Alpha Technologies Group Reports Third Quarter Results.Business Editors LOS ANGELES--(BUSINESS WIRE)--Sept. 9, 2003 Alpha Technologies Group, Inc. (Nasdaq:ATGI ATGI Alpha Technologies Group, Inc. ATGi Active Technologies Group, Inc. ) today announced results for the third quarter and first nine months of fiscal 2003 ended July 27, 2003. The net loss for this year's third quarter before non-cash charges 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. was $568,000, or $0.08 per share. This compares to net income for last year's third quarter before non-cash charges of $121,000, or $0.02 per share. Revenue for the third quarter of fiscal 2003 was $11,658,000 versus $15,258,000 for the third quarter of fiscal 2002. For the nine months ended July 27, 2003, the net loss before non-cash charges was $1,389,000, or $0.19 per share. For the nine months ended July 28, 2002, net income before non-cash charges and losses associated with the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt was $50,000, or $0.01 per share. Revenue for the first nine months of fiscal 2003 declined to $35,288,000 from $41,778,000 for the same period last year. The Company's results for the third quarter and first nine months of fiscal 2003 included non-cash charges totaling $13,303,000 for the write-off of all remaining goodwill on the Company's balance sheet and the impairment of other intangibles under Statement of Financial Accounting Standards (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) No. 142. Results for the third quarter and first nine months of fiscal 2002 included non-cash charges of $15,602,000 for the write-off of goodwill associated with the NNE NNE abbr. north-northeast Noun 1. NNE - the compass point that is midway between north and northeast nor'-nor'-east, north northeast acquisition in January 2001. Including non-cash charges, the net loss for this year's third quarter was $13,871,000, or $1.95 per share. Including non-cash charges, the net loss for last year's third quarter was $9,833,000, or $1.38 per share. Including non-cash charges, the net loss for this year's first nine months was $14,692,000, or $2.07 per share. Including non-cash charges and the costs associated with debt extinguishment, the net loss for the first nine months of fiscal 2002 was $10,495,000, or $1.48 per share. The third quarter and nine months' fiscal 2003 Benefit For Income Taxes reflects a $5,300,000 increase in the Company's tax valuation allowance. This increase is necessary to adjust the potential tax benefit, which may not be realized, related to the recent write-off of goodwill and other 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. . Total debt declined to $22,600,000 at July 27, 2003 from $24,850,000 at October 27, 2002. "Conditions in our primary markets remain stable at approximately the same sales levels as the past few quarters. We continue to be focused on providing our clients with the highest quality thermal management products while keeping our 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. to a minimum. Alpha's low cost structure will allow us to quickly return to profitability when market conditions improve," said CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Larry Butler
1. . Non-GAAP Financial Measures Cash flow for the first nine months of fiscal 2003, as measured by earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
The following table reconciles GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). to non-GAAP financial measures:
RECONCILIATION FROM GAAP TO NON-GAAP FINANCIAL MEASURES
(In Thousands)
Nine Months Ended
July 27, 2003 July 28, 2002
Net Loss $(14,692) $(10,495)
Add (deduct):
Impairment of goodwill 12,980 15,602
Depreciation and amortization 2,508 2,862
Interest expense 1,525 1,912
Losses associated with debt
extinguishment and modifications -- 591
Impairment of other intangible
asset 323 --
Other 45 --
Credit for income taxes (883) (5,975)
EBITDA $1,806 $4,497
Conference Call Alpha has scheduled a conference call today at 11:00 AM ET. A simultaneous WebCast may be accessed at www.ALPHAtgi.com/pr.html. A replay will be available after 1:00 PM ET at this same internet address There are two kinds of addresses that are widely used on the Internet. One is a person's e-mail address, and the other is the address of a Web site, which is known as a URL. Following is an explanation of Internet e-mail addresses only. For more on URLs, see URL and Internet domain name. . For a telephone replay, dial (800) 633-8284, reservation #21158508 after 1:00 PM ET. About Alpha Technologies Group Alpha Technologies Group (www.ALPHAtgi.com), Inc. is engaged in the manufacture, fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. and sale of thermal management and non-thermal fabricated fab·ri·cate tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates 1. To make; create. 2. To construct by combining or assembling diverse, typically standardized parts: products and aluminum extrusions. The Company is one of the leading manufacturers of thermal management products in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Thermal management products, principally heat sinks A material that absorbs heat. Typically made of aluminum, heat sinks are widely used in amplifiers and other electronic devices that build up heat. Small heat sinks are the most economical method for cooling microprocessors and other chips. , dissipate dis·si·pate v. dis·si·pat·ed, dis·si·pat·ing, dis·si·pates v.tr. 1. To drive away; disperse. 2. unwanted heat generated by electronic components. The Company's thermal management products serve the automotive, telecommunication, industrial controls, transportation, power supply, factory automation, consumer electronics, aerospace, defense, microprocessor, and computer industries. The Company also sells non-thermal fabricated products and aluminum extrusions to various industries including the construction, sporting goods Noun 1. sporting goods - sports equipment sold as a commodity commodity, trade good, good - articles of commerce sports equipment - equipment needed to participate in a particular sport and other leisure activity markets. 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. This press release may contain forward-looking statements within the meaning 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. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including the following: changes in demand for the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, excess or shortage of production capacity, compliance with covenants in the Company's loan documents, ability to meet principal payments under those loan documents and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. , and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances which may take place after the date of this release.
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
Three Months Ended Nine Months Ended
July 27, July 28, July 27, July 28,
2003 2002 2003 2002
SALES $11,658 $15,258 $35,288 $41,778
COST OF SALES 10,465 12,768 31,425 35,119
Gross profit 1,193 2,490 3,863 6,659
OPERATING EXPENSES
Research and development 97 129 292 372
Selling, general and
administrative 1,509 1,540 4,326 4,678
Goodwill impairment charge 12,980 15,602 12,980 15,602
Other intangible assets
impairment charge 323 -- 323 --
Total operating expenses 14,909 17,271 17,921 20,652
OPERATING (LOSS) INCOME (13,716) (14,781) (14,058) (13,993)
INTEREST EXPENSE (494) (627) (1,525) (1,912)
OTHER INCOME, net 3 8 8 26
COSTS ASSOCIATED WITH DEBT
EXTINGUISHMENTS AND
MODIFICATIONS -- -- -- (591)
LOSS BEFORE BENEFIT FOR INCOME
TAXES (14,207) (15,400) (15,575) (16,470)
BENEFIT FOR INCOME TAXES (336) (5,567) (883) (5,975)
NET LOSS $(13,871) $(9,833) $(14,692) $(10,495)
LOSS PER COMMON SHARE:
BASIC $(1.95) $(1.38) $(2.07) $(1.48)
DILUTED $(1.95) $(1.38) $(2.07) $(1.48)
WEIGHTED AVERAGE NUMBER OF COMMON
& COMMON EQUIVALENT SHARES OUTSTANDING:
BASIC 7,110 7,109 7,110 7,110
DILUTED 7,110 7,109 7,110 7,110
SELECTED BALANCE SHEET DATA
(In Thousands)
July 27, October 27,
2003 2002
Cash $1,406 $751
Working capital 9,769 9,484
Debt, including current maturities 22,600 24,850
Total assets 38,518 55,633
Stockholders' equity $11,334 $25,880
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