Advanced Power Technology Reports Fourth Quarter and Full-Year 2001 Results; Expects Sequential Revenue Growth in First Quarter 2002.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)--Feb. 14, 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. PST PST Paroxysmal supraventricular tachycardia, see there , Feb. 14, 2002 -- Advanced Power Technology will conduct a conference call at 2:00 p.m. PST, Thursday Thursday: see week. , Feb. 14, 2002, 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/-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 9:00 p.m. PST, March 14, 2002. In addition, a telephone replay of the conference call, available from 4:00 p.m. PST Feb. 14, until 9:00 p.m. PST March 14, can be accessed at 800/428-6051 and from international locations at 973/709-2089; passcode 231619. Selected Fourth Quarter Information -- Revenues decreased 57.2 percent to $5.3 million from $12.5 million in last year's fourth quarter. -- Net income decreased to a loss of $712,000 from a profit of $1.9 million in last year's fourth quarter. -- Earnings per share as reported decreased to a loss of $0.08 per diluted share from a net income of $0.21 per diluted share in last year's fourth quarter. 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 financial results for the fourth quarter and year ended Dec. 31, 2001. Revenues for the fourth quarter of 2001 were $5.3 million, down 57.2 percent compared to $12.5 million in the fourth quarter of 2000 and down 22.2 percent sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen from the $6.8 million recorded in the third quarter of 2001. Revenue for the year ended Dec. 31, 2001, totaled $36.9 million down 16.6 percent from the $44.2 million of revenue in 2000. The quarterly sequential One after the other in some consecutive order such as by name or number. decline in revenue was due to lower shipments to customers in the communications and semiconductor capital equipment markets. Combined shipments to the industrial, medical and military and aerospace markets as well as to distributors in the fourth quarter of 2001 were essentially unchanged from the third quarter of 2001. Net loss for the fourth quarter of 2001 was $712,000, or $0.08 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to a net profit of $1.9 million, or $0.21 per diluted share, earned in the fourth quarter of 2000 and compared to a net loss of $417,000, or $0.05 per diluted share in the third quarter of 2001. Net income for the year ended Dec. 31, 2001, was $1.8 million, or $0.19 per diluted share, compared to $3.8 million, or $0.50 per diluted share in 2000. Gross margin for the fourth quarter of 2001 was 19.8 percent compared to 44.1 percent for the fourth quarter of 2000 and 19.1 percent for the third quarter of 2001. The decrease in gross margin from the fourth quarter of 2000 was primarily due to significantly lower fixed cost absorption absorption [Lat.,=sucking from], taking of molecules of one substance directly into another substance. It is contrasted with adsorption, in which the molecules adhere only to the surface of the second substance. in the company's internal manufacturing facilities and to the lower content of RF products in the Company's revenues. For the year ended Dec. 31, 2001, gross margin was 32.1 percent compared to 39.5 percent in 2000. Fourth quarter 2001 research and development expenses totaled $635,000 or 11.9 percent of revenues, compared to $335,000, or 2.7 percent of revenue in last year's fourth quarter. Research and development expenses increased 65.0 percent to $1.8 million in 2001 from $1.1 million in 2000. In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the difficult market environment the Company has been capitalizing on its strong financial position to accelerate its research and development programs leading to the introduction of an increasing flow of new products. Selling, general and administrative expenses (S,G&A) totaled $1.9 million in the fourth quarter of 2001, or 35.7 percent of revenues, a 26.6 percent decrease compared to $2.6 million in last year's comparable period and 3.4 percent below the $2.0 million of S,G&A expenses in the third quarter of 2001. S,G&A expenses decreased 6.9 percent to $9.3 million in 2001 from $10.0 million in 2000. As previously announced in 2001, the Company instituted a number of expense and cost-reduction programs, including a reduction of employment, a wage freeze Noun 1. wage freeze - a freeze of wages at a given level freeze - fixing (of prices or wages etc) at a particular level; "a freeze on hiring" wage freeze n → congelación f de salarios and graduated pay reductions for domestic salaried and hourly workers, and planned Company-wide shutdowns. Since the beginning of 2002 the Company has further reduced staffing in its internal 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. facility by a total of 23 employees, including through a reduction in force action. There were no significant charges or accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. associated with the Company's reduction in force actions. The Company's internal wafer fabrication facility has been sized to support technologies not conducive con·du·cive adj. Tending to cause or bring about; contributive: working conditions not conducive to productivity. See Synonyms at favorable. to outside foundries, custom proprietary products, and research and development efforts. The Company will predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. rely on cost effective 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 subcontractors to support future growth. At the end of the fourth quarter of 2001 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 totaled $35.7 million, compared to $36.5 million at the end of the fourth quarter of 2000 and $36.1 million at the end of the third quarter of 2001. The Company has continued to focus aggressively on cash management as well as expense reduction and implemented significant production shutdowns in order to reduce production levels in line with reduced demand and to control inventories. Patrick Sireta, chief executive officer commented, "Relative to third quarter 2001 the fundamental dynamics in the fourth quarter 2001 continued to be weakness in the communications and the semiconductor capital equipment markets and stability in the industrial, medical and military and aerospace markets as well as in our sales to distribution. Our total sales in 2001 to the communications and the semiconductor capital equipment markets declined by 19.6 percent and 39.5 percent respectively from 2000 sales, while the combined industrial, medical and military and aerospace markets grew by 8.3 percent. "We experienced another strong quarter of design wins, attesting to the real benefits of our unique technologies and giving us confidence as we focus on the longer term. With 81 design wins in the last twelve months compared to 69 design wins in the previous twelve months and 57 design wins in the preceding twelve months, 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. Many of the recent design wins came from our 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(TM) products, which provide for extremely efficient and reliable power conversion in our customers' systems, benefits that we believe will remain paramount Paramount (pâr`əmount'), city (1990 pop. 47,669), Los Angeles co., S Calif.; inc. 1957. Originally a dairy region, it has become highly industrialized since the 1950s. to our customers in designing their advanced power electronics systems." "APT's strong balance sheet, with $35.7 million in cash and marketable securities, $53.9 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, has allowed us to make increasing investments in R&D as well as the recently announced acquisition of GHz Technology which are both key to fueling future profitable growth," 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 Feb. 14, 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 first quarter ending March 31, 2002 are expected to be in the range of $7.4 million to $7.9 million including revenues associated with GHz Technology, Inc. from the acquisition date of Jan. 25, 2002, thru the end of the quarter. This is based upon the Company's most recent demand forecasts in an environment where there still is fluidity to the ordering patterns from some customers but also encouraging 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. Excluding revenues from GHz Technology, the Company expects its revenues to grow sequentially by 7 percent to 13 percent from the fourth quarter 2001 to the first quarter 2002. At anticipated first quarter 2002 revenue levels, the Company expects gross margins to continue to remain depressed primarily due to the negative leverage associated with under-utilization of the Company's in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. manufacturing capacity. Gross margin (inclusive of inclusive of prep. Taking into consideration or account; including. GHz Technology) for the first quarter 2002 is expected to be in the 24 percent to 26 percent range. The Company has taken aggressive actions to lower costs associated with its internal wafer 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 first quarter of 2002 are expected to be approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10 percent of revenues. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in the first quarter of 2002 are expected to be approximately 30 percent of revenues. These R&D and operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. estimates include the impact of GHz Technology, Inc. from the acquisition date of Jan. 25, 2002, thru the end of the quarter, other than a one time 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 in-process R&D and the amortization of certain 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. acquired. 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 21, 2001 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 Twelve Months
Ended Dec. 31, Ended Dec. 31,
2001 2000 2001 2000
-------- -------- -------- --------
(unaudited)
Revenues, net $ 5,333 $12,469 $36,855 $44,168
Cost of goods sold 4,276 6,967 25,023 26,713
-------- -------- -------- --------
Gross profit 1,057 5,502 11,832 17,455
-------- -------- -------- --------
Operating expenses:
Research and development 635 335 1,810 1,097
Selling, general and
administrative 1,904 2,593 9,268 9,956
-------- -------- -------- --------
Total operating expenses 2,539 2,928 11,078 11,053
-------- -------- -------- --------
Income (loss) from operations (1,482) 2,574 754 6,402
Other income (expense), net:
Interest, net 273 575 1,595 (292)
Other, net (11) (103) 14 (105)
-------- -------- -------- --------
Income (loss) before income taxes (1,220) 3,046 2,363 6,005
Provision (benefit) for income
taxes (508) 1,100 567 2,246
-------- -------- -------- --------
Net income (loss) $ (712) $ 1,946 $ 1,796 $ 3,759
======== ======== ======== ========
Net income (loss) per share:
Basic ($0.08) $ 0.23 $ 0.21 $0.59
Diluted ($0.08) $ 0.21 $ 0.19 $0.50
Weighted average number of shares
used in the computation of net
income (loss) per share:
Basic 8,834 8,399 8,737 6,319
Diluted 8,834 9,354 9,368 7,551
Net income (loss) adjusted for non
cash interest, goodwill
amortization and other non cash
pushdown accounting charges $ (712) $ 1,946 $ 1,796 $ 4,790
======== ======== ======== ========
Net income (loss) adjusted per
share:
Basic ($0.08) $ 0.23 $0.21 $0.76
Diluted ($0.08) $ 0.21 $0.19 $0.63
Weighted average number of shares
used in the computation of net
income (loss) adjusted per share:
Basic 8,834 8,399 8,737 6,319
Diluted 8,834 9,354 9,368 7,551
ADVANCED POWER TECHNOLOGY, INC
CONSOLIDATED BALANCE SHEETS
(In thousands)
Dec. 31, Dec. 31,
2001 2000
---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 16,102 $ 25,326
Short term investments 17,093 8,118
Accounts receivable, net 3,493 6,776
Inventories, net 9,307 6,814
Prepaid and other current assets 3,422 1,799
---------- ----------
Total current assets 49,417 48,833
Property and equipment, net 5,546 4,367
Long term investments 2,473 3,022
Other assets 639 1,091
---------- ----------
Total assets $ 58,075 $ 57,313
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,805 $ 4,385
Accrued expenses 1,031 1,402
Current portion of long term debt - 21
Current portion of capital lease obligations 73 80
---------- ----------
Total current liabilities 3,909 5,888
Capital lease obligations, less current portion 58 130
Deferred gain on sale leaseback 160 177
---------- ----------
Total liabilities 4,127 6,195
Stockholders' equity:
Common stock 88 85
Additional paid in capital 67,640 66,826
Treasury stock (1,700) (1,700)
Deferred stock compensation (166) (330)
Accumulated other comprehensive income 117 64
Accumulated deficit (12,031) (13,827)
---------- ----------
Total stockholders' equity 53,948 51,118
---------- ----------
Total liabilities and stockholders' equity $ 58,075 $ 57,313
========== ==========
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