Alpha Technologies Group Reports Fourth Quarter and Fiscal 2001 Results
LOS ANGELES--Feb. 12, 2002--Alpha Technologies Group, Inc. announced today that net income from continuing operations for the fiscal year ended October 28, 2001 was $557,000, or $0.08 per diluted share, reflecting a 40% effective tax rate. Net income from continuing operations before taxes, restructuring and other nonrecurring items totaled $1,744,000. Revenue for the year was $67,914,000.For fiscal 2000, net income from continuing operations was $7,918,000, or $1.07 per diluted share, reflecting a 7% effective tax rate as the Company utilized the benefits of its remaining tax loss carryforwards. Net income from continuing operations before taxes, restructuring and other nonrecurring items totaled $8,498,000. Revenue for fiscal 2000 was $61,547,000.
For the three months ended October 28, 2001, the net loss from continuing operations was $875,000, or $0.12 per share, including pre-tax restructuring and other nonrecurring costs of $600,000, and reflecting a tax benefit of 34%. Revenue for the quarter was $15,461,000. This compares to net income from continuing operations for the fourth quarter of fiscal 2000 of $2,459,000, or $0.33 per diluted share, reflecting an 18% tax rate, on revenue of $18,061,000.
Results for the fourth quarter and fiscal 2001 included the results of National Northeast (NNE), which was acquired on January 9, 2001. NNE, Pelham, New Hampshire, manufactures aluminum heat sinks and extrusions.
Cash flow, as measured by earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA), was $715,000 for the fourth quarter and $8,363,000 for fiscal 2001. "With the substantial cash flow generated during this difficult year, we were able to reduce debt by approximately $7.2 million since the initial funding of our credit facility in January, 2001. The Company repaid an additional $1.5 million of long-term debt on December 31, 2001. We believe that this speaks to the underlying quality of our business and our long-term growth opportunity in the thermal management industry," said Chairman and Chief Executive Officer Lawrence Butler.
Butler said that the Company was not in compliance with certain of its loan covenants at year end, but that the Company had obtained a waiver from its banks through the end of the fourth quarter of fiscal 2001. All of the Company's debt was classified as current at October 28, 2001. "We currently are in discussions with our lenders regarding a restructuring of the loan agreement. We are optimistic that the terms of an amended loan agreement will be reached soon. Once this is completed, our debt will be reclassified into current and long-term portions," Butler said.
Bookings increased to $14,803,000 for the fourth quarter from $13,268,000 for the third quarter. "While this increase is modest, it is welcome and may indicate a gradual improvement in business conditions in fiscal 2002. Bookings continue to slowly recover from the fiscal 2001 third quarter low point but remain well below the rate we experienced in fiscal 2000 or expected in fiscal 2001," Butler said.
The CEO added, "During fiscal 2001 we greatly reduced our costs to reflect the subdued pace of activity in the business. Headcount was reduced by 29% from its peak following the NNE transaction. We completed the integration of NNE into our existing operations and the transition of our corporate accounting and administration functions from Houston to our other facilities. We are continuing to manage our costs closely. In the first quarter of fiscal 2002, headcount and other overhead expenses have been cut further. Now, with our increasingly efficient operations, lean corporate structure, and experienced management team, Alpha Technologies is in a position to flourish when conditions in our primary markets improve."
Conference Call
Alpha has scheduled a conference call at 11:00 AM EST. A simultaneous WebCast may be accessed at www.CompanyBoardroom.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.20042069 one hour after the call.
About Alpha Technologies Group
Alpha Technologies Group, Inc. is engaged in the manufacture, fabrication and sale of thermal management products and aluminum extrusions. The Company is one of the leading manufacturers of thermal management products in the United States. Thermal management products, principally heat sinks, dissipate unwanted heat generated by electronic components. The Company's thermal management products serve the automotive, telecommunication, industrial controls, transportation, power supply, factory automation, consumer electronics, aerospace, defense, microprocessor, and computer industries. The Company also sells aluminum extrusions to various industries including the construction, sporting goods and other leisure activity markets.
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.
ALPHA TECHNOLOGIES GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
($ in thousands except per share data)
Three Months Ended Twelve Months Ended
Oct. 28, Oct. 29, Oct. 28, Oct. 29,
2001 2000 2001 2000
(unaudited)(unaudited)
Sales $ 15,461 $ 18,061 $ 67,914 $ 61,547
Cost of sales 13,282 12,453 53,940 43,136
Gross profit 2,179 5,608 13,974 18,411
Operating expenses
Research and development 135 201 926 831
Selling, general and
administrative 2,091 2,465 9,031 8,722
Restructuring and other
nonrecurring 600 -- 822 --
Total operating expenses 2,826 2,666 10,779 9,553
Operating income (loss) (647) 2,942 3,195 8,858
Interest income (expense), net (671) 51 (2,345) (505)
Other income (expense), net (3) (4) 72 145
Income (loss) from continuing
operations before taxes (1,321) 2,989 922 8,498
Provision (benefit) for income
taxes -- continuing operations (446) 530 365 580
Income (loss) from continuing
operations (875) 2,459 557 7,918
Income from discontinued
operation and gain on sale,
net of tax -- 53 198 7,474
Extraordinary item, net of tax -- -- (450) --
------ ------ ------ ------
Net income (loss) $ (875) $ 2,512 $ 305 $ 15,392
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Basic earnings per common share
Income (loss) from continuing
operations $ (0.12) $ 0.36 $ 0.08 $ 1.17
Income from discontinued
operation and gain on sale -- 0.01 0.02 1.11
Extraordinary item -- -- (0.06) --
Net income (loss) $ (0.12) $ 0.37 $ 0.04 $ 2.28
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Diluted earnings per common share
Income (loss) before
discontinued operations $ (0.12) $ 0.33 $ 0.08 $ 1.07
Income from discontinued
operation and gain on sale -- 0.01 0.02 1.00
Extraordinary item -- -- (0.06) --
Net income (loss) $ (0.12) $ 0.33 $ 0.04 $ 2.07
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Shares used in computing net
income per share -- Basic 7,063 6,751 7,038 6,760
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Shares used in computing net
income per share -- Diluted 7,283 7,542 7,468 7,428
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SELECTED BALANCE SHEET DATA
($ in thousands) (Oct. 2000 audited) Oct. 28, Oct. 29,
2001 2000
Cash $ 2,701 $ 12,364
Working capital (18,117) 22,646
Debt (including current maturities) 33,226 3,280
Total assets 77,451 45,605
Stockholders' equity $ 36,870 $ 34,515