Advanced Power Technology Reports First Quarter 2003 Results; Expects Quarterly Sequential Revenue Growth.Business Editors BEND, Ore.--(BUSINESS WIRE)--April 23, 2003 Advanced Power Technology, Inc. (Nasdaq:APTI APTI Association for Preservation Technology International APTI Air Pollution Training Institute ): Conference Call at 2:00 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT , April 23, 2003 -- Advanced Power Technology will conduct a conference call at 2:00 p.m. PDT, Wednesday Wednesday: see week. , April 23, 2003, webcast simultaneously for interested investors via the Company's corporate web site at www.advancedpower.com. The call can be accessed live by dialing 800/915-4836. International callers please dial 973/317-5319. 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 for 30 days. In addition, a telephone replay of the conference call will be available for 30 days and can be accessed at 800/428-6051 and from international locations at 973/709-2089; passcode 290493. Advanced Power Technology, Inc. (Nasdaq:APTI), a leading supplier of high performance power semiconductors used in the conditioning and control of electrical power for both switching and RF applications, today reported financial results for the first quarter ended March 31, 2003. First quarter 2003 revenues were $11.2 million, up 35.4 percent from $8.2 million for the first quarter of 2002, and down 2.5 percent from $11.4 million for the fourth quarter of 2002. Excluding the acquisitions of GHz Technology, Inc. (GHz) and of the business of Microsemi RF Products, Inc., which were completed on Jan. 25, 2002, and May 24, 2002 respectively, first quarter 2003 revenues were up 10.9 percent over the year ago quarter. The net loss for the first quarter 2003 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 $1.0 million, or $(0.10) per share, compared to the first quarter 2002 net loss of $2.6 million or $(0.26) per share and compared to the fourth quarter 2002 net loss of $641,000 or $(.06) per share. Excluding severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when charges associated with reduction of personnel and non-cash purchase accounting charges related to the acquisitions of GHz and of the business of Microsemi RF Products, Inc., 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 loss for the first quarter ended March 31, 2003, was $663,000 or $(0.06) per share, compared to a net loss of $387,000 or $(0.04) per share in the year-ago quarter, and a pro forma net loss of $277,000 or $(0.03) per share in the fourth quarter of 2002. Excluding non-cash purchase accounting charges associated with acquisitions, gross margin for the first quarter 2003 was 30.5 percent of revenue compared to 31.9 percent in the year-ago quarter and 30.6 percent in the prior quarter. Patrick Sireta, chief executive officer commented, "The Company's management team is committed to returning to profitability quickly. We have implemented and are continuing to implement actions to further reduce costs and control inventory levels. These include actions to reduce payroll expense, continuously improve manufacturing yields and efficiencies, and strictly control discretionary spending. We expect to fully realize the benefit of these actions in the second half 2003. The move to consolidate our Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York wafer fabrication Wafer Fabrication is a procedure composed of many repeated sequential processes to produce complete electrical or photonic circuits. Examples include production of radio frequency (RF) amplifiers, LEDs, optical computer components, and CPUs for computers. operations into our Bend, Oregon Bend is a city in Deschutes County, Oregon, United States. The name Bend was derived from "Farewell Bend," the designation used by early pioneers to refer to the location along the Deschutes River where the town eventually was platted, one of the few fordable points along the facility is progressing on plan. "Although our book to bill ratio in the first quarter closed below one at 0.95 we are anticipating a sequential One after the other in some consecutive order such as by name or number. increase in our second quarter revenues. A number of key RF design wins in military, radar, avionics avionics (ā'vēŏn`ĭks), electronic instruments used in air or space flight; also the design and production of such instruments. Early planes had few instruments, but as aviation and aircraft became more complex, so did instrumentation. , medical and semiconductor capital equipment applications are moving into production. APT's strategic relationship with Microsemi Corporation has allowed us to make excellent progress in penetrating penetrating breaching the tissues of the body. the implantable defibrillator defibrillator, device that delivers an electrical shock to the heart in order to stop certain forms of rapid heart rhythm disturbances (arrhythmias). The shock changes a fibrillation to an organized rhythm or changes a very rapid and ineffective cardiac rhythm to a market. We are continuing to see very positive results from our worldwide distribution agreement with Richardson Richardson, city (1990 pop. 74,840), Dallas and Collins counties, N Tex., a suburb of Dallas; founded in the 1850s, inc. as a city 1956. Richardson manufactures telecommunications equipment, medical devices, supercomputers, computer chips, and fiber optics. Electronics for both RF and switching power applications. These factors, in addition to the broad acceptance of 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. Power MOS (1) (Metal Oxide Semiconductor) See MOSFET. (2) (Mean Opinion Score) The quality of a digitized voice line. It is a subjective measurement that is derived entirely by people listening to the calls and scoring the results from 7 products by existing and new customers present APT with substantial growth opportunity. We experienced another solid quarter of design wins in the first quarter with 16 design wins." "We continue to maintain a strong balance sheet with 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 of $18.1 million and $70.2 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. with only $51,000 of total debt. This gives us the ability to continue to make the necessary investments in our future, including other strategic acquisition opportunities as they may arise," concluded 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 23, 2003. 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 in this release will not be realized. Revenues for the second quarter ending June June: see month. 30, 2003 are expected to be in the range of $11.5 million to $12.0 million, a quarterly sequential increase of 3 percent to 8 percent. At the anticipated revenue levels indicated above, gross margin for the second quarter 2003 (exclusive of non-cash purchase accounting charges associated with acquisitions) is expected to be in the 31 percent to 34 percent range. Actions which we expect will further reduce the Company's operational break-even point break-even point - In the process of implementing a new computer language, the point at which the language is sufficiently effective that one can implement the language in itself. , including consolidation of internal wafer fabrication operations, greater utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of low cost offshore assembly subcontractors associated with corresponding downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing of internal assembly operations and centralization cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. of support organizations are being implemented at a rapid pace. Some of these actions may result in charges in the quarter in which the action is taken. R&D expenses in the second quarter 2003 are expected to be approximately 8 percent to 9 percent of revenues and SG&A expenses to be 28 percent to 31 percent of revenues. These R&D and SG&A expense estimates are exclusive of non-cash purchase accounting charges associated with acquisitions and include approximately $250,000 of legal expenses associated with ongoing patent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . Interest income in the second quarter 2003 is expected to be approximately $70,000. Consistent with GAAP, goodwill and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. are carried on the Company's balance sheet at fair value and reviewed at least annually for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. or when other indications of impairment are present. Due to recent stock market and economic conditions, the Company will perform this impairment analysis in the second quarter ending June 30, 2003. The results of this analysis may require that the Company record a non-cash charge Non-Cash Charge 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. for the amount of any impairment deemed to have occurred. On a before tax basis, the non-cash purchase accounting charges associated with the GHz and Microsemi RF Products acquisitions for the second quarter 2003 are expected to be $281,000 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 and $14,000 in SG&A expenses. The tax effect of these charges is expected to be $104,000. Overall, the net loss per share for the second quarter 2003, excluding non-cash purchase accounting charges related to acquisitions, restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. and potential goodwill impairment charges, is expected to range from $(0.04) to $(0.02) per share. Patrick Sireta, chief executive officer indicated, "While we are not providing specific guidance beyond the second quarter 2003, we are encouraged by the anticipated sequential revenue growth in the second quarter and the current customer demand outlook for the second half of this year as well as by the expected impact of the cost and expense reduction actions we have taken." 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 for both switching and RF applications. The Company's products are used in communications and data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a , semiconductor capital equipment, industrial/medical, and military/aerospace markets. 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 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; the cost and liability associated with patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. litigation; and other uncertainties disclosed in the Company's S-1 filing with the Securities and Exchange Commission dated August 7, 2000, 2002 Form 10K filed on March 25, 2003 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)
(unaudited)
Three Months Ended:
--------------------------
Mar. 31, Dec. 31,
2003 2002 2002
-------- -------- --------
Revenues, net $11,159 $8,239 $11,440
Cost of goods sold 7,752 5,612 7,939
Amortization of technology rights and other
charges 284 392 462
-------- -------- --------
Total cost of goods sold 8,036 6,004 8,401
-------- -------- --------
Gross profit 3,123 2,235 3,039
-------- -------- --------
Operating expenses:
Research and development 833 1,021 858
Selling, general and administrative 3,931 2,510 3,445
In-process research and development
charges - 1,897 -
-------- -------- --------
Total operating expenses 4,764 5,428 4,303
-------- -------- --------
Loss from operations (1,641) (3,193) (1,264)
Other income, net:
Interest, net 56 219 91
Other, net 11 39 (8)
-------- -------- --------
Loss before income taxes (1,574) (2,935) (1,181)
Benefit for income taxes (565) (370) (540)
-------- -------- --------
Net loss $(1,009) $(2,565) $(641)
======== ======== ========
Net loss per share:
Basic ($0.10) ($0.26) ($0.06)
Diluted ($0.10) ($0.26) ($0.06)
Weighted average number of shares used in
the computation of net loss per share:
Basic 10,400 9,859 10,391
Diluted 10,400 9,859 10,391
ADVANCED POWER TECHNOLOGY, INC
SUPPLEMENTAL PRO FORMA DISCLOSURES (A)
RECONCILIATION OF GAAP TO PRO FORMA NET LOSS
(In thousands except per share amounts)
(Unaudited)
Three Months Ended:
--------------------------
Mar. 31, Dec. 31,
2003 2002 2002
-------- -------- --------
Reported GAAP net loss $(1,009) $(2,565) $(641)
Purchase accounting adjustments related to
acquisitions and other pro forma adjustments:
Cost of sales
Intangible asset amortization 270 124 270
Inventory fair value adjustment - 226 168
Deferred compensation amortization 14 42 24
Research and development expense
Deferred compensation amortization - 18 12
Selling, general and administrative
Deferred compensation amortization 17 46 58
Severance charge 240 - -
In-process research and development charges - 1,897 -
Tax effect of pro forma adjustments (195) (175) (168)
-------- -------- --------
Pro forma net loss $(663) $(387) $(277)
======== ======== ========
Pro forma net loss per share:
Basic ($0.06) ($0.04) ($0.03)
Diluted ($0.06) ($0.04) ($0.03)
Weighted average number of shares used in
the computation of pro forma net loss per
share:
Basic 10,400 9,859 10,391
Diluted 10,400 9,859 10,391
(A) Supplemental pro-forma disclosures are not based on generally
accepted accounting principles (GAAP), but are provided to
explain the impact of certain significant items. In accordance
with new SEC regulation G, the Company believes that this
disclosure is useful to investors and creditors of the Company
as it is a way to explain the impact of certain accounting
charges included in the Company's operating results due to our
recent company acquisitions and severance costs due to
restructuring actions.
ADVANCED POWER TECHNOLOGY, INC
CONSOLIDATED BALANCE SHEETS
(In thousands)
Mar. 31, Dec. 31,
2003 2002
----------- -----------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $7,990 $6,708
Short term investments in available-for-sale
securities 8,073 10,452
Accounts receivable, net 7,195 6,899
Inventories, net 11,728 11,949
Prepaid and other current assets 2,329 2,521
----------- -----------
Total current assets 37,315 38,529
Property and equipment, net 10,501 10,617
Long term investments in available-for-sale
securities 2,000 2,000
Other assets 181 109
Intangible assets, net 9,618 9,887
Goodwill 15,570 15,806
----------- -----------
Total assets $75,185 $76,948
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $2,782 $2,873
Accrued expenses 1,735 2,475
----------- -----------
Total current liabilities 4,517 5,348
Other long term liabilities 423 428
----------- -----------
Total liabilities 4,940 5,776
Stockholders' equity:
Common stock 105 105
Additional paid in capital 88,502 88,490
Treasury stock (1,700) (1,700)
Deferred stock compensation (124) (171)
Accumulated other comprehensive income 189 166
Accumulated deficit (16,727) (15,718)
----------- -----------
Total stockholders' equity 70,245 71,172
----------- -----------
Total liabilities and stockholders'
equity $75,185 $76,948
=========== ===========
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