Performance Technologies Announces Fourth Quarter Financial Results.Business/Technology Editors ROCHESTER, N.Y.--(BUSINESS WIRE)--Feb. 6, 2001 "...Company achieves 14th consecutive year of profitability..." Performance Technologies, Inc. (Nasdaq: PTIX) a leading provider of packet-based telecom and networking products, today announced financial results for the fourth quarter 2000. All 1999 amounts contained herein have been restated to reflect the acquisition of MicroLegend Telecom Systems, Inc., accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. . Net income for the fourth quarter 2000 amounted to $2.0 million, or $.15 per share. Net income for the fourth quarter 1999 amounted to $3.3 million, or $.23 per share excluding one-time acquisition expenses, and $1.5 million, or $.11 per share including these one-time expenses. Net income for 2000 amounted to $7.0 million, or $.51 per share. Net income for 1999 amounted to $8.0 million, or $.58 per share excluding one-time acquisition expenses, and $6.2 million, or $.45 per share including these one-time expenses. Beginning in 1994, the Company had contracts with various sub-contractors, including Lockheed Martin For the former company, see . Lockheed Martin (NYSE: LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta. , to provide the U.S. Government with legacy LAN An older local area network. It typically refers to Token Ring and FDDI, but may also refer to a slow 10 Mbps Ethernet. See legacy network. Interface products for various Navy programs. These contracts ended in June 2000. Revenue from these contracts amounted to $1.1 million in 2000, including zero dollars in the fourth quarter 2000, and $13.5 million in 1999, including $4.3 million in the fourth quarter 1999. Excluding legacy LAN product shipments to U.S. Government sub-contractors, revenue for the fourth quarter 2000 was $10.0 million, compared to $8.6 million for the fourth quarter 1999. Total revenue for the fourth quarter 2000 was $10.0 million, compared to $12.9 million for the fourth quarter 1999. Excluding legacy LAN product shipments to U.S. Government sub-contractors, revenue for 2000 was $37.9 million, compared to $31.0 million for 1999, a 22% increase. Total revenue for 2000 was $39.0 million, compared to $44.5 million for 1999. Performance Technologies continues to be recognized by major telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. equipment manufacturers, OEMs and integrators as a leading source for reliable, high performance products and innovative technical solutions. "Our accomplishments throughout 2000 can be attributed largely to an established forward-looking strategy that focuses on products and systems specifically developed for next-generation Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (IP) networks, third generation (3G) wireless network infrastructures and emerging broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). communication solutions," said Donald Turrell, president and chief executive officer. "We also feel confident that this strategy will be the foundation for significant future participation as the build-out of this next-generation communication infrastructure occurs." At the close of 2000, PTI PTI - Portable Tool Interface marked the one-year anniversary since its acquisition of MicroLegend Telecom Systems in Ottawa, Canada. MicroLegend's success in providing Signaling Systems 7 (SS7) solutions for the public telephone network, IP networks and next-generation wireless network infrastructures has borne out to be the ideal complement to Performance Technologies' various access products and protocol software offerings. Combining the strengths, experience and technologies of the individual companies into a single organization has elevated PTI to a prominent position in the explosive telecommunications marketplace. IPNexus(TM), PTI's new family of leading-edge network access products, and the new MicroLegend(TM) 4000 Series Signaling Gateway A network device that converts control signals from one format to another. For example, a SIGTRAN signaling gateway converts SS7 signals of the PSTN to SIGTRAN for transport over IP. Contrast with media gateway. See SIGTRAN. , both directed toward next-generation network infrastructures, are stimulating considerable interest and acclaim. We are extremely proud that the new CPC (1) (Central Processing Complex) An IBM mainframe that has two or more central processors (CPs) that share memory. It is the collection of processors, memory and I/O subsystems manufactured with a single serial number, typically all contained in one cabinet. 4400 Ethernet switch A device that connects clients and servers to each other in an Ethernet network. See switched Ethernet. , the cornerstone cornerstone Ceremonial building block, dated or otherwise inscribed, usually placed in an outer wall of a building to commemorate its dedication. Often the stone is hollowed out to contain newspapers, photographs, or other documents reflecting current customs, with a view to of the IPNexus product family, has received the Product of the Year Award from Internet Telephony Another term for IP telephony and VoIP. In the late 1990s, some people made a distinction between Internet Telephony and VoIP: Internet telephony referred to voice over the public Internet, while VoIP referred to voice over private IP networks. magazine and the new MicroLegend 4000 Series Signaling Gateway has been recognized as the Product of the Year by Communications Solutions magazine. Both of these publications are highly regarded within the telecommunications industry. Relationships with major companies in the telecommunications industry continue to play an important role in Performance Technologies' success. Worldwide leaders of Internet Protocol (IP) telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. solutions, such as Clarent Corporation, are incorporating a variety of PTI signaling gateway and IPNexus products as part of their next-generation systems. In another application, Motorola is using PTI's high availability Also called "RAS" (reliability, availability, serviceability) or "fault resilient," it refers to a multiprocessing system that can quickly recover from a failure. There may be a minute or two of downtime while one system switches over to another, but processing will continue. SS7/IP signaling gateway solutions for its Aspira(TM) 3G mobile communications solutions. 3G combines voice, data and multi-media into one broadband, IP-based network that integrates access networks, applications and Internet services over wireless Voice-over-IP networks. As the Company enters 2001, the Rochester, NY based employees of Performance Technologies are anxiously looking forward to relocating to a new 55,000 square foot facility that will accommodate our corporate headquarters, Rochester administrative, sales and marketing staffs, and the Company's 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. . Quite literally, the Company has outgrown its present building and the new facility is designed to handle our immediate business requirements while providing a variety of expansion options to accommodate the Company's future growth initiatives. The following are 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. within the meaning of the Securities Act of 1933 and Securities Exchange Act of 1934 and are subject to the 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. provisions of those Regulations: PTI supplies products to telecommunications and broadband equipment suppliers that are integrated into current and next-generation network infrastructure. Design wins reach production volumes at varying rates, typically beginning twelve months after the design win occurs. A variety of risks such as schedule delays, cancellations and changes in customer markets can adversely affect a design win before production is reached or during deployment. PTI's management continues to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the Company's prospects for 2001, particularly during the second half of the year when a number of the customers, who represented "design wins" over the past thirteen months, are expected to begin ordering product in volume. Furthermore, the Company is currently seeing significant interest for its new products directed at next-generation network applications such as Voice-over-IP, 3G wireless and broadband infrastructure. However, during the past sixty days, many of PTI's customers, who are large telecom equipment suppliers, have made cautious statements Noun 1. cautious statement - a statement made with careful qualifications statement - a message that is stated or declared; a communication (oral or written) setting forth particulars or facts etc; "according to his statement he was in London on that day" regarding their business prospects in the near term and for 2001. Given the change in economic conditions during the latter months of 2000 and the cautious statements made by our customers, management has modified its strategy for 2001. Revenue growth expectations are being adjusted to be between 22% and 27% for 2001 and at the same time, spending expectations have been reduced to match these new expectations. As we enter the year, PTI will selectively, rather than broadly, increase investments in sales, marketing and engineering, especially during the first half of 2001, while monitoring the economic climate. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of is expected to increase by 20% to 25%, from the $.51 per share reported in 2000. For the first quarter 2001, revenue is expected to be between $8.5 million and $9.5 million and diluted earnings per share is expected to be between $.08 and $.11 per share. The corporate income tax rate is expected to be 33% for 2001, compared to 38% as previously announced. The year 2000 was PTI's first full year with Canadian operations. Based on operational decisions implemented during 2000, PTI was able to take advantage of certain Canadian tax incentives that began benefiting the Company in 2000. More in-depth discussions of the Company's strategy and financial performance can be found in the Company's recent Annual and Quarterly Reports, on 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 Form 10-Q Form 10-Q See 10-Q. , as filed with the Securities and Exchange Commission. About Performance Technologies Performance Technologies, Inc. is a leading supplier of innovative telecommunications and networking products that enable the convergence of wireline, wireless and next-generation Internet Protocol networks. The Company provides enabling carrier-grade technology solutions, including telecom connectivity products, Ethernet switching products and Signaling System 7 solutions to telecom equipment suppliers, network operators and systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. worldwide. PTI is headquartered in Rochester, New York This article is about the city of Rochester in Monroe County. For the town in Ulster County, see Rochester, Ulster County, New York. Rochester, once known as The Flour City, and more recently as The Flower City or . Additional engineering and operational facilities are located in Raleigh, North Carolina For other uses of this name, see Raleigh. Raleigh (IPA: /ˈrɑli/, ral-ee) is the capital of the State of North Carolina and the county seat of Wake County. ; San Diego, California “San Diego” redirects here. For other uses, see San Diego (disambiguation). San Diego is a coastal Southern California city located in the southwestern corner of the continental United States. As of 2006, the city has a population of 1,256,951. ; and Ottawa, Canada. For more information about Performance Technologies, visit www.pt.com. PTI's management will host a conference call at 5:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. to discuss the Company's financial results for the fourth quarter. All interested institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. can participate in the conference call on (877) 871-4105. The conference call will also be available simultaneously for all other investors on (877) 871-9526. An audio replay will be available after the completion of the conference call for three days on (800) 633-8284. Please access this replay using passcode #17763790. A live Webcast of the conference call will also be available on the Company's Web site at www.pt.com. Forward-Looking Statements 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 provides a "safe harbor" for certain forward-looking statements. This press release contains forward-looking statements which reflect the Company's current views with respect to future events and financial performance, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and is subject to the safe harbor provisions of those Sections. These forward-looking statements are subject to certain risks and uncertainties and the Company's actual results could differ materially from those discussed in the forward-looking statements. These risks and uncertainties include, among other factors, general business and economic conditions, rapid or unexpected changes in technologies, cancellation or delay of customer orders including those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc design wins, changes in the product or customer mix of sales, delays in new product development, customer acceptance of new products and customer delays in qualification of products. These statements should be read in conjunction with the audited Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge , the Notes thereto there·to adv. 1. To that, this, or it. 2. Archaic In addition to that; furthermore. thereto Adverb Formal 1. to that or it 2. , and Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations of the Company as of December 31, 1999, as reported in its Annual Report on Form 10-K and as of March 31, 2000, June 30, 2000 and September 30, 2000, as reported in its Form 10-Q, as filed with the Securities and Exchange Commission.
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
December 31, December 31,
2000 1999
Current assets:
Cash and cash equivalents $17,187,000 $ 9,792,000
Marketable securities 9,995,000 22,007,000
Accounts receivable, net 7,393,000 9,474,000
Inventories, net 5,788,000 3,910,000
Prepaid expenses and other 745,000 684,000
Deferred taxes 679,000 1,129,000
Total current assets 41,787,000 46,996,000
Equipment and improvements, net 2,119,000 1,695,000
Software development, net 852,000 451,000
Total assets $44,758,000 $49,142,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $ -- $ 6,000
Accounts payable 1,347,000 904,000
Income taxes payable 219,000 1,990,000
Accrued expenses 3,246,000 5,087,000
Total current liabilities 4,812,000 7,987,000
Deferred taxes 478,000 327,000
Total liabilities 5,290,000 8,314,000
Stockholders' equity:
Preferred stock
Common stock 133,000 132,000
Additional paid-in capital 12,375,000 12,665,000
Retained earnings 35,053,000 28,003,000
Cumulative translation adjustments (51,000) 28,000
Treasury stock (8,042,000) --
Total stockholders' equity 39,468,000 40,828,000
Total liabilities and
stockholders' equity $ 44,758,000 $ 49,142,000
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2000 AND 1999
Three Months Ended Twelve Months Ended
December 31, December 31,
2000 1999 2000 1999
Sales $10,036,000 $12,895,000 $38,963,000 $44,494,000
Cost of goods sold 4,268,000 4,202,000 13,768,000 15,174,000
Gross profit 5,768,000 8,693,000 25,195,000 29,320,000
Operating expenses:
Selling and
marketing 933,000 1,554,000 4,889,000 5,767,000
Research and
development 2,206,000 1,658,000 8,926,000 7,906,000
General and
administrative 416,000 705,000 2,497,000 3,756,000
Acquisition charges -- 1,744,000 -- 1,744,000
Total operating
expenses 3,555,000 5,661,000 16,312,000 19,173,000
Income from
operations 2,213,000 3,032,000 8,883,000 10,147,000
Other income, net 431,000 424,000 1,947,000 1,478,000
Income before
income taxes 2,644,000 3,456,000 10,830,000 11,625,000
Provision for
income taxes 670,000 1,943,000 3,780,000 5,399,000
Net income $ 1,974,000 $ 1,513,000 $ 7,050,000 $ 6,226,000
Basic earnings
per share $ .15 $ .11 $ .54 $ .47
Weighted average
common shares 12,740,000 13,374,000 13,106,000 13,165,000
Diluted earnings
per share $ .15 $ .11 $ .51 $ .45
Weighted average
common and common
equivalent shares 13,358,000 14,115,000 13,769,000 13,789,000
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