Aavid Thermal Technologies, Inc. Announces Second Quarter Results.Business/Technology Editors CONCORD, N.H.--(BUSINESS WIRE)--Aug. 7, 2000 Aavid Thermal Technologies, Inc., the 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 operating results for its second quarter ended June June: see month. 30, 2000. Results for the second quarter include the results of operations of Thermalloy, the thermal management sector of Bowthorpe, plc, which Aavid acquired during the fourth quarter of 1999. For the second quarter of 2000, the Company's total sales were $78.4 million. Sales for the Company's software subsidiary, Fluent fluent /flu·ent/ (floo´int) flowing effortlessly; said of speech. , Inc., were $14.7 million, or 22% higher than the $12.0 million in sales reported for the second quarter of 1999. Second quarter sales for thermal management products totaled $63.7 million as compared to $35.7 million in sales reported for the second quarter of 1999 and prior to the acquisition of Thermalloy. Year over year second quarter comparisons cannot be made including Thermalloy for 1999 because Thermalloy's financial reporting was based in the United Kingdom where reporting is on a semiannual Semiannual An event that occurs twice in a calendar year. Notes: A bond with semiannual coupons would issue payment once every six months. See also: Annual, Bond, Coupon Bond basis, and quarterly financial statements are not separately reported. On a six month pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis that combines the revenues of Aavid and Thermalloy as if the acquisition had occurred on January January: see month. 1, 1999, the Company's total sales increased 8% to $156.4 million from approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $145.3 million in 1999, excluding $2.6 million in sales of the Intel Special Product (as defined in the Company's Form S-4 filed with the Securities and Exchange Commission) that ceased in the first quarter of 1999. Fluent's sales for the first six months of 2000 were $29.4 million, or 18% higher than the $24.8 million reported for the first six months of 1999. Sales for thermal management products for the first six months of 2000 totaled $127.0 million, representing a 5% increase over the $120.5 million in sales for the same period of 1999 on a pro forma basis including Thermallay and exclusive of the Intel Special Product. 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 (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 ) for the quarter totaled $11.3 million. Pro forma Adjusted EBITDA for the first six months totaled $ 20.5 million, representing a 6% increase from the $19.4 million reported for the first six months of 1999, excluding $0.6 million in Adjusted EBITDA attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the Intel Special Product. Second quarter 2000 Adjusted EBITDA of $11.3 million represents an increase of $2.1 million or 23% over the first quarter 2000 Adjusted EBITDA of $9.2 million. The attached financial schedules further describe the business performance and components and nature of Adjusted EBITDA as presented in this release. The Company also announced the closing of its Corby Corby, town (1991 pop. 48,704) and district, Northamptonshire, central England. Situated over one of the world's largest ironstone fields, Corby has grown rapidly since the 1930s, when new techniques of steel production were developed. , England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. manufacturing facility as a part of its ongoing integration plan for the thermal management business. This facility will complete its production activities in September September: see month. . Approximately 32 direct and indirect laborers will be impacted by this closure. The Company is in the process of transferring customer requirements to other manufacturing sites in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Asia.
The Company is also pleased to announce the additions of Dr. Sukhvinder Kang KANG Kansas Air National Guard as Chief Technology Officer for Aavid Thermalloy and Mr. John Horton Horton, river, c.275 mi (440 km) long, rising in a lake N of Great Bear Lake, Northwest Territories, Canada, and flowing NW to Franklin Bay, a part of the Beaufort Sea. as Aavid Thermalloy's Vice President and General Manager, Computer and Networking Business Unit. Both Dr. Kang and Mr. Horton have proven track records in their areas of expertise and will round out the management team in the thermal management sector. Company Background Aavid Thermal Technologies 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 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. , Europe and the Far East. Aavid's 1999 sales totaled $214 million, driven by the company's operations in two distinct markets: thermal management solutions and computational fluid dynamics software. 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 time-con·sum·ing adj. Taking up much time. time-consuming Adjective taking up a great deal of time Adj. 1. 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 pre·ma·ture adj. 1. Occurring or developing before the usual or expected time. 2. Born after a gestation period of less than the normal time, especially, in human infants, after a period of less than 37 weeks. component and system failure. 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 .
Aavid Thermal Technologies, Inc.
Summary Financial Statements
Consolidated Statement of Operations
Quarter Quarter Six Months Six Months
Ending Ending Ending Ending
July 1, July 3, July 1, July 3,
2000 1999 2000 1999
(Pro (Historical) (Pro (Historical)
Forma)(1) Forma)(1)
(in thousands) (Unaudited)(Unaudited)(Unaudited)(Unaudited)
Aavid Thermalloy $ 63,704 $ 35,745 $ 127,020 $ 72,685
Fluent 14,714 12,042 29,400 24,943
Combined net sales 78,418 47,787 156,420 97,628
Cost of goods sold 50,777 29,147 106,344 60,507
Gross Profit 27,641 18,640 50,076 37,121
S,G&A Expenses 17,634 11,401 35,895 22,513
Write-off of in-process R&D -- -- 15,000 --
Amortization of intangibles 7,413 312 12,767 567
Research and Development 2,404 1,736 4,879 3,465
Operating Income 190 5,191 (18,465) 10,576
Interest expense(income), net (6,315) (71) (11,119) (186)
Other expense(income) 21 (246) (42) (489)
Income before taxes (6,104) 4,874 (29,626) 9,901
Income tax expense (1,857) (1,741) (3,698) (3,600)
Minority interest expense (32) -- (36) --
Net Income $ (7,993)$ 3,133 $ (33,360)$ 6,301
Interest 6,551 71 11,356 186
Taxes 1,857 1,741 3,698 3,600
Depreciation 2,924 1,708 6,032 3,426
Amortization 7,413 263 12,767 567
Write-off in process R&D -- -- 15,000 --
Other non-cash charges (2) 544 -- 485 --
Non-cash inventory charge from
purchase accounting write-up
to fair value (3) -- -- 4,532 --
Adjusted EBITDA $ 11,296 $ 6,916 $ 20,510 $ 14,080
(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. Periods prior to the Willis Stein merger are referred to
as operations of the predecessor.
(2) Consists of minority interest expense of $32 for the second
quarter, $36 for the first six months, unfavorable lease accretion
income of $45 for the quarter and $108 for the first six months and
non-cash charges related to write-offs of receivables and inventory in
Hong Kong and Malaysia of $557 occurring in the second quarter due to
shut-down and integration.
(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.
Consolidated Condensed Balance Sheets
July 1, April 1, December 31,
2000 2000 1999
(in thousands)
(Unaudited)(Unaudited)(Historical)
ASSETS
Cash $ 21,202 $ 14,977 $ 18,273
Other current assets 92,550 92,224 90,037
Current assets 113,752 107,201 108,310
Property, plant and equipment 57,839 58,014 60,955
Goodwill, net 195,691 198,819 50,330
Developed technology and
Assembled workforce 24,187 25,875 --
Other assets 15,029 15,242 9,357
Total assets 406,498 405,151 228,952
LIABILITIES, MINORITY INTEREST AND
STOCKHOLDERS' EQUITY
Current portion long-term debt 6,363 4,424 2,337
Other current liabilities 70,794 61,084 58,923
Current liabilities 77,157 65,508 61,260
Revolving line of credit 7,700 7,700 8,182
Term loan 47,000 49,000 78,000
12 3/4% senior subordinated notes 143,997 143,850 --
Other long term debt 1,584 1,170 426
Deferred taxes 6,555 6,608 707
Total liabilities 283,993 273,836 148,575
Commitments and Contingencies
Minority interest in consolidated
subsidiaries 5,657 5,625 809
Preferred stock -- --
Common stock -- 96
Warrants 4,560 4,560 --
Additional paid in capital 147,187 147,187 58,660
Cumulative translation
adjustment (912) (63) (1,294)
Retained Earnings (33,987) (25,994) 22,106
Total Stockholder's equity 116,848 125,690 79,568
Total liabilities, minority
Interest and stockholder's equity $ 406,498 $ 405,151 $ 228,952
Consolidated Condensed Statement of Cash Flows
Three Months Three Months Six Months Six Months
Ending Ending Ending Ending
April 1, July 1, July 1, July 3,
2000 2000 2000 1999
(Pro Forma) (Pro Forma) (Pro Forma)(Historical)
(Unaudited) (Unaudited) (Unaudited)
(in thousands)
Net Income $ (25,368) $ (7,992) $ (33,360) $ 6,301
Depreciation and
amortization 8,462 10,686 19,148 3,993
In-process R&D 15,000 -- 15,000 --
Inventory fair
value adjustment 4,532 -- 4,532 --
Other operating
cash flows (633) 7,756 7,123 (1,621)
Total cash flows from
operations 1,993 10,450 12,443 8,673
Purchase of property,
plant and equipment (2,110) (3,197) (5,307) (3,541)
Proceeds from sale
of property -- -- -- 61
Total cash flows from
investing activities (2,110) (3,197) (5,307) (3,480)
Issuance of
common stock 349 -- 349 829
Advances under
line of credit 7,700 -- 7,700 --
Repayments of
line of credit (8,182) -- (8,182) --
Advances under
other debt
obligations 53,856 501 54,357 202
Repayments other
debt obligations (80,025) -- (80,025) (1,490)
Payment of
merger expenses (15,793) (1,399) (17,192) --
Repurchase of
common stock,
options and warrants (261,267) -- (261,267) --
Proceeds from
12 3/4% senior
subordinated notes 148,312 -- 148,312 --
Proceeds from
investors 152,000 -- 152,000 --
Cash flows from financing
activities (3,050) (898) (3,948) (459)
Foreign exchange
effect (129) (130) (259) (46)
Net increase
(decrease) in cash (3,296) 6,225 2,929 4,688
Cash at beginning
of period 18,273 14,977 18,273 20,027
Cash at end of period $ 14,977 $ 21,202 $ 21,202 $ 24,715
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