Performance Technologies Reports Record Revenue and a 99% Increase in Second Quarter Earnings.ROCHESTER, N.Y.--(BUSINESS WIRE)--July 26, 1999-- Performance Technologies, Incorporated (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on NM: PTIX) today announced record revenue and a 99% increase in net income for the second quarter 1999, compared to a year earlier. Revenue increased 47% to $8.9 million for the second quarter 1999, compared to $6.1 million for the same period in 1998. 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 doubled to $.22 per share, from $.11 per share for the second quarter 1998. Net income grew to $1.7 million, from $861,000 for the second quarter 1998. For the first six months of 1999, revenue increased 27% to $17.0 million, compared to $13.5 million for the same period in 1998. Diluted earnings per share grew 47% to $.44, from $.30 for the first six months in 1998. Net income increased 45% to $3.3 million, compared to $2.3 million for the same period in 1998. "Certainly one of management's objectives for 1999 is to accelerate the Company's revenue growth," said Donald Turrell, President and Chief Executive Officer. "At mid-year, we have met our internal revenue targets and are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that revenue will continue to grow in the second half of 1999. Demand for the Company's WAN and LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. products is strong and our scheduled backlog continues to rise." In June, the Company announced confirmation that all contingencies for the $3.7 million order, as part of an $8.3 million order announced April 7, 1999, have been removed. PTI's customer also negotiated an additional order of $2.6 million for product to be confirmed in the next 60 days, bringing the total value of this contract to $10.9 million. Under the terms of this contract, the Company will provide Fault Tolerant The ability to continue non-stop when a hardware failure occurs. A fault-tolerant system is designed from the ground up for reliability by building multiples of all critical components, such as CPUs, memories, disks and power supplies into the same computer. 100Mbit/sec FDDI (Fiber Distributed Data Interface) Often pronounced "fiddy," it was a LAN and MAN access method that had its heyday in the mid-1990s. FDDI was an ANSI standard token passing network that transmitted 100 Mbps over optical fiber up to 10 kilometers. Local Area Networking products to a government funded program. This contract represents the largest single order Performance Technologies has ever received. In June, the Company introduced Channel7(TM), a comprehensive hardware and software Signaling System 7 (SS7) MTP-2 solution that provides telecom equipment manufacturers and developers with enabling technology for a broad range of applications and systems. While Channel7 has superior competitive features, the product is also significant from a strategic perspective as it represents the Company's first major milestone in offering Advanced Intelligent Network (AIN Ain, in the Bible Ain (ā`ĭn), in the Bible. 1 Town, N ancient Palestine. 2 See En-rimmon. Ain, department, France Ain (ăN), department (1990 pop. ) software for its WAN products. SS7 technology is a basic building block for applications such as Voice over IP Gateways and Cellular Roaming support. In July, the Company demonstrated the non-stop computing/networking attributes of its Nebula nebula (nĕb`y  lə) [Lat.,=mist], in astronomy, observed manifestation of a collection of highly rarefied gas and dust in interstellar space. 8000 Fault Tolerant switch at Comdex and
Networld+Interop in Toronto, Canada. The Nebula 8000 has a unique
hardware and software configuration which enables, for the first time,
fault tolerant performance and enhanced uptime assurance for business
and mission critical environments.
In a June issue of Business Week, Performance Technologies was recognized as one of BW's "Top 100 Hot Growth Companies." This was the third consecutive year that PTI PTI - Portable Tool Interface has been recognized by Business Week. PTI is one of only four companies with this distinction. 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 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. " 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 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 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, 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, 1998, as reported in its Annual Report 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 as of March 31, 1999, as reported in its Form 10-Q Form 10-Q See 10-Q. , both as filed with the Securities and Exchange Commission. Performance Technologies, Inc., 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 , designs, manufactures and markets high performance, 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. and high reliability network switching and data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. solutions. The Company's products are targeted towards mission-critical networking and communications applications typically used in the telecommunications, financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , information processing information processing: see data processing. information processing Acquisition, recording, organization, retrieval, display, and dissemination of information. Today the term usually refers to computer-based operations. , and defense industries. For current financial and Company information, visit our home page at http://www.pt.com. -0-
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
1999 1998
(unaudited)
Current assets:
Cash and cash equivalents $ 7,712,000 $ 25,627,000
Marketable securities 21,016,000
Accounts receivable, net 5,403,000 4,799,000
Inventories, net 4,644,000 4,425,000
Prepaid expenses and other 614,000 679,000
Deferred taxes 549,000 549,000
Total current assets 39,938,000 36,079,000
Equipment and improvements, net 772,000 934,000
Software development, net 714,000 822,000
Total assets $ 41,424,000 $ 37,835,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $ 12,000 $ 12,000
Accounts payable 1,437,000 1,932,000
Income taxes payable 474,000 507,000
Accrued expenses 2,518,000 1,838,000
Total current liabilities 4,441,000 4,289,000
Long term liabilities:
Long term debt, less current portion -- 6,000
Deferred taxes 288,000 288,000
Total liabilities 4,729,000 4,583,000
Stockholders' equity:
Preferred stock
Common stock 75,000 75,000
Additional paid-in capital 13,897,000 13,250,000
Retained earnings 24,161,000 20,844,000
Treasury stock (1,438,000) (917,000)
Total stockholders' equity 36,695,000 33,252,000
Total liabilities and
stockholders' equity $ 41,424,000 $ 37,835,000
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
Sales $8,923,000 $6,051,000 $17,036,000 $13,462,000
Cost of goods sold 3,239,000 2,482,000 6,374,000 5,345,000
Gross profit 5,684,000 3,569,000 10,662,000 8,117,000
Operating expenses:
Selling and
marketing 1,306,000 1,041,000 2,366,000 1,934,000
Research and
development 1,405,000 907,000 2,630,000 1,970,000
General and
administrative 670,000 600,000 1,227,000 1,286,000
Total operating
expenses 3,381,000 2,548,000 6,223,000 5,190,000
Income from
operations 2,303,000 1,021,000 4,439,000 2,927,000
Other income, net 339,000 303,000 664,000 614,000
Income before
income taxes 2,642,000 1,324,000 5,103,000 3,541,000
Provision for
income taxes 925,000 463,000 1,786,000 1,261,000
Net income $1,717,000 $861,000 $3,317,000 $2,280,000
Basic earnings
per share $.24 $.12 $.46 $.31
Weighted average
common shares 7,278,000 7,296,000 7,260,000 7,284,000
Diluted earnings
per share $.22 $.11 $.44 $.30
Weighted average
common and common
equivalent shares 7,675,000 7,595,000 7,581,000 7,634,000
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