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COMPUTER PRODUCTS REPORTS FIRST QUARTER RESULTS

 BOCA RATON, Fla., April 22 /PRNewswire/ -- Computer Products, Inc. (NASDAQ: CPRD) today reported net income of $2.8 million, or $0.13 per share, on sales of $28.7 million in the first quarter of 1993, vs. a net loss of $439,000, or $0.02 per share, on sales of $26.5 million in the first quarter of 1992. The 1993 first quarter results include a favorable impact of $2.3 million, or $0.11 per share, from the cumulative effect of changes in accounting principles.
 Orders in the first quarter increased 16.5 percent over the first quarter a year ago, and 23.3 percent over the fourth quarter of 1992 as adjusted. The increase in orders resulted from improvement at Power Conversion, particularly from large OEM customers whose order pattern was quite soft in the fourth quarter. The significant improvement in Power Conversion was partially offset by continued weakness in Process Automation and Computer Systems orders. The disappointing order patterns in the real-time systems businesses resulted from continued weakness in certain market segments, increased competition and sluggish demand for some new products.
 Company-wide, sales were up 8.3 percent over the first quarter a year ago, but down 4 percent from the fourth quarter. Power Conversion sales were up 26.1 percent from the first quarter of 1992, and remained about the same as in the fourth quarter of 1992. All segments of Power Conversion improved over the first quarter of last year, particularly the National Accounts Division. European sales were also higher despite their recessionary climate. Both real-time systems businesses experienced lower sales. Process Automation sales were notably lower than a year ago when it participated in several domestic and international utility projects.
 Gross margins in the first quarter were down from a year ago, as well as from the record levels reported in the fourth quarter of 1992. The decrease mainly reflects the decline in volume in the real-time systems businesses, particularly Process Automation. Lower than expected revenues in the real-time systems businesses not only caused margins in these operations to decline, but also negatively impacted the overall mix since these products generally represent high-margin business. Compounding this effect was a shift in mix within Power Conversion due to the significantly higher sales to OEM accounts (which carry a lower gross margin than standard products) and reduced sales of low power standard products.
 The decrease in selling, general and administrative expenses from a year ago were volume related and also reflect a positive impact from foreign currency gains. Research and development expenses were somewhat lower than a year ago, but remained just above the $2 million level as they were in the fourth quarter of 1992.
 During the first quarter ended April 2, 1993, the company adopted Statement of Financial Accounting Standards (SFAS) No. 109 (Accounting for Income Taxes) which resulted in a $3.1 million earnings benefit. This benefit is attributable to the recognition of deferred tax assets that were not allowed under prior
accounting standards. This benefit was offset by $0.8 million from the adoption of SFAS No. 112 (Employers' Accounting for Postemployment Benefits) which requires companies to recognize the severance cost benefits to employees expected to be terminated in the future as those benefits are earned.
 Commenting on the results, John N. Lemasters, chairman and chief executive officer, stated, "We are pleased at the continuation of strong growth in our Power Conversion business. The pickup in large orders to OEM customers, both domestic and European, reflects our strategic thrust. Although these margins are not as high as our standard products, we believe continued emphasis on promising vertical niches and new products will result in margins that are quite acceptable and will contribute to revenue growth.
 "We have responded to the lower revenue in our real-time systems businesses with organizational downsizing at both Process Automation and Computer Systems. At the same time, we are continuing our investment in new product development and sales force initiatives in order to meet the increased competition we are experiencing in the current environment of overall weak demand. Although the effects of increasing our product development efforts will not be apparent immediately, with a strengthening economy, we could see some improvement in the results from these businesses during the second half of the year," Lemasters continued.
 "Assuming a favorable business climate, continued strong growth from Power Conversion, and improvements in real-time systems later in the year, we continue to expect 1993 results to be significantly better than last year's," Lemasters added.
 Computer Products, Inc., headquartered in Boca Raton, Fla., is a multinational manufacturer of standard and custom-designed electronic products and subsystems for power conversion, industrial automation, and other real-time systems applications. The company has operations in Pompano Beach, Fla.; Madison, Wis.; Boston; Fremont Calif.; Hong Kong and the Republic of Ireland.
 COMPUTER PRODUCTS, INC.
 CONSOLIDATED STATEMENT OF OPERATIONS
 (Unaudited)
 (In thousands except per share amounts)
 QUARTER ENDED
 2-Apr-93 3-Apr-92
 ORDERS $32,133 $27,576
 SALES:
 Power Conversion $21,377 $16,947
 Process Automation 3,674 5,176
 Computer Systems 3,610 4,337
 TOTAL SALES 28,661 26,460
 COST OF SALES 17,122 14,754
 GROSS PROFIT 11,539 11,706
 EXPENSES:
 Selling, general &
 administrative 7,950 8,833
 Research and
 development 2,169 2,434
 TOTAL EXPENSES 10,119 11,267
 OPERATING INCOME 1,420 439
 OTHER INCOME (EXPENSE):
 Interest expense (908) (1,119)
 Interest income 143 314
 TOTAL OTHER EXPENSE (765) (805)
 INCOME (LOSS) FROM
 CONTINUING OPERATIONS
 BEFORE INCOME TAXES 655 (366)
 PROVISION FOR
 INCOME TAXES 144 73
 INCOME (LOSS) FROM
 CONTINUING OPERATIONS
 BEFORE CUMULATIVE
 EFFECT OF A CHANGE IN
 ACCOUNTING PRINCIPLES 511 (439)
 Cumulative effect of
 a change in
 accounting principles 2,270 ---
 NET INCOME (LOSS) $2,781 ($439)
 PER SHARE AMOUNTS:
 Income (loss) from
 continuing operations
 before cumulative
 effect of a change
 in accounting
 principles $0.02 ($0.02)
 Cumulative effect of
 a change in accounting
 principles 0.11 0.00
 Net income (loss) $0.13 ($0.02)
 Weighted average
 number of common
 and equivalent shares
 outstanding 20,972 19,915
 CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
 (Dollars in thousands)
 2-Apr-93 1-Jan-93
 (Unaudited) (Audited)
 ASSETS
 CURRENT ASSETS:
 Cash and equivalents $12,756 $15,561
 Accounts receivable, net 19,214 20,683
 Inventories 17,387 17,445
 Deferred income taxes, net 1,066 ---
 Prepaid expenses 1,546 1,200
 Total current assets 51,969 54,889
 PROPERTY, NET 23,761 23,949
 OTHER ASSETS:
 Goodwill, net 17,044 19,034
 Deferred income taxes, net 4,157 ---
 Other assets, net 4,516 4,790
 Total other assets 25,717 23,824
 TOTAL ASSETS $101,447 $102,662
 LIABILITIES AND STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES $21,554 $25,365
 LONG-TERM LIABILITIES:
 Long-term debt 5,499 5,573
 Lease liabilities 6,878 7,023
 Convertible subordinated debentures 33,895 33,895
 Total long-term liabilities 46,272 46,491
 TOTAL LIABILITIES 67,826 71,856
 STOCKHOLDERS' EQUITY 33,621 30,806
 TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY $101,447 $102,662
 -0- 4/22/93
 /CONTACT: John Lemasters of Computer Products, Inc., 407-451-1000; or Claudia Gatlin, 212-830-9080, for Computer Products, Inc./
 (CPRD)


CO: Computer Products, Inc. ST: Florida IN: CPR SU: ERN

AW -- FL002 -- 9241 04/22/93 09:33 EDT
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Publication:PR Newswire
Date:Apr 22, 1993
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