Aavid Thermal Technologies, Inc. Announces Second Quarter Results and Changes to Management Team at Aavid Thermalloy Subsidiary.Business/Technology Editors CONCORD, N.H.--(BUSINESS WIRE)--Aug. 13, 2001 Aavid Thermal Technologies, Inc., a leading provider of thermal management solutions and developer of computational fluid dynamics Computational fluid dynamics The numerical approximation to the solution of mathematical models of fluid flow and heat transfer. Computational fluid dynamics is one of the tools (in addition to experimental and theoretical methods) available to solve software, today announced preliminary operating results for its second quarter ended June June: see month. 30, 2001. For the quarter, total sales were $53.3 million or 13.5% lower than the $61.6 million reported in the prior quarter, and represented a $25.1 million decrease from the $78.4 million in sales reported for the second quarter of 2000. Sales for the Company's software subsidiary, Fluent fluent /flu·ent/ (floo´int) flowing effortlessly; said of speech. , Inc., were $16.4 million, or 7.9% lower than the $17.8 million in sales reported for the first quarter of 2001, and an 11.6% increase over second quarter 2000 sales of $14.7 million. Second quarter sales for the thermal management division totaled $36.9 million or 15.8% lower than the prior quarter's sales of $43.8 million and 42.1% lower than the $63.7 million in sales reported for the second quarter of 2000. The Company's Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (adjusted earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. and non-recurring charges) for the second quarter of 2001 was $4.0 million. This represents a 64.6% decrease from the $11.3 million of Adjusted EBITDA for the second quarter of 2000 as well as a 33.3% decrease from the $6.0 million reported in the first quarter of 2001. The Company also announced that Jason Huang Huang (Chinese: 黃) is a Chinese surname. While Huang is the pinyin romanisation of the word, it may also be romanised as Wong, Vong, Bong, Ng, Uy, Wee, Oi, Oei or Ooi, Ong, Hwang, or Ung due to pronunciations of the word in joined Aavid Thermalloy as President, Asia Pacific and George Davison For the English-born entrepreneur and official in early Quebec, see George Davison (merchant). George Davison (born Lowestoft 1854; died Antibes 26 December 1930). joined as Vice President, Sales & Marketing - Americas A·mer·i·cas , the See America. . Mr. Huang most recently served as the Group General Manager for Framatome Connectors International located in Taiwan Taiwan (tī`wän`), Portuguese Formosa, officially Republic of China, island nation (2005 est. pop. 22,894,000), 13,885 sq mi (35,961 sq km), in the Pacific Ocean, separated from the mainland of S China by the 100-mi-wide (161-km) Taiwan . With a strong manufacturing background that includes fourteen years of management experience at Molex Molex (NASDAQ: MOLX) is a manufacturer of electronic components, including electrical and fiber optic interconnection products and systems, switches, integrated products and application tooling. facilities in both Asia and North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Jason will be responsible for consolidating and improving Aavid Thermalloy's operations in Taiwan and China. Mr. Davison was formerly the Vice President of North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. Sales and Customer Service for the Microelectronics microelectronics, branch of electronic technology devoted to the design and development of extremely small electronic devices that consume very little electric power. Division of Millipore Corporation For other uses, see Millipore. Millipore Corporation (NYSE: MIL) founded in 1954, listed among the S&P 500 since the early 1990s, is an international biosciences company, known widely for its micrometer pore-size filters and tests. located in Bedford, Massachusetts Bedford is a town in Middlesex County, Massachusetts, United States. It is within the Greater Boston area, some 15 miles north-west of the city of Boston. The population of Bedford was 12,595 at the 2000 census. . He spent over 14 years with Millipore including positions in Texas as Worldwide Marketing Director and in Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. as Microelectronics Division Manager. Huang and Davison along with Gerald Walle, Aavid Thermalloy's President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , who joined the Company in April of this year, are leading the efforts to focus the organization around opportunities with the greatest potential for market share gains and long term growth. Regarding the second quarter performance and the management changes, Bart Patel, President and Chief Executive Officer of Aavid Thermal Technologies, Inc., commented, "Aavid Thermalloy has been heavily impacted by the extraordinary downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. in the computer and electronics industries. In response, we have moved aggressively to align align (  līn),v to move the teeth into their proper positions to conform to the line of occlusion. our cost structure with revenue levels pending an upturn in the economy. Further, our new management team brings a level of talent and experience that will drive Aavid Thermalloy in both the short and long term." "I am also pleased with the performance of Fluent during these economic times. Fluent's second quarter U.S. revenue increased 23% over second quarter 2000 levels. For the first six months of 2001, Fluent's overall revenue increased 16.2% over the same period a year ago and is on track with the Company's growth expectations for the year", Patel concluded. The Company has scheduled its quarterly conference call for Tuesday, August 14, 2001 at 10:00 a.m. Eastern. The call may be accessed by dialing 1-800-633-8950 and entering reservation number 19500037. The conference call will also be webcast and archived on the audio portion of the Company's website at http://www.aatt.com Company Background Aavid Thermal Technologies, Inc. is a leading provider of thermal management solutions for dissipating potentially damaging heat from digital and industrial electronics. Aavid serves a highly diversified diversified (di·verˑ·s range of markets, principally in North America, Europe and the Far East, driven by the company's operations in three distinct markets: thermal management solutions, computational fluid dynamics software and customized and integrated analysis-design solutions for computer aided engineering (application) Computer Aided Engineering - (CAE) Use of computers to help with all phases of engineering design work. Like computer aided design, but also involving the conceptual and analytical design steps. (CAE (1) (Computer-Aided Engineering) Software that analyzes designs which have been created in the computer or that have been created elsewhere and entered into the computer. ). Thermal management solutions include products and services that solve problems associated with the dissipation Dissipation See also Debauchery. Breitmann, Hans lax indulger. [Am. Lit.: Hans Breitmann’s Ballads] Burley, John wasteful ne’er-do-well. [Br. Lit. of unwanted heat in electronic and electrical components and systems. Computational fluid dynamics (CFD CFD - Computational Fluid Dynamics ) software permits computer modeling and flow analysis of products and processes that would otherwise require time-consuming and expensive physical models and the facilities to test them. Ongoing increases in silicon and system integration, higher processing speeds See MHz. and frequencies, smaller form factors, more sophisticated power requirements and other advances in chip technology create excessive heat in microprocessors This is a list of microprocessors. Intel
Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. operate efficiently only in a narrow temperature band. The excessive heat generated by these semiconductors not only harms their own performance but also degrades system performance and reliability and can cause system failure. The increasingly wide range of environmental conditions, including temperature extremes, in which electronic systems are expected to operate, exacerbates these negative effects. The use of Aavid's thermal solutions helps maintain device and system performance and reliability and helps avoid premature component and system failure. Beyond specific thermal solutions, a variety of design and analysis challenges can be addressed with customized, integrated and tuned analysis-design solutions. These solutions bridge various physical disciplines and their associated CAE software components, resulting in a customer specific solution with an intuitive and specified GUI based Having a graphical user interface (GUI). Same as "graphics based." See GUI. interface. This allows the customer to focus on the design challenges at hand not the myriad Myriad is a classical Greek name for the number 104 = 10 000. In modern English the word refers to an unspecified large quantity. The term myriad is a progression in the commonly used system of describing numbers using tens and hundreds. of analysis and design tools mitigating mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. analysis costs and shortening product design cycles. Additional information on Aavid Thermal Technologies is available on the World Wide Web at http://www.aatt.com. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement Under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 The matters discussed in this release contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. (as such term is defined in the Private Securities Litigation Reform Act of 1995) and information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Company that is based on the beliefs of the management of the Company, as well as assumptions made by and information currently available to the management of the Company. The words "estimate," "project," "believe," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events, and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. The Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" or to reflect the occurrence of unanticipated events. Adjusted EBITDA is included because the Company understands that such information is considered to be an additional basis on which to evaluate our ability to pay interest, repay debt and make capital expenditures. Adjusted EBITDA is not intended to represent and should not be considered more meaningful than, or as an alternative to, measures of performance, profitability or liquidity determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting .
Summary Financial Statements Attached
Aavid Thermal Technologies, Inc.
Summary Financial Statements
Quarter and Six Months Ended June 30, 2001
Consolidated Statements of Operations (Unaudited)
Quarter Quarter Six Months Six Months
Ending Ending Ended Ended
June 30, July 1, June 30, July 1,
2001 2000 2001 2000
(Company) (Company) (Company) (Predecessor)
(in thousands) (Pro forma)(1)
Aavid Thermalloy $ 36,914 $ 63,704 $ 80,812 $ 127,020
Fluent 16,405 14,714 34,118 29,400
Combined net sales 53,319 78,418 114,930 156,420
Cost of goods sold 35,140 50,777 73,284 106,344
Gross profit 18,179 27,641 41,646 50,076
S,G&A expenses 13,916 17,634 31,879 35,895
Write-off of
in-process R&D -- -- -- 15,000
Amortization of
intangibles 8,561 7,413 17,121 12,767
Restructuring
charge (2) 408 -- 12,865 --
Research and
development 3,644 2,404 6,528 4,879
Operating
income(loss) (8,350) 190 (26,747) (18,465)
Interest (expense)
income, net (6,894) (6,315) (13,172) (11,119)
Other (expense)
income 75 21 (71) (42)
Income before
taxes (15,169) (6,104) (39,990) (29,626)
Income tax
expense (1,619) (1,857) (2,529) (3,698)
Minority interest
income (expense) (56) (32) 3,114 (36)
Gain on
extinguishment
of debt 4,979 -- 4,979 --
Net income $ (11,865) $ (7,993) $ (34,426) $ (33,360)
Interest 5,214 6,145 11,270 10,679
Taxes 1,619 1,857 2,529 3,698
Depreciation 3,065 2,924 6,260 6,032
Amortization 10,463 7,774 19,576 13,336
Minority interest 56 32 (3,114) 36
Write-off in
process R&D -- -- -- 15,000
Gain on
extinguishment
of debt (4,979) -- (4,979) --
Restructuring
charges 408 -- 12,865 --
Inventory and
receivables
provisions 557 557
Non-cash inventory
charge from
purchase
accounting
write-up
to fair value (3) -- -- -- 4,532
Adjusted EBITDA $ 3,981 $ 11,296 $ 9,981 $ 20,510
North America cost
savings
add-back (4) 1,496 -- 4,203 --
Amended Adjusted
EBITDA $ 5,477 $ 11,296 $ 14,184 $ 20,510
(1) Pro forma combines the period January 1, 2000 to February 1, 2000
(operations of the Predecessor) with the period February 2, 2000
to April 1, 2000 (operations of the Company). Results are
considered pro forma as Aavid Thermal Technologies, Inc.'s
financial statements are presented using a new basis of accounting
subsequent to the Willis Stein merger. Presentation of periods
prior to the Willis Stein merger are referred to as operations of
the predecessor.
(2) One-time restructuring charges related to the closure of the
Dallas, Texas manufacturing facility, Loudwater, U.K. facility and
employee cost reductions in New Hampshire.
(3) Inventory write-up to fair value that was recorded as part of
purchase accounting is included as additional expense within cost
of sales for the first three months of 2000.
(4) This represents a pro forma add-back to EBITDA associated with
estimated cost savings which result from certain employee cost
reductions in New Hampshire and the cessation (on June 30, 2001)
of manufacturing operations in our Dallas, Texas facility as
allowed under our Amended Senior Credit Facility.
Consolidated Condensed Balance Sheets (Unaudited)
June 30, March 31, December 31,
2001 2001 2000
(in thousands)
ASSETS
Cash $ 24,272 $ 14,473 $ 23,849
Accounts receivable 38,559 43,784 49,094
Inventory 21,686 23,471 25,203
Other current assets 4,898 5,263 4,625
Current assets 89,415 86,991 102,771
Property, plant and
equipment,net 48,696 50,114 57,013
Goodwill, net 151,413 156,636 162,430
Developed technology
and assembled workforce 43,568 46,291 49,015
Other assets 8,649 10,484 15,059
Total assets $ 341,741 $ 350,516 $ 386,288
LIABILITES, MINORITY
INTEREST AND
STOCKHOLDERS' EQUITY
Current portion
long-term debt $ 4,362 $ 10,744 $ 10,768
Accounts payable 14,012 16,915 18,582
Accrued expenses 26,090 22,479 29,998
Restructuring charges 3,192 3,745 1,274
Other current liabilities 17,432 17,758 17,381
Current liabilities 65,088 71,641 78,003
Revolving line of credit 17,000 7,700 7,700
Term loan 37,000 39,000 41,000
12 3/4% senior
subordinated notes 119,369 144,451 144,290
Other long term debt 303 173 244
Deferred taxes 9,862 9,922 9,977
Total liabilities 248,622 272,887 281,214
Commitments and
Contingencies
Minority interest
in consolidated
subsidiaries 1,492 1,744 4,915
Preferred stock -- -- --
Common stock -- -- --
Warrants 3,764 4,560 4,560
Additional paid
in capital 176,236 147,187 147,187
Cumulative translation
adjustment (3,967) (3,321) (1,608)
Retained earnings (84,406) (72,541) (49,980)
Total stockholder's
equity 91,627 75,885 100,159
Total liabilities,
minority
interest and
stockholder's equity $ 341,741 $ 350,516 $ 386,288
Consolidated Condensed Statements of Cash Flows (Unaudited)
Quarter Ending Six Months Ending
June 30, July 1, June 30, July 1,
2001 2000 2001 2000
(ProForma)
(in thousands) (Company) (Company) (Company) (Predecessor)
Net Income $ (11,865) $ (7,993) $ (34,426) $ (33,360)
Depreciation and
amortization 13,650 10,519 25,526 18,981
In-process R&D -- -- -- 15,000
Inventory fair
value adjustment -- -- -- 4,532
Interest paid on
Sr. Credit Facility (970) (1,105) (1,865) (2,222)
Interest paid on
123/4% senior
subordinated notes -- -- (9,563) --
Restructuring charge 408 -- 12,865 --
Other operating
cash flows 2,374 9,031 7,099 9,512
Total cash flows
from Operations 3,597 10,452 (364) 12,443
Purchase of Curamik
minority
interest (882) -- (882) --
Purchase of property,
plant and
equipment (1,697) (3,197) (4,309) (5,307)
Proceeds from sale
of property 126 -- 126 --
Total cash flows
from investing
Activities (2,453) (3,197) (5,065) (5,307)
Issuance of
common stock -- -- -- 349
Advances under
line of credit 9,300 -- 9,300 7,700
Repayments of
line of credit (396) -- (396) (8,182)
Advances under
other debt
obligations -- 501 -- 54,357
Repayments under
other debt
obligations (8,138) (10,218) (80,025)
Payment of
merger expenses -- (1,398) -- (17,192)
Repurchase of
common stock,
options and
warrants -- -- -- (261,267)
Make-well
contribution 34,028 -- 34,028 --
Retirement of
123/4% senior
subordinated notes (26,028) -- (26,028) --
Proceeds from
12 3/4% senior
subordinated notes -- -- -- 148,312
Proceeds from
investors -- -- -- 152,000
Cash flows from
financing
Activities 8,766 (897) 6,686 (3,948)
Foreign exchange
effect (111) (133) (834) (259)
Net increase
(decrease) in cash 9,799 6,225 423 2,929
Cash at beginning
of period 14,473 14,977 23,849 18,273
Cash at end of
period $ 24,272 $ 21,202 $ 24,272 $ 21,202
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