American Power Conversion reports that fourth quarter revenues rose 13% but earnings slid 67%. The company had record revenues for 2005, but lower profits.
Said Rodger B. Dowdell Jr., APC’s CEO, “We experienced growth across all of our product lines and we are particularly proud of the 60% year- over-year revenue growth for InfraStruXure, our core NCPI solution. We are investing to re-architect our supply chain to drive higher levels of customer satisfaction and reduce product costs, while simultaneously investing in the start up of new product lines as well as new factories. While we are realizing some benefits of higher volume on our manufacturing costs, as well as leverage on our operating expenses, we are incurring additional costs to implement the improvements in our manufacturing and supply chain, which impacted our gross margin in the quarter.”
The company also announced that its Board of Directors approved a stock repurchase program authorizing up to $200 million to repurchase outstanding shares of APC’s common stock. “The actions taken by our Board of Directors to authorize a stock buyback program demonstrate our confidence in APC’s future,” said Dowdell.
Revenue for Q4 was a record $578.6 million, up from $510.8 million in the Q4 2004, the tenth consecutive quarter of double-digit revenue growth, and up 13 percent from $512.3 million in the third quarter 2005.
Net income for Q4 was $17.5 million or $0.09 per diluted share, down 67 percent from $52.8 million or $0.27 per diluted share in the fourth quarter 2004 and a decrease of 64 percent from $48.7 million or $0.24 per diluted share in the third quarter 2005.
Net income for the fourth quarter 2005 includes $19.9 million or $0.10 per diluted share in additional income tax expense associated with the repatriation of $500 million in cash from foreign subsidiaries under the American Jobs Creation Act. Excluding the incremental tax expense, non-GAAP net income for the fourth quarter 2005 was $37.3 million or $0.19 per diluted share. On a non-GAAP basis, fourth quarter 2005 net income decreased 29 percent from fourth quarter 2004 net income and 23 percent from the third quarter 2005.
Revenue for 2005 was a record $1.98 billion, an increase of 16 percent from $1.70 billion in 2004. Net income for the year 2005 was $144.1 million or $0.72 per diluted share, down 21 percent from $181.5 million or $0.90 per diluted share in 2004.
Non-GAAP net income for 2005, which excludes the aforementioned incremental tax charge associated with the repatriation of cash, was $163.9 million or $0.82 per diluted share. Net income for 2004 includes a net tax credit of approximately $20.8 million or $0.10 per diluted share associated with the reversal of income tax provisioning resulting from the favorable outcome of tax audits by U.S. federal and state taxing authorities, partially offset by a charge for excess inventory of $11.5 million or $0.04 per diluted share after-tax. Excluding these items, non-GAAP net income for 2004 was $169.2 million or $0.84 per diluted share. On a non-GAAP basis, full year 2005 net income decreased 3 percent year-over-year.