Alpha Technologies Group Reports Fiscal 2001 Third Quarter and Nine Month Results
LOS ANGELES--Sept. 4, 2001--Alpha Technologies Group, Inc. announced today that net income from continuing operations for the first nine months of fiscal 2001 ended July 29, 2001, was $1,432,000, or $0.19 per diluted share, on revenue of $52,453,000, including goodwill amortization and other non-recurring items and reflecting a 36% effective tax rate. This compares to net income from continuing operations for the same period of fiscal 2000 of $5,459,000, or $0.75 per diluted share, reflecting a 1% effective tax rate. The Company utilized the benefits of prior year tax loss carryforwards in fiscal 2000.For the three months ended July 29, 2001, the net loss from continuing operations was $426,000, or $0.06 per share, on revenue of $16,655,000, including restructuring and other non-recurring costs of $222,000 (before taxes). The net loss includes a tax benefit of 36%. This compares to net income from continuing operations of $2,399,000, or $0.32 per diluted share, on revenue of $16,244,000, reflecting a 2% effective tax rate.
Cash flow, as measured by earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA), was $1,416,000 for this year's third quarter and $7,466,000 for this year's first nine months. This compares to EBITDA of $3,237,000 and $8,042,000 for the third quarter and first nine months of fiscal 2000 respectively.
This year's third quarter and nine months included the results of National Northeast (NNE) since its acquisition on January 9, 2001. NNE is engaged in the aluminum heat sink and extrusion business in Pelham, New Hampshire.
Chairman and Chief Executive Officer Lawrence Butler said, "The continuing global slowdown in the computer and telecommunications industries negatively affected our results for the third quarter. We have made further progress on cutting costs from the business. In addition to the reductions in headcount and other steps associated with the integration of NNE that we implemented in the second quarter, during the third quarter we began to transition our corporate accounting and administration functions from Houston to our other facilities."
Butler said that in connection with the closure of the Company's Houston office and the consolidation of accounting and administrative functions, Jim Polakiewicz has been named Chief Financial Officer of Alpha Technologies. Polakiewicz joined the Company in January 1994 as Controller of its Wakefield subsidiary and is currently Vice President, Finance of Wakefield. Polakiewicz succeeds Johnny Blanchard, who will serve as a consultant to the Company and will assist in the transition.
"We have created an increasingly efficient operating company, enhanced our sales and marketing capabilities, and assembled an experienced management team. The Company continues to generate substantial cash flow that allowed us to reduce debt by more than $5 million since the initial funding of our new credit facility in January 2001. We remain optimistic about Alpha Technologies' longer term prospects once conditions in our primary markets improve," Butler concluded.
About Alpha Technologies Group
Alpha Technologies Group, Inc. designs, manufactures and sells thermal management products, principally fabricated aluminum extrusions (heat sinks) that dissipate unwanted heat generated by electronic components. The Company's thermal management products serve the microprocessor, computer, automotive, telecommunications, industrial controls, transportation, power supply, factory automation, consumer electronics, and aerospace and defense industries.
Forward-Looking Statements
This press release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about the Company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: changes in demand for the Company's products, product mix, the timing of customer orders and deliveries, the impact of competitive products and pricing, excess or shortage of production capacity, difficulties encountered in the integration of acquired businesses and other risks discussed from time to time in the Company's Securities and Exchange Commission filings and reports. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and the Company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
Conference Call
Alpha has scheduled a conference call at 11:00 AM ET. A simultaneous WebCast may be accessed at www.StreetFusion.com or www.Alphatgi.com. A replay will be available immediately following the WebCast at these same Internet addresses. For a telephone replay, dial (800) 633-8284, reservation No. 19558362 beginning at approximately 1:00 PM ET.
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In Thousands Except Per Share Data)(Unaudited)
Three Months Ended Nine Months Ended
July 29, July 30, July 29, July 30,
2001 2000 2001 2000
Sales $ 16,655 $ 16,244 $ 52,453 $ 43,486
Cost of Sales 14,120 11,167 40,658 30,683
Gross profit 2,535 5,077 11,795 12,803
Operating Expenses:
Research and development 217 212 791 637
Selling, general and
administrative 2,128 2,231 6,940 6,250
Restructuring & other
non-recurring 222 -- 222 --
Total operating expenses 2,567 2,443 7,953 6,887
Income (Loss) from Continuing
Operations (32) 2,634 3,842 5,916
Other Income (Expense), Net 90 (27) 75 149
Interest Income (Expense), Net (731) (158) (1,674) (556)
Operating Income (Loss)
Before Income Taxes (673) 2,449 2,243 5,509
Provision (Benefit) for
Income Taxes (247) 50 811 50
Income (Loss) from
Continuing Operations $ (426) $ 2,399 $ 1,432 $ 5,459
Income from Operations Sold,
Net of Income Tax -- 227 (59) 943
Gain from Sale of Operation,
Net of Income Tax -- 6,478 207 6,478
Extraordinary Loss, Early
Extinguishment of Debt,
Net of Tax -- -- (400) --
Net Income (Loss) $ (426) $ 9,104 $ 1,180 $ 12,880
Basic Earnings (Loss) per
Common Share:
Income (loss) before
discontinued operations $ (0.06) $ 0.36 $ 0.20 $ 0.81
Net income (loss) $ (0.06) $ 1.36 $ 0.17 $ 1.92
Diluted Earnings (Loss) per
Common Share:
Income (loss) before
discontinued operations $ (0.06) $ 0.32 $ 0.19 $ 0.75
Net income (loss) $ (0.06) $ 1.22 $ 0.16 $ 1.76
SHARES USED IN COMPUTING NET INCOME
PER SHARE -- BASIC 7,083 6,692 7,006 6,700
SHARES USED IN COMPUTING NET INCOME
PER SHARE -- DILUTED 7,469 7,470 7,497 7,320
PROFORMA ADJUSTMENTS
GOODWILL AND NONCOMPETE
AMORTIZATION, net of tax(1) $ 270 $ 35 $ 616 $ 106
NONRECURRING OTHER INCOME
(EXPENSE), net of tax 84 17 94 (95)
PROVISION FOR INCOME TAX(2) -- (837) -- (1,944)
PROFORMA NET INCOME (LOSS)
FROM CONTINUING OPERATIONS $ (72) $ 1,614 $ 2,142 $ 3,526
PROFORMA DILUTED EARNINGS (LOSS)
PER COMMON SHARE FROM
CONTINUING OPERATIONS $ (0.01) $ 0.22 $ 0.29 $ 0.48
Footnotes:
(1) Acquisition related goodwill and noncompete amortization
(2) Proforma adjustment to make the 2001 and 2000 earnings
comparable, if the Company had been subject to income tax on
both years' earnings. Because the Company was able to utilize
the benefit of prior year tax loss carry forwards no tax
provision was recorded in the first half of 2000.
SELECTED BALANCE SHEET DATA
($ in thousands)(July 2001 unaudited) Jul. 29, Oct. 29,
2001 2000
Cash $ 2,040 $ 12,364
Working capital 9,998 22,646
Debt-current maturities 6,500 1,080
Long term debt 27,700 2,200
Total assets 78,155 45,605
Stockholders' equity 37,402 34,515