EX-99.1 2 a06-4100_1ex99d1.htm EXHIBIT 99
EXHIBIT 99.1

 

For Immediate Release

 

American Power Conversion Reports Record

Revenue for the Fourth Quarter and Full Year 2005

 

•                  Fourth Quarter Revenues Increase 13% and Contribute to Record Revenues in 2005

•                  GAAP Earnings per Share of $0.09 Include $0.10 Additional Tax Expense

•                  Board of Directors Approves $200 Million Stock Repurchase Plan

 

WEST KINGSTON, R.I. — February 2, 2006 — American Power Conversion Corporation (Nasdaq: APCC) (APC) today reported financial results for the fourth quarter and full year ended December 31, 2005.

 

Revenue for the fourth quarter 2005 was a record $578.6 million, up 13 percent from $510.8 million in the fourth quarter 2004, the tenth consecutive quarter of double-digit revenue growth, and up 13 percent from $512.3 million in the third quarter 2005.  Net income for the fourth quarter 2005 was $17.5 million or $0.09 per diluted share, down 67 percent from $52.8 million or $0.27 per diluted share in the fourth quarter 2004 and a decrease of 64 percent from $48.7 million or $0.24 per diluted share in the third quarter 2005.

 

Net income for the fourth quarter 2005 includes $19.9 million or $0.10 per diluted share in additional income tax expense associated with the repatriation of $500 million in cash from our foreign subsidiaries under the American Jobs Creation Act.  Excluding the incremental tax expense, non-GAAP net income for the fourth quarter 2005 was $37.3 million or $0.19 per diluted share.  On a non-GAAP basis, fourth quarter 2005 net income decreased 29 percent from fourth quarter 2004 net income and 23 percent from the third quarter 2005.

 

Fourth Quarter 2005 Financial Summary

(In millions, except per share amounts)

 

 

 

 

 

 

 

YOY

 

 

 

QOQ

 

 

 

Q4 2005

 

Q4 2004

 

Change

 

Q3 2005

 

Change

 

Revenue

 

$

578.6

 

$

510.8

 

13

%

$

512.3

 

13

%

Operating Income

 

$

35.2

 

$

67.2

 

(48

)%

$

58.2

 

(39

)%

Net Income

 

$

17.5

 

$

52.8

 

(67

)%

$

48.7

 

(64

)%

EPS

 

$

0.09

 

$

0.27

 

(68

)%

$

0.24

 

(64

)%

 


 

Full Year 2005 Results

 

Revenue for the twelve months ended December 31, 2005 was a record $1.98 billion, an increase of 16 percent from $1.70 billion in 2004.  Net income for the year 2005 was $144.1 million or $0.72 per diluted share, down 21 percent from $181.5 million or $0.90 per diluted share in 2004.

 

Non-GAAP net income for 2005, which excludes the aforementioned incremental tax charge associated with the repatriation of cash, was $163.9 million or $0.82 per diluted share.  Net income for 2004 includes a net tax credit of approximately $20.8 million or $0.10 per diluted share associated with the reversal of income tax provisioning resulting from the favorable outcome of tax audits by U.S. federal and state taxing authorities, partially offset by a charge for excess inventory of $11.5 million or $0.04 per diluted share after-tax.  Excluding these items, non-GAAP net income for 2004 was $169.2 million or $0.84 per diluted share.  On a non-GAAP basis, full year 2005 net income decreased 3 percent year-over-year.

 

Full Year 2005 Financial Summary

(In millions, except per share amounts)

 

 

 

 

 

 

 

YOY

 

 

 

2005

 

2004

 

Change

 

Net Sales

 

$

1,979.5

 

$

1,699.9

 

16

%

Operating Income

 

$

187.0

 

$

204.4

 

(9

)%

Net Income

 

$

144.1

 

$

181.5

 

(21

)%

EPS

 

$

0.72

 

$

0.90

 

(20

)%

 

“We are pleased that the investments we have made in the innovative products and service offerings for our customers and partners continued to drive double-digit revenue growth in the fourth quarter,” said Rodger B. Dowdell, Jr., APC’s president and chief executive officer.  “We experienced growth across all of our product lines and we are particularly proud of the 60% year-over-year revenue growth for InfraStruXure, our core NCPI solution.  We are also investing to re-architect our supply chain to drive higher levels of customer satisfaction and reduce product costs while simultaneously investing in the start up of new product lines as well as new factories.  While we are realizing some benefits of higher volume on our manufacturing costs, as well as leverage on our operating expenses, we are incurring additional costs to implement the improvements in our manufacturing and supply chain which impacted our gross margin in the quarter.”

 


 

Segment Review

 

For the fourth quarter and full year 2005, APC reported record revenue in the Large Systems segment, consisting primarily of 3-phase uninterruptible power supplies (UPSs), APC Global Services, precision cooling and ancillary products for data centers, facilities and communication applications.  Fourth quarter revenue of $143.1 million increased 33 percent year-over-year and 43 percent sequentially.  Full year 2005 Large Systems segment revenue of $429 million was up 33 percent from 2004.

 

The Company also reported record Small Systems segment revenue for the fourth quarter and full year 2005.  Fourth quarter revenue in the Company’s Small Systems segment, which provides power protection, UPS and management products for the PC, server and networking markets, was $413 million, up 9 percent year-over-year and up 6 percent sequentially.  For the full year, the Small Systems segment increased 13 percent to approximately $1.5 billion.

 

Business Outlook

 

Dowdell continued, “As we implement initiatives to transform APC into a lean, ambidextrous, customer-centric enterprise, we expect to begin to see the benefits of the improvements in our global supply chain, distribution, and manufacturing operations throughout the year.  We believe that now is the time to invest in continuing the momentum that is building in our ISX business and, as this business grows, we will continue to work on optimizing our margins. For 2005, growing our top line at approximately 3 times the growth rate of the global IT market implies we are effectively addressing our customers’ real problems. Most importantly, we are investing to win InfraStruXure customers today in order to benefit from their follow-on business tomorrow.”

 

Common Stock Repurchase Program

 

The Company announced that its Board of Directors approved a stock repurchase program authorizing up to $200 million to repurchase outstanding shares of APC’s common stock. The purchases would be made on the open market based on market and business factors. The duration of the repurchase program is two years but may be suspended or discontinued at any time without prior notice.  “The actions taken by our Board of Directors to authorize a stock buyback program demonstrate our confidence in APC’s future,” said Dowdell.

 


 

Non-GAAP Results

 

The Company believes that the non-GAAP results, i.e., results excluding certain charges or one-time events, described in this release for the fourth quarter 2005 and full year 2005 and 2004, are useful for an understanding of its ongoing operations because GAAP (generally accepted accounting principles) results include financial results not expected to be part of the Company’s ongoing business.  Specifically, the Company does not currently believe the charges and one-time events items outlined in this release for the fourth quarter 2005, full year 2005 and full year 2004 will recur in future quarters.  The Company cautions that non-GAAP results are not a substitute for GAAP results.  A comparison and reconciliation from non-GAAP to GAAP results is included in the financial statements accompanying this release.

 

Conference Call and Webcast

 

In conjunction with the fourth quarter and full year 2005 earnings announcement, APC management is hosting a conference call to discuss the Company’s results.  This conference call will be held today, February 2, at 5:00 p.m. Eastern time and will be available live and archived, in its entirety, to the public via the Company’s Web site at investor.apcc.com or live by dialing 913-981-4901.  A replay will be accessible via telephone at approximately 8:00 p.m. on February 2 by dialing 719-457-0820 and entering the access code 2840317 and will continue through February 9 at midnight Eastern Time.

 

Safe Harbor Provision

 

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  All statements in this press release that do not describe historical facts, such as statements concerning the Company’s future plans or prospects and those contained in the “Business Outlook” section of the press release, are forward-looking statements.  All forward-looking statements are not guarantees and are subject to risks and uncertainties that could cause actual results to differ from those projected.  The factors that could cause actual results to differ materially include the following: the Company’s ability to improve the execution of its operations processes and eliminate operational waste and excess expense; depending on market circumstances, the Company may not start or complete the stock repurchase program; costs to maintain compliance with the provisions of the Sarbanes-Oxley Act of 2002 are greater than currently anticipated; the impact of increasing competition which could adversely affect the Company’s revenues and profitability; the impact of foreign currency exchange rate fluctuations; the impact on demand, component availability and pricing, and logistics, and the disruption of manufacturing operations that result from labor disputes, war, acts of terrorism or political instability; ramp up, expansion, transfer and rationalization of global manufacturing capacity; the potential impact of complying with changing environmental regulations; impact on order management and fulfillment, financial reporting and supply chain management processes as a result of the Company’s reliance on a variety of computer systems, including Oracle 11i which is periodically upgraded; the discovery of a latent defect in any of the Company’s products; the Company’s ability to effectively align operating expenses and production capacity with the current

 


 

demand environment; general worldwide economic conditions, and, in particular, the possibility that the PC and related markets decline; growth rates in the power protection industry and related industries; product mix changes and the potential negative impact on gross margins from such changes; changes in the seasonality of demand patterns; inventory risks due to shifts in market demand; component constraints, shortages, pricing and quality; risk of nonpayment of accounts receivable; the uncertainty of the litigation process including risk of an unexpected, unfavorable result of current or future litigation; and the risks described from time to time in the Company’s filings with the Securities and Exchange Commission.

 

About American Power Conversion

 

Founded in 1981, American Power Conversion (Nasdaq: APCC) (APC) is a leading provider of global, end-to-end solutions for real-time infrastructure.  APC’s comprehensive products and services for home and corporate environments improve the availability, manageability and performance of sensitive electronic, network, communication and industrial equipment of all sizes.  APC offers a wide variety of products for network-critical physical infrastructure including InfraStruXureÔ, its revolutionary architecture for on-demand data centers, as well as physical threat management products through the company’s NetBotzâ division.  These products and services help companies increase the availability and reliability of their IT systems.  Headquartered in West Kingston, Rhode Island, APC reported sales of $2.0 billion for the year ended December 31, 2005, and is a Fortune 1000, Nasdaq 100 and S&P 500 Company.  All trademarks are the property of their owners.  Additional information about APC and its global end-to-end solutions is available at www.apc.com or by calling 800-877-4080.

 

#  #  #

 

For more information contact:

Investors: Richard Thompson, chief financial officer, 401-789-5735, ext. 2325, Richard.thompson@apcc.com

 

Media: Chet Lasell, APC director, public relations-North America, 800-788-2208 ext. 2693, chet.lasell@apcc.com

 


 

Supplemental Financial Information for American Power Conversion Corporation

 

Fourth Quarter 2005 Financial Summary

(In millions, except per share amounts)

 

 

 

 

 

 

 

YOY

 

 

 

QOQ

 

 

 

Q4 2005

 

Q4 2004

 

Change

 

Q3 2005

 

Change

 

Revenue

 

$

578.6

 

$

510.8

 

13

%

$

512.3

 

13

%

Operating Income

 

$

35.2

 

$

67.2

 

(48

)%

$

58.2

 

(39

)%

Net Income

 

$

17.5

 

$

52.8

 

(67

)%

$

48.7

 

(64

)%

EPS

 

$

0.09

 

$

0.27

 

(68

)%

$

0.24

 

(64

)%

 

Fourth Quarter Segment Summary

 

 

 

 

 

 

 

YOY

 

 

 

QOQ

 

 

 

Q4 2005

 

Q4 2004

 

Change

 

Q3 2005

 

Change

 

Revenue (In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Systems

 

$

413.2

 

$

380.0

 

9

%

$

390.3

 

6

%

% of revenue

 

72

%

75

%

 

 

76

%

 

 

Large Systems

 

$

143.1

 

$

107.7

 

33

%

$

100.4

 

43

%

% of revenue

 

25

%

21

%

 

 

20

%

 

 

Other

 

$

18.3

 

$

19.3

 

(6

)%

$

18.5

 

(2

)%

% of revenue

 

3

%

4

%

 

 

4

%

 

 

Shipping and Handling

 

$

4.0

 

$

3.8

 

 

 

$

3.1

 

 

 

Net Sales

 

$

578.6

 

$

510.8

 

13

%

$

512.3

 

13

%

 

 

 

 

 

 

 

YOY Basis

 

 

 

QOQ Basis

 

 

 

Q4 2005

 

Q4 2004

 

Point Change

 

Q3 2005

 

Point Change

 

Gross Margin Percentage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Systems

 

40.2

%

48.1

%

(790

)

44.8

%

(460

)

Large Systems

 

20.9

%

23.8

%

(290

)

16.4

%

450

 

Other

 

56.9

%

54.8

%

210

 

60.4

%

(340

)

 

Fourth Quarter Geographic Summary

 

 

 

 

 

 

 

YOY

 

 

 

QOQ

 

 

 

Q4 2005

 

Q4 2004

 

Change

 

Q3 2005

 

Change

 

Revenue (In millions)

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$

291.4

 

$

241.9

 

21

%

$

268.3

 

9

%

% of revenue

 

50

%

48

%

 

 

52

%

 

 

EMEA

 

$

185.6

 

$

179.8

 

3

%

$

148.9

 

25

%

% of revenue

 

32

%

35

%

 

 

29

%

 

 

Asia

 

$

101.6

 

$

89.1

 

14

%

$

95.1

 

7

%

% of revenue

 

18

%

17

%

 

 

19

%

 

 

Net Sales

 

$

578.6

 

$

510.8

 

13

%

$

512.3

 

13

%

 

Note:

 

YOY = year-over-year

 

QOQ = quarter-over-quarter

 


 

Full Year 2005 Financial Summary

(In millions, except per share amounts)

 

 

 

 

 

 

 

YOY

 

 

 

2005

 

2004

 

Change

 

Net Sales

 

$

1,979.5

 

$

1,699.9

 

16

%

Operating Income

 

$

187.0

 

$

204.4

 

(9

)%

Net Income

 

$

144.1

 

$

181.5

 

(21

)%

EPS

 

$

0.72

 

$

0.90

 

(20

)%

 

Full Year 2005 Segment Summary

 

 

 

 

 

 

 

YOY

 

 

 

2005

 

2004

 

Change

 

Revenue (In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Systems

 

$

1,467.2

 

$

1,300.2

 

13

%

% of revenue

 

75

%

77

%

 

 

Large Systems

 

$

429.0

 

$

322.1

 

33

%

% of revenue

 

22

%

19

%

 

 

Other

 

$

70.5

 

$

66.0

 

7

%

% of revenue

 

3

%

4

%

 

 

Shipping and Handling

 

$

12.8

 

$

11.6

 

 

 

Net Sales

 

$

1,979.5

 

$

1,699.9

 

16

%

 

 

 

 

 

 

 

YOY Basis

 

 

 

2005

 

2004

 

Point Change

 

Gross Margin Percentage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Systems

 

44.2

%

48.2

%

(400

)

Large Systems

 

19.4

%

19.7

%

(30

)

Other

 

58.3

%

61.2

%

(290

)

 

Full Year 2005 Geographic Summary

 

 

 

 

 

 

 

YOY

 

 

 

2005

 

2004

 

Change

 

Revenue (In millions)

 

 

 

 

 

 

 

Americas

 

$

1,021.8

 

$

843.0

 

21

%

% of revenue

 

52

%

50

%

 

 

EMEA

 

$

591.4

 

$

547.2

 

8

%

% of revenue

 

30

%

32

%

 

 

Asia

 

$

366.3

 

$

309.7

 

18

%

% of revenue

 

18

%

18

%

 

 

Net Sales

 

$

1,979.5

 

$

1,699.9

 

16

%

 

Note:

 

YOY = year-over-year

 

QOQ = quarter-over-quarter

 


 

AMERICAN POWER CONVERSION CORPORATION & SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

IN THOUSANDS

(UNAUDITED)

 

 

 

DECEMBER 31, 2005

 

DECEMBER 31, 2004

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

CASH AND CASH EQUIVALENTS

 

$

262,414

 

$

72,721

 

SHORT TERM INVESTMENTS

 

511,181

 

642,853

 

ACCOUNTS RECEIVABLE, NET

 

374,694

 

327,547

 

INVENTORIES

 

541,823

 

465,927

 

PREPAID EXPENSES AND OTHER CURRENT ASSETS

 

59,181

 

39,294

 

DEFERRED INCOME TAXES

 

72,864

 

57,018

 

TOTAL CURRENT ASSETS

 

1,822,157

 

1,605,360

 

 

 

 

 

 

 

PROPERTY, PLANT & EQUIPMENT

 

459,736

 

420,102

 

LESS: ACCUMULATED DEPRECIATION AND AMORTIZATION

 

293,692

 

265,251

 

NET PROPERTY, PLANT & EQUIPMENT

 

166,044

 

154,851

 

 

 

 

 

 

 

LONG TERM INVESTMENTS

 

562

 

5,542

 

GOODWILL

 

15,781

 

7,179

 

OTHER INTANGIBLES, NET

 

36,115

 

39,627

 

DEFERRED INCOME TAXES

 

29,702

 

28,687

 

OTHER ASSETS

 

5,101

 

2,626

 

 

 

 

 

 

 

TOTAL ASSETS

 

$

2,075,462

 

$

1,843,872

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

ACCOUNTS PAYABLE

 

$

176,345

 

$

132,213

 

ACCRUED EXPENSES

 

204,702

 

182,621

 

INCOME TAXES PAYABLE

 

39,755

 

11,330

 

TOTAL CURRENT LIABILITIES

 

420,802

 

326,164

 

 

 

 

 

 

 

DEFERRED TAX LIABILITY

 

14,911

 

15,449

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

435,713

 

341,613

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

COMMON STOCK

 

1,958

 

1,921

 

ADDITIONAL PAID-IN CAPITAL

 

131,862

 

60,081

 

RETAINED EARNINGS

 

1,504,093

 

1,437,691

 

ACCUMULATED OTHER COMPREHENSIVE INCOME

 

1,836

 

2,566

 

TOTAL SHAREHOLDERS’ EQUITY

 

1,639,749

 

1,502,259

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

 

$

2,075,462

 

$

1,843,872

 

 

Note: The data reported above are based on an unaudited balance sheet, but include all adjustments that the Company considers necessary for a fair presentation of financial condition for this period.

 


 

AMERICAN POWER CONVERSION CORPORATION & SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

IN THOUSANDS EXCEPT PER SHARE AMOUNTS

(UNAUDITED)

 

 

 

FOR THE THREE MONTHS ENDED

 

 

 

DECEMBER 31, 2005

 

DECEMBER 31, 2004

 

 

 

 

 

 

 

NET SALES

 

$

578,634

 

$

510,792

 

 

 

 

 

 

 

COST OF GOODS SOLD

 

390,881

 

304,196

 

 

 

 

 

 

 

GROSS PROFIT

 

187,753

 

206,596

 

 

 

 

 

 

 

MARKETING, SELLING, GENERAL AND ADMINISTRATIVE

 

127,166

 

115,374

 

 

 

 

 

 

 

RESEARCH AND DEVELOPMENT

 

25,345

 

24,007

 

 

 

 

 

 

 

TOTAL OPERATING EXPENSES

 

152,511

 

139,381

 

 

 

 

 

 

 

OPERATING INCOME

 

35,242

 

67,215

 

 

 

 

 

 

 

OTHER INCOME, NET

 

7,446

 

3,248

 

 

 

 

 

 

 

EARNINGS BEFORE INCOME TAXES

 

42,688

 

70,463

 

 

 

 

 

 

 

INCOME TAXES

 

25,202

 

17,615

 

 

 

 

 

 

 

NET INCOME

 

$

17,486

 

$

52,848

 

 

 

 

 

 

 

DILUTED EARNINGS PER SHARE

 

$

0.09

 

$

0.27

 

 

 

 

 

 

 

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING

 

200,316

 

196,456

 

 

Note: The data reported above are based on unaudited statements of income, but include all adjustments that the Company considers necessary for a fair presentation of results for these periods.

 

Net income for the fourth quarter of 2005 includes income tax expense of approximately $19.9 million or $0.10 per share associated with the American Jobs Creation Act. Excluding this item, non-GAAP net income for the fourth quarter of 2005 was $37.3 million or $0.19 per share.

 

The following table details a reconciliation from Non-GAAP amounts to U.S. GAAP and effects of this item:

 

 

 

FOR THE THREE MONTHS ENDED

 

 

 

DECEMBER 31, 2005

 

 

 

 

 

 

 

Per

 

 

 

 

 

 

 

Diluted

 

 

 

Pretax

 

Net of Tax

 

Share

 

 

 

 

 

 

 

 

 

Non-GAAP income, excluding charges

 

$

42,688

 

$

37,346

 

$

0.19

 

 

 

 

 

 

 

 

 

Items excluded from non-GAAP results:

 

 

 

 

 

 

 

American Jobs Creation Act income tax expense

 

—

 

(19,860

)

(0.10

)

 

 

 

 

 

 

 

 

GAAP income, including charges

 

$

42,688

 

$

17,486

 

$

0.09

 

 


 

 

 

FOR THE TWELVE MONTHS ENDED

 

 

 

DECEMBER 31, 2005

 

DECEMBER 31, 2004

 

 

 

 

 

 

 

NET SALES

 

$

1,979,532

 

$

1,699,877

 

 

 

 

 

 

 

COST OF GOODS SOLD

 

1,260,407

 

1,017,981

 

 

 

 

 

 

 

GROSS PROFIT

 

719,125

 

681,896

 

 

 

 

 

 

 

MARKETING, SELLING, GENERAL AND ADMINISTRATIVE

 

441,640

 

391,829

 

 

 

 

 

 

 

RESEARCH AND DEVELOPMENT

 

90,520

 

85,618

 

 

 

 

 

 

 

TOTAL OPERATING EXPENSES

 

532,160

 

477,447

 

 

 

 

 

 

 

OPERATING INCOME

 

186,965

 

204,449

 

 

 

 

 

 

 

OTHER INCOME, NET

 

21,877

 

9,711

 

 

 

 

 

 

 

EARNINGS BEFORE INCOME TAXES

 

208,842

 

214,160

 

 

 

 

 

 

 

INCOME TAXES

 

64,761

 

32,705

 

 

 

 

 

 

 

NET INCOME

 

$

144,081

 

$

181,455

 

 

 

 

 

 

 

DILUTED EARNINGS PER SHARE

 

$

0.72

 

$

0.90

 

 

 

 

 

 

 

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING

 

199,798

 

201,658

 

 

Note: The data reported above are based on unaudited statements of income, but include all adjustments that the Company considers necessary for a fair presentation of results for these periods.

 

Net income for the year ended December 31, 2005 includes income tax expense of approximately $19.9 million or $0.10 per share associated with the American Jobs Creation Act. Excluding this item, non-GAAP net income for the year of 2005 was $163.9 million or $0.82 per share.

 

The following table details a reconciliation from Non-GAAP amounts to U.S. GAAP and effects of this item:

 

 

 

FOR THE TWELVE MONTHS ENDED

 

 

 

DECEMBER 31, 2005

 

 

 

 

 

 

 

Per

 

 

 

 

 

 

 

Diluted

 

 

 

Pretax

 

Net of Tax

 

Share

 

 

 

 

 

 

 

 

 

Non-GAAP income, excluding charges

 

$

208,842

 

$

163,941

 

$

0.82

 

 

 

 

 

 

 

 

 

Items excluded from non-GAAP results:

 

 

 

 

 

 

 

American Jobs Creation Act income tax expense

 

—

 

(19,860

)

(0.10

)

 

 

 

 

 

 

 

 

GAAP income, including charges

 

$

208,842

 

$

144,081

 

$

0.72

 

 


 

Net income for the year ended December 31, 2004 includes a net tax credit of approximately $20.8 million or $0.10 per share associated with the reversal of income tax provisioning resulting from the favorable outcome of recent tax audits by U.S. federal and state taxing authorities, partially offset by a charge for excess inventory of $11.5 million, or $0.04 per share after-tax. Excluding these items, non-GAAP net income for the year of 2004 was $169.2 million or $0.84 per share.

 

The following table details a reconciliation from Non-GAAP amounts to U.S. GAAP and effects of these items:

 

 

 

FOR THE TWELVE MONTHS ENDED

 

 

 

DECEMBER 31, 2004

 

 

 

 

 

 

 

Per

 

 

 

 

 

 

 

Diluted

 

 

 

Pretax

 

Net of Tax

 

Share

 

 

 

 

 

 

 

 

 

Non-GAAP income, excluding charges

 

$

225,660

 

$

169,246

 

$

0.84

 

 

 

 

 

 

 

 

 

Items excluded from non-GAAP results:

 

 

 

 

 

 

 

Charge for excess inventory in COGS

 

(11,500

)

(8,625

)

(0.04

)

Tax reserve adjustment

 

—

 

20,834

 

0.10

 

 

 

 

 

 

 

 

 

GAAP income, including charges

 

$

214,160

 

$

181,455

 

$

0.90