Alpha Technologies Group, Inc. Announces Its Q4 and Fiscal 1998
9 February 1999
Alpha Technologies Group, Inc. Announces Its Fourth Quarter and Fiscal 1998 Results
BEVERLY HILLS, Calif.--Feb. 9, 1999--Alpha Technologies Group, Inc. announced a net loss of $3,236,000, or $0.47 per share, for the fourth quarter of fiscal 1998 ended October 25, 1998. This compares to net loss of $1,707,000, or $0.26 per share for the fourth quarter of 1997. The 1998 quarter's net loss includes additional inventory reserves of $926,000, a $269,000 write off of toolings used in the manufacture of certain slow moving products, severance payments of $282,000 and the net reversal of $362,000 accrued in connection with the consolidation of the thermal management operations begun in the fourth quarter of 1997. The 1997 loss reflected income from operations of $321,000, or $0.05 per share prior to the effects of the $2,028,000 restructuring charges associated with the closing of the Company's manufacturing facility in Wakefield, Mass.The Company reported a net loss for the 1998 fiscal year of $2,783,000 which included the above mentioned additional reserves and charges. This compares to net loss of $3,352,000 which included charges for restructuring and other non recurring costs of $2,494,000, a charge for additional inventory reserves of $588,000, and a gain of $610,000 from the sale of its hermetic connector business.
Lawrence Butler, President and Chief Executive Officer, stated, "the results for fiscal 1998 were extremely disappointing. In the first half of 1998, the company grew to record sales levels and earned $.13 per share. However, in the second half of the year, sales in our thermal management business fell substantially. In response to these changes, during the fourth quarter of 1998, the thermal business was restructured. Robert Streiter, the president of our connector subsidiary, assumed the additional responsibility of running the thermal management business. Significant headcount and cost reductions were implemented. In the first quarter of fiscal 1999, which ended January 31, our thermal management business, and Alpha as a whole, returned to profitability. Alpha expects to report earnings of approximately $.07 per share for the first quarter of fiscal 1999."
Alpha Technologies Group, Inc. currently designs, manufactures and sells thermal management products, electronic connectors, and custom-designed electronic subsystems. The Company's thermal management products, principally heat sinks that dissipate unwanted heat generated by electronic components, serve the microprocessor, computer, consumer electronics, transportation and other industries. Its connector products serve a variety of industries including aerospace, automotive, communications, and defense. Its custom-designed subsystems are used by military, telecommunications and commercial customers.
In conjunction with the provisions of the new "Safe Harbor" section of the Private Securities Litigation Reform Act of 1995, this press release may contain forward-looking statements pertaining to future anticipated projected plans, performance and developments, as well as other statements relating to future operations. All such forward-looking statements are necessarily only estimates of future results and there can be no assurance that actual results will not materially differ from expectations. Further information on potential factors which could affect Alpha Technologies Group, Inc. are included in the company's Form 10Q and Form 10K filed with the Securities and Exchange Commission.
ALPHA TECHNOLOGIES GROUP, INC.
CONDENSED STATEMENT OF INCOME
(In Thousands, Except Per Share Data)
Three Months Ended Twelve Months Ended
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(audited) (audited)
Oct 25, Oct 26 Oct 25, Oct 26,
1998 1997 1998 1997
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Sales $16,527 $19,639 $77,045 $75,665
Cost of sales 15,634 15,383 63,773 61,726
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Gross profit 893 4,256 13,272 13,939
Operating expenses
Research and development 465 375 1,903 1,506
Sales & marketing 1,593 1,642 6,609 6,576
General and administrative 1,818 1,643 6,610 6,355
Restructuring and other (80) 2,028 127 2,494
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Total operating expenses 3,900 5,688 15,249 16,931
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Operating income (2,903) (1,432) (1,977) (2,992)
Interest and other income
(expense), net (333) (275) (806) (1,024)
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Income (loss) before taxes (3,236) (1,707) (2,783) (4,016)
Provision (benefit)
for income taxes - - - -
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Income (loss) before
income from operation sold (3,236) (1,707) (2,783) (4,016)
Gain on sale of discontinued
operation, net of income tax - - - 610
Income (loss) from operation
sold, net of income tax - - - 54
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Net loss ($3,236) ($1,707) ($2,783) ($3,352)
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Net loss per common share ($0.47) ($0.26) ($0.41) ($0.50)
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Average common shares used
in computation 6,896 6,688 6,754 6,682
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SELECTED BALANCE SHEET DATA
($ in thousands, audited)
Oct. 25, Oct. 26,
1998 1997
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Cash $ 1,387 $ 1,707
Working capital 9,099 10,331
Debt (including current maturities) 11,974 9,557
Total assets 38,675 41,378
Stockholders' equity 16,317 18,801