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CAMARILLO, Calif.--(BUSINESS WIRE)--Jul. 23, 2009--
Power-One, Inc. (NASDAQ: PWER) (the “Company”), a leading provider of power conversion and power management solutions, today announced that net sales were $91.2 million for the second quarter ended June 28, 2009, a decrease of 39% from $149.3 million in the second quarter of 2008. The net loss attributable to common stockholders, was $6.8 million, or $0.08
per share, compared to
$3.9 million, or $0.04 per share, for the same period last year. Included in the net loss for the second quarter of 2009 was $3.9 million of restructuring charges which were primarily due to severance charges related to the previously announced plant closure in the Dominican Republic. The negative impact of the decline in sales on the second quarter results was partially offset by a net gain of $5.3 million on the repurchase of the Company’s 8% senior secured convertible notes due 2013.
The difficult market environment continued to influence the Company’s sales during the quarter and resulted in a weakening in demand for power conversion products. Bookings of
$89.0 million yielded a book to bill ratio of 0.98 in the second quarter of 2009.
For the second quarter of 2009, gross margin was 19.9% compared to 14.2% in the first quarter of 2009, and 20.5% in the year ago quarter. The sequential improvement in gross margin from the first quarter of 2009 was largely attributable to the cost reduction initiatives implemented by the Company in previous quarters. In addition, S,G&A, engineering, quality assurance and amortization expenses decreased 32% to
$21.3 million compared with $31.2 million for the second quarter of 2008.
The Company continues to realign its global manufacturing resources and execute aggressive actions to streamline operations and reduce costs. During the second quarter, the Company announced plans to close the
Dominican Republic facility and expects to realize an annual savings of approximately $14 to $15 million from the closure. Other restructuring efforts reduced the Company’s headcount by approximately 300, which resulted in a year-to-date headcount reduction of 1,300, or 29%.
Richard Thompson, Chief Executive Officer, commented, “While the market environment continued to impact our sales during the quarter, we remained focused on increasing overall operational efficiency and further decreasing our cost structure. Gross margin improved despite lower revenues, and we are on track to complete the transfer of production from the
Dominican Republic facility, which will have a positive impact on our results in later periods.”
Continuing, Mr. Thompson said, “The renewable energy market continues to show increasing promise having ramped throughout the last quarter. Additionally, our book to bill ratio improved for the first time in over 12 months suggesting that the demand curve may have reached an inflection point.”
Due to the current economic uncertainty and poor demand visibility, the Company is not providing financial guidance for the third quarter and full year 2009.
Earnings Conference Call
Power-One will discuss its 2009 second quarter results today beginning at 2:00 p.m. Pacific Time. The call will be available over the Internet through the Company’s investor relations Web site at www.power-one.com. To listen to the call, please go to the Web site at least 10 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 Web site at www.power-one.com throughout the current quarter.
Power-One Power-One designs and manufactures energy-efficient power conversion and power management solutions for alternative/renewable energy, routers, data storage and servers, wireless communications, optical networking, medical diagnostics, military, railway controls, semiconductor test equipment, and custom applications. Power-One, with headquarters in Camarillo, CA, has global sales offices, manufacturing, and R&D operations in Asia, Europe, and the Americas. For information on Power-One and its products, visit the Company’s Web site at www.power-one.com.
Safe Harbor Statement
Statements made in this press release which state the Company's or management's intentions, beliefs, expectations or predictions for the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and may include statements regarding anticipated future productivity. It is important to note that future performance and actual results could differ materially from those discussed in or underlying such forward-looking statements as a result of risks and uncertainties that cannot be predicted or quantified and that are beyond the Company’s control. Important factors that could cause actual results to differ materially include, but are not limited to: economic conditions in general and business conditions in the power supplies and renewable energy markets; foreign exchange rates; the Company’s ability to improve its operational and supply chain efficiencies; competitive factors such as pricing and technology; the timing and results achieved in completing product manufacturing transitions to Company facilities in
China or other low-cost locations; the threat of a prolonged economic slowdown or a lengthy or severe recession; continued volatility of the financial markets, including fluctuations in interest rates and trading prices of the Company's equity securities; the results of pending legal proceedings; the Company’s ability to secure market share in higher margin, high-growth markets; the market growth of product sectors targeted by the Company as sectors of focus; and the Company’s ability to increase working capital. Additional information concerning factors that could cause actual results to differ materially from expectations expressed in this press release are described in the Company's reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 from time to time, which are also available through the Company's Website at www.power-one.com or through the SEC's Electronic Data Gathering and Analysis Retrieval System (EDGAR) at www.sec.gov. Power-One undertakes no obligation to publicly update or revise any forward-looking statement.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 28, June 29, June 28, June 29, 2009
2008 NET SALES $ 91,169 $ 149,273 $ 189,009 $ 267,031 COST OF GOODS SOLD 73,028 118,692 157,003 215,124 GROSS PROFIT 18,141 30,581 32,006 51,907 GENERAL AND ADMINISTRATIVE Selling, general and administrative 13,653 18,834 26,839 39,048 Engineering and quality assurance 7,234 11,796 14,742 23,824 Amortization of intangibles 372 540 774 1,408 Restructuring costs 3,882 - 5,013 - Goodwill impairment - - 56,999 - Total expenses 25,141 31,170 104,367 64,280 LOSS FROM OPERATIONS (7,000) (589) (72,361) (12,373) INTEREST AND OTHER INCOME (EXPENSE): Interest income 17 165 222 383 Interest expense (2,211) (3,149) (4,336) (5,120) Other income (expense), net 3,182 (968) 8,296 (2,686) Total interest and other income (expense) 988 (3,952) 4,182 (7,423) LOSS BEFORE INCOME TAXES (6,012) (4,541) (68,179) (19,796) PROVISION (BENEFIT) FOR INCOME TAXES 446 240 (406) (200) EQUITY IN EARNINGS FROM JOINT VENTURE 134 872 275 2,048 NET LOSS $ (6,324) $ (3,909) $ (67,498) $ (17,548) PREFERRED STOCK DIVIDEND AND ACCRETION 506 - 506 NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (6,830) $ (3,909) $ (68,004) $ (17,548) BASIC AND DILUTED LOSS PER SHARE $ (0.08) $ (0.04) $ (0.77) $ (0.20) BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
CONSOLIDATED BALANCE SHEET
June 28, December 28, 2009 2008 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 75,681 $ 28,414 Accounts receivable: Trade (net of allowance) 94,531 143,093 Other 4,512 2,698 Inventories 81,426 101,608 Prepaid expenses and other current assets 12,026 11,037 Total current assets 268,176 286,850 PROPERTY AND EQUIPMENT, net 50,573 55,381 INTANGIBLE ASSETS, net 19,392 79,311 OTHER ASSETS 8,378 7,417 TOTAL ASSETS $ 346,519 $ 428,959 LIABILITIES, PREFERRED STOCK AND EQUITY CURRENT LIABILITIES: Bank credit facilities and notes payable $ 17,392 $ 26,949 Accounts payable 65,647 100,658 Restructuring reserve 5,542 3,651
Long-term debt, current portion 210 472 Other accrued expenses and current liabilities 26,478 26,544 Total current liabilities 115,269 158,274 LONG-TERM DEBT, less current portion 77,280 70,425 OTHER LONG-TERM LIABILITIES 16,956 16,041 REDEEMABLE CONVERTIBLE PREFERRED STOCK 18,051 - STOCKHOLDERS' EQUITY: Common stock 88 88 Additional paid-in capital 621,982 618,255 Accumulated other comprehensive income 38,160 39,645 Accumulated deficit (541,267) (473,769) Total stockholders' equity 118,963 184,219 TOTAL LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY $ 346,519 $ 428,959
(In thousands, except per share data)
Three Months Ended Six Months Ended June 28, June 29, June 28, June 29, 2009 2008 2009 2008 Orders $ 89,001 $ 149,292 $ 165,855 $ 304,387 Sales $ 91,169 $ 149,273 $ 189,009 $ 267,031 Operating Loss $ (7,000) $ (589) $ (72,361) $ (12,373) Net Loss Attributable to Common Stockholders $ (6,830) $ (3,909) $ (68,004) $ (17,548) Basic and Diluted Loss Per Share $ (0.08) $ (0.04) $ (0.77) $ (0.20) Basic and Diluted Weighted Average Shares Outstanding 88,005 87,554 87,934 87,473
Senior Vice President, Finance and CFO
Avalon Investor Relations