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 23, 2003
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, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
(99.1) Press release issued by Performance Technologies, Incorporated
on April 23, 2003.
Item 12. Results of Operations and Financial Condition.
On April 23, 2003, Performance Technologies, Incorporated announced its
results of operations for the quarter ended March 31, 2003. 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 23, 2003 By: /s/ Donald L. Turrell
---------------------------------------
Donald L. Turrell
President and
Chief Executive Officer
April 23, 2003 By: /s/ Dorrance W. Lamb
----------------------------------------
Dorrance W. Lamb
Chief Financial Officer and
Vice President, 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 Reports Continued Revenue Growth
in the First Quarter
"10% Revenue Growth over Fourth Quarter and a
72% Increase over the First Quarter 2002"
ROCHESTER, NY - April 23, 2003 -- Performance Technologies, Inc. (Nasdaq NM:
PTIX), a leading developer of embedded computing products and system-level
solutions for the communications, military and commercial markets, today
announced financial results for the first quarter 2003.
Revenue in the first quarter 2003 was $11.0 million, compared to $6.4 million in
the first quarter 2002. For the first quarter 2003, the results of operations
include the Computing Products Group acquired in October 2002. Net income for
the first quarter 2003 amounted to $.3 million, or $.02 per share, compared to
$.4 million, or $.03 per share for the first quarter 2002, based on 12.2 million
and 12.6 million shares outstanding, respectively. First quarter 2002 results
included expenses associated with a restructuring charge amounting to $.2
million (pre-tax), or $.01 per share. In January 2002, the uncertain economic
conditions and the lack of visibility of customer orders led the Company to
improve its cost structure by reducing annualized expenses by approximately $1.6
million.
Cash and marketable securities amounted to $22.1 million at March 31, 2003,
compared to $24.1 million at the end of 2002 and no long-term debt existed at
either date.
The following contains forward-looking statements within the meaning of the
Securities Act of 1933 and Securities Exchange Act of 1934 and is subject to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
As the Company began integrating the Computing Products Group acquired from
Intel in October 2002, management sought to maximize the synergies between the
two organizations, which it believed provided considerable opportunity to
improve both future top and bottom line performance, despite current economic
conditions. To capitalize on this opportunity, a new corporate strategy was
defined that integrates the Company's technological innovation and product
breadth, and emphasizes the Company's expanded capability to offer a "unified"
solution to the customer base including software, hardware and system platforms
through a single Performance Technologies offering. This new business strategy
broadens the Company's market focus to more effectively address embedded systems
requirements for communications, military and commercial applications. While
early signs are encouraging, management expects the response to the Company's
new strategy to be evolutionary as the marketplace and our customers better
understand and embrace the Company's enhanced capabilities.
Performance Technologies Reports Continued Revenue Growth in the First Quarter
Page 2
"We are pleased with the progress the Company made implementing the initial
phase of its strategy during the first quarter," said Donald Turrell, president
and chief executive officer. "We successfully added three new sales people,
initiated new advertising and marketing programs, and began focusing on
interoperability between all elements of our expanded product line. Most
importantly, we received positive indications from customers validating the
Company's new approach to providing a more comprehensive range of embedded
products and system platforms. In addition, our sales organization reports
seeing increased involvement earlier in the customer's project development
cycle. We feel these are very important and positive indicators in measuring the
Company's progress in establishing itself as a leading supplier in the embedded
systems market."
Guidance
The Company's products are integrated 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. Typically, design wins 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, and changes in customer
markets and economic conditions can adversely affect a design win before
production is reached or during deployment. While management still believes that
design wins continue to be an important metric in evaluating the market
acceptance of the Company's products, unfortunately in the current economic
climate, fewer customers are doing new design activity and a smaller number of
these design wins are moving into production than in the past. In addition,
during difficult 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 the
quarter and shipped in the final month of the quarter.
In the Company's target markets, capital spending appeared to stabilize during
the fourth quarter and certain customers appear to be moving projects toward
production during the first quarter. However, overall, new project deployments
and design activity in the quarter were still sluggish with only limited forward
visibility in the market. During the first quarter 2003, the Company realized
three new design wins for its IPnexusTM, SEGwayTM and ZiatechTM product
families.
Based upon the current business mix, the current backlog and review of sales
forecasts, management expects revenue to be $11.5 million to $12.5 million in
the second quarter 2003. Gross margin is expected to be approximately 45% to 47%
and diluted earnings per share for the second quarter is expected to be between
$.02 and $.06. This guidance includes an increase in expenses of approximately
$.3 million reflecting the full quarter's impact for initiatives commenced
during the first quarter to implement the new strategy. The income tax rate for
the second quarter is assumed 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.
Performance Technologies Reports Continued Revenue Growth in the First Quarter
Page 3
About Performance Technologies
Performance Technologies is a leading developer of embedded computing products
and system-level solutions for equipment manufacturers and service providers
worldwide. With competencies in compute platforms, IP/Ethernet switching,
communications software, wide area networking, SS7/IP interworking and high
availability, the Company offers unified products for existing and emerging
applications. Serving the industry for over 20 years, the Company's solutions
focus on time-to-market, performance and cost advantages for companies in the
communications, industrial, military and medical markets.
Performance Technologies is headquartered in Rochester, New York. Additional
operational and engineering facilities are located in San Diego and San Luis
Obispo, California 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 or unexpected
changes in technologies, cancellation or delay of customer orders including
those relating to design wins, changes in the product or customer mix of sales,
delays in new product development, customer acceptance of new products and
customer delays in qualification of products. 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, 2002, 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 Thursday, April 24, 2003 at 10:00 a.m. EDT to
discuss the Company's financial performance for the first quarter 2003. All
interested institutional investors can participate in the conference call by
dialing (888) 423-7081. The conference call will also be available
simultaneously for all other investors at (888) 701-8678. The conference ID
number is 9745317. A digital recording will be available two hours after the
completion of the conference from April 24 through April 26, 2003. To access
Encore, US/Canada participants should dial (800) 642-1687 or for
International/Local participants, dial (706) 645-9291 and enter the conference
ID 9745317. A live Webcast of the conference call will also be available on the
Performance Technologies Web site at www.pt.com. The Webcast will be archived to
the Web site within two hours after the completion of the call.
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
2003 2002
---------------- ---------------
(unaudited)
Current assets:
Cash and cash equivalents $20,140,000 $22,077,000
Marketable securities 2,001,000 2,006,000
Accounts receivable 7,722,000 6,622,000
Inventories 6,391,000 4,550,000
Prepaid expenses and other assets 432,000 942,000
Deferred taxes 1,583,000 1,574,000
---------------- ---------------
Total current assets 38,269,000 37,771,000
Property, equipment and improvements 2,786,000 3,012,000
Software development costs 2,104,000 2,068,000
Note receivable from unconsolidated company 1,000,000 1,000,000
Investment in unconsolidated company 1,327,000 1,353,000
---------------- ---------------
Total assets $45,486,000 $45,204,000
================ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,396,000 $ 1,926,000
Income taxes payable 564,000 502,000
---------------- ---------------
Total current liabilities 5,836,000 5,641,000
Deferred taxes 756,000 754,000
---------------- ---------------
Total liabilities 6,592,000 6,395,000
---------------- ---------------
Stockholders' equity:
Preferred stock
Common stock 133,000 133,000
Additional paid-in capital 10,961,000 10,961,000
Retained earnings 40,822,000 40,565,000
Treasury stock (12,956,000) (12,782,000)
Accumulated other comprehensive loss (66,000) (68,000)
---------------- ---------------
Total stockholders' equity 38,894,000 38,809,000
---------------- ---------------
Total liabilities and stockholders'
equity $45,486,000 $45,204,000
================ ===============
PERFORMANCE TECHNOLOGIES, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(unaudited)
Three Months Ended
March 31,
2003 2002
--------------- ---------------
Sales $11,039,000 $6,407,000
Cost of goods sold 6,036,000 2,652,000
--------------- ---------------
Gross profit 5,003,000 3,755,000
--------------- ---------------
Operating expenses:
Selling and marketing 1,362,000 1,063,000
Research and development 2,307,000 1,498,000
General and administrative 1,063,000 577,000
Restructuring charge 163,000
--------------- ---------------
Total operating expenses 4,732,000 3,301,000
--------------- ---------------
Income from operations 271,000 454,000
Other income, net 127,000 116,000
--------------- ---------------
Income before income taxes and equity in
loss of unconsolidated company 398,000 570,000
Income tax provision 124,000 177,000
--------------- ---------------
Income before equity in loss of
unconsolidated company 274,000 393,000
Equity in loss of unconsolidated company,
net of tax (17,000)
--------------- ---------------
Net income $ 257,000 $ 393,000
=============== ===============
Basic earnings per share $ .02 $ .03
=============== ===============
Weighted average common shares 12,232,000 12,238,000
=============== ===============
Diluted earnings per share $ .02 $ .03
=============== ===============
Weighted average common and common
equivalent shares 12,235,000 12,552,000
=============== ===============