AVX Corporation (NYSE: AVX) today reported preliminary unaudited
results for the second quarter ended September 30, 2016.
Chief Executive Officer and President, John Sarvis, stated, “We
completed the second quarter of our fiscal year with net sales of
$327.5 million reflecting an increase over both the previous
quarter and the same quarter in the prior year. Our gross profit of
$61.8 million, or 18.9%, was negatively impacted by $9.9 million,
or 3.1%, related to intellectual property litigation (discussed
below). Our results continue to reflect solid operating results
reflective of our focus on value added products for our
customers and our focus on cost control. We continue to be
optimistic about future activity as we saw a build in our
order backlog during the quarter and increased distribution
customer activity. We have made significant investments in
manufacturing plant expansion and product line rationalizations to
support the anticipated growth resulting from the continuing
evolution of new electronic devices and increased electronic
component content in the products and devices that impact our
lives.”
For the three and six month periods ended September 30, 2016,
net sales were $327.5 million and $642.3 million, respectively,
compared to net sales of $304.4 million and $604.9 million,
respectively, for the same periods last year reflecting improving
markets for our components and interconnect products.
Profit from operations for the three and six month periods ended
September 30, 2016 include charges of $12.8 million and $15.3
million, respectively, related to previously disclosed intellectual
property damages awards resulting from litigation with respect to a
patent infringement case filed in the United States District Court
for the District of Delaware by Presidio Components, Inc. This case
alleged that certain American Technical Ceramics Corp. (ATC, a
subsidiary of AVX) products infringe on a Presidio patent. On April
18, 2016, the jury returned a verdict in favor of the plaintiff and
found damages to be paid to Presidio in the amount of $2.2 million,
which was accrued as of March 31, 2016. In addition, at that time
the court indicated that it was considering awarding additional
damages on product sales; however, no amounts were disclosed by the
court of any potential award. We made an estimate of the probable
amount of the award and accrued $2.5 million in the quarter ended
June 30, 2016 on sales of the affected product. Subsequently, on
August 17, 2016, the court issued a permanent injunction
prohibiting ATC from manufacturing or selling the related product
after November 16, 2016 and awarded Presidio damages related to
ATC’s sale of such products from February 21, 2016 through November
16, 2016. Furthermore, on October 21, 2016, the Federal Circuit
court granted AVX’s request for a stay of the permanent injunction
whereby AVX may continue to sell the disputed product until March
17, 2017 to anyone who was a customer prior to June 17, 2016. Any
sales subsequent to November 16, 2016 pursuant to the stay of the
permanent injunction are subject to the intellectual property
damages award discussed above. The $12.8 million and $15.3 million
intellectual property damages award charges for the three and six
month periods ended September 30, 2016, respectively, include $6.2
of damages (over and above our original $2.5 million estimate)
related to sales that occurred prior to the beginning of the
current quarter and $6.6 million of damages which related to sales
that occurred in the current quarter ended September 30, 2016. Net
sales for the three and six month periods ended September 30, 2016
include $2.9 million from increased sales prices related to the
affected products which have the effect of partially offsetting the
effect of the intellectual property damages awards.
The net effect of the damages awards and the higher selling
prices was a negative impact on net income of $6.4 million, or
$0.04 per diluted share and $8.1 million, or $0.05 per diluted
share, for the three and six month periods ended September 30,
2016, respectively.
Additionally, profit from operations was impacted by the accrual
of estimated environmental remediation costs and the settlement of
certain litigation involving legacy environmental issues during the
six month period ended September 30, 2016 and the three and six
month periods ended September 30, 2015 as discussed below. Profit
from operations for the three month period and six month periods
ended September 30, 2015 reflect a charge of $6.2 million related
to the settlement of certain litigation involving legacy
environmental issues. Profit from operations for the six month
period ended September 30, 2016 reflects a charge of $3.6 million
related to estimated environmental remediation costs resulting from
legacy environmental issues at an inactive property.
Net income for the quarter ended September 30, 2016 was $24.8
million, or $0.15 per diluted share, compared to net income of
$27.9 million, or $0.17 per diluted share, for the three months
ended September 30, 2015.
Net income for the six month period ended September 30, 2016 was
$54.7 million, or $0.33 per diluted share, compared to net income
of $63.5 million, or $0.38 per diluted share, for the six month
period ended September 30, 2015.
Chief Financial Officer, Kurt Cummings, stated, “As a part of
our long-term strategy, we continued to foster our financial
strength in order to allow flexibility for investments in potential
acquisitions, materials, equipment and people to support the
long-term growth of the Company. We have cash, cash equivalents and
short-term investments in securities of approximately $1.1 billion
and no debt. We continued to use our resources to provide value to
our stockholders during the quarter by paying $17.6 million in
dividends to stockholders and using $3.2 million to repurchase
shares of AVX stock on the open market.”
AVX, headquartered in Fountain Inn, 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, 2015
2016 2015 2016 Net sales $ 304,361 $ 327,461 $
604,877 $ 642,284 Cost of sales 232,585 252,869 455,926 495,358
Intellectual property damages award - 12,793 -
15,264 Gross profit 71,776 61,799 148,951 131,662 Selling,
general & admin. expense 27,874 29,047 56,380 60,524
Environmental charges 6,150 - 6,150 3,600
Profit from operations 37,752 32,752 86,421 67,538 Other income,
net 1,497 2,729 3,010 7,794 Income before
income taxes 39,249 35,481 89,431 75,332 Provision for taxes
11,382 10,661 25,935 20,623 Net income $
27,867 $ 24,820 $ 63,496 $ 54,709 - Basic income per share $ 0.17 $
0.15 $ 0.38 $ 0.33 Diluted income per share $ 0.17 $ 0.15 $ 0.38 $
0.33 Weighted average common shares outstanding: - Basic
167,906 167,324 167,998 167,389 Diluted 168,070 167,597 168,210
167,602
AVX CORPORATION
Consolidated Condensed Balance
Sheets
(unaudited)
(in thousands)
March 31, September 30, 2016
2016 Assets Cash and cash equivalents $ 454,208 $ 511,488
Short-term investments in securities 494,594 570,415 Accounts
receivable, net 168,672 174,106 Inventories 484,268 472,273 Other
current assets 85,149 72,398 Total current assets
1,686,891 1,800,680 Long-term investments in securities 85,577 -
Property, plant and equipment, net 217,998 225,787 Goodwill and
other intangibles 270,605 269,325 Other assets 148,748
169,014 TOTAL ASSETS $ 2,409,819 $ 2,464,806
Liabilities and Stockholders' Equity Accounts payable $ 78,168 $
74,043 Income taxes payable and accrued expenses 102,134
118,334 Total current liabilities 180,302 192,377 Other
liabilities 52,411 76,490 TOTAL LIABILITIES
232,713 268,867 TOTAL STOCKHOLDERS' EQUITY 2,177,106
2,195,939 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 2,409,819 $ 2,464,806
This Press Release contains "forward-looking" information within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements other than statements of historical fact,
including statements regarding industry prospects and future
results of operations or financial position, made in this Press
Release are forward-looking. The forward-looking information
may include, among other information, statements concerning our
outlook for fiscal year 2017, overall volume and pricing trends,
potential for future growth, cost reduction and acquisition
strategies and their anticipated results, expectations for research
and development, and capital expenditures. There may also be
other statements of expectations, beliefs, outlook, future plans
and strategies, anticipated events or trends, and similar
expressions concerning matters that are not historical
facts. Forward-looking statements reflect management's
expectations and are inherently uncertain. The forward-looking
information and statements in this Press Release are subject to
risks and uncertainties, including those discussed in our Annual
Report on Form 10-K for fiscal year ended March 31, 2016, that
could cause actual results to differ materially from those
expressed in or implied by the information or statements
herein. Forward-looking statements should be read in context
with, and with the understanding of, the various other disclosures
concerning the Company and its business made elsewhere in this
Press Release as well as other public reports filed by the Company
with the SEC. You should not place undue reliance on any
forward-looking statements as a prediction of actual results or
developments.
Any forward-looking statements by the Company are intended to
speak as of the date thereof. We do not intend to update or revise
any forward-looking statement contained in this Press Release to
reflect new events or circumstances unless and to the extent
required by applicable law. All forward-looking statements
contained in this Press Release constitute "forward-looking
statements" within the meaning of Section 21E of the United States
Securities Exchange Act of 1934 and, to the extent it may be
applicable by way of incorporation of statements contained in this
Press Release by reference or otherwise, Section 27A of the United
States Securities Act of 1933, each of which establishes a
safe-harbor from private actions for forward-looking statements as
defined in those statutes.
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version on businesswire.com: http://www.businesswire.com/news/home/20161026005277/en/
AVX Corporation, Fountain InnKurt Cummings,
864-967-9303investor.relations@avx.com
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