Advanced Power Technology Reports First Quarter 2002 Results; Expects Continued Quarterly Sequential Revenue Growth.Business Editors BEND Bend, city (1990 pop. 20,469), seat of Deschutes co., W central Oregon, on the Deschutes River, at the eastern foot of the Cascade Range; inc. 1904. Lumbering is the primary industry, and tourism is also important. , Ore.--(BUSINESS WIRE)--April 24, 2002 Advanced Power Technology, Inc. (Nasdaq:APTI APTI Association for Preservation Technology International APTI Air Pollution Training Institute ): Conference Call at 2:00 p.m. PT, April 24, 2002 -- Advanced Power Technology will conduct a conference call at 2:00 p.m. PT, Wednesday Wednesday: see week. , April 24, 2002 webcast simultaneously si·mul·ta·ne·ous adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics for interested investors via the Company's corporate web site at www.advancedpower.com. The call can be accessed live by dialing 800/388-8975. International callers please dial 973/694-2225. The content of the call will remain available for replay on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through 8:00 p.m. PT, May 24, 2002. In addition, a telephone replay of the conference call, available from 4:00 p.m. PT April 24, until 8:00 p.m. PT May 24, can be accessed at 800/428-6051 and from international locations at 973/709-2089; passcode 236996. Advanced Power Technology, Inc. (Nasdaq: APTI), a leading supplier of high performance power semiconductors used in the conditioning and control of electrical power, today reported first quarter 2002 revenues of $8.2 million, above the initial Company guidance of $7.4 to $7.9 million and in line with the updated guidance given on March 30, 2002. Excluding non-cash purchase accounting charges related to the January January: see month. 25, 2002 acquisition of GHz Technology, Inc. (GHz), 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 net income for the first quarter ended March 31, 2002 was a loss of $387,000 or $0.04 per share. The net loss for the first quarter of 2002 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 (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) was $2.6 million or $0.26 per share. Gross margin for the first quarter was 31.9 percent of revenue excluding $392,000 of non-cash purchase accounting charges associated with the acquisition of GHz. Patrick Sireta, Chief Executive Officer commented, "During the recent severe 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. experienced by the semiconductor industry we have taken a number of steps to position the Company for the next upturn which now appears to be underway. I believe that with the recent acquisition of GHz, the continued implementation of an effective manufacturing strategy and a sustained commitment to invest in research and development we are very well positioned to profitably grow our business. APT's strong balance sheet, with $30.7 million in cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has , $71.4 million in stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. and only $131,000 of total debt, gives us the ability to make increasing investments in R&D as well as execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution on strategic acquisition opportunities as they arise." "We experienced another strong quarter of design wins with 18 design wins in the first quarter of 2002. We believe that we have strong momentum in the market place and are well positioned to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the upturn. Through the course of the first quarter 2002 we have seen continued strengthening of the short term demand from our customers across all market segments, but primarily from the communications and semiconductor capital equipment markets and have been able to capitalize on that stronger demand. Even though we are only three weeks into the second quarter 2002, indications are that this positive trend is accelerating," concluded Mr. Sireta. Business Outlook The following statements are based on current expectations. These statements are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. , subject to risks and uncertainties, and actual results may differ materially. These statements do not include the potential impact of any investments outside the ordinary course of business, or mergers or acquisitions that may be completed after April 24, 2002. Readers are cautioned not to place undue reliance on these 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. , which speak only as of the date of this press release. The inclusion of any statement in this release does not constitute a suggestion by the Company or any other person that the 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 described in such statements are material. The Company does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in this release will not be realized. Revenues for the second quarter ending June June: see month. 30, 2002 are expected to be in the range of $8.8 million to $9.3 million. This is based upon the Company's most recent demand forecasts in an environment where there are increasingly strong signs of stabilization Stabilization The action undertakes a country when it buys and sells its own currency to protect its exchange value. Actions registered competitive traders undertake by on the NYSE to meet the exchange requirement that 75% of their traded be stabilizing, meaning that sell orders and of resumption RESUMPTION. To reassume; to promise again; as, the resumption of payment of specie by the banks is general. It also signifies to take things back; as the government has resumed the possession of all the lands which have not been paid for according to the requisitions of the law, and the of growth. It also includes three months of revenue from GHz versus two months in the first quarter of 2002. At these anticipated revenue levels, gross margin (exclusive of non-cash purchase accounting charges associated with the GHz acquisition) for the second quarter 2002 is expected to be in the 27 percent to 32 percent range. The Company has taken aggressive actions to lower costs associated with its internal wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. processing facilities while at the same time establishing capacity at its subcontractors to meet future increases in customer demand. Capitalizing on its strong financial position, the Company intends to continue its investment in R&D programs to sustain and advance its technology leadership, while simultaneously maintaining strict controls on discretionary spending. R&D expenses in the second quarter of 2002 are expected to be 9 percent to 10 percent of revenues and SG&A expenses 28 percent to 30 percent of revenues. These R&D and SG&A expense estimates are exclusive of non-cash purchase accounting charges associated with the acquisition of GHz. On a before tax basis the non-cash purchase accounting charges associated with the GHz acquisition for the second quarter of 2002 are expected to be $451,000 in cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold , $18,000 in R&D expenses and $46,000 in SG&A expenses. The tax effect of these charges is expected to be $198,000. About Advanced Power Technology Advanced Power Technology is a leading supplier of high performance power semiconductors used in the conditioning and control of electrical power. The Company's products are used in communications and Internet infrastructure equipment, semiconductor capital equipment, as well as medical, industrial, and military and aerospace systems. Important information about Advanced Power Technology, Inc., including press releases and SEC filings, are available at no charge through the Company's Web site at www.advancedpower.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 Except for historical information contained herein, the matters discussed in this news release are forward-looking statements made pursuant to safe harbor provisions of 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. APT (Automatic Programmed Tools) A high-level programming language used to generate instructions for numerical control machines. 1. (language) APT - Automatically Programmed Tools. 2. (company) APT - Audio Processing Technology. cautions that such statements are subject to a number of uncertainties, and actual results may differ materially. Factors that could affect the Company's actual results include the ability of subcontractors to meet their delivery commitments; unfavorable changes in industry and competitive conditions; the Company's mix of product shipments; the accuracy of customers forecasts; the effectiveness of the Company's efforts to control and reduce costs; and other uncertainties disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in the Company's S-1 filing with the Securities and Exchange Commission dated August 7, 2000, Annual Report on Form 10K filed on March 29, 2002 and other periodic filings made by the Company. The Company assumes no obligation to update the information in this release.
ADVANCED POWER TECHNOLOGY, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
Three Months Ended
March 31,
2002 2001
------- -------
(unaudited)
Revenues, net $ 8,239 $13,158
Amortization of technology rights
& other 392 --
Cost of goods sold 5,612 7,944
------- -------
Gross profit 2,235 5,214
------- -------
Operating expenses:
Research and development 1,021 351
Selling, general and administrative 2,510 2,726
In-process research & development
charge 1,897 --
------- -------
Total operating expenses 5,428 3,077
------- -------
Income (loss) from operations (3,193) 2,137
Other income, net:
Interest, net 219 523
Other, net 39 81
------- -------
Income (loss) before income taxes (2,935) 2,741
Provision (benefit) for income taxes (370) 959
------- -------
Net income (loss) $(2,565) $ 1,782
======= =======
Net income (loss) per share:
Basic ($ 0.26) $ 0.21
Diluted ($ 0.26) $ 0.19
Weighted average number of shares
used in the computation of net income
(loss) per share:
Basic 9,859 8,452
Diluted 9,859 9,300
Pro forma net income (loss) - see
reconciliation below $ (387) $ 1,782
======= =======
Pro forma net income (loss) per share:
Basic ($ 0.04) $ 0.21
Diluted ($ 0.04) $ 0.19
Weighted average number of shares
used in the computation of pro forma
net income (loss) per share:
Basic 9,859 8,452
Diluted 9,859 9,300
ADVANCED POWER TECHNOLOGY, INC
RECONCILIATION OF PRO FORMA NET INCOME (LOSS)
Three Months Ended
March 31,
2002 2001
------- -------
(unaudited)
Reported GAAP net income (loss) $(2,565) $ 1,782
Purchase accounting adjustments related to
acquisition of GHz Technology:
Cost of sales:
Amortization of technology rights 124 --
Inventory fair value adjustment 226 --
Deferred compensation amortization 42 --
Research & development expense:
Deferred compensation amortization 18 --
Selling, general and administrative:
Deferred compensation amortization 46 --
In-process research & development charge 1,897 --
Tax effect of pro forma adjustments (175) --
------- -------
Pro forma net (loss) $ (387) $ 1,782
======= =======
ADVANCED POWER TECHNOLOGY, INC
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, Dec. 31,
2002 2001
-------- --------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 6,345 $ 16,102
Short term investments 22,989 17,093
Accounts receivable, net 5,389 3,493
Inventories, net 10,388 9,307
Prepaid and other current assets 2,112 3,422
-------- --------
Total current assets 47,223 49,417
Property and equipment, net 7,260 5,546
Long term investments 1,404 2,473
Other assets 592 639
Technology rights 7,325 --
Goodwill 15,061 --
-------- --------
Total assets $ 78,865 $ 58,075
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,913 $ 2,805
Accrued expenses 2,002 1,031
Current portion of capital lease
obligations 80 73
-------- --------
Total current liabilities 4,995 3,909
Deferred tax liability 2,296 --
Capital lease obligations, less current
portion 51 58
Deferred gain on sale leaseback 155 160
-------- --------
Total liabilities 7,497 4,127
Stockholders' equity:
Common stock 104 88
Additional paid in capital 88,045 67,640
Treasury stock (1,700) (1,700)
Deferred stock compensation (558) (166)
Accumulated other comprehensive income 73 117
Accumulated deficit (14,596) (12,031)
-------- --------
Total stockholders' equity 71,368 53,948
-------- --------
Total liabilities and
stockholders' equity $ 78,865 $ 58,075
======== ========
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