Alpha Industries announces second quarter results, strategic divestiture plans.WOBURN, Mass.--(BUSINESS WIRE)--Nov. 4, 1996--ALPHA INDUSTRIES, INC inc - /ink/ increment, i.e. increase by one. Especially used by assembly programmers, as many assembly languages have an "inc" mnemonic. Antonym: dec. . (AMEX AMEX See: American Stock Exchange Symbol: AHA) today announced the results for the second quarter ended September 29, 1996. The Company also announced that, as part of its strategic focus on components for the wireless industry, it intends to divest To deprive or take away. Divest is usually used in reference to the relinquishment of authority, power, property, or title. If, for example, an individual is disinherited, he or she is divested of the right to inherit money. its European ceramics manufacturing operation and its digital radio subsystem A unit or device that is part of a larger system. For example, a disk subsystem is a part of a computer system. A bus is a part of the computer. A subsystem usually refers to hardware, but it may be used to describe software. product line. Second quarter earnings were within the range previously announced by the Company, with a net loss for the quarter of $4.7 million or $0.48 per share, compared with net income of $1.1 million or $0.13 per share for the comparable period last year. As described in the prior announcement on October 1, 1996, second quarter earnings were impacted by slower than expected receipt of new orders for ceramic products and millimeter wave digital radio components, as well as reserves for excess inventory and a loss on a large filter order at Trans-Tech, Inc., the Company's ceramics subsidiary. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the quarter were $20.1 million, compared with $23.7 million for the same period last year. New orders received in the second quarter totaled $20.5 million, compared with $26.2 million for the same period last year. Orders received in the first quarter of this year totaled $15.3 million, net of $2.5 million in orders canceled by the Company. The inventory write-down at Trans-Tech, which amounted to $1.5 million, resulted from shifts in demand away from certain products and lower than anticipated sales volumes. The loss on the filter order, which was $500,000, occurred when a customer redesigned the end product. This redesign required us to scrap certain finished parts and materials and to issue credits for returned product that was no longer required by the customer. Tom Leonard Tom Leonard is the name of several notable people:
System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. industry and, as a result, we are expanding our GaAs MMIC (Monolithic Microwave IC) An integrated circuit used in high-frequency applications such as mobile phones. Also known as "monolithic microwave/millimeter-wave IC," MMICs combine transistors and passive devices (resistors, capacitors, etc. capacity. In addition, we are acting to divest two operations that are not assisting us in this mission. "Both of these actions are driven by the fact that we are achieving design wins and receiving volume orders from major OEMs in the cellular telephone and PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. industry. These orders, and those we anticipate from the design wins, are expected to result in volume shipments in the fourth quarter of Alpha's fiscal 1997 and in the first quarter of fiscal 1998. The increasing order activity that we are already seeing should significantly improve operating results for the third quarter and allow Alpha to achieve profitability in the fourth quarter. "In response to increased orders for our GaAs MMICs and our expectation of a steep ramp in the fourth and first quarters, we are revamping our GaAs fab to handle four inch wafers, and we are adding a third shift in the fab. These measures will more than double our capacity. "We have decided to divest our Trans-Tech Europe manufacturing operation. Trans-Tech Europe has provided ceramics manufacturing capacity at a higher cost than our U.S. operations, which, coupled with improved efficiencies in Maryland, have made the European operation unnecessary. "Similarly, we have decided to divest the digital radio subsystem product line at Alpha, which develops and manufactures microwave transceivers, gunn oscillators, and motion sensors. Divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). will remove the disproportionate dis·pro·por·tion·ate adj. Out of proportion, as in size, shape, or amount. dis  pro·por risk and cost associated
with the manufacture of these highly complex and low-volume, low-margin
subsystems, which have led to some past unpredictability in the
Company's operating results.
"We are acting to finalize fi·nal·ize tr.v. fi·nal·ized, fi·nal·iz·ing, fi·nal·iz·es To put into final form; complete or conclude: "They have jointly agreed ... these divestitures at an early date, and we will take any associated charges in the third quarter. We are working to achieve favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms for the divestitures, but these charges are not expected to exceed $2.6 million, or $.26 per share, in the least favorable outcome. Mr. Leonard also stated, "With these actions behind us, we are poised to serve the market in a more focused way, better than at any time in our history. Our capacity is now more closely aligned with demand, and we are working with our customers much more effectively, as measured by the increase in design wins. More Alpha products are being inserted in more handset, base station and other wireless platforms with a broader array of customers." -0- 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 the historical information contained herein, this news release contains 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. that are inherently subject to risks and uncertainties. The Company's results could differ materially based on various factors, including without limitation: cancellation or deferral deferral - Waiting for quiet on the Ethernet. of customer orders, difficulties in the timely development and market acceptance of new products, market developments that vary from the current public expectations concerning the growth of wireless communications (including PCS), difficulty in divesting the above-mentioned business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets (including the possibility that the Company may be unable to structure acceptable transactions), difficulties in manufacturing new or existing products in sufficient quantity or quality, increased competitive pressures, or changes in economic conditions. Further information on factors that could affect the Company's financial results is included in the Company's periodic reports filed with the S.E.C., including the most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and subsequent 10-Qs. Alpha Industries Alpha Industries is a clothing manufacturer founded in 1959 in Knoxville, Tennessee. The company makes items such as flight jackets and vests, and has made jackets for the military of the United States like the M65 Jacket. Two models are the MA-1 and CWU-45/P pilot jackets. designs and manufactures a broad range of monolithic integrated circuits The common form of chip design, in which the base material (substrate) contains the pathways as well as the active elements that take part in its operation. , ceramic products, discrete semiconductors and subsystems for microwave, millimeter wave and radio frequency wireless communications applications. Alpha's products serve the needs of commercial manufacturers of cellular telephones, personal communications systems In telecommunication, a communications system is a collection of individual communications networks, transmission systems, relay stations, tributary stations, and data terminal equipment (DTE) usually capable of interconnection and interoperation to form an integrated whole. and networks (PCS/PCN), global positioning systems Global Positioning System: see navigation satellite. Global Positioning System (GPS) Precise satellite-based navigation and location system originally developed for U.S. military use. , mobile radio, and specialized wireless data services.
ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(unaudited) Second Quarter Ended Six Months Ended
Sept. 29, Oct. 1, Sept. 29, Oct. 1,
(in thousands, 1996 1995 1996 1995
except per share data)
------------------------------------------------------------------------------
Net sales $20,137 $23,733 $40,203 $46,167
Cost of sales 17,318 15,836 33,592 30,888
Research and development
expenses 2,470 2,128 4,958 3,915
Selling and administrative
expenses 4,451 4,308 9,838 8,737
Repositioning credit ---- ---- ---- (320)
-------- -------- -------- --------
Operating income (loss) (4,102) 1,461 (8,185) 2,947
Interest expense (130) (232) (247) (441)
Interest income and other, net 108 44 280 77
-------- -------- -------- --------
Income (loss) before
income taxes (4,124) 1,273 (8,152) 2,583
Provision for income taxes 604 192 ---- 388
-------- -------- -------- --------
Net income (loss) ($4,728) $1,081 ($8,152) $2,195
======== ======== ======== ========
Net income (loss) per share ($0.48) $0.13 ($0.83) $0.27
======== ======== ======== ========
Weighted average common shares and
common share equivalents 9,820 8,208 9,764 8,196
======== ======== ======== ========
-0-
COMPARATIVE BALANCE SHEET
(unaudited) Sept. 29, Oct. 1,
(in thousands) 1996 1995
------------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $7,118 $2,104
Short-term investments 3,039 ---
Accounts receivable, net 15,410 16,152
Inventories 13,094 10,747
Prepaid expenses and other
current assets 1,079 565
Property, plant and equipment,
less accumulated
depreciation and amortization 29,269 21,828
Other assets 716 650
------- -------
Total assets $69,725 $52,046
======= =======
Liabilities and Equity
Current liabilities
Current portion of long-term debt $1,975 $5,842
Current maturities of capital
lease obligations 385 408
Accounts payable 4,771 4,834
Accrued liabilities and other
current liabilities 6,402 7,375
Long-term debt 4,583 1,617
Other long-term liabilities 1,351 1,670
Stockholders' equity 50,258 30,300
------- -------
Total liabilities and equity $69,725 $52,046
======= =======
CONTACT: Alpha Industries, Inc. James C. Nemiah, 617/935-5150 |
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