For Immediate Release: July 20, 1994
American Power Conversion Corporation today announced record sales and earnings for the second quarter ended June 30, 1994.
Sales for the second quarter of 1994 were $86.3 million, up 51.5 percent from $56.9 million for the second quarter of 1993. Earnings for the second quarter of 1994 were $15.5 million ($.17 per share) up 48.2 % from $10.5 million ($.11 per share), in the second quarter of 1993.
For the six months ended June 30, 1994, sales were $160.9 million, up 53.1 percent from $105.1 million for the same time period in 1993. Earnings for the six months ended June 30, 1994 were 29.2 million ($.31 per share), up 55.8% from 18.7 million ($.20 per share) in the same time period in 1993.
Rodger Dowdell Jr., President and Chief Executive Officer, credited the quarterly results to strong demand in several fast-growing markets, including computer networking, internetworking equipment, and point of sale (POS) devices.
At the high end of the company's core networking business, Dowdell said corporations continue to opt for APC protection, increasingly across all aspects of the network.
"Recently a large automobile manufacturer in Europe selected APC to protect servers, hubs and workstations across all of their European operations," said Dowdell, who said the company does not identify these accounts by name for competitive reasons. "This opportunity dramatically illustrates how important protecting all points of a corporate network has become."
"Managing these networks is a significant opportunity," said Dowdell, noting that during the quarter a major telecommunications company completely outfitted a new building with multiple Matrix-UPS, PowerNet SNMP Adapters, Measure-Ups and PowerNet for Novell NMS.
At the low end of the company's core PC business, Dowdell said the company has seen an uptick in interest from home office users, a market not fully addressed by the company's current marketing.
"These users are realizing that power protection is their individual responsibility," said Dowdell. "Many consumers are realizing that computer insurance, in the form of an APC UPS, is just as important as car or home insurance. We believe the high shipment rates and low UPS penetration makes this an attractive opportunity for APC. Right now, for every PC that gets a UPS, 18 don't."
Dowdell said the company's products continue to win acclaim from editors worldwide. During the quarter, the company's new PowerManager was featured as a "Hot Pick for the Home Office" in a special Newsweek supplement and Computer Reseller News voted APC a "Channel Champion" in the UPS category, with one industry analyst pointing out that APC is a company "doing everything right."
This quarter APC products were also endorsed by Banyan Systems, and received compatibility approval from Synoptics, who noted the additional reliability an APC UPS can add to a network using Synoptics products. In addition, APC's PowerChute software was one of approximately 10 initial products selected for Lotus Notes "Runs with Notes" joint marketing program.
"We continue to obsolete our own product aggressively, this quarter announcing new Back-UPS with user replaceable batteries," said Dowdell. In addition, a new version of PowerChute, featuring a unique benefit called FlexEvents was unveiled as were new SmartCell XRs for extended run Matrix-UPS applications.
"At the same time, we have seen no signs of significant competitive penetration in distribution accounts shared with our competitors," said Dowdell, who added the company continues to expand into new markets, shipping for the first time to Access Graphics, a major distributor for Unix and workstation products who had previously sold a competitive brand exclusively. Dowdell said during the quarter a large insurance company and a retail sales/manufacturing company began trading-up their installed base of competitive products to new APC offerings.
"Beyond these exciting developments in our core businesses, the proliferation of PC-based networking into special vertical applications has powered the company into largely untapped markets," Dowdell said, noting that during the quarter APC was selected by a major lab equipment manufacturer to protect custom analysis devices worldwide.
"This is a marriage between traditional lab equipment and advanced computer networks. We believe this trend will continue to unveil opportunities for the company," said Dowdell.
During the quarter, Microsoft selected APC Smart-UPS to support servers running their new Tiger video server software during the product's roll out.
"This important strategic application has far reaching implications for how information will be transmitted along the so-called 'Information Superhighway' and for how consumers of the future will receive and use information in their homes," said Dowdell. "Receiving such a strong endorsement of the need for power protection on this application at such an early stage of development is indicative of future opportunity for the company."
Dowdell said one new application with immediate return has been Point of Sales. "Retail environments are developing which rival financial networks in their complexity and mission-critical nature."
To further support APC's international efforts, the Company announced the opening of a Chinese sales office during the quarter.
"We currently have approximately 148 employees in our manufacturing facility in Galway, Ireland, and expect this to reach 285 by the end of the year," said Dowdell. "While we have purchased adjacent land and completed excavation for the 200,000 square foot addition in West Kingston, RI, we are agressively seeking construction approvals from the state and the implementation of a sewer line and traffic light."
"We continue to see strong opportunity in virtually all segments of the business," said Dowdell. "While several networking companies have noted slowing demand, the fact that we are mainly a retro-fitted sale, and address the installed base more than new shipments has helped us continue to grow sales."
"If the much anticipated CPU price war materializes, peripherals companies are poised to benefit. When computers get faster and cheaper, volumes get higher and buyers have additional funds for peripherals which would have otherwise been earmarked for the computer itself."
# # #
American Power Conversion (NASDAQ:APCC) is the market share leader in Uninterruptible Power Supplies (UPS) and software for networks and similar mission-critical applications. Product lines include the Back-UPS, Smart-UPS, Matrix-UPS, Line-R power conditioners, PowerChute software, PowerNet SNMP adapters and software, SurgeArrest surge suppressors and PowerManager Power Center.