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 BOCA RATON, Fla., July 28 /PRNewswire/ -- Computer Products, Inc. (NASDAQ: CPRD) today reported net income for the second quarter ended July 2, 1993 of $649,000, or $0.03 per share, on sales of $30.7 million, vs. net income of $620,000, or $0.03 per share, on sales of $28.6 million in the second quarter of 1992.
 Net income for the 26 weeks ended July 2, 1993 was $3.4 million, or $0.16 per share, on sales of $59.4 million, vs. net income of $181,000, or $0.01 per share, on sales of $55.0 million in the first half of 1992. Results for the first half of 1993 included a favorable impact of $2.3 million, or $0.11 per share, from the cumulative effect of changes in accounting principles that occurred during the first quarter.
 The company's order rate continued to improve, increasing 10.2 percent over the second quarter a year ago and 5.5 percent over the first quarter of 1993. The improvement over the second quarter of 1992 resulted from significantly higher orders in the Power Conversion business, partially offset by lower orders from the real-time systems businesses. Power Conversion orders were up dramatically from a year ago, primarily due to the increase in OEM orders in both the United States and Europe. Compared to the first quarter of 1993, Power Conversion orders improved as a result of higher orders from distributors and OEM customers. Computer Systems' orders were off significantly over last year's second quarter due to a decline in orders from certain OEM customers; however, orders rose from the first quarter 1993 due to enhanced marketing focus and improved market conditions. Process Automation's orders were substantially lower than a year ago and essentially flat from the first quarter because of a severe decline in utility projects in both Europe and the United States.
 Total company sales were up approximately 7 percent from both a year ago and first quarter levels. Power Conversion sales were up 23.9 percent over the year ago period, primarily due to the strong improvement in its OEM business, as well as a modest improvement in distributor sales. Computer Systems sales were off 23.3 percent from the second quarter of 1992 due to the decline in its OEM business; however, sales were up 7.9 percent from the first quarter of this year as a result of improved marketing efforts. Process Automation sales were off from both year ago and first quarter 1993 levels due to the continued weakness in external market conditions.
 Gross margins dropped to 40.1 percent from 44.4 percent a year ago and 40.3 percent in the first quarter of 1993. This decline resulted from several factors which included an overall shift in mix from higher margin real-time systems business to lower margin power conversion sales, coupled with volume-related gross margin declines in the real- time systems businesses; a shift in mix within Power Conversion toward high-volume OEM customers; and a less favorable sales mix within Process Automation.
 The decrease in selling, general and administrative expenses from a year ago resulted from downsizing activities in the real-time systems businesses.
 Research and development increased over the first quarter of 1993 due to higher levels of engineering activity related to new projects and cost reduction programs.
 The 1993 second quarter results included a positive impact from foreign currency gains of $152,000, vs. $306,000 in the first quarter of the year.
 Commenting on the quarter, John N. Lemasters, chairman and chief executive officer, stated, "We continued to make important headway during the quarter, both in terms of improving overall results and positioning ourselves for future growth. Power Conversion is maintaining its emphasis on attractive vertical niche markets and fine tuning the sales effort in certain areas. These initiatives, coupled with additional new product development and cost reduction activities, will help this business continue its high growth rate. One of our most exciting new products, the BASiX(TM) line of high density converters, has gone into volume production, and shipments to the first OEM customer are scheduled to begin in September. While the impact on overall company sales will be minimal in 1993, we expect BASiX, together with other promising new products, to account for significant new revenue in 1994. We are encouraged by the progress at Computer Systems and expect continued improvement during the next several quarters. At Process Automation, although our objective is to reach breakeven before year end, significant top line improvement may take until next year due to the extreme weakness in the utility sector worldwide. We are encouraged by our recent refocusing efforts and the fact that we recently landed a major new order in Europe.
 "We have forward momentum and enthusiasm for the future in all areas of Computer Products, and assuming continued gradual improvement in the business climate, we expect a better second half to lead us into an even better 1994."
 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.
 (Dollars In Thousands)
 2-July-93 1-Jan-93
 (Unaudited) (Audited)
 Current Assets:
 Cash and equivalents $11,159 $15,561
 Accounts receivable, net 20,366 20,683
 Inventories 16,945 17,445
 Prepaid expenses 1,804 1,200
 Deferred income taxes, net 1,066
 Total current assets 51,340 54,889
 Property, Net 24,035 23,949
 Other Assets:
 Goodwill, net 16,852 19,034
 Deferred income taxes, net 4,157
 Other assets, net 4,499 4,790
 Total other assets 25,508 23,824
 Total Assets $100,883 $102,662
 Current Liabilities $21,485 $25,365
 Long-Term Liabilities:
 Long-term debt 5,250 5,573
 Lease liabilities 6,786 7,023
 Convertible subordinated debentures 33,895 33,895
 Total long-term liabilities 45,931 46,491
 Total Liabilities 67,416 71,856
 Stockholders' Equity 33,467 30,806
 Total Liabilities and
 Stockholders' Equity $100,883 $102,662
 (In Thousands Except Per Share Amounts)
 13 Weeks Ended 26 Weeks Ended
 2-July-93 3-July-92 2-July-93 3-July-92
 Orders $33,899 $30,768 $66,032 $58,343
 Power Conversion $23,388 $18,873 $44,765 $35,820
 Process Automation 3,427 4,601 7,101 9,777
 Computer Systems 3,894 5,079 7,504 9,416
 Total Sales 30,709 28,553 59,370 55,013
 Cost of Sales 18,399 15,877 35,522 30,631
 Gross Profit 12,310 12,676 23,848 24,382
 Selling, general
 & administrative 8,273 8,957 16,528 17,790
 Research and development 2,442 2,204 4,611 4,638
 Total Expenses 10,715 11,161 21,139 22,428
 Operating Income 1,595 1,515 2,709 1,954
 Other Income (Expense):
 Interest expense (926) (1,124) (1,834) (2,243)
 Interest income 182 272 325 586
 Foreign exchange gain 152 --- 458 ---
 Total Other Income (Expense) (592) (852) (1,051) (1,657)
 Income before Income Taxes 1,003 663 1,658 297
 Provision for Income Taxes 354 94 498 167
 Income before
 Extraordinary Credit
 and Cumulative Effect of
 a Change
 in Accounting Principles 649 569 1,160 130
 Extraordinary credit -
 utilization of net operating
 loss carryforwards --- 51 --- 51
 Cumulative effect of a change
 in accounting principles --- --- 2,270 ---
 Net Income $649 $620 $3,430 $181
 Per Share Amounts:
 Income before extraordinary
 credit and cumulative effect
 of a change in accounting
 principles $0.03 $0.03 $0.05 $0.01
 Extraordinary credit -
 utilization of net operating
 loss carry forwards --- --- --- ---
 Cumulative effect of a change
 in accounting principles --- --- 0.11 ---
 Net income $0.03 $0.03 $0.16 $0.01
 Weighted average number
 of common and equivalent
 shares outstanding 20,555 20,695 20,810 21,122
 -0- 7/28/93
 /NOTE TO EDITOR: BASiX is a trademark of Computer Products, Inc.
 CONTACT: John Lemasters of Computer Products, Inc., 407-451-1000; or Claudia Gatlin 212-830-9080, for Computer Products, Inc./

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

AW -- FL002 -- 6617 07/28/93 08:56 EDT
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Publication:PR Newswire
Date:Jul 28, 1993

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