Aavid Thermal Technologies, Inc. Operating Earnings On Track; Third Quarter Sales $48.8 Million, Net Income $2.5 Million, EPS $0.26 Excluding One-Time Charge.CONCORD, N.H.--(BUSINESS WIRE)--Oct. 20, 1998--Aavid Thermal thermal /ther·mal/ (ther´m'l) pertaining to or characterized by heat. ther·mal adj. 1. Of, relating to, using, producing, or caused by heat. 2. Technologies, Inc. (Nasdaq:AATT AATT Advanced Air Transportation Technologies (NASA air traffic control project) AATT Advanced Aviation Transportation Technology AATT Advanced Air Traffic Technologies (US FAA) AATT Absolute Arrival Time Technique ), today announced third quarter 1998 sales of $48.8 million, an increase of 12 percent over third quarter 1997 sales of $43.7 million. Net income for the third quarter of 1998 before a net one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge was $2.5 million, a 12 percent increase from the $2.2 million reported for the third quarter of 1997. Earnings before the one-time charge were 26 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. compared to 25 cents per share for the third quarter of 1997. Share count for the third quarter of 1998 was 9,526,593, an increase of 733,647 from the third quarter of 1997. Aavid Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Ronald F. Borelli said, "We are pleased with the results of our latest quarter, particularly in light of the unsettled condition of the electronics industry and our previously announced ramp-down in business from a major customer. The growing need for heat dissipation Noun 1. heat dissipation - dissipation of heat chilling, cooling, temperature reduction - the process of becoming cooler; a falling temperature in a broad array of computer and communications products continues to benefit Aavid and we see several areas of strength contributing to the growth of our base business. "Sales in our software and thermal design service businesses remain strong. We are also experiencing strong growth in our low-cost China manufacturing operation that Aavid launched earlier this year. This new operation provides heat dissipation products directly to an expanding base of leading suppliers in the personal computer business," Borelli concluded. The company also announced it expects to take a one time after tax, non-recurring charge of $2.4 million, or $0.25 per share in the quarter for costs associated with the closing of a plant dedicated to the major customer. Borelli commented, "We decided to close the plant over the next quarter because the equipment there is unique to this particular customer. Further, we will experience greater efficiencies shifting the remaining production to other facilities, which allows us to lower our overall cost structure. We believe that the combination of new business and lowered costs provides a healthy base for entering 1999." Company Background Aavid Thermal Technologies is a leading provider of thermal management solutions for dissipating potentially damaging heat from digital and power 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 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 the Far East.
Aavid's 1997 sales, which totaled $168 million, were driven by the
company's operations in two distinct markets: thermal management
solutions and computational fluid dynamics Computational fluid dynamicsThe 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. Thermal management solutions include products and services for 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 involves developing software for 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 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. When used in this presentation, the words "estimate," "project," "believe," "anticipate," "intend," "expect," "see," 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 ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. 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. Conference call is scheduled for Wednesday Wednesday: see week. , October October: see month. 21, 1998 at 9:00 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . Conference call number is 212-896-6171 - reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 1597037. -0-
AAVID THERMAL TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(Unaudited)
Sept. 26, Dec. 31,
1998 1997
ASSETS
Cash and cash equivalents $ 9,001 $ 6,919
Accounts receivable-trade 36,510 33,766
Notes receivable 3,459
Inventories 12,698 13,368
Refundable income taxes 502 1,138
Deferred income taxes 8,856 2,365
Prepaid and other current assets 3,661 2,256
-------- --------
Total current assets 74,687 59,812
Property, plant and equipment, net 42,615 43,155
Other assets, net 6,645 7,829
-------- --------
Total assets $123,947 $110,796
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of debt obligations $ 3,716 $ 3,360
Accounts payable - trade 13,892 16,378
Accrued expenses and other current
liabilities 24,588 17,778
-------- --------
Total current liabilities 42,196 37,516
Debt obligations, net of current portion 12,025 20,596
Deferred income taxes 2,133 2,269
-------- --------
Total liabilities 56,354 60,381
-------- --------
Stockholders' equity:
Common stock, $0.01 par value 93 76
Additional paid-in capital 56,081 43,793
Retained earnings 11,419 6,546
-------- --------
Total stockholders' equity 67,593 50,415
-------- --------
Total liabilities and stockholders'
equity $123,947 $110,796
======== ========
AAVID THERMAL TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share data)
(UNAUDITED)
QUARTER ENDED
Sept. 26, Sept. 27,
1998 1997
From One-time As
Operations Charge Reported
Net sales $ 48,837 $ -- $ 48,837 $ 43,695
Cost of goods sold 33,183 -- 33,183 29,097
---------- ----------- ---------- ----------
Gross profit 15,654 -- 15,654 14,598
Selling, general
and administrative
expenses 9,978 -- 9,978 8,904
Research and
Development 1,501 -- 1,501 1,592
Restructuring and
buyout of compensation
agreement charges -- 3,882 3,882 --
---------- ----------- ---------- ----------
Income from
Operations 4,175 (3,882) 293 4,102
Interest expense,
net (340) -- (340) (606)
Other expense, net (73) -- (73) (42)
---------- ----------- ---------- ----------
Income before
income taxes and
extraordinary item 3,762 (3,882) (120) 3,454
Provision for
income tax
expense (1,311) 1,499 188 (1,259)
---------- ----------- ---------- ----------
Net income $ 2,451 ($ 2,383) $ 68 $ 2,195
========== =========== ========== ==========
Diluted Net income
(loss) per share $ 0.26 ($ 0.25) $ 0.01 $ 0.25
========== =========== ========== ==========
Weighted average
common shares and
equivalents 9,526,593 9,526,593 9,526,593 8,792,946
========== =========== ========== ==========
AAVID THERMAL TECHNOLOGIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share data)
(UNAUDITED)
NINE MONTHS ENDED
Sept. 26, Sept. 27,
1998 1997
From One-time As
Operations Charge Reported
Net sales $ 158,682 $ -- $ 158,682 $ 115,175
Cost of goods sold 106,222 -- 106,222 72,769
---------- ----------- ---------- ----------
Gross profit 52,460 -- 52,460 42,406
Selling, general
and administrative
expenses 32,224 -- 32,224 25,845
Research and
development 4,846 -- 4,846 5,109
Restructuring and
buyout of compensation
agreement charges -- 5,740 5,740 --
---------- ----------- ---------- ----------
Income from
operations 15,390 (5,740) 9,650 11,452
Interest expense,
net (1,155) -- (1,155) (1,603)
Other expense, net (486) -- (486) (716)
---------- ----------- ---------- ----------
Income before
income taxes and
extraordinary item 13,749 (5,740) 8,009 9,133
Provision for
income tax
expense (5,024) 2,192 (2,832) (3,310)
---------- ----------- ---------- ----------
Net income
$ 8,725 ($ 3,548) $ 5,177 $ 5,823
========== =========== ========== ==========
Diluted Net income
(loss) per share $ 0.92 ($ 0.38) $ 0.55 $ 0.69
========== =========== ========== ==========
Weighted average
common shares and
equivalents 9,457,437 9,457,437 9,457,437 8,481,246
========== =========== ========== ==========
AAVID THERMAL TECHNOLOGIES, INC.
COMPARATIVE FINANCIAL DATA (a)
(in millions, except EPS)
1996
Unaudited
Q1 Q2 Q3 Q4 Y/E
NET SALES 26.0 23.0 25.7 32.2 107.0
(b)ATP-
Power Electronics 12.9 12.0 12.1 12.2 49.2
ATP-
Computer and Network 7.6 4.9 7.2 12.8 32.5
Fluent 5.5 6.1 6.4 7.2 25.2
Applied Thermal
Technologies 0.0 0.0 0.0 0.0 0.0
Cost of Sales 16.7 14.0 15.9 19.4 66.0
GROSS PROFIT 9.4 9.0 9.8 12.8 41.0
SG&A 5.7 7.1 6.4 8.3 27.6
R&D 1.3 1.3 1.6 1.5 5.7
OPERATING EXPENSES 7.0 8.4 8.0 9.8 33.2
OPERATING INCOME 2.3 0.6 1.8 3.0 7.8
Interest Inc/
(Exp), net -0.4 -0.3 -0.3 -0.5 -1.6
Other, net 0.1 0.0 -0.3 -0.4 -0.6
PRETAX INCOME 2.0 0.3 1.2 2.1 5.6
Provision for Taxes 0.7 0.1 0.4 0.8 2.0
NET INCOME 1.3 0.2 0.8 1.4 3.6
EPS (excl. one-time
charges) 0.18 0.02 0.1 0.17 0.47
Shares O/S 6.9 7.9 7.8 8.0 7.7
Capital Expenditures 1.9 1.7 1.0 2.4 7.0
Depreciation and
Amortization 1.1 1.0 1.1 1.0 4.1
Cash 6.1 4.0 4.5 4.1
Debt 13.5 13.9 20.9 23.3
Leverage Ratio 46% 52% 75% 79%
Inventory Turns
(Therm Products only) 11.1 10.5 8.9 7.2
A/R DSO 57 63 63 67
Number of employees 1,037 949 1,115 1,199
AAVID THERMAL TECHNOLOGIES, INC.
COMPARATIVE FINANCIAL DATA (a)
(in millions, except EPS)
1997
Unaudited
Q1 Q2 Q3 Q4 Y/E
NET SALES 34.4 37.1 43.7 52.6 167.7
(b) ATP-
Power Electronics 14.6 15.2 15.0 17.8 62.6
ATP-
Computer and Network 11.2 14.0 21.1 25.8 72.1
Fluent 8.6 7.8 7.5 8.7 32.5
Applied Thermal
Technologies 0.0 0.1 0.1 0.3 0.5
Cost of Sales 20.6 23.0 29.1 34.6 107.4
GROSS PROFIT 13.8 14.0 14.6 17.9 60.3
SG&A 8.3 8.6 8.9 10.9 36.7
R&D 1.8 1.7 1.6 1.8 6.9
OPERATING EXPENSES 10.1 10.4 10.5 12.7 43.6
OPERATING INCOME 3.7 3.7 4.1 5.2 16.7
Interest Inc/
(Exp), net -0.5 -0.5 -0.6 -0.6 -2.2
Other, net -0.5 -0.2 0.0 -0.5 -1.2
PRETAX INCOME 2.7 3.0 3.5 4.2 13.3
Provision for Taxes 1.0 1.0 1.3 1.5 4.8
NET INCOME 1.7 1.9 2.2 2.7 8.5
EPS (excl. one-time
charges) 0.21 0.23 0.25 0.3 0.98
Shares O/S 8.1 8.5 8.9 9.0 8.6
Capital Expenditures 1.4 2.2 4.6 6.9 15.1
Depreciation and
Amortization 1.6 1.4 1.7 1.4 6.1
Cash 3.2 4.6 5.3 6.9
Debt 26.2 27.3 30.2 24.0
Leverage Ratio 83% 77% 77% 48%
Inventory Turns
(Therm Products only) 7.3 7.8 8.9 9.6
A/R DSO 69 69 71 61
Number of employees 1,496 1,502 1,794 1,934
AAVID THERMAL TECHNOLOGIES, INC.
COMPARATIVE FINANCIAL DATA (a)
(in millions, except EPS)
1998
Unaudited
Q1 Q2 Q3
NET SALES 55.6 54.3 48.8
(b)ATP-
Power Electronics 17.4 16.5 13.0
ATP-
Computer and Network 27.7 28.3 27.1
Fluent 10.2 9.2 8.6
Applied Thermal Technologies 0.3 0.3 0.3
Cost of Sales 37.2 35.9 33.2
GROSS PROFIT 18.4 18.4 15.7
SG&A 11.0 11.2 10.0
R&D 1.7 1.7 1.5
OPERATING EXPENSES 12.7 12.9 11.5
OPERATING INCOME 5.7 5.5 4.2
Interest Inc/
(Exp), net -0.5 -0.4 -0.3
Other, net -0.3 -0.1 -0.1
PRETAX INCOME 4.9 5.1 3.8
Provision for Taxes 1.8 1.9 1.3
NET INCOME 3.1 3.2 2.5
EPS (excl. one-time charges) 0.33 0.34 0.26
Shares O/S 9.3 9.5 9.5
Capital Expenditures 4.6 2.4 1.7
Depreciation and Amortization 2.2 2.5 2.4
Cash 5.9 3.2 9.0
Debt 21.8 17.3 15.7
Leverage Ratio 39% 27% 23%
Inventory Turns
(Therm Products only) 10.1 10.4 9.6
A/R DSO 61 64 68
Number of employees 2,042 1,997 2,152
AAVID THERMAL TECHNOLOGIES, INC.
COMPARATIVE FINANCIAL DATA (a)
(in millions, except EPS)
1996
Unaudited
Q1 Q2 Q3 Q4 Y/E
MARGIN ANALYSIS
Cost of Sales 64.0% 60.9% 61.7% 60.3% 61.7%
Gross Margin 36.0% 39.1% 38.3% 39.7% 38.3%
SG&A 22.1% 30.9% 25.0% 25.7% 25.8%
R&D 4.9% 5.6% 6.3% 4.7% 5.3%
Operating
Margin 9.0% 2.7% 7.0% 9.3% 7.2%
Interest
Inc/Exp, net -1.7% -1.4% -1.4% -1.5% -1.5%
Pre Tax Income 7.6% 1.4% 4.7% 6.5% 5.2%
Tax Rate 36.0% 43.7% 33.7% 35.7% 35.8%
Net Income 4.8% 0.8% 3.1% 4.2% 3.4%
Yr to Yr %
Change
Sales 36.8% 1.6% 9.4% 25.1% 17.6%
Gross Profit 55.1% 34.7% 34.0% 25.3% 35.5%
Operating
Profit 107.6% -68.9% -19.9% 1.1% -6.8%
Pre Tax Income 221.2% -74.8% -17.6% -5.4% 1.0%
Net Income 90.3% -79.1% -56.5% -0.7% -23.8%
Earnings per
Share 32.7% -87.0% -71.6% -35.6% -50.8%
Qtr to Qtr %
Change
Sales 0.9% -11.5% 11.7% 25.3%
Gross Profit -8.3% -3.7% 9.2% 29.9%
Operating
Profit -21.4% -73.7% 194.3% 66.2%
Pre Tax Income -11.3% -84.2% 288.7% 73.7%
Net Income -7.4% -86.1% 358.3% 68.3%
Earnings per
Share -30.0% -87.9% 361.8% 64.3%
AAVID THERMAL TECHNOLOGIES, INC.
COMPARATIVE FINANCIAL DATA (a)
(in millions, except EPS)
1997
Unaudited
Q1 Q2 Q3 Q4 Y/E
MARGIN ANALYSIS
Cost of Sales 60.0% 62.1% 66.6% 65.9% 64.0%
Gross Margin 40.0% 37.9% 33.4% 34.1% 36.0%
SG&A 24.1% 23.3% 20.4% 20.7% 21.9%
R&D 5.3% 4.6% 3.6% 3.5% 4.1%
Operating
Margin 10.6% 10.0% 9.4% 10.0% 10.0%
Interest
Inc/Exp, net -1.4% -1.4% -1.4% -1.1% -1.3%
Pre Tax Income 7.9% 8.0% 7.9% 8.0% 7.9%
Tax Rate 37.7% 34.6% 36.5% 36.2% 36.2%
Net Income 4.9% 5.2% 5.0% 5.1% 5.1%
Yr to Yr %
Change
Sales 32.2% 61.1% 69.8% 63.1% 56.8%
Gross Profit 47.2% 55.8% 48.3% 40.3% 47.2%
Operating
Profit 56.6% 501.3% 127.0% 74.8% 115.2%
Pre Tax Income 37.8% 853.7% 185.7% 99.2% 138.3%
Net Income 34.0% 1008.0% 173.7% 97.8% 136.8%
Earnings per
Share 13.6% 922.0% 141.5% 76.0% 111.1%
Qtr to Qtr %
Change
Sales 6.7% 7.8% 17.8% 20.3%
Gross Profit 7.7% 2.0% 4.0% 22.9%
Operating
Profit 21.7% 1.0% 11.1% 27.9%
Pre Tax Income 29.2% 9.3% 16.5% 21.1%
Net Income 25.1% 14.8% 13.2% 21.6%
Earnings per
Share 23.4% 9.1% 9.1% 19.7%
AAVID THERMAL TECHNOLOGIES, INC.
COMPARATIVE FINANCIAL DATA (a)
(in millions, except EPS)
1998
Unaudited
Q1 Q2 Q3
MARGIN ANALYSIS
Cost of Sales 66.9% 66.1% 68.0%
Gross Margin 33.1% 33.9% 32.1%
SG&A 19.8% 20.7% 20.4%
R&D 3.0% 3.0% 3.1%
Operating
Margin 10.2% 10.2% 8.6%
Interest
Inc/Exp, net -0.8% -0.7% -0.7%
Pre Tax Income 8.8% 9.4% 7.7%
Tax Rate 37.2% 37.1% 34.9%
Net Income 5.5% 5.9% 5.0%
Yr to Yr %
Change
Sales 61.5% 46.4% 11.7%
Gross Profit 33.6% 31.2% 7.2%
Operating
Profit 55.7% 49.6% 1.8%
Pre Tax Income 81.0% 71.2% 8.9%
Net Income 82.3% 64.7% 11.6%
Earnings per
Share 58.9% 48.4% 3.8%
Qtr to Qtr %
Change
Sales 5.7% -2.3% -10.1%
Gross Profit 2.5% 0.2% -15.0%
Operating
Profit 8.4% 2.9% -24.4%
Pre Tax Income 17.4% 3.4% -25.9%
Net Income 15.3% 3.7% -23.3%
Earnings per
Share 11.4% 1.9% -23.6%
Notes:
(a) The above analysis does not include certain one-time charges. Q3
1995 excludes $6.194 million, which consist of $2.649 million relating
to the Buyout of a Compensation Arrangement, $2.770 million for the
Purchase of Undeveloped Technology and $0.775 million Write-off of
Deferred Financing Costs. Q2 1996 excludes $3.446 million relating to
the Purchase of Undeveloped Technology. Q1 1998 excludes $1.858
million relating to Buyout of Compensation Arrangements. Q3 1998
excludes $3.882 million relating to costs associated with the closing
of a plant.
(b) ATP - Power Electronics formally known as ATP -
Telecommunications, Industrial Electronics, Instrumentation and Other.
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