Advanced Power Technology Reports Second 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)--July 25, 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. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT , July July: see month. 25, 2002 -- Advanced Power Technology will conduct a conference call at 2:00 p.m. PDT, Thursday Thursday: see week. , July 25, 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 800/360-9865. International callers please dial 973/694-6836. 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 August 25, 2002. In addition, a telephone replay of the conference call, available from 7:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT July 25, until 11:59 p.m. EDT August 25, can be accessed at 800/428-6051 and from international locations at 973/709-2089; passcode 249151. 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 second quarter 2002 revenues of $10.7 million, above the initial Company guidance of $8.8 to $9.3 million and slightly above the updated guidance given on July 1, 2002 of $10.6 million. The net loss for the second 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 $545,000 or $(0.05) per share. Excluding non-cash purchase accounting charges related to the January January: see month. 25, 2002 acquisition of GHz Technology, Inc. (GHz) and the May 24, 2002 acquisition 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 income for the second quarter ended June June: see month. 30, 2002 was a loss of $26,000 or $(0.00) per share. Gross margin for the second quarter of 2002 was 33.9 percent of revenue excluding $565,000 of non-cash purchase accounting charges associated with the two acquisitions. Patrick Sireta, Chief Executive Officer commented, "Our recent acquisitions combined with an improved environment in some of the markets we serve, a strong balance sheet, continued stringent cost control and a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. tax rate resulted in a second quarter financial performance that was essentially at break-even excluding acquisition-related non-cash purchase accounting charges, showing continued improvement from the prior two quarters. "We experienced continued strength in the order level, driving a book-to-bill ratio Book-to-Bill Ratio The technology industry's demand-to-supply ratio for orders on a "firm's book" to number of orders filled. Notes: This ratio tells whether the company has more orders than it can deliver (if greater than 1), has the same amount of orders that it can of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 1.12 for the second quarter of 2002. The short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. demand from our customers remained strong, primarily in the semiconductor capital equipment market, and we were able 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>. it. We had another solid quarter of design wins with 20 design wins in the second quarter of 2002. "While we remain cautious relative to the rate of revenue growth in the quarters ahead we are encouraged by our revenue growth in the second quarter 2002. We are pleased with the additional opportunities for growth that can be derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from our recent acquisitions and with the improved balance they provide us between the four key markets we serve, 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. "Excluding the impact of the $18.9 million net cash used for acquisitions, the Company has generated approximately $3.2 million of net cash since the beginning of calendar 2002 of which $1.0 million was used to purchase capital equipment, primarily for information technology infrastructure. APT's strong balance sheet, with $18.9 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 , $71.3 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 $113,000 of total debt, gives us the ability to continue to make the necessary investments in R&D as well as execute on other strategic acquisition opportunities as they may arise," 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 July 25, 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 third quarter ending September September: see month. 30, 2002 are expected to be in the range of $12.6 million to $13.2 million. This corresponds to a 5% to 11% quarterly sequential One after the other in some consecutive order such as by name or number. growth rate, excluding revenues from the acquired Microsemi RF Products business. This business only contributed to the Company's $10.7 million consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: second quarter of 2002 revenues for five weeks from the date of acquisition. While it is expected that the acquisition of the Microsemi RF Products business will be immediately slightly accretive to earnings it will reduce gross margin by a couple of percentage points in the third quarter 2002. At the anticipated revenue levels indicated above, gross margin for the third quarter 2002 (exclusive of non-cash purchase accounting charges associated with the GHz and Microsemi RF Products acquisitions) is expected to be in the 31.5 percent to 33.5 percent range. The company is moving expeditiously ex·pe·di·tious adj. Acting or done with speed and efficiency. See Synonyms at fast1. ex on identifying and implementing cost reduction and consolidation actions to fully realize the synergies between its two recent acquisitions and to further increase their contribution to earnings per share. 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 third quarter of 2002 are expected to be 7 percent to 8 percent of revenues and SG&A expenses 24 percent to 25 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 and the Microsemi RF Products, Inc. business. On a before tax basis the non-cash purchase accounting charges associated with the GHz and Microsemi RF Products business for the third quarter of 2002 are expected to be $553,000 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 , $13,000 in R&D expenses and $35,000 in SG&A expenses. The tax effect of these charges is expected to be $231,000. 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 data processing, 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 (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 Six Months Ended
June 30, June 30,
2002 2001 2002 2001
--------- --------- --------- ---------
(unaudited) (unaudited)
Revenues, net $ 10,694 $ 11,526 $ 18,933 $ 24,684
Amortization of technology
rights & other 565 - 957 -
Cost of goods sold 7,074 7,274 12,686 15,218
--------- --------- --------- ---------
Gross profit 3,055 4,252 5,290 9,466
--------- --------- --------- ---------
Operating expenses:
Research and development 960 465 1,981 816
Selling, general and
administrative 3,023 2,668 5,533 5,394
In-process research &
development charge 211 - 2,108 -
--------- --------- --------- ---------
Total operating
expenses 4,194 3,133 9,622 6,210
--------- --------- --------- ---------
Income (loss) from
operations (1,139) 1,119 (4,332) 3,256
Other income (loss), net:
Interest, net 162 474 381 997
Other, net (48) 32 (9) 113
--------- --------- --------- ---------
Income (loss) before income
taxes (1,025) 1,625 (3,960) 4,366
Provision (benefit) for
income taxes (480) 482 (850) 1,441
--------- --------- --------- ---------
Net income (loss) $ (545) $ 1,143 $ (3,110) $ 2,925
========= ========= ========= =========
Net income (loss) per share:
Basic ($0.05) $0.13 ($0.31) $0.34
Diluted ($0.05) $0.12 ($0.31) $0.32
Weighted average number of
shares used in the
computation of net income
(loss) per share:
Basic 10,356 8,623 10,105 8,538
Diluted 10,356 9,264 10,105 9,271
Pro forma net income (loss)
- see reconciliation below $ (26) $ 1,143 $ (413) $ 2,925
========= ========= ========= =========
Pro forma net income (loss)
per share:
Basic ($0.00) $0.13 ($0.04) $0.34
Diluted ($0.00) $0.12 ($0.04) $0.32
Weighted average number of
shares used in the
computation of pro forma
net income (loss) per share:
Basic 10,356 8,623 10,105 8,538
Diluted 10,356 9,264 10,105 9,271
ADVANCED POWER TECHNOLOGY, INC
RECONCILIATION OF PRO FORMA NET INCOME (LOSS)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
--------- --------- --------- ---------
(unaudited) (unaudited)
Reported GAAP net income
(loss) $ (545) $ 1,143 $ (3,110) $ 2,925
Purchase accounting adjustments
related to acquisitions
Cost of sales
Intangible asset amortization 215 - 339 -
Inventory fair value
adjustment 308 - 534 -
Deferred compensation
amortization 42 - 84 -
Research & development expense
Deferred compensation
amortization 18 - 36 -
Selling, general and
administrative
Deferred compensation
amortization 48 - 94 -
In-process research &
development charge 211 - 2,108 -
Tax effect of pro forma
adjustments (323) - (498) -
--------- --------- --------- ---------
Pro forma net (loss) $ (26) $ 1,143 $ (413) $ 2,925
=========== ========= =========== =========
ADVANCED POWER TECHNOLOGY, INC
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, Dec. 31,
2002 2001
--------- ---------
unaudited
Assets
Current assets:
Cash and cash equivalents $ 2,458 $ 16,102
Short term investments 15,491 17,093
Accounts receivable, net 7,274 3,493
Inventories, net 12,940 9,307
Prepaid and other current assets 2,369 3,422
--------- ---------
Total current assets 40,532 49,417
Property and equipment, net 10,466 5,546
Long term investments 1,000 2,473
Other assets 658 639
Intangible assets, net 10,425 -
Goodwill 15,980 -
--------- ---------
Total assets $ 79,061 $ 58,075
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,138 $ 2,805
Accrued expenses 2,058 1,031
Current portion of capital lease
obligations 82 73
--------- ---------
Total current liabilities 5,278 3,909
Deferred tax liability 2,296
Capital lease obligations, less current
portion 31 58
Deferred gain on sale leaseback 151 160
--------- ---------
Total liabilities 7,756 4,127
Stockholders' equity:
Common stock 105 88
Additional paid in capital 88,292 67,640
Treasury stock (1,700) (1,700)
Deferred stock compensation (428) (166)
Accumulated other comprehensive income 177 117
Accumulated deficit (15,141) (12,031)
--------- ---------
Total stockholders' equity 71,305 53,948
--------- ---------
Total liabilities and
stockholders' equity $ 79,061 $ 58,075
========= =========
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