EXHIBIT 99.1
AVX Corporation Announces Second Quarter Results
MYRTLE BEACH, S.C. -- (BUSINESS WIRE) -- October 23 2008-- AVX Corporation (NYSE: AVX)
Quarter highlights:
| · | Revenue increased over the previous quarter to $400.3 million. |
| · | GAAP earnings per share were $0.16 per diluted share. Non-GAAP diluted earnings per share, excluding special charges, were $0.19 per diluted share. |
| · | Dividends of $6.8 million, or $0.04 per share, were paid during the current quarter. |
AVX today reported net sales for the quarter ended September 30, 2008 of $400.3 million, which represents an increase over the previous quarter’s sales. Net sales for the six month period ended September 30, 2008 increased $13.3 million to $797.2 million compared to net sales of $783.9 million for the same period last year.
Chief Executive Officer and President, John Gilbertson stated, "Despite uncertainty in the overall economic picture, the sales in the current quarter grew and margins improved. Some of this quarter’s restructuring actions will help subsequent quarters’ margins, but the overall visibility into the next few quarters is limited. Still, we are confident that our customer relationships will allow AVX to continue to take advantage of available market growth.”
On a U.S. GAAP basis (including special charges), net income was $27.8 million, or $0.16 per diluted share, for the current quarter compared to net income of $37.4 million for the same quarter last year. Non-GAAP net income excluding special charges was $31.8 million, or $0.19 per diluted share, compared to $39.3 million for the same quarter last year. During the current quarter, the Company incurred $4.0 million of pre-tax restructuring costs related to global headcount reductions and the closure of a plant in Brazil as it continues to realign production capabilities and reduce costs. In addition, the Company recorded a $1.7 million pre-tax impairment charge related to the decline in value of its available-for-sale securities as a result of the current economic turmoil in the financial markets around the world.
GAAP to Non-GAAP Reconciliation (unaudited) (in thousands, except per share data) | | Three Months Ended September 30, | | Six Months Ended September 30, |
| | | 2007 | | 2008 | | 2007 | | 2008 |
| Including special charges (GAAP) | | | | | | | | |
| Net Sales | $ | 400,706 | $ | 400,280 | $ | 783,864 | $ | 797,169 |
| | | | | | | | | |
| Net income | $ | 37,441 | $ | 27,791 | $ | 76,600 | $ | 58,796 |
| Diluted Income per share | $ | 0.22 | $ | 0.16 | $ | 0.44 | $ | 0.34 |
| | | | | | | | | |
| Excluding special charges (Non-GAAP) | | | | | | | | |
| Special charges (after-tax) | | | | | | | | |
| Restructuring | $ | 1,439 | $ | 2,801 | $ | 1,552 | $ | 3,705 |
| IPR&D | $ | 390 | $ | - | $ | 390 | $ | - |
| Other operating income | $ | - | $ | - | $ | - | $ | (2,957) |
| Available-for-Sale securities impairment | $ | - | $ | 1,178 | $ | - | $ | 1,178 |
| Net income | $ | 39,270 | $ | 31,770 | $ | 78,542 | $ | 60,722 |
| Diluted income per share | $ | 0.23 | $ | 0.19 | $ | 0.46 | $ | 0.35 |
See discussion of GAAP/Non-GAAP presentation below.
Chief Financial Officer, Kurt Cummings stated, “The Company’s financial position remains exceptionally strong with cash and cash equivalents and short and long-term investments in securities of $804.0 million and no debt at September 30, 2008. During the quarter, $6.8 million of dividends to stockholders were paid and $3.6 million was spent to repurchase shares of AVX stock on the open market which are held as treasury stock.”
Management believes that in order to better understand the Company’s short-term and long-term financial trends, investors may find it useful to consider results excluding special charges related to the estimated write off of in-process research and development (“IPR&D”) in connection with the acquisition of ATC, other operations’ restructuring charges for headcount reductions, other operating income and the write off of some available-for-sale securities due to an other-than-temporary impairment. Management believes that the resulting non-GAAP financial measure provides useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and is useful for period-over-period comparisons of such operations. Management eliminates such charges when evaluating the operating performance of the Company. Investors should consider the non-GAAP measure in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, the non-GAAP financial measure may not be the same as similar measures presented by other companies. Detail of the Company’s non-GAAP measure is provided in the table above.
AVX, headquartered in Myrtle Beach, South Carolina, is a leading manufacturer and supplier of a broad line of passive electronic components and related products.
Please visit our website at www.avx.com.
AVX CORPORATION
Consolidated Condensed Statements of Income
(unaudited)
(in thousands, except per share data)
| | | Three Months Ended | | | Six Months Ended |
| | | September 30, | | | September 30, |
| | | 2007 | | 2008 | | | 2007 | | 2008 |
| Net sales | $ | 400,706 | $ | 400,280 | | $ | 783,864 | $ | 797,169 |
| Cost of sales | | 329,861 | | 333,510 | | | 638,133 | | 666,968 |
| Restructuring charges | | 2,056 | | 3,297 | | | 2,217 | | 4,576 |
| Gross profit | | 68,789 | | 63,473 | | | 143,514 | | 125,625 |
| Selling, general & admin. expense | | 29,581 | | 32,530 | | | 60,149 | | 66,679 |
| Restructuring charges | | - | | 705 | | | - | | 717 |
| In-process research and development | | 390 | | - | | | 390 | | - |
| Other operating income | | - | | - | | | - | | (4,051) |
| Profit from operations | | 38,818 | | 30,238 | | | 82,975 | | 62,280 |
| Other income | | 13,184 | | 5,595 | | | 24,180 | | 13,971 |
| Income before income taxes | | 52,002 | | 35,833 | | | 107,155 | | 76,251 |
| Provision for taxes | | 14,561 | | 8,042 | | | 30,555 | | 17,455 |
| Net income | $ | 37,441 | $ | 27,791 | | $ | 76,600 | $ | 58,796 |
| | | | | | | | | | |
| Basic income per share | $ | 0.22 | $ | 0.16 | | $ | 0.45 | $ | 0.34 |
| Diluted income per share | $ | 0.22 | $ | 0.16 | | $ | 0.44 | $ | 0.34 |
| | | | | | | | | | |
| Weighted average common | | | | | | | | | |
| shares outstanding: | | | | | | | | | |
| Basic | | 171,685 | | 170,700 | | | 171,741 | | 170,837 |
| Diluted | | 172,477 | | 170,802 | | | 172,554 | | 171,103 |
Results for the quarter and six months ended September 30, 2008 include restructuring charges of $4,002 and $5,293, respectively. In addition, during the quarter ended September 30, 2008, the Company recorded a $1,683 impairment charge in other income related to the decline in value of its available-for-sale securities. For the six month period ended September 30, 2008, results also reflect a gain on the sale of corporate assets of $4,051 included in other operating income.
Results for the quarter and six months ended September 30, 2007 include restructuring charges of $2,056 and $2,217, respectively. In addition, during the quarter ended September 30, 2007, the Company recorded a $390 charge for the write-off of in process research and development related to the acquisition of ATC on September 26, 2007.
AVX CORPORATION
Consolidated Condensed Balance Sheets
(unaudited)
(in thousands)
| | | | March 31, | | | September 30, |
| | | | 2008 | | | 2008 |
| Assets | | | | | |
| Cash and cash equivalents | $ | 568,864 | | $ | 560,103 |
| Short-term investments in securities | | 50,000 | | | - |
| Available-for-sale securities | | 44,790 | | | 40,026 |
| Accounts receivable, net | | 203,762 | | | 209,559 |
| Inventories | | 421,216 | | | 399,747 |
| Other current assets | | 88,573 | | | 75,331 |
| | Total current assets | | 1,377,205 | | | 1,284,766 |
| Long-term investments in securities | | 108,999 | | | 179,001 |
| Long-term available-for-sale securities | | 42,666 | | | 24,912 |
| Property, plant and equipment, net | | 316,572 | | | 306,148 |
| Goodwill and other intangibles | | 254,059 | | | 257,027 |
| Other assets | | 9,577 | | | 9,178 |
| | | | | | | |
| | TOTAL ASSETS | $ | 2,109,078 | | $ | 2,061,032 |
| | | | | | | |
| Liabilities and Stockholders' Equity | | | | | |
| Accounts payable | $ | 137,152 | | $ | 114,202 |
| Income taxes payable and accrued expenses | | 83,364 | | | 79,614 |
| | Total current liabilities | | 220,516 | | | 193,816 |
| Other liabilities | | 59,211 | | | 55,770 |
| | | | | | | |
| | TOTAL LIABILITIES | | 279,727 | | | 249,586 |
| | | | | | | |
| | TOTAL STOCKHOLDERS' EQUITY | | 1,829,351 | | | 1,811,446 |
| | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 2,109,078 | | $ | 2,061,032 |
Contact:
AVX Corporation, Myrtle Beach
Kurt Cummings,
843-946-0691
finance@avxus.com
