EX-99.1 3 a04-1722_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

Contacts:

 

 

 

 

 

Ed Schnopp

 

Kristyn Hutzell

Senior Vice President, Treasurer and CFO

 

The Global Consulting Group

(805) 987-8741

 

Investor Relations

 

 

(925) 946-9392

 

FOR IMMEDIATE RELEASE

 

January 29, 2004

 

POWER-ONE ANNOUNCES RESULTS

FOR THE FOURTH QUARTER AND FULL YEAR 2003

 

FORECASTS GROWTH AND RETURN TO PROFITABILITY IN 2004

 

•                  Q4’03 net sales of $67.0 million vs. $66.0 million in Q4’02

•                  Bookings surge across broad customer base, resulting in book-to-bill ratio of 1.06 in Q4 from 0.92 in Q3

•                  Q4’03 results impacted by investment write-down and restructuring costs of $8.8 million, or approximately $0.10 per share

•                  Q4’03 net loss of $0.12 per share vs. Q4’02 net income of $0.06 per share

•                  Full year 2003 revenues increase 11% over 2002

•                  Company forecasts profitability by mid-2004

 

Camarillo, CA, January 29, 2004 — Power-One, Inc. (NASDAQ: PWER) today announced that net sales for the fourth fiscal quarter ended December 31, 2003 increased to $67.0 million compared with $66.0 million for the fourth quarter of 2002.  Revenues for the fourth quarter exceeded the upper-end of the Company’s previously announced guidance due to strength across all of Power-One’s businesses, and were boosted slightly by foreign currency movements.

 

Net loss for the fourth fiscal quarter ended December 31, 2003 was $10.4 million, or $0.12 per share compared with a net income of $5.1 million, or $0.06 per share, for the same quarter in 2002.  Net loss for the third quarter of 2003 was $3.6 million, or $0.04 per share.  During the fourth quarter of 2003, the Company recorded a write-down of approximately $5.7 million to reduce the book value of an investment held in a privately-owned enterprise and a restructuring charge of $3.1 million for a small reduction in force and an excess facility; these charges totaled $8.8 million, or approximately $0.10 per share.  In addition, the Company’s gross margin was favorably impacted by approximately $1.3 million, or 1.9%, for sales of inventory that had previously been written off, and the Company recognized a tax benefit in its European operations of $2.3 million.  These items favorably impacted the quarter’s results by $3.6 million, or approximately $0.04 per share.

 

 

For the full year ended December 31, 2003, the Company recorded net sales of $256.3 million, an 11% increase over 2002’s sales of $230.7 million.  Loss per share for the year ended December 31, 2003 was $0.22 per share compared with a loss of $2.62 per share in 2002.

 

Net new orders in the fourth quarter of 2003 were $71.4 million, compared with $58.7 million in the third quarter of 2003.  The book-to-bill ratio was 1.06 for the fourth quarter of 2003 compared with 0.92 for the third quarter of 2003.  The Company’s 180-day backlog at the end of the fourth quarter was $39.6 million compared with $37.3 million at the end of the third quarter of 2003; 90-day backlog was $34.7 million compared with $29.7 million at the end of the third quarter.  Overall turns business was approximately 57% during the fourth quarter compared with approximately 51% in the third quarter of 2003.

 

“We are pleased with the strength in our 2003 results and in particular that our fourth quarter results exceeded expectations due to a stronger-than-expected increase in demand” said Steve Goldman, chief executive officer of Power-One.  “Although the industry recovery may continue to be somewhat choppy, we believe that a real recovery is in progress and that the overall trend line should be positive as we look deeper into 2004.  We have received optimistic feedback from several of our larger customers suggesting that 2004 will be the turnaround year for our industry, and we are projecting profitability sometime mid-year.  In addition to growth related to the recovery, we also expect to gain market share over the long-term with our new technologically-innovative products.”

 

Mr. Goldman continued, “In the technology arena, we remain on schedule for the launch of our “Z” Series platform of the maXyz™ product line, and are excited about unveiling many details about this groundbreaking new product family.  Our existing maXyz™ products have logged approximately 30 design wins in a relatively short time frame since they were launched in 2003; companywide we have logged over 130 significant design wins in 2003 with minimum revenue potential of $500,000 each.”

 

Mr. Goldman concluded, “We continue to believe that the market is ripe for the introduction of our new technology, and are confident that we made the right strategic decision to forego profitability in the short-term in order to invest heavily in next-generation technology.  We believe that we have set the stage for substantial revenue and profit growth during this next upturn in the business cycle, and we look forward to returning to profitability in 2004.”

 

Future Outlook

 

For the first quarter of 2004, the Company anticipates net sales to be in the range of $66 to $70 million, which reflects a modest increase in demand for the Company’s AC/DC and DC/DC power supplies, offset by seasonal weakness in the Company’s DC power systems businesses in Northern Europe.  The Company forecasts a net loss in the range of $0.03 to $0.06 per share, while maintaining quarterly investments in next-generation silicon technology of approximately $3 million, or $0.04 per share.

 

For fiscal 2004, the Company expects a sales growth percentage in the mid-teens over fiscal 2003 sales of $256 million.  The Company also expects to return to profitability during mid-2004.

 

The preceding statements are based on current expectations.  These statements are forward-looking, and actual results may differ materially.

 

 

Earnings Conference Call

 

     Power-One will be holding a conference call with investors and analysts on Thursday, January 29, 2004 at 8:00 a.m. PT.  The call will be available over the Internet through the Company’s investor relations website at www.power-one.com.  To listen to the call, please go to the website at least 15 minutes early to register, download, and install any necessary audio software.  For those who cannot listen to the live broadcast, the webcast will be available on the investor relations section of the Company’s website at www.power-one.com throughout the fourth quarter.

 

About Power-One:

 

Power-One is a leading designer and manufacturer of power conversion products sold to telecommunications and Internet service providers, as well as communications equipment manufacturers.  Power-One’s high-reliability products are also used in applications such as test equipment and high-end industrial applications.  Power-One, with headquarters in Camarillo, CA, has over 2,000 employees with manufacturing and R&D operations in the United States, Dominican Republic, Switzerland, Slovakia, Norway, Ireland and China.

 

For information on Power-One and its products, visit the company’s Web site at www.power-one.com.

 

This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995.  Words such as “expect,” “continue,” “anticipate,” “believe,” “forecast,” “will,” and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.  Future results may be adversely affected by various factors including a continuation of the general economic slowdown, continued price pressure, ongoing pervasive weakness throughout the communications industry, market acceptance of the Company’s new products and increased R&D expenditures above previous levels.  See “Risk Factors” in the Company’s 2002 Form 10-K on file with the Securities and Exchange Commission for greater detail regarding factors that constitute cautionary statements with respect to such forward-looking statements, including certain risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements.  The Company undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

 

 

###

 

 

POWER-ONE, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share data)

(Unaudited, except for fiscal 2002)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31,
2003

 

December 31,
2002

 

December 31,
2003

 

December 31,
2002

 

 

 

 

 

 

 

 

 

 

 

NET SALES

 

$

67,019

 

$

66,026

 

$

256,334

 

$

230,656

 

COST OF GOODS SOLD

 

42,396

 

41,397

 

161,668

 

234,662

 

GROSS PROFIT (LOSS)

 

24,623

 

24,629

 

94,666

 

(4,006

)

 

 

 

 

 

 

 

 

 

 

EXPENSES:

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

15,898

 

13,492

 

62,427

 

59,321

 

Engineering and quality assurance

 

10,877

 

8,026

 

40,780

 

34,663

 

Amortization of intangible assets

 

960

 

692

 

3,622

 

5,139

 

Restructuring costs

 

3,128

 

(904

)

3,128

 

10,690

 

Asset Impairment

 

—

 

376

 

—

 

110,216

 

Total expenses

 

30,863

 

21,682

 

109,957

 

220,029

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) FROM OPERATIONS

 

(6,240

)

2,947

 

(15,291

)

(224,035

)

 

 

 

 

 

 

 

 

 

 

INTEREST AND OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

 

 

Interest income

 

302

 

(212

)

1,644

 

1,758

 

Interest expense

 

(277

)

(170

)

(1,042

)

(1,133

)

Other income (expense), net

 

(6,479

)

663

 

(4,484

)

166

 

Total interest and other income (expense)

 

(6,454

)

281

 

(3,882

)

791

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

(12,694

)

3,228

 

(19,173

)

(223,244

)

 

 

 

 

 

 

 

 

 

 

BENEFIT FOR INCOME TAXES

 

(2,325

)

(1,856

)

(969

)

(12,240

)

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$

(10,369

)

$

5,084

 

$

(18,204

)

$

(211,004

)

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS (LOSS) PER SHARE

 

$

(0.12

)

$

0.06

 

$

(0.22

)

$

(2.62

)

 

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS (LOSS) PER SHARE

 

$

(0.12

)

$

0.06

 

$

(0.22

)

$

(2.62

)

 

 

 

 

 

 

 

 

 

 

BASIC WEIGHTED AVERAGE SHARES OUTSTANDING (1)

 

83,126

 

81,178

 

82,539

 

80,396

 

 

 

 

 

 

 

 

 

 

 

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING (1)

 

83,126

 

82,389

 

82,539

 

80,396

 

 

(1) Basic weighted average shares outstanding (WASO) is utilized for periods with a net loss.  This is due to the fact that diluted WASO would be anti-dilutive for these periods.  Diluted WASO is utilized for periods with a net income.

 

 

POWER-ONE, INC.

CONSOLIDATED BALANCE SHEET

(In thousands)

 

 

 

December 31,
2003

 

December 31,
2002

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

 

$

99,507

 

$

107,109

 

Accounts receivable:

 

 

 

 

 

Trade (net of allowance)

 

55,823

 

49,395

 

Other

 

10,511

 

7,379

 

Notes receivable

 

804

 

3,000

 

Inventories

 

51,215

 

48,751

 

Prepaid expenses and other current assets

 

4,859

 

6,648

 

 

 

 

 

 

 

Total current assets

 

222,719

 

222,282

 

 

 

 

 

 

 

PROPERTY & EQUIPMENT, net

 

59,631

 

59,436

 

PROPERTY & EQUIPMENT HELD FOR SALE

 

4,529

 

7,573

 

INTANGIBLE ASSETS, net

 

57,276

 

50,938

 

NOTES RECEIVABLE

 

—

 

4,485

 

OTHER ASSETS

 

5,722

 

16,149

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

349,877

 

$

360,863

 

 

 

 

 

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Bank credit facility

 

$

1,993

 

$

717

 

Current portion of long-term debt

 

589

 

572

 

Accounts payable

 

35,430

 

27,015

 

Restructuring reserve

 

5,660

 

8,252

 

Other accrued expenses

 

20,360

 

35,403

 

 

 

 

 

 

 

Total current liabilities

 

64,032

 

71,959

 

 

 

 

 

 

 

LONG-TERM DEBT, less current portion

 

8,596

 

8,908

 

OTHER LIABILITIES

 

1,930

 

858

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

Common stock

 

83

 

80

 

Additional paid-in capital

 

595,449

 

586,038

 

Deferred compensation

 

(662

)

 

 

Accumulated other comprehensive income

 

24,047

 

18,414

 

Accumulated deficit

 

(343,598

)

(325,394

)

 

 

 

 

 

 

Total stockholders’ equity

 

275,319

 

279,138

 

 

 

 

 

 

 

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY

 

$

349,877

 

$

360,863

 

 

 

POWER-ONE, INC.

FINANCIAL HIGHLIGHTS

(In thousands, except per share data)

(UNAUDITED)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31,
2003

 

December 31,
2002

 

December 31,
2003

 

December 31,
2002

 

Orders

 

$

71,364

 

$

53,559

 

$

257,181

 

$

212,811

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

67,019

 

$

66,026

 

$

256,334

 

$

230,656

 

 

 

 

 

 

 

 

 

 

 

Operating Income (Loss)

 

$

(6,240

)

$

2,947

 

$

(15,291

)

$

(224,035

)

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

 

$

(10,369

)

$

5,084

 

$

(18,204

)

$

(211,004

)

 

 

 

 

 

 

 

 

 

 

Basic Earnings (Loss) Per Share

 

$

(0.12

)

$

0.06

 

$

(0.22

)

$

(2.62

)

 

 

 

 

 

 

 

 

 

 

Diluted Earnings (Loss) Per Share

 

$

(0.12

)

$

0.06

 

$

(0.22

)

$

(2.62

)

 

 

 

 

 

 

 

 

 

 

Basic Weighted Average Shares Outstanding (1)

 

83,126

 

81,178

 

82,539

 

80,396

 

 

 

 

 

 

 

 

 

 

 

Diluted Weighted Average Shares Outstanding (1)

 

83,126

 

82,389

 

82,539

 

80,396

 

 

(1) Basic weighted average shares outstanding (WASO) is utilized for periods with a net loss.  This is due to the fact that diluted WASO would be anti-dilutive for these periods.  Diluted WASO is utilized for periods with a net income.