UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 27, 2004
PERFORMANCE TECHNOLOGIES, INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-27460 16-1158413
(Commission File Number) (I.R.S. Employer
Identification No.)
205 Indigo Creek Drive, Rochester, New York 14626
(Address of principal executive offices) (Zip Code)
(585) 256-0200
(Company's telephone number, including area code)
(Not Applicable)
(Former name or former address, if changed since last report)
Item 7. Financial Statements and Exhibits
(c) Exhibits.
(99.1) Press release issued by Performance Technologies, Incorporated
on April 27, 2004.
Item 12. Results of Operations and Financial Condition.
On April 27, 2004, Performance Technologies, Incorporated announced
its results of operations for the quarter ended March 31, 2004. A copy of the
related press release is being furnished as Exhibit 99.1 to this Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
PERFORMANCE TECHNOLOGIES, INCORPORATED
April 28, 2004 By:/s/ Donald L. Turrell
---------------------------
Donald L. Turrell
President and
Chief Executive Officer
April 28, 2004 By:/s/ Dorrance W. Lamb
-----------------------------
Dorrance W. Lamb
Chief Financial Officer and
Vice President of Finance
Exhibit 99.1
For more information contact:
Dorrance W. Lamb
Chief Financial Officer
Performance Technologies
585-256-0200 ext. 276
http://www.pt.com
finance@pt.com
Performance Technologies Announces First Quarter 2004 Financial Results
'Record Quarterly Revenue and over 500% Increase in Quarter-Over-Quarter
Profits'
ROCHESTER, N.Y. -- April 27, 2004 -- Performance Technologies, Inc.
(Nasdaq NM: PTIX), a leader in unified systems design for the communications,
military and commercial markets today announced financial results for the
first quarter 2004.
Revenue in the first quarter 2004 amounted to $15.6 million, compared to $11.0
million in the corresponding quarter a year earlier. The Voice Technology Group
(Mapletree Networks, Inc.(R)), acquired in January 2004, contributed $1.2
million to revenue in the first quarter 2004.
GAAP Earnings Basis:
Net income for the first quarter 2004 amounted to $1.6 million, or $.11 per
diluted share including non-recurring expense, based on 13.6 million shares
outstanding. Net income for the first quarter 2003 amounted to $.3 million, or
$.02 per diluted share, based on 12.2 million shares outstanding.
Non-GAAP Information:
Management believes that the Company's results excluding non-recurring expense
is a better indicator of the operating results of the Company on a comparative
basis as these charges result from facts and circumstances that vary in
frequency and/or impact on continuing operations.
Net income for the first quarter 2004 amounted to $1.8 million, or $.13 per
diluted share excluding non-recurring expense, based on 13.6 million shares
outstanding. During the first quarter 2004, the Company completed the purchase
of Mapletree Networks and recorded in-process research and development costs
associated with this acquisition in the amount of $.2 million (after-tax), or
$.02 per diluted share. Net income for the first quarter 2003 amounted to $.3
million, or $.02 per diluted share, based on 12.2 million shares outstanding.
Including the Voice Technology Group's operations, the Company's first quarter
2004 revenue grew by 41% when compared to the corresponding quarter a year
earlier and grew by 17%, compared to the fourth quarter 2003. Excluding the
Voice Technology Group's operations, the Company's first quarter revenue grew by
30% when compared to the corresponding quarter a year earlier and grew by 8%
when compared to the fourth quarter 2003.
Cash amounted to $24.1 million and $29.6 million at March 31, 2004 and December
31, 2003, respectively. During the first quarter 2004, the Company paid $6.6
million to purchase Mapletree Networks and $1.3 million was loaned to InSciTek
Microsystems, Inc. in the form of a convertible note. The Company had no
long-term debt at March 31, 2004 or December 31, 2003.
The following contains forward-looking statements within the meaning of the
Securities Act of 1933 and Securities Exchange Act of 1934 and are subject to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995.
"Performance Technologies continues to demonstrate growth and improved financial
performance," said Donald Turrell, president and chief executive officer. "We
believe there is a mounting market acceptance of the Company's technologies and
Advanced Managed Platform offering. As the economy improves and our customer
base in the embedded systems market expands, we would expect to see this growth
trend continue."
In January 2004, the Company completed the purchase of Mapletree Networks
located in Norwood, Massachusetts. Mapletree Networks, now the Voice Technology
Group (VTG), develops voice, data and fax processing products using Digital
Signal Processing (DSP) technology. The core of VTG's technology offering is the
award-winning and extensive UniPorte Software Architecture(TM), which provides a
comprehensive software capability for the development of IP-based communications
network equipment. The addition of VTG's products to the Company's portfolio
enables Performance Technologies to deliver more comprehensive platform
solutions for VoIP and wireless applications, both representing growing segments
of the communications market.
Guidance
The Company's integrated platforms, components and software solutions are
incorporated into current and next-generation embedded systems infrastructure.
Traditionally, design wins have been an important metric for management to judge
the Company's product acceptance in its marketplace. Design wins, if
implemented, reach production volumes at varying rates, generally beginning
twelve to eighteen months after the design win occurs. A variety of risks such
as schedule delays, cancellations, changes in customer markets and economic
conditions can adversely affect a design win before production is reached, or
during deployment. In addition, during weak economic periods, customer's
visibility deteriorates causing delays in the placement of orders. These factors
often result in a substantial portion of the Company's revenue being derived
from orders placed within a quarter and shipped in the final month of the same
quarter. Unfortunately, forward-looking visibility on customer orders continues
to be very limited. During the first quarter 2004, the Company realized four
design wins for its IPnexus(TM), SEGway(TM) and UniPorte Architecture product
families.
During the first quarter 2004, the newly acquired Voice Technology Group
generated revenue of $1.2 million and was approximately break-even on an
operating basis. However, the purchase accounting for the Mapletree acquisition
negatively impacted the Company's first quarter earnings by $.02 per diluted
share. In the second quarter, the Voice Technology Group's financial results are
expected to negatively impact the Company's earnings by $.02 to $.03 per share.
Management believes the VTG operations will be accretive to the Company's
earnings during the fourth quarter 2004.
During the second quarter 2004, the Company's revenue is expected to reflect a
higher volume of computing products, and a lower volume of signaling and access
products than in the first quarter 2004. Computing products have significantly
lower gross margins than signaling and access products.
Based upon the current business mix, the current backlog, and review of sales
forecasts, management expects revenue to be in the range of $15.0 million to
$16.5 million in the second quarter 2004. Gross margin is expected to be
approximately 48.5% to 50.5%. Excluding the operating results of the Voice
Technology Group, diluted earnings per share in the second quarter is expected
to be $.10 to $.14. Including the operating results of the Voice Technology
Group, diluted earnings per share in the second quarter is expected to be $.07
to $.12. The effective income tax rate for the second quarter is expected to be
31%.
More in-depth discussions of the Company's strategy and financial performance
can be found in the Company's recent Annual and Quarterly Reports, on Form 10-K
and Form 10-Q, as filed with the Securities and Exchange Commission.
About Performance Technologies
Performance Technologies (Nasdaq NM: PTIX) develops integrated platforms,
components and software solutions for the world's evolving communications
infrastructure. Our broad customer base includes companies in the
communications, military and commercial markets. Serving the industry for more
than 20 years, our complete line of packet-based products enables equipment
manufacturers and service providers to offer highly available and fully-managed
systems with time-to-market, performance and cost advantages.
Performance Technologies is headquartered in Rochester, New York. Additional
operational and engineering facilities are located in San Diego and San Luis
Obispo, California; Norwood, Massachusetts and Ottawa, Canada. For more
information, visit www.pt.com.
Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for certain forward-looking statements. This press release contains
forward-looking statements which reflect the Company's current views with
respect to future events and financial performance, within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 and is subject to the safe harbor provisions of those
Sections.
These forward-looking statements are subject to certain risks and uncertainties,
and the Company's actual results could differ materially from those discussed in
the forward-looking statements. These risks and uncertainties include, among
other factors, general business and economic conditions, rapid technological
changes accompanied by frequent new product introductions, competitive
pressures, dependence on key customers, the attainment of design wins,
fluctuations in quarterly and annual results, the reliance on a limited number
of third party suppliers, limitations of the Company's manufacturing
arrangements, the protection of the Company's proprietary technology, the
dependence on key personnel, potential delays associated with the purchase and
implementation of an enterprise-wide software system, and potential impairments
of investments. These statements should be read in conjunction with the audited
Consolidated Financial Statements, the Notes thereto, and Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Company as of December 31, 2003, as reported in its Annual Report on Form 10-K,
and other documents as filed with the Securities and Exchange Commission.
A conference call will be held on Wednesday, April 28, 2004 at 10:00 a.m.
eastern time to discuss the Company's financial performance for the first
quarter. All interested investors can participate in the conference call by
dialing (800) 683-1585. International/local calls may be made by dialing (973)
935-2409. A digital recording will be available one hour after the completion of
the conference from April 28 through April 30, 2004. To access, participants
should dial (877) 519-4471 or for International/local participants, dial (973)
341-3080 and enter the PIN 4718041. A Webcast of the conference call will also
be available on the Performance Technologies Web site at www.pt.com within two
hours after the completion of the call.
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
2004 2003
------------- -------------
(unaudited)
Current assets:
Cash and cash equivalents $24,085,000 $29,589,000
Accounts receivable 10,464,000 7,857,000
Inventories 6,353,000 5,443,000
Prepaid expenses and other assets 471,000 626,000
Deferred taxes 1,714,000 1,714,000
------------ -------------
Total current assets 43,087,000 45,229,000
Property, equipment and improvements 2,359,000 2,432,000
Software development costs 3,184,000 2,597,000
Notes receivable from
unconsolidated companies 2,300,000 1,000,000
Investment in unconsolidated company 414,000 402,000
Goodwill 5,474,000
------------- -------------
Total assets $56,818,000 $51,660,000
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,812,000 $ 1,231,000
Income taxes payable 1,835,000 1,760,000
Accrued expenses 4,338,000 4,019,000
------------- -------------
Total current liabilities 7,985,000 7,010,000
Deferred taxes 698,000 698,000
------------- -------------
Total liabilities 8,683,000 7,708,000
------------- -------------
Stockholders' equity:
Preferred stock
Common stock 133,000 133,000
Additional paid-in capital 12,823,000 12,863,000
Retained earnings 41,238,000 40,532,000
Treasury stock (6,030,000) (9,536,000)
Accumulated other comprehensive loss (29,000) (40,000)
------------- -------------
Total stockholders' equity 48,135,000 43,952,000
Total liabilities ------------- -------------
and stockholders' equity $56,818,000 $51,660,000
============= =============
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
(unaudited)
Three Months Ended
March 31,
2004 2003
------------- -------------
Sales $15,566,000 $11,039,000
Cost of goods sold 7,588,000 6,036,000
------------- -------------
Gross profit 7,978,000 5,003,000
------------- -------------
Operating expenses:
Selling and marketing 1,628,000 1,362,000
Research and development 2,591,000 2,307,000
General and administrative 1,343,000 1,063,000
In-process research and development 218,000
------------- -------------
Total operating expenses 5,780,000 4,732,000
------------- -------------
Income from operations 2,198,000 271,000
Other income, net 138,000 127,000
Income before income taxes and equity in ------------- -------------
income (loss) of unconsolidated company 2,336,000 398,000
Income tax provision 791,000 115,000
Income before equity in income (loss) of ------------- -------------
unconsolidated company 1,545,000 283,000
Equity in income (loss) of unconsolidated
company 12,000 (26,000)
------------- -------------
Net income $ 1,557,000 $ 257,000
============= =============
Basic earnings per share $ .12 $ .02
============= =============
Weighted average common shares 12,606,000 12,232,000
============= =============
Diluted earnings per share $ .11 $ .02
============= =============
Weighted average common and
common equivalent shares 13,637,000 12,235,000
============= =============