EX-99.1 2 a05-8663_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

Contacts:

 

 

 

 

 

Ed Schnopp

 

Kristyn Hutzell

Senior Vice President, Treasurer and CFO

 

The McBride Group

(805) 987-8741

 

Investor Relations

 

 

(925) 946-9432

 

FOR IMMEDIATE RELEASE

 

May 4, 2005

 

POWER-ONE ANNOUNCES RESULTS FOR THE FIRST QUARTER OF 2005

 

•                  Q1’05 net sales of $66.7 million, in line with guidance, vs. Q1’04 net sales of $68.7 million

•                  Restructuring plans progressing more quickly than originally anticipated, targeted cost savings increased to $30 million annually from $25 million

•                  Q1’05 net loss of $0.34 per share vs. Q1’04 net loss of $0.03 per share

•                  Q1’05 net loss includes the following: restructuring and asset impairment charges of $14.5 million, or $0.17 per share, recorded for realignment of telecom power systems business and other cost reductions; inventory charges of $4.0 million, or $0.05 per share; and other impairment charges of $2.5 million, or $0.03 per share for foreign investments.  Remaining restructuring charges of approximately $5 million expected in Q2 2005

•                  maXyz™ Z-One Digital IBA™ design win activity accelerating

 

Camarillo, CA, May 4, 2005 — Power-One, Inc. (NASDAQ: PWER) today announced that net sales for the first fiscal quarter ended March 31, 2005 were in line with guidance at $66.7 million, compared with $68.7 million for the first quarter of 2004.  Net loss for the first quarter ended March 31, 2005 was $28.4 million, or $0.34 per share, compared with a net loss of $2.8 million, or $0.03 per share, for the same quarter in 2004.  Net new orders in the first quarter of 2005 were $67.2 million, a 6% increase compared with $63.4 million in the fourth quarter of 2004.   The book-to-bill ratio was 1.01 for the first quarter of 2005, compared with 0.88 for the fourth quarter of 2004.  The Company’s 180-day backlog at the end of the first quarter was $38.8 million, a 2% increase compared with $38.0 million at the end of the fourth quarter of 2004;  90-day backlog was $34.6 million, a 2% increase compared with $33.9 million at the end of the fourth quarter of 2004.  Overall turns business was approximately 49% during the first quarter of 2005 compared with approximately 50% in the fourth quarter of 2004.

 

The net loss during the first quarter of 2005 included $14.5 million, or $0.17 per share, of restructuring and asset impairment charges.  In addition to the restructuring and asset impairment charges, the current quarter results included $4 million, or $0.05 per share, of inventory charges related to excess and obsolete inventory.  The inventory write-down was primarily the result of changes in the Company’s forecasted product mix, including lower sales volumes into the semiconductor automatic test equipment market, as well as product rationalization in the Company’s European telecom systems business.  Inventory not forecasted to be used within the next twelve months is written down as excess.

 


 

The Company previously announced an aggressive restructuring plan and stated that it expected to incur $20 to $25 million of restructuring and asset impairment charges during the first and second quarters of 2005 in an effort to achieve $25 million in annual cost reductions in the business.  The Company believes that its restructuring plan is ahead of schedule and that actual savings will be in excess of the original target and closer to $30 million.

 

 “We are pleased with the favorable progress we’ve made in implementing the restructuring plan we announced last quarter,” said Steve Goldman, Chief Executive Officer of Power-One.  “We have a great team of talented professionals who have risen to the occasion to realign our business structure and significantly reduce overhead costs.  The restructuring of our telecom power systems operations in Norway is clearly ahead of schedule, while our other cost reduction efforts are strongly on target.  We continue to believe that we will successfully remove close to $30 million annually from our cost structure, such that we’ll be able to achieve breakeven or profitable results at a $68 million sales level for the third quarter of this year.”

 

Mr Goldman continued, “In addition, we are seeing considerable progress on the number of design wins for our Z-One digital power management technology.  We have now achieved over 20 design wins with customers in North America, Europe and Asia, including a few pilot production orders.  We’ve also received positive responses from customers on the Z1000 No-Bus™ family of digital products we announced during the first quarter, which will be available for beta sampling during the second quarter.

 

Mr. Goldman concluded, “We continue to believe that the changes we’re implementing at Power-One will provide our shareholders with a healthy and profitable company that can compete effectively in the marketplace with its traditional embedded and systems products, as well as with its new state of the art Z-One digital power management technology.  We also believe that we have developed a portfolio of intellectual property for our new technology that will provide us with a long-term competitive advantage.”

 

Future Outlook

 

For the second quarter of 2005, the Company anticipates a modest increase in net sales to a range of approximately $68 million and that net loss will be in the range of $0.03 to $0.06 per share.  The Company expects some duplication of costs during the second quarter, as functions in locations slated for closure are starting up in other locations.  This forecast excludes any restructuring or related charges.  The Company currently expects to incur approximately $5 million in restructuring charges during the second quarter of 2005 related to it’s previously announced cost reduction efforts.

 

Earnings Conference Call

 

Power-One will be holding a conference call with investors and analysts on Wednesday, May 4, 2005 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 current quarter.

 

About Power-One:

 

Power-One is a leading designer and manufacturer of power conversion products sold primarily 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,” “anticipate,” “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 any general economic slowdown, pricing pressure resulting from need to respond to market conditions, a downturn or other disruption of the market trends within the communications industry, market acceptance of the Company’s new products, ability to turn design wins into sales revenues, delays or cancellations of new product designs by customers, ability to successfully implement the restructuring plan and realize expected savings in the amounts, cost categories and/or timeframe projected, and increased R&D expenditures above previous levels.  See “Risk Factors” in the Company’s 2004 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)

 

 

 

Three Months Ended

 

 

 

March 31,
2005

 

March 31,
2004

 

 

 

 

 

 

 

NET SALES

 

$

66,747

 

$

68,652

 

COST OF GOODS SOLD

 

50,576

 

43,923

 

GROSS PROFIT

 

16,171

 

24,729

 

 

 

 

 

 

 

EXPENSES:

 

 

 

 

 

Selling, general and administrative

 

15,834

 

16,374

 

Engineering and quality assurance

 

10,630

 

10,503

 

Amortization of intangible assets

 

979

 

974

 

Restructuring costs

 

7,370

 

—

 

Asset impairment

 

7,087

 

—

 

Total expenses

 

41,900

 

27,851

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

(25,729

)

(3,122

)

 

 

 

 

 

 

INTEREST AND OTHER INCOME (EXPENSE):

 

 

 

 

 

Interest income

 

756

 

376

 

Interest expense

 

(33

)

(228

)

Other income (expense), net

 

(2,474

)

931

 

Total interest and other income (expense)

 

(1,751

)

1,079

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

(27,480

)

(2,043

)

 

 

 

 

 

 

PROVISION FOR INCOME TAXES

 

932

 

779

 

 

 

 

 

 

 

NET LOSS

 

$

(28,412

)

$

(2,822

)

 

 

 

 

 

 

BASIC AND DILUTED LOSS PER SHARE

 

$

(0.34

)

$

(0.03

)

 

 

 

 

 

 

BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING

 

84,474

 

83,434

 

 


 

POWER-ONE, INC.

CONSOLIDATED BALANCE SHEET

(In thousands)

 

 

 

March 31,
2005

 

December 31,
2004

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

Cash and cash equivalents

 

$

29,569

 

$

35,504

 

Available for Sale investments

 

7,640

 

7,516

 

Held to maturity investments

 

12,863

 

9,405

 

Accounts receivable:

 

 

 

 

 

Trade (net of allowance)

 

56,655

 

56,397

 

Other

 

4,563

 

4,837

 

Inventories

 

48,560

 

54,311

 

Prepaid expenses and other current assets

 

3,291

 

4,121

 

 

 

 

 

 

 

Total current assets

 

163,141

 

172,091

 

 

 

 

 

 

 

INVESTMENTS, HELD TO MATURITY

 

31,919

 

34,788

 

PROPERTY & EQUIPMENT, net

 

47,772

 

57,707

 

INTANGIBLE ASSETS, net

 

56,416

 

58,082

 

OTHER ASSETS

 

2,824

 

4,385

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

302,072

 

$

327,053

 

 

 

 

 

 

 

LIABILITIES & EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

Accounts payable

 

28,897

 

29,613

 

Restructuring reserve

 

8,515

 

2,288

 

Deferred income taxes

 

1,419

 

1,497

 

Other accrued expenses and current liabilities

 

22,582

 

21,986

 

 

 

 

 

 

 

Total current liabilities

 

61,413

 

55,384

 

 

 

 

 

 

 

OTHER LIABILITIES

 

1,473

 

1,632

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

Common stock

 

85

 

84

 

Additional paid-in capital

 

604,010

 

602,737

 

Deferred compensation

 

—

 

(44

)

Accumulated other comprehensive income

 

28,292

 

32,048

 

Accumulated deficit

 

(393,201

)

(364,788

)

 

 

 

 

 

 

Total stockholders’ equity

 

239,186

 

270,037

 

 

 

 

 

 

 

TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY

 

$

302,072

 

$

327,053

 

 


 

POWER-ONE, INC.

FINANCIAL HIGHLIGHTS

(In thousands, except per share data)

(UNAUDITED)

 

 

 

Three Months Ended

 

 

 

March 31,
2005

 

March 31,
2004

 

 

 

 

 

 

 

Orders

 

$

67,216

 

$

74,662

 

 

 

 

 

 

 

Sales

 

$

66,747

 

$

68,652

 

 

 

 

 

 

 

Operating Loss

 

$

(25,729

)

$

(3,122

)

 

 

 

 

 

 

Net Loss

 

$

(28,412

)

$

(2,822

)

 

 

 

 

 

 

Basic and Diluted Loss Per Share

 

$

(0.34

)

$

(0.03

)

 

 

 

 

 

 

Basic and Diluted Weighted Average Shares Outstanding

 

84,474

 

83,434