Alpha Technologies Group Reports Fiscal 2002 Second Quarter Results
LOS ANGELES--June 12, 2002--Alpha Technologies Group, Inc. today reported higher revenue and income from continuing operations for the second quarter of fiscal 2002 compared to the year's first quarter.For the three months ended April 28, 2002, net income from continuing operations before an extraordinary item was $16,000, or $0.00 per diluted share. This compares to a net loss from continuing operations for the first quarter of fiscal 2002 of $314,000, or $0.04 per share, and to net income from continuing operations for the second quarter of fiscal 2001 of $708,000, or $0.09 per diluted share.
After a one-time charge of $364,000 (net of tax) associated with the restructuring of the Company's bank debt, the net loss for this year's second quarter was $348,000, or $0.05 per share. This extraordinary loss was related to the amendment and restructuring of the Company's loan agreement with its bank group announced on March 20, 2002.
Revenue for the second quarter of fiscal 2002 increased 10.7% to $13,933,000 from $12,587,000 for the first quarter. Revenue for the second quarter of fiscal 2001 was $19,637,000.
"In addition to the first sequential increase in sales that we've experienced for a number of quarters, Alpha's second quarter performance benefited from the sharp expense cuts implemented during the past year and our continuing focus on reducing costs wherever possible. New order bookings have stabilized over the past few months. While business remains a lot slower than we'd like it to be, we believe that Alpha has turned the corner and is on the path toward gradual recovery. However, any significant growth in our profitability is dependent on increasing revenue," Butler said.
For the six months ended April 28, 2002, the net loss from continuing operations before the extraordinary item was $298,000, or $0.04 per share. This compares to net income from continuing operations of $1,858,000, or $0.27 per diluted share, for the first half of fiscal 2001. Revenue was $26,520,000 for this year's first half compared to $35,798,000 for the same period a year earlier.
Cash flow, as measured by earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA), was $2,702,000 for the first half of fiscal 2002 compared to $6,222,000 for the first half of fiscal 2001.
The Company repaid $2,250,000 of long-term debt during the second quarter of fiscal 2002 and ended the quarter with approximately $1,400,000 of cash and working capital of approximately $4,928,000. Alpha is now in full compliance with the covenants contained in the loan documents. However, the Company is required to make a $5 million principal payment under its amended credit agreement by June 28, 2002. The Company plans to engage in a sale and leaseback transaction for its Pelham, NH facility to raise the funds to make the payment. The Company has received two offers for such a transaction. The first offer is for $5 million and is subject to financing and the signing of a definitive purchase and sale agreement and the execution of a lease. The second offer is for $4.25 million and is not subject to financing but is subject to the signing of a definitive purchase and sale agreement and the execution of a lease. Neither offer will be able to close by June 28, 2002 and the lower offer will not yield sufficient funds to make the full payment. The Company has asked its lenders for an extension of time to make the payment and the lenders' agreement to accept less than $5 million, but there is no assurance this request will be agreed to.
Conference Call
Alpha has scheduled a conference call today at 11:00 AM EDT. A simultaneous WebCast may be accessed at http://www.CompanyBoardroom.com or http://www.Alphatgi.com/pr.html. A replay will be available at 1:00 PM EDT at these same Internet addresses. For a telephone replay, dial (800) 633-8284, reservation #20603706 after 1:00 PM EDT.
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, compliance with covenants in the company's loan documents, ability to meet principal payments under these loan documents, 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 STATEMENTS OF INCOME
(Unaudited)(In Thousands, Except Per Share Data)
Quarter Ended Six Months Ended
Apr. 28, Apr. 29, Apr. 28, Apr. 29,
2002 2001 2002 2001
Sales $13,933 $19,637 $26,520 $35,798
Cost of sales 11,545 14,946 22,351 26,538
Gross profit 2,388 4,691 4,169 9,260
Operating expenses:
Research and development 131 345 243 574
Selling, general and
administrative 1,597 2,496 3,138 4,812
Total operating expenses 1,728 2,841 3,381 5,386
Operating Income 660 1,850 788 3,874
Interest Expense, net (640) (802) (1,267) (943)
Other Income (Expense), Net -- 1 -- (15)
(Loss) Income Before Income Tax 20 1,049 (479) 2,916
(Benefit) Provision for Income Taxes 4 341 (181) 1,058
(Loss) Income from Continuing
Operations before extraordinary
items 16 708 (298) 1,858
Loss from Discontinued Operation,
Net of Tax -- -- -- (59)
Gain on Sale of Discontinued
Operation, Net of Tax -- -- -- 207
Extraordinary Loss, Early
Extinguishment of Debt,
Net of Tax (364) -- (364) (400)
Net (Loss) Income $ (348) $ 708 $ (662) $ 1,606
Earnings per Common Share:
Basic
(Loss) Income from
Continuing Operations $ 0.00 $ 0.10 $ (0.04) $ 0.27
Loss from Discontinued
Operation -- -- -- (0.01)
Gain on Sale of
Discontinued Operation -- -- -- 0.03
Extraordinary Loss, Early
Extinguishment of Debt,
Net of Tax (0.05) -- (0.05) (0.06)
Net (Loss) Income $ (0.05) $ 0.10 $ (0.09) $ 0.23
Diluted
(Loss) Income from
Continuing Operations $ 0.00 $ 0.09 $ (0.04) $ 0.25
Loss from Discontinued
Operation -- -- -- (0.01)
Gain on Sale of Discontinued
Operation -- -- -- 0.03
Extraordinary Loss, Early
Extinguishment of Debt,
Net of Tax (0.05) -- (0.05) (0.05)
Net (Loss) Income $ (0.05) $ 0.09 $ (0.09) $ 0.21
Shares Used in Computing
Net Income per Share
Basic 7,110 7,078 7,109 6,954
Diluted 7,147 7,539 7,201 7,483
SELECTED BALANCE SHEET DATA
($ in thousands)(April 2002 unaudited) Apr. 28, Oct. 28,
2002 2001
Cash $ 1,395 $ 2,701
Working capital 4,928 (18,117)
Debt, including current maturities 31,150 32,600
Total assets 74,878 77,451
Stockholders' equity $36,474 $36,870