gross margins in the third quarter should remain in the mid-40s and operating
expenses as a percentage of sales should remain in the mid-20s yielding
earnings per share in a range of $.29 to $.35. For the fourth quarter we
expect earnings per share to be a few cents higher than the third quarter,
bringing the full year earnings per share range to approximately $1.13 to
$1.25.
"We continue to build our incremental businesses, focusing on high growth
areas such as the Internet infrastructure build-out and communications growth.
APC remains the largest, and we believe the most profitable, global provider
of AC power protection solutions and we continue to aggressively ramp efforts
to expand our position in both traditional and new markets."
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 ABL and Advance Power'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,
telecommunications 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; the uncertainty of the litigation
process including risk of an unexpected, unfavorable result of current or
future litigation including, without limitation, the pending Anthony F.
Coppola litigation discussed in the Company's SEC filings; financial impact
during any period of the Company's purchase of the license to certain patent
rights under a worldwide patent license from General Signal Power Systems; 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 availability enhancement solutions which
include surge suppressors, uninterruptible power supplies (UPS), DC-based
power systems, cabling and connectivity solutions, power conditioning
equipment, related software, and professional and consulting services for
Nonstop Networking(TM). APC's comprehensive products, services and accessory
offering, which is designed for both home and corporate environments, improves
the availability, manageability and performance of sensitive electronic,
network, communication 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 and is a Fortune 1000 and S&P 500
company.
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.
For more information contact:
Investors:
Donald M. Muir, chief financial officer, 401-789-5735, ext. 2105
Deborah K. Grey, investor relations manager, 401-789-5735, ext. 2994,
dgrey@apcc.com
Media:
Jodi Kennedy, director of corporate communications, 401-789-5735, ext.
2158, jkennedy@apcc.com
AMERICAN POWER CONVERSION CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
IN THOUSANDS
JULY 2, 2000 DECEMBER 31, 1999
(UNAUDITED)
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $307,665 $456,325
SHORT TERM INVESTMENTS 75,000 -
ACCOUNTS RECEIVABLE, NET 250,776 216,810
INVENTORIES 223,989 176,477
PREPAID EXPENSES AND
OTHER CURRENT ASSETS 21,011 18,283
DEFERRED INCOME TAXES 28,845 31,962
TOTAL CURRENT ASSETS 907,286 899,857
PROPERTY, PLANT & EQUIPMENT 301,716 260,649
LESS: ACCUMULATED DEPRECIATION
AND AMORTIZATION 116,582 103,422
NET PROPERTY, PLANT & EQUIPMENT 185,134 157,227
GOODWILL AND OTHER INTANGIBLES 112,281 48,239
OTHER ASSETS 22,021 1,615
TOTAL ASSETS $1,226,722 $1,106,938
CURRENT LIABILITIES
ACCOUNTS PAYABLE $110,304 $78,641
ACCRUED EXPENSES 78,720 84,562
INCOME TAXES PAYABLE 20,191 30,616
TOTAL CURRENT LIABILITIES 209,215 193,819
DEFERRED TAX LIABILITY 13,260 11,029
TOTAL LIABILITIES 222,475 204,848
SHAREHOLDERS' EQUITY
COMMON STOCK 1,946 1,933
ADDITIONAL PAID-IN CAPITAL 103,682 82,989
RETAINED EARNINGS 902,744 820,525
TREASURY STOCK (1,551) (1,551)
ACCUMULATED OTHER
COMPREHENSIVE INCOME (2,574) (1,806)
TOTAL SHAREHOLDERS' EQUITY 1,004,247 902,090
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,226,722 $1,106,938
AMERICAN POWER CONVERSION CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS
FOR THE THREE MONTHS ENDED
JULY 2, 2000 JUNE 27, 1999
(UNAUDITED)
NET SALES $365,745 $315,462
COST OF GOODS SOLD 201,344 176,909
GROSS PROFIT 164,401 138,553
MARKETING, SELLING, GENERAL
AND ADMINISTRATIVE 79,558 71,102
SPECIAL CHARGES 30,400 -
RESEARCH AND DEVELOPMENT 11,623 8,823
TOTAL OPERATING EXPENSES 121,581 79,925
OPERATING INCOME 42,820 58,628
OTHER INCOME, NET 6,634 2,100
EARNINGS BEFORE INCOME TAXES 49,454 60,728
INCOME TAXES 14,341 17,914
NET INCOME $35,113 $42,814
DILUTED EARNINGS PER SHARE $.17 $.22
DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING 201,040 195,177
Note: Included in the second quarter 2000 results are a charge to pre-tax
earnings of $30.4 million associated with the partial one-time write-off of
fully paid-up patent licenses obtained during the second quarter by APC from
General Signal Power Systems, as well as an after-tax loss of $.9 million
associated with the acquisitions of Advance Power and ABL Electronics.
AMERICAN POWER CONVERSION CORPORATION & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS
FOR THE SIX MONTHS ENDED
JULY 2, 2000 JUNE 27, 1999
(UNAUDITED)
NET SALES $675,158 $592,647
COST OF GOODS SOLD 364,788 331,939
GROSS PROFIT 310,370 260,708
MARKETING, SELLING, GENERAL
AND ADMINISTRATIVE 156,045 137,426
SPECIAL CHARGES 30,400 -
RESEARCH AND DEVELOPMENT 20,928 17,775
TOTAL OPERATING EXPENSES 207,373 155,201
OPERATING INCOME 102,997 105,507
OTHER INCOME, NET 12,804 4,571
EARNINGS BEFORE INCOME TAXES 115,801 110,078
INCOME TAXES 33,582 32,473
NET INCOME $82,219 $77,605
DILUTED EARNINGS PER SHARE $.41 $.40
DILUTED WEIGHTED AVERAGE
SHARES OUTSTANDING 200,336 195,850
Note: Included in the second quarter 2000 results are a charge to pre-tax
earnings of $30.4 million or $.11 per share associated with the partial one-
time write-off of fully paid-up patent licenses obtained during the second
quarter by APC from General Signal Power Systems, as well as an after-tax loss
of $.9 million associated with the acquisitions of Advance Power and ABL
Electronics.
SOURCE American Power Conversion Corporation
CO: American Power Conversion
ST: Rhode Island
IN: CPR
SU: ERN
07/27/2000 16:11 EDT prnewswire.com |
