<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from_____________to_____________
COMMISSION FILE NUMBER: 1-12432
AMERICAN POWER CONVERSION CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MASSACHUSETTS 04-2722013
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
132 FAIRGROUNDS ROAD, WEST KINGSTON, RHODE ISLAND 02892
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 401-789-5735
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED
ALL REPORTS TO BE FILED BY SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS
(OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED
TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES [ X ] NO [ ]
THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S
COMMON STOCK, $.01 PAR VALUE, ON AUGUST 7, 1995 WAS 93,032,466
SHARES.
1
<PAGE>
FORM 10-Q
JUNE 30, 1995
AMERICAN POWER CONVERSION CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
PART I - FINANCIAL INFORMATION:
ITEM 1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS:
<S> <C> <C>
CONSOLIDATED CONDENSED BALANCE
SHEETS -JUNE 30, 1995
(UNAUDITED) AND DECEMBER 31,
1994 3,4
CONSOLIDATED CONDENSED
STATEMENTS OF INCOME - SIX
MONTHS AND THREE MONTHS ENDED
JUNE 30, 1995 AND 1994(UNAUDITED) 5
CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS - SIX
MONTHS AND THREE MONTHS ENDED
JUNE 30,1995 AND 1994(UNAUDITED) 6
NOTES TO CONSOLIDATED
CONDENSED FINANCIAL STATEMENTS
(UNAUDITED) 7
ITEM 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 8-10
PART II - OTHER INFORMATION:
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 12
</TABLE>
2
<PAGE>
FORM 10-Q
JUNE 30, 1995
PART I - CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
ITEM 1 - FINANCIAL STATEMENTS
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $3,197,472 $29,072,717
SHORT-TERM INVESTMENTS - 12,407,729
ACCOUNTS RECEIVABLE, LESS
ALLOWANCE FOR DOUBTFUL
ACCOUNTS OF $4,281,330 IN
1995 AND $2,978,908 IN 1994 75,174,704 60,538,872
---------- ----------
INVENTORIES:
RAW MATERIALS 69,643,300 40,786,937
WORK-IN-PROCESS AND
FINISHED GOODS 87,770,282 51,628,608
---------- ----------
TOTAL INVENTORIES 157,413,582 92,415,545
----------- ----------
PREPAID EXPENSES AND OTHER
CURRENT ASSETS 14,540,970 8,919,733
RECOVERABLE INCOME TAXES - 1,801,217
DEFERRED INCOME TAXES 10,193,000 5,710,000
---------- ---------
TOTAL CURRENT ASSETS 260,519,728 210,865,813
----------- -----------
PROPERTY, PLANT AND EQUIPMENT:
LAND, BUILDINGS AND IMPROVEMENTS 14,931,618 11,320,618
MACHINERY AND EQUIPMENT 47,609,918 40,522,512
PURCHASED SOFTWARE 3,688,586 3,302,513
OFFICE EQUIPMENT AND FURNITURE 15,030,577 11,417,622
---------- ----------
81,260,699 66,563,265
LESS ACCUMULATED DEPRECIATION
AND AMORTIZATION 16,577,361 13,108,988
---------- ----------
NET PROPERTY, PLANT AND 64,683,338 53,454,277
---------- ----------
OTHER ASSETS 907,049 842,948
---------- ----------
TOTAL ASSETS $326,110,115 $265,163,038
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
3
<PAGE>
FORM 10-Q
JUNE 30, 1995
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
(UNAUDITED)
<S> <C> <C>
CURRENT LIABILITIES:
LINE OF CREDIT $ 8,500,000 $ -
ACCOUNTS PAYABLE 41,188,136 33,557,687
ACCRUED EXPENSES 5,019,762 2,933,164
ACCRUED COMPENSATION 5,457,801 6,214,705
ACCRUED SALES AND MARKETING PROGRAMS 3,136,722 3,939,939
ACCRUED PENSION CONTRIBUTIONS 3,098,800 3,608,034
INCOME TAXES PAYABLE 2,419,131 -
--------- ---------
TOTAL CURRENT LIABILITIES 68,820,352 50,253,529
DEFERRED INCOME TAX LIABILITY 3,762,000 2,982,000
---------- ----------
TOTAL LIABILITIES 72,582,352 53,235,529
---------- ----------
SHAREHOLDERS' EQUITY:
COMMON STOCK, $.01 PAR VALUE;
AUTHORIZED 200,000,000 SHARES;
ISSUED AND OUTSTANDING 93,041,064
SHARES IN 1995 AND 92,451,801
IN 1994 930,411 924,518
ADDITIONAL PAID-IN CAPITAL 34,773,173 29,326,171
UNREALIZED HOLDING LOSSES - (497,000)
RETAINED EARNINGS 217,824,179 182,173,820
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 253,527,763 211,927,509
----------- -----------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $326,110,115 $265,163,038
============ ============
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
4
<PAGE>
FORM 10-Q
JUNE 30, 1995
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net Sales $231,754,353 160,979,524 122,550,777 86,359,265
Cost of goods 121,697,126 78,123,376 65,084,353 41,770,235
----------- ----------- ----------- ----------
Gross Profit 110,057,227 82,856,148 57,466,424 44,589,030
Operating expenses:
Research and Development 6,131,461 4,565,624 3,382,282 2,417,784
Selling, General
and Administrative 51,111,789 33,787,361 28,088,364 18,424,432
---------- ---------- ---------- ----------
Total Operating Expenses 57,243,250 38,352,985 31,470,646 20,842,216
---------- ---------- ---------- ----------
Operating Income 52,813,977 44,503,163 25,995,778 23,746,814
Other income(deductions):
Interest income 886,864 1,029,789 250,977 609,353
Other income(expenses) (91,482) (9,142) (110,209) (26,313)
---------- ---------- ---------- ----------
Earnings before taxes 53,609,359 45,523,810 26,136,546 24,329,854
Income Taxes 17,959,000 16,365,000 8,756,000 8,735,000
---------- ---------- --------- ----------
Net Income $ 35,650,359 29,158,810 17,380,546 15,594,854
========== ========== ========== ==========
Earnings per share $0.38 0.31 0.19 0.17
Weighted average
shares outstanding 93,378,485 93,003,988 93,642,721 93,210,315
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
5
<PAGE>
FORM 10-Q
JUNE 30, 1995
American Power Conversion Corporation and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six months Ended Three months Ended
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income $35,650,359 29,158,810 17,380,546 15,594,854
Adjustments to reconcile
net income to net
cash provided by (used
in) operating activities:
Depreciation and amortization 4,562,080 2,168,277 2,484,270 1,118,275
Provision for losses on
accounts receivable 1,302,000 789,000 787,000 422,000
Provision for deferred taxes (3,703,000) (1,776,000) (2,772,000) (1,062,000)
Increase in accounts
receivable (15,937,832) (11,603,386) (13,551,566) (8,552,272)
Increase in inventories (64,998,037) (40,812,178) (23,818,910) (27,125,910)
Increase in prepaid expenses
and other current assets (3,820,020) (1,555,166) (3,874,857) (1,598,717)
Increase in other assets (64,101) (51,219) (64,101) (44,172)
Increase (decrease) in
accounts payable 7,630,449 26,011,505 (13,945,096) 16,591,362
Increase in accrued expenses 17,243 3,650,015 1,344,562 3,929,183
Increase (decrease) in
income taxes payable 2,419,131 (1,516,246) (3,591,577) (6,882,824)
---------- ---------- ---------- ----------
Net cash provided by(used in)
operating activities (36,941,728) 4,463,412 (39,621,729) (7,610,221)
----------- --------- ---------- ---------
Cash flows from investing
activities:
Capital expenditures, net
of capital grants (15,921,451) (19,927,035) (8,305,707) (13,297,342)
Proceeds from sale of equipment 130,310 - - -
Sales/maturities of short-
term investments 13,707,529 5,891,074 13,512,698 3,738,205
Purchases of short-term
investments (802,800) (7,862,203) - (5,066,967)
---------- ---------- ---------- ----------
Net cash provided by(used in)
investing activities (2,886,412) (21,898,164) 5,206,991 (14,626,104)
---------- ---------- --------- ----------
Cash flows from financing
activities:
Line of credit borrowings,
net of repayments 8,500,000 - 8,500,000 -
Issuances of common stock 5,452,895 4,866,489 4,967,230 1,673,130
--------- --------- --------- ---------
Net cash provided by
financing activities 13,952,895 4,866,489 13,467,230 1,673,130
---------- --------- ---------- ---------
Net decrease in cash and
cash equivalents (25,875,245) (12,568,263) (20,947,508) (20,563,195)
Cash and cash equivalents
at beginning of period 29,072,717 38,101,472 24,144,980 46,096,404
---------- ---------- ---------- ----------
Cash and cash equivalents
at end of period $ 3,197,472 25,533,209 3,197,472 25,533,209
========== ========== ========= ==========
</TABLE>
The Company paid approximately $17,442,000 and $19,657,000 for
income taxes for the six month periods ended June 30, 1995 and
1994, respectively. During the first six months of 1995, changes in
unrealized holding losses on short-term investments resulted in
increases to shareholders' equity and to short-term
investments of $497,000.
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
6
<PAGE>
FORM 10-Q
JUNE 30, 1995
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
(1) MANAGEMENT REPRESENTATION: In the opinion of management,
the accompanying unaudited interim financial statements contain all
adjustments (consisting of only normal recurring accruals)
necessary to present fairly the financial position and the
results of operations for the interim periods. The results of
operations for the interim period are not necessarily indicative of
results to be expected for the full year.
(2) PRINCIPLES OF CONSOLIDATION: The consolidated
financial statements include the financial statements of American
Power Conversion Corporation and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been
eliminated in consolidation.
(3) PER SHARE DATA: Earnings per common share are based on the
weighted average number of shares of common stock and dilutive
common stock options and warrants outstanding during each period.
Under the treasury stock method, the unexercised options were
assumed to be exercised at the beginning of the period or at
issuance, if later. The assumed proceeds were then used to
purchase common stock at the average market price during the
period. Common stock equivalents whose inclusion would have the
effect of increasing earnings per share (i.e antidilutive) are
excluded from the computation. Primary and fully diluted
earnings per share are equivalent for all periods presented.
(4) SHORT-TERM INVESTMENTS: Short-term investments consist
primarily of U.S. and State government and government agency debt
securities with fixed rates of interest and have original
maturities greater than three months. The cost of short-term
investments sold is determined using the specific identification
method. Short-term investments are designated as available for
sale.
(5) SHAREHOLDERS' EQUITY: Changes in paid-in capital for the
periods presented represent the issuances of common stock
resulting from the exercise of employee stock options, as well as
the Company's contributions to the Employee Stock Ownership Plan.
7
<PAGE>
FORM 10-Q
JUNE 30, 1995
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
NET SALES: Net sales for the second quarter and first
six months of 1995 increased 42% and 44%, respectively,
compared to the same periods in 1994. The increase is
attributable to continued strong end-user demand for the
Company's products across fast-growing core markets, including
computer networking, internetworking equipment, client/server
markets and point-of-sale devices, as well as what the Company
believes is an increasing awareness by computer users of the
consequences of data loss and hardware damage which can be caused
by power problems. International sales (including Canada)
comprised 37% and 34% of net sales in the first six months of
1995 and 1994, respectively.
GROSS PROFIT: Gross profit as a percentage of net sales for
the three-month period ended June 30, 1995 decreased to 46.9%
from 51.6% for the same period last year. Gross profit was 47.5%
and 51.4% of net sales for the six month periods in 1995 and
1994, respectively. Gross profit decline was primarily caused by
on-going start-up costs and production inefficiencies relating to the
establishment of manufacturing operations in Galway, Ireland,
as well as additional freight and duty costs associated with the
transportation of component materials to the Galway facility.
Gross profit for the second quarter of 1995 also included the
impact, primarily to cost of goods sold, of direct and indirect
manufacturing costs associated with reworking a defective component.
OPERATING EXPENSES: Operating expenses include Selling,
General and Administrative and Research and Development expenses.
SG&A expenses increased to 22.9% from 21.3% of net sales for the
three month period ended June 30, 1995 compared to the same
period one year ago. SG&A expenses were 22.1% and 21.0% of net
sales for the first six months of 1995 and 1994, respectively.
The increases in SG&A expenses for the second quarter and first
six months from 1994 to 1995 are attributable to increased
investment in short-term and long-term market development
activities, including the hiring of additional personnel,
particularly in the sales and marketing areas, and the
implementation of sales programs relating to the newly-introduced,
third generation Smart-UPS product line.
Research and Development expenses remained comparatively stable
for the second quarter (at 2.8% of net sales) and decreased
slightly as a percentage of sales for the first six months (2.6%
vs. 2.8%) of 1995. Although the aggregate dollars of R&D
expenses has increased from 1994 to 1995 for the periods
presented as a result of new product development and continued
improvements to existing products, the decrease as a percentage
of sales for the six month period is attributable to certain
fixed R&D expenses spread over a higher revenue base in 1995.
8
<PAGE>
FORM 10-Q
JUNE 30, 1995
RESULTS OF OPERATIONS (CONTINUED):
OTHER INCOME, EXPENSES: Interest income decreased by 59%
and 14% for the three months and six months ended June 30, 1995,
respectively, compared to the same periods a year ago. The
decrease is attributable to the decrease in cash available for
investment during the periods.
PROVISION FOR INCOME TAXES: For the 1995 and 1994 periods
presented, the Company's effective tax rate was approximately
33.5% and 36%, respectively. The decrease in 1995 is primarily
attributable to the tax savings derived from the Company's
operations in Ireland, a jurisdiction currently having a lower
income tax rate for manufacturing companies than the present U.S.
statutory income tax rate.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at June 30, 1995 was $191,699,376 compared to
$160,612,284 at December 31, 1994. The Company has been able to
increase its working capital position as the result of continued
strong operating results and despite financing the
capital investment of the expansion of its operations,
particularly in Ireland (see below), and the build-up of
inventories. Inventory levels have been increased in order to
support the growth in the Company's sales volume, as well as to
maintain the necessary carrying levels of raw materials, in-process
assemblies and finished stock as a result of major new products
introduced during the fourth quarter of 1994 . The Company
anticipates its cash requirements for the foreseeable future will
be satisfied by cash flow from operations, existing cash, short
term borrowings and, if needed, the proceeds from the sale of
additional equity.
At June 30, 1995, the Company had unsecured line of credit agreements
with two banks aggregating $40 million at floating rates of interest
equal to the banks' prime rate. The Company had $8,500,000
outstanding under these facilities at June 30, 1995.
Capital investment for the second quarter and first six months of
1995 consisted primarily of manufacturing and office equipment to
support increased manufacturing, selling, marketing and
administrative efforts needed to support the Company's growth.
The Company has continued to expand its operations in the United
States, particularly in Rhode Island and Florida. Construction
and new capital equipment requirements for the expanding United
States operations are expected to be approximately $15.0 million
for the remainder of 1995 and will be financed from operating
cash and, if needed, short-term borrowings. The Company also
continues to investigate additional domestic and international sites.
9
<PAGE>
FORM 10-Q
JUNE 30, 1995
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
During the first six months of 1995, gross capital expenditures for
the Galway operation were primarily for production equipment and
amounted to approximately $2.9 million. Capital expenditures for
the remainder of 1995 are projected to be approximately $3.0
million based upon anticipated manufacturing capacity
requirements and future operational needs. The Company receives
grant monies equal to 40% of the costs incurred for machinery,
equipment and building improvements for the Irish facility under
an agreement with the Industrial Development Authority of Ireland
("IDA"). The maximum amount attainable under the agreement is
approximately $13.1 million, of which approximately $5.7 million
of capital grant claims have been submitted to date. The total
amount of capital grant claims submitted during the first
six months of 1995 was approximately $2.8 million. In addition
to the grant monies provided by the Irish government,
the remaining capital expenditures will be financed with cash
generated from operations and, if needed, third party borrowings or
the sale of additional equity.
Under a separate agreement with the IDA, the Company also
receives up to $3,000 per new employee hired for the direct
reimbursement of training costs. The total amount of training
grant claims submitted during the first six months of 1995 was
approximately $522,000.
Management believes that current internal cash flows together
with on-hand cash, available credit facilities or, if needed, the
proceeds from the sale of additional equity would provide
sufficient financing support for anticipated capital spending
needs and other working capital requirements.
Foreign Currency Activity
During the fourth quarter of 1994, the Company began invoicing
its customers in Great Britain, France and Germany in their
respective local currencies. Realized and unrealized transaction
gains or losses are included in the results of operations and are
measured based upon the effect of changes in exchange rates on
the actual or expected amount of functional currency cash flows.
Transaction gains and losses were not material to the results of
operations in the first six months and second quarter of 1995.
The Company is continually reviewing the manner in which it
manages its foreign exchange exposure and will consider various
techniques including the netting of foreign currency receipts and
disbursements, rate protection agreements with customers/vendors
and foreign exchange contracts.
10
<PAGE>
FORM 10-Q
JUNE 30, 1995
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
During the first two weeks of August 1995, several purported class
action lawsuits were filed in the United States District Court for
the District of Rhode Island in which the Company was named as a
defendant, along with certain of its officers. The lawsuits
relate to disclosures made by the Company in its public filings
and press releases and assert violations of federal securities
laws. The plaintiffs seek unspecified damages,
interest, costs and fees. It is possible that other claims may be
made against the Company or that there may be other consequences.
The Company intends to vigorously defend these lawsuits and any
similar lawsuits that may be filed; however, the ultimate outcome
of these matters cannot yet be determined. No provision for any
liability that may result from the actions has been recognized in
the accompanying consolidated condensed financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders was held on June 14, 1995 at
which the shareholders of the Company approved the following:
(i) by a vote of 82,831,049 shares in favor, 740,639 shares
opposed and 181,392 abstaining, the number of directors was fixed
at five.
(ii) the following persons (with vote results) were elected to
serve another term as Directors of the Company:
<TABLE>
<CAPTION>
For Withheld
----- --------
<S> <C> <C>
Rodger B.Dowdell, Jr. 82,707,423 1,045,657
James D. Gerson 82,697,653 1,055,427
Emanuel E. Landsman 82,686,156 1,066,924
Ervin F. Lyon 82,695,760 1,057,320
Neil E. Rasmussen 82,685,934 1,055,427
</TABLE>
(iii) by a vote of 83,516,850 shares in favor, 106,687 shares
opposed and 129,543 shares abstaining, the ratification of the
selection of the firm of KPMG Peat Marwick LLP as auditors for the
fiscal year ending December 31, 1995.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8 - K
(A) EXHIBITS:
EXHIBIT NO. 10.1 - LETTER AGREEMENT DATED JUNE 22, 1995 TO AMEND LOAN
AGREEMENT DATED DECEMBER 30, 1991 BY AND BETWEEN FLEET NATIONAL BANK
AND THE COMPANY (PAGE 13)
EXHIBIT NO. 11 - COMPUTATION OF EARNINGS PER SHARE (PAGE 15)
EXHIBIT NO. 27 - FINANCIAL DATA SCHEDULE
(B) REPORTS ON FORM 8-K
NO REPORT ON FORM 8-K WAS FILED BY AMERICAN POWER CONVERSION
CORPORATION DURING THE QUARTER ENDED JUNE 30, 1995.
11
<PAGE>
FORM 10-Q
JUNE 30, 1995
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 THEREUNTO DULY AUTHORIZED.
AMERICAN POWER CONVERSION CORPORATION
/s/ Rodger B. Dowdell, Jr.
-----------------------------
Date: August 10, 1995
RODGER B. DOWDELL, JR.
CHAIRMAN AND PRESIDENT (PRINCIPAL EXECUTIVE
OFFICER AND PRINCIPAL FINANCIAL OFFICER)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEET AT JUNE 30, 1995 AND CONSOLIDATED CONDENSED
STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 3197472
<SECURITIES> 0
<RECEIVABLES> 75174704
<ALLOWANCES> 4281330
<INVENTORY> 157413582
<CURRENT-ASSETS> 260519728
<PP&E> 81260699
<DEPRECIATION> 16577361
<TOTAL-ASSETS> 326110115
<CURRENT-LIABILITIES> 68820352
<BONDS> 0
<COMMON> 930411
0
0
<OTHER-SE> 252597352
<TOTAL-LIABILITY-AND-EQUITY> 253527763
<SALES> 231754353
<TOTAL-REVENUES> 231754353
<CGS> 121697126
<TOTAL-COSTS> 57243250
<OTHER-EXPENSES> 91482
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 53609359
<INCOME-TAX> 17959000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35650359
<EPS-PRIMARY> 0.38
<EPS-DILUTED> 0.38
</TABLE>
<PAGE>
FORM 10-Q
JUNE 30, 1995
Exhibit 10.1
June 22, 1995
Mr. Edward W. Machala
Vice President
American Power Conversion Corporation
132 Fairgrounds Road
West Kingston, Rhode Island 02892
Dear Ed:
Reference is hereby made to the Loan Agreement (the
"Agreement") made as of December 30, 1991, by and between
Fleet National Bank (the "Bank") and American Power
Conversion Corporation (the "Borrower"). All terms defined
therein shall be incorporated by reference herein.
Where as, Borrower desires to increase the existing
unsecured demand line of credit, with the Bank, from
$10,000,000 to $25,000,000; and
Whereas, the Bank is willing to make such a loan to the
Borrower subject to the terms and conditions of this
Agreement,
Now, therefore, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, it
is hereby agreed by and between the Bank and the Borrower as
follows:
Section 1.1 - The Loan
Section 1.1 of the Loan Agreement is amended in its entirety
to read as follows:
"Subject to the terms and conditions contained in this
Agreement, the Bank, from time to time, will make loans to
the Borrower (the "Line of Credit") up to and aggregate
principal amount advanced of Twentyfive Million Dollars
($25,000,000) outstanding, (the "Credit Limit").
13
<PAGE>
Section 1.2 - The Note
The first sentence of Section 1.2 of the Loan Agreement is
amended in its entirety to read as follows:
"The Line of Credit will be evidenced by that certain Line
of Credit Demand Note of Borrower in the principal amount of
Twenty-Five Million Dollars ($25,000,000) of even date
herewith (the "Note").
Section 1.4 (a) - Interest
The third paragraph of Section 1.4 (a) of the Loan Agreement
is amended in its entirety to read as follows:
The "Cost of Funds Rate" means the rate of interest per
annum which is the sum of (i) the Bank's cost of funds for
periods of 7, 14, 30, 60, 90 or 180 days, as applicable, as
determined by the Bank, and in effect on the first day of
any period for which a Cost of Funds Rate is in effect and
(ii) 1.25%.
The Line of Credit Demand Note
All references to a principal amount of Ten Million dollars
($10,000,000) are hereby amended to read as Twenty-Five
Million Dollars ($25,000,000).
Except as modified hereby, the Borrower confirms, ratifies
and restates all of the representations, warranties,
covenants and agreements made and set forth in the Loan
Agreement and the Line of Credit Demand Note and any and all
other documents executed in connection therewith.
In witness whereof, the parties hereto have caused this
amendment to the Loan Agreement to be executed as of the
date of this letter agreement.
Witness: Fleet National Bank
/s/ Donald J. Cavanagh, Jr. By: /s/ Timothy J. McCormick,V.P.
/s/ Donald J. Cavanagh, Jr. By: /s/ Timothy J. McCormick,V.P.
American Power Conversion Corporation
/s/ Michael J. Ricci By: /s/ Edward W. Machala
14
<PAGE>
FORM 10-Q
JUNE 30, 1995
EXHIBIT 11
American Power Conversion Corporation
Computation of Earnings Per Share
(Unaudited)
Six months Ended Three months ended
June 30, June 30,
1995 1994 1995 1994
Primary:
Weighted average shares
outstanding 92,703,601 91,455,258 92,956,907 91,742,131
Net effect of dilutive stock
options and warrants based on
the treasury stock method using
the average market price 674,884 1,548,730 685,814 1,468,184
---------- --------- --------- ----------
Total 93,378,485 93,003,988 93,642,721 93,210,315
Net Income $35,650,359 29,158,810 17,380,546 15,594,854
Per share amount $0.38 $0.31 0.19 0.17
Fully Diluted:
Weighted average shares
outstanding 92,703,601 91,455,258 92,956,907 91,742,131
Net effect of dilutive stock
options and warrants based
on the treasury stock method
using the period end
market price 875,127 1,177,181 875,127 1,177,181
---------- ---------- --------- ----------
Total 93,578,728 92,632,439 93,832,034 92,919,312
Net income $35,650,359 29,158,810 17,380,546 15,594,854
Per share amount $0.38 $0.31 0.19 0.17
15
