Ault Expects to Report Strong Fourth Quarter/Full-Year Fiscal 1999 Sales and Earnings.MINNEAPOLIS--(BUSINESS WIRE)--July 12, 1999-- Below-Plan First Quarter Results Not Expected to Affect Positive Fiscal 2000 Outlook Ault Incorporated (Nasdaq NMS See NetWare Management System. : AULT) today announced that earnings for the fourth quarter of fiscal 1999 ended May 30 are expected to range between $.14 to $.16 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 $.10 per diluted share reported in the fourth quarter of fiscal 1998. The anticipated fourth quarter earnings, which are consistent with previous expectations, would bring full-year fiscal 1999 earnings to $.50 to $.52 per diluted share, compared to $.31 per diluted share in fiscal 1998. The Company expects to release its audited fiscal 1999 operating results during the fourth week of July. Frederick M. Green, president and chief executive officer, said earnings for the first quarter of fiscal 2000 ending August 29 are expected to fall below the $.11 per diluted share posted in the year-earlier period, due to temporary order deferrals by one of the Company's cable modem cable modem Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet. OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and customers. Business volumes with the Company's other cable modem customers remain strong and at planned levels, indicating no general weakness in the overall cable modem market. Green said this customer recently notified Ault that it had temporarily over-forecasted shipment levels of cable modems. As a result, this customer is now utilizing its excess inventory of the Company's external power supplies before taking new shipments. Shipments to this customer are slated to resume later in the first quarter, and strong order levels are being forecasted over the balance of fiscal 2000. Green said that since he believes most or all of the first quarter earnings shortfall can be recouped in subsequent quarters, the Company is maintaining its previous fiscal 2000 operating plan, which forecasts strong full-year sales and earnings growth. Strong first quarter business volumes with other customers are expected to largely offset the deferred cable modem shipments. As a result, first quarter sales are expected to approximate the $11.3 million reported in the year-earlier period. However, the Company's first quarter profitability will be affected by higher 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. related to initiatives aimed at strengthening and expanding the Company's sales organization and manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. . In another recent development, the Company announced it is not proceeding with its joint venture with Sumitomo Corporation Sumitomo Corporation (住友商事, Sumitomo Shōji) TYO: 8053 is a highly built worldwide trading company (Sogo shosha), and is a diversified corporation based in Tokyo, Japan. It is a member company of the Sumitomo Group. to manufacture and market battery packs for Korean OEMs of wireless phones. Since recent changes in battery pack market conditions in Korea and technologies would have significantly delayed the payback Payback The length of time it takes to recover the initial cost of a project, without regard to the time value of money. on this business, the joint venture became less financially attractive than initially anticipated. The Company's fiscal 2000 earnings will not be affected by the joint venture decision, since the business was forecasted to be at or near breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations for the full year. In addition, the minimal joint venture expenses that have been incurred thus far are not expected to have any impact on the Company's operating results. The Company may elect to proceed with the joint venture at a future date, depending upon market and technology factors. Ault is the largest independent manufacturer of external power conversion products based in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . The Company is a leading supplier to original equipment manufacturers of telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and medical equipment. Statements regarding Ault's anticipated performance in fiscal 1999 and 2000 are forward-looking and therefore involve risks and uncertainties, including but not limited to: market conditions in the global electronics industry, buying patterns of major customers, competitive products and technologies, and other factors set forth in the Company's filings with the Securities and Exchange Commission. |
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