Power-One Announces Record Third Quarter Results
CAMARILLO, Calif.--(BUSINESS WIRE)--Oct. 25, 2000--Power-One, Inc. (Nasdaq:PWER - news):
Record net sales of $150 million, up 107 percent vs. Q3 `99
Cash EPS $0.24 per diluted share, up 140 percent vs. Q3 `99
Q3 `00 backlog increases to a record $238 million, up 21 percent
vs. Q2 `00
Power-One, Inc. (Nasdaq:PWER - news) today announced that net sales for the third quarter ended Oct. 1, 2000 increased 107 percent to a record $150.4 million, compared to $72.6 million for the same year-ago quarter.
Net sales for the third quarter of 2000 increased sequentially by $36.6 million, or 32 percent, compared to the $113.8 million achieved in the second quarter of 2000. Results for 2000 include Powec AS, which was acquired on May 16, 2000.
Net income for the third quarter ended Oct. 1, 2000 increased 206 percent to a record $16.0 million compared with $5.2 million for the same year-ago quarter. Earnings per share increased 122 percent to $0.20 per diluted share compared with $0.09 per diluted share for the same year-ago quarter.
Cash earnings per share, or earnings before amortization of intangibles and acquisition related charges, net of income taxes, for the third quarter ended Oct. 1, 2000 increased 140 percent to $0.24 per diluted share, compared to $0.10 per diluted share for the same year-ago quarter.
Net sales for the nine months ended Oct. 1, 2000 increased 109 percent to $341.2 million, compared to $163.2 million for the same period in 1999.
Net income for the nine months ended Oct. 1, 2000 before acquisition related charges was $36.7 million, or $0.48 per diluted share, compared with $7.9 million, or $0.13 per diluted share, for the same period in 1999. Including acquisition related charges, net income was $25.1 million, or $0.33 per diluted share, for the nine months ended Oct.1, 2000, compared with $3.6 million, or $0.06 per diluted share, for the same period in 1999.
Cash earnings per share for the nine months ended Oct. 1, 2000 increased 211 percent to $0.56 per diluted share, compared to $0.18 per diluted share for the same period in 1999.
Commenting on the results, Steve Goldman, Chief Executive Officer of Power-One, said, ``We are very excited to again report strong operating results in terms of sales, net income and cash EPS. Our overall business continued to gain momentum, especially in our key high-density board-mounted DC/DC and telecom systems markets.
``We are pleased to see the continued rapid growth of our shipments to the datacom and telecom markets as they are the cornerstones of our communications-oriented growth strategy. In the embedded AC/DC power systems market, we experienced continued strong growth in systems-level power supplies with record shipments to our high-power oriented automated/semiconductor test equipment customers.
``In the fourth quarter, we expect that lower sales to our automated/semiconductor test equipment customers will be more than offset by stronger growth from our high-density DC/DC converter business. Looking ahead, we anticipate strong overall results in the fourth quarter of fiscal 2000.
``Our enhanced focus on the communications infrastructure market has been pivotal in allowing us to pursue additional high-growth opportunities. The Powec and HC Power acquisitions allowed us to expand our product offerings to communications and Internet service providers. This strategy has driven our sales to the communications infrastructure market to $107 million in the third quarter of 2000 from $42 million in the third quarter of 1999, a 157 percent increase.
``The communications infrastructure market now accounts for 71 percent of net sales. We expect to achieve our goal of deriving 75 percent of total sales from this fast-growing market by early 2001,'' continued Goldman.
Goldman further commented, ``We experienced robust bookings during this quarter, with our backlog at the end of the third quarter reaching a record $238 million, or an increase of 21 percent compared to backlog of $197 million at the end of the second quarter. As was the case last quarter, the composition of our 180-day backlog has changed, with certain customers lengthening their lead-times to us by placing orders further out in order to ensure sufficient supply to meet increased demand.
``Our 90-day backlog also continued to increase and reached $159 million at the end of the third quarter. Turns business was about 6 percent of our third quarter revenue and we expect turns business to be approximately 1-2 percent in the fourth quarter.''
Bill Yeates, President and COO, commented, ``In spite of the component availability issues facing the industry, our operations team again executed successfully to meet record customer demand. In terms of component availability, the third quarter was one of the most challenging this year. Looking forward, we see our materials issues improving in the fourth quarter.
``While the steep growth ramp during the quarter led to somewhat higher material and expedite costs, which impacted our gross margins negatively compared to the second quarter, we expect this effect to be short-term. The Powec division also experienced strong sales growth and its lower gross margins impacted our overall gross margin.
``Looking ahead to the fourth quarter, our gross margins should remain fairly flat as higher prices for certain components are offset by our initiatives to move more production to our lower-cost manufacturing locations, and as we build additional `partnerships' with key commodity suppliers. We have also opened an international purchasing office in Hong Kong to establish a lower cost materials pipeline as well as an alternate source for scarce materials.
``One key to our success has been our ability to execute and to proactively expand our manufacturing capacity. By year-end our facilities expansion efforts will have added about 40 percent of manufacturing space to approximately 1.0 million square feet company-wide.
``We have also increased our assembly operations by adding six Surface Mount Technology lines during the third quarter and expect to have 19 Surface Mount Technology lines in place at year-end, with each line capable of producing approximately $25-$35 million in annual sales. We further expanded in Asia by opening systems assembly operations in Singapore, Australia, and China. On the R&D front, we opened advanced research centers in Andover, Mass. and in Austin, Tex.,'' continued Yeates.
``Our strategic initiatives this year have allowed us to tap into a $4.0 billion global market for telecom power systems. Our strategy to broaden our product breadth has provided us with a very comprehensive, technologically advanced portfolio of power system offerings for communications and Internet applications worldwide, making us what we believe to be the supplier of choice.
Power-One's recent inclusion in the S&P 500 is a testimony to our industry leadership. Looking forward, we remain focused on increasing capacity to meet strong demand,`` concluded Yeates.
Goldman concluded, ``We remain very excited about our growth prospects. In the last 12 months, we have expanded our product offering, scale, and geographic presence through a solid combination of both internal initiatives and strategic acquisitions. Looking ahead, we expect that the Distributed Power Architecture segment will continue to grow rapidly as the technology becomes more widely adopted.
``We will continue to build infrastructure to benefit from our strong position in the communications market. Also, our performance in the third quarter demonstrates our ability to complete synergistic acquisitions that contribute to bottom-line growth. We are continuing to evaluate acquisition opportunities to expand our product line even further, to enhance our leading technological position, and to expand capacity and open up new geographies. We believe Power-One is well-poised to capture additional market opportunities.''
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, Calif., has over 7,000 employees with manufacturing operations in Irvine, Calif.; Boston, Mass.; 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.
Power-One will be holding a conference call with investors and analysts on Wednesday, Oct. 25, 2000 at 8:00 a.m PT. The call will be available over the Internet through Vcall at www.streetfusion.com. To listen to the call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software.
For those who cannot listen to the live broadcast, a replay will be available shortly after the call at www.streetfusion.com through Nov. 1, 2000.
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,'' ``anticipate'' 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.
The matters set forth under ``Risk Factors'' in the Company's 1999 Form 10-K and Registration Statement on Form S-3 (filed Oct. 18, 2000) on file with the Securities and Exchange Commission constitute cautionary statements identifying important factors 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.
POWER-ONE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
FINAL RESULTS
(In thousands, except per share data)
Three Months Ended Nine Months Ended
Oct. 1, Sept. 26, Oct. 1, Sept. 26,
2000 1999 2000 1999
NET SALES $ 150,391 $ 72,626 $ 341,242 $ 163,240
COST OF GOODS SOLD 92,490 44,883 206,476 99,513
GROSS PROFIT 57,901 27,743 134,766 63,727
GENERAL AND ADMINISTRATIVE
Selling, general and
administrative 19,066 11,294 59,145 30,047
Engineering and quality
assurance 8,980 5,988 26,602 15,372
Amortization of
Intangibles 3,649 1,354 7,721 4,914
In process research and
development -- -- -- 3,300
Total Expenses 31,695 18,636 93,468 53,633
INCOME FROM OPERATIONS 26,206 9,107 41,298 10,094
OTHER INCOME (EXPENSE)
Interest income 244 27 1,424 68
Interest expense (2,755) (1,138) (4,375) (2,852)
Other income (expense) 334 (151) (727) 125
Total other, net (2,177) (1,262) (3,678) (2,659)
INCOME BEFORE INCOME TAXES 24,029 7,845 37,620 7,435
INCOME TAXES 8,063 2,624 12,547 3,863
NET INCOME $ 15,966 $ 5,221 $ 25,073 $ 3,572
BASIC EARNINGS PER
COMMON SHARE $ 0.22 $ 0.09 $ 0.34 $ 0.06
DILUTED EARNINGS PER
COMMON SHARE $ 0.20 $ 0.09 $ 0.33 $ 0.06
BASIC SHARES 73,623 57,606 73,070 57,018
DILUTED SHARES 78,271 59,931 76,830 58,644
-0-
POWER-ONE, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
FINAL RESULTS
(In thousands)
Oct. 1, Jan. 2,
2000 2000
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 19,578 $ 63,769
Accounts receivable:
Trade (net of allowance) 111,618 45,805
Other 3,483 1,914
Inventories 153,175 61,834
Deferred income tax assets,
net -- current 2,622 1,916
Current portion of notes
receivable from stockholders -- 30
Prepaid expenses and other
current assets 4,238 1,795
Total current assets 294,714 177,063
PROPERTY & EQUIPMENT, net 87,800 55,608
INTANGIBLE ASSETS, net 161,785 59,217
NOTES RECEIVABLE FROM STOCKHOLDERS,
less current portion -- 79
OTHER ASSETS 13,153 3,137
TOTAL ASSETS $ 557,452 $ 295,104
LIABILITIES & EQUITY
CURRENT LIABILITIES:
Credit facility $ 145,716 $ 7,579
Current portion of long term debt 2,453 4,002
Current portion of capital leases 610 897
Bank overdraft 9,269 5,804
Accounts payable 48,468 13,107
Accrued payroll and related expenses 5,879 2,583
Other accrued expenses 38,372 16,811
Total current liabilities 250,767 50,783
LONG TERM DEBT, less current portion 9,897 3,379
LONG TERM CAPITAL LEASES,
less current portion 392 842
DEFERRED INCOME TAX LIABILITY, noncurrent 9,714 2,757
OTHER LIABILITIES 598 112
STOCKHOLDERS' EQUITY:
Common stock 74 24
Additional paid-in capital 241,793 212,196
Accumulated other comprehensive loss (8,478) (3,476)
Retained earnings 52,695 28,487
Total stockholders' equity 286,084 237,231
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 557,452 $ 295,104
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POWER-ONE, INC.
FINANCIAL HIGHLIGHTS
(In thousands, except per share earnings)
(UNAUDITED)
PRELIMINARY
Three Months Ended Nine Months Ended
Oct. 1, Sept. 26 Oct. 1 Sept. 26,
2000 1999 2000 1999
Orders $ 211,652 $ 71,562 $ 532,247 $206,013
Sales 150,391 72,626 341,242 163,240
Operating Income 26,206 9,107 41,298 10,094
EBITDA 33,401 13,036 71,234 24,463
Cash Earnings (1) 18,720 6,206 31,143 6,496
Net Income 15,996 5,221 25,073 3,572
Cash Earnings per
Share -- Diluted (1) 0.24 0.10 0.56 0.18
Earnings per
Share -- Diluted 0.20 0.09 0.33 0.06
Weighted Shares --
Diluted 78,271 59,931 76,830 58,644
(1) Earnings before amortization of intangibles and aquisition related
charges.
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Contact:
Power-One, Inc.
Ed Schnopp, 805/987-8741
or
The Financial Relations Board
Jill Fukuhara, 310/442-0599 (analyst)
Karen Taylor, 310/442-0599 (general) |
