<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 September 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 NOVEMBER 7, 1995 WAS 93,177,965 SHARES.
1
<PAGE>
FORM 10-Q
SEPTEMBER 30, 1995
AMERICAN POWER CONVERSION CORPORATION
INDEX
PAGE NO.
PART I - FINANCIAL INFORMATION:
ITEM 1. CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS:
CONSOLIDATED CONDENSED BALANCE
SHEETS -SEPTEMBER 30, 1995
(UNAUDITED) AND DECEMBER 31,
1994 3,4
CONSOLIDATED CONDENSED
STATEMENTS OF INCOME - NINE
MONTHS AND THREE MONTHS ENDED
SEPTEMBER 30, 1995 AND 1994
(UNAUDITED) 5
CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS -
NINE MONTHS AND THREE MONTHS
ENDED SEPTEMBER 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 - 11
PART II - OTHER INFORMATION:
ITEM 1. LEGAL PROCEEDINGS 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURES 13
2
<PAGE>
FORM 10-Q
SEPTEMBER 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>
SEPTEMBER 30, DECEMBER 31,
1995 1994
(UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 10,704,866 $29,072,717
SHORT-TERM INVESTMENTS - 12,407,729
ACCOUNTS RECEIVABLE, LESS
ALLOWANCE FOR DOUBTFUL
ACCOUNTS OF $5,978,000
IN 1995 AND $2,978,000
IN 1994 77,562,555 60,538,872
----------- -----------
INVENTORIES:
RAW MATERIALS 72,482,500 40,786,937
WORK-IN-PROCESS AND
FINISHED GOODS 81,261,316 51,628,608
----------- -----------
TOTAL INVENTORIES 153,743,816 92,415,545
----------- -----------
PREPAID EXPENSES AND OTHER
CURRENT ASSETS 12,570,642 8,919,733
RECOVERABLE INCOME TAXES - 1,801,217
DEFERRED INCOME TAXES 11,889,000 5,710,000
----------- ----------
TOTAL CURRENT ASSETS 266,470,879 210,865,813
----------- -----------
PROPERTY, PLANT AND EQUIPMENT:
LAND, BUILDINGS AND IMPROVEMENTS 15,376,418 11,320,618
MACHINERY AND EQUIPMENT 50,723,826 40,522,512
PURCHASED SOFTWARE 3,863,431 3,302,513
OFFICE EQUIPMENT AND FURNITURE 16,325,018 11,417,622
----------- -----------
86,288,693 66,563,265
LESS ACCUMULATED DEPRECIATION
AND AMORTIZATION 19,127,042 13,108,988
----------- -----------
NET PROPERTY, PLANT AND EQUIPMENT 67,161,651 53,454,277
----------- -----------
OTHER ASSETS 903,448 842,948
----------- -----------
TOTAL ASSETS $334,535,978 $265,163,038
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS
3
<PAGE>
FORM 10-Q
SEPTEMBER 30, 1995
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
1995 1994
(UNAUDITED)
<S> <C> <C>
CURRENT LIABILITIES:
LINE OF CREDIT $ 8,370,000 $ -
ACCOUNTS PAYABLE 26,970,027 33,557,687
ACCRUED EXPENSES 5,403,184 2,933,164
ACCRUED COMPENSATION 5,883,562 6,214,705
ACCRUED SALES AND MARKETING PROGRAMS 5,033,595 3,939,939
ACCRUED PENSION CONTRIBUTIONS 3,686,447 3,608,034
INCOME TAXES PAYABLE 3,215,849 -
---------- ----------
TOTAL CURRENT LIABILITIES 58,562,664 50,253,529
DEFERRED INCOME TAX LIABILITY 4,250,000 2,982,000
---------- ----------
TOTAL LIABILITIES 62,812,664 53,235,529
---------- ----------
SHAREHOLDERS' EQUITY:
COMMON STOCK, $.01 PAR VALUE;
AUTHORIZED 200,000,000 SHARES;
ISSUED AND OUTSTANDING 93,152,490
SHARES IN 1995 AND 92,451,801 IN
1994 931,525 924,518
ADDITIONAL PAID-IN CAPITAL 35,838,170 29,326,171
UNREALIZED HOLDING LOSSES - (497,000)
RETAINED EARNINGS 234,953,619 182,173,820
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 271,723,314 211,927,509
----------- -----------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $334,535,978 $265,163,038
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS
4
<PAGE>
FORM 10-Q
SEPTEMBER 30, 1995
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPT 30, SEPT 30, SEPT 30, SEPT 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net Sales $373,747,703 264,783,870 141,993,350 103,804,346
Cost of goods sold 204,446,667 128,827,552 82,749,541 50,704,176
----------- ----------- ---------- ----------
Gross Profit 169,301,036 135,956,318 59,243,809 53,100,170
----------- ----------- ---------- ----------
Operating expenses:
Research and
Development 9,351,018 7,039,661 3,219,557 2,474,037
Selling, General
and Administrative 81,323,937 54,856,034 30,212,148 21,068,673
---------- ---------- ---------- ----------
Total Operating
Expenses 90,674,955 61,895,695 33,431,705 23,542,710
---------- ---------- ---------- ----------
Operating Income 78,626,081 74,060,623 25,812,104 29,557,460
Other income
(deductions):
Interest income 995,169 1,535,446 108,305 505,657
Interest expense (227,231) - (203,606) -
Other income(expenses) (26,220) - 41,637 9,142
---------- ---------- ---------- ----------
Earnings before income
taxes 79,367,799 75,596,069 25,758,440 30,072,259
Income Taxes 26,588,000 27,247,000 8,929,000 10,882,000
---------- ---------- ---------- ----------
Net Income $ 52,779,799 48,349,069 17,129,440 19,190,259
========== ========== ========== ==========
Earnings per Share $0.56 0.52 0.18 0.21
Weighted average
shares outstanding 93,492,265 92,900,087 93,765,475 93,119,668
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS
5
<PAGE>
FORM 10-Q
SEPTEMBER 30, 1995
American Power Conversion Corporation and Subsidiaries
Consolidated Condensed Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine months Ended Three months Ended
SEPT 30, SEPT 30, SEPT 30, SEPT 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income $52,779,799 48,349,069 17,129,440 19,190,259
Adjustments to reconcile
net income to net
cash provided by (used
in) operating activities:
Depreciation and
amortization 6,018,054 3,766,929 1,455,974 1,598,652
Provision for losses on
accounts receivable 3,000,000 1,325,101 1,698,000 536,101
Provision for deferred
taxes (4,911,000) (3,094,000) (1,208,000) (1,318,000)
Increase in accounts
receivable (20,023,683)(21,276,193) (4,085,851) (9,672,807)
(Increase) decrease in
inventories (61,328,271)(43,074,059) 6,669,766 (2,261,881)
(Increase) decrease in
prepaid expenses and
other current assets (1,849,692) (3,519,035) 1,970,328 (1,963,869)
(Increase) decrease in
other assets (60,500) (919,777) 3,601 (868,558)
Increase (decrease) in
accounts payable (6,587,660) 19,231,388 (14,218,109) (6,780,117)
Increase in accrued
expenses 3,310,946 6,743,312 3,293,703 3,093,297
Increase in income taxes
payable 3,215,849 1,969,966 796,718 3,486,212
---------- ---------- ---------- ----------
Net cash provided by (used
in) operating activities (26,436,158) 9,502,701 10,505,570 5,039,289
------------ --------- ---------- ---------
Cash flows from investing
activities:
Capital expenditures, net
of capital grants (19,855,738)(28,042,564) (3,934,287) (8,115,529)
Proceeds from sale of
equipment 130,310 - - -
Sales/maturities of short-
term investments 13,707,529 8,658,919 - 2,767,845
Purchases of short-term
investments (802,800)(11,873,576) - (4,011,373)
---------- ---------- --------- ---------
Net cash used in
investing activities (6,820,699)(31,257,221) (3,934,287) (9,359,057)
---------- ---------- --------- ---------
Cash flows from financing
activities:
Line of credit borrowings,
net of repayments 8,370,000 - (130,000) -
Issuances of common stock 6,519,006 5,156,047 1,066,111 289,558
---------- --------- --------- --------
Net cash provided by
financing activities 14,889,006 5,156,047 936,111 289,558
---------- ---------- -------- --------
Net increase (decrease)
in cash and cash
equivalents (18,367,851)(16,598,473) 7,507,394 (4,030,210)
Cash and cash equivalents
at beginning of period 29,072,717 38,101,472 3,197,472 25,533,209
---------- ---------- ---------- ----------
Cash and cash equivalents
at end of period $10,704,866 21,502,999 10,704,866 21,502,999
========== ========== ========== ==========
</TABLE>
The Company paid approximately $29,698,000 and $28,371,000 for
income taxes for the nine month periods ended September 30, 1995
and 1994, respectively. During the first nine 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
SEPTEMBER 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
SEPTEMBER 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 third quarter and the first
nine months of 1995 increased 37% and 41%, 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. The revenue growth is also attributable to strong
international sales which increased 59% over the third quarter of
1994, while third quarter domestic sales grew 28% over 1994.
GROSS PROFIT: Gross profit as a percentage of net sales for
the three-month period ended September 30, 1995 decreased to
41.7% from 51.1% for the same period last year. Gross profit was
45.3% and 51.3% of net sales for the nine month periods in 1995
and 1994, respectively. Gross profit decline was
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 margins for the third quarter of 1995 were
also adversely affected by product transition occurring within
its Smart-UPS family of products as the Company has introduced a
new third generation Smart-UPS product line replacing the
existing second generation, which has been in place for the past
five years, and a product mix shift resulting from an
accelerating growth rate on low-end, lower margin UPS products.
The Company also increased its inventory reserve provisions
during the third quarter in light of its inventories running at
higher than historical levels and the on-going product
transition.
OPERATING EXPENSES: Operating expenses include Selling,
General and Administrative and Research and Development expenses.
SG&A expenses increased to 21.3% from 20.3% of net sales for the
three month period ended September 30, 1995 compared to the same
period one year ago. SG&A expenses were 21.8% and 20.7% of net
sales for the first nine months of 1995 and 1994, respectively.
The increases in SG&A expenses for the third quarter and first
nine 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
and the implementation of sales and marketing programs relating
to its newly-introduced UPS products.
Research and Development expenses decreased slightly as a
percentage of sales for the third quarter (2.3% vs. 2.4%) and
decreased slightly as a percentage of sales for the first nine
months (2.5% vs. 2.6%) of 1995. Although the aggregate dollar amount
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 nine month period is attributable to certain
fixed R&D expenses spread over a higher revenue base in 1995.
8
<PAGE>
FORM 10-Q
SEPTEMBER 30, 1995
RESULTS OF OPERATIONS (CONTINUED):
OTHER INCOME, EXPENSES: Interest income decreased by 79%
and 35% for the three months and nine months ended September 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. Interest expense incurred during
the third quarter of 1995 was the result of outstanding
borrowings against the available lines of credit.
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 September 30, 1995 was $207,908,215 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 past four quarters. 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 September 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 $8,370,000 outstanding under these facilities at September
30, 1995. On October 11, 1995, the Company increased its
aggregate line of credit availability to $65 million.
Capital investment for the third quarter and first nine 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 $5.0 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
SEPTEMBER 30, 1995
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
During the first nine months of 1995, gross capital expenditures
for the Galway operation were primarily for production equipment
and amounted to approximately $4.0 million. Capital expenditures
for Galway for the remainder of 1995 are projected to be
approximately $1.5 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 nine 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 nine months of 1995 was
approximately $522,000.
On November 2, 1995, the Company announced that it will begin
further negotiations with the IDA for financial incentives in
connection with the possible future expansion of the Company's
manufacturing operations to additional sites within Ireland.
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 nine months and third 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
SEPTEMBER 30, 1995
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Shareholder Lawsuits
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.
11
<PAGE>
FORM 10-Q
SEPTEMBER 30, 1995
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As initially reported in Report on Form 10-Q for the quarterly
period ended June 30, 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
defendent, 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 6 - EXHIBITS AND REPORTS ON FORM 8 - K
(A) EXHIBITS:
EXHIBIT NO. 10.1 - LETTER AGREEMENT DATED OCTOBER 11, 1995 TO
AMEND LOAN AGREEMENT DATED DECEMBER 30, 1991 BY AND BETWEEN FLEET
NATIONAL BANK AND THE COMPANY (PAGE 14)
EXHIBIT NO. 11 - COMPUTATION OF EARNINGS PER SHARE (PAGE 17)
EXHIBIT NO. 27 - FINANCIAL DATA SCHEDULE
(B) REPORTS ON FORM 8-K
On August 25, 1995, the Company filed a Report on Form 8-K to
disclose the issuance of a press release made on August 4, 1995
concerning several purported class action suits filed against the
Company. No financial statements were filed as part of this Form
8-K.
12
<PAGE>
FORM 10-Q
SEPTEMBER 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/ Donald M. Muir
--------------------------
Date: November 10, 1995
DONALD M. MUIR
(DULY AUTHORIZED OFFICER AND CHIEF FINANCIAL OFFICER)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEET AT SEPTEMBER 30, 1995 AND CONSOLIDATED
CONDENSED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 10704866
<SECURITIES> 0
<RECEIVABLES> 77562555
<ALLOWANCES> 5978000
<INVENTORY> 153743816
<CURRENT-ASSETS> 266470879
<PP&E> 86288693
<DEPRECIATION> 19127042
<TOTAL-ASSETS> 334535978
<CURRENT-LIABILITIES> 58562664
<BONDS> 0
<COMMON> 931525
0
0
<OTHER-SE> 270791789
<TOTAL-LIABILITY-AND-EQUITY> 334535978
<SALES> 373747703
<TOTAL-REVENUES> 373747703
<CGS> 204446667
<TOTAL-COSTS> 204446667
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 227231
<INCOME-PRETAX> 79367799
<INCOME-TAX> 26588000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 52779799
<EPS-PRIMARY> 0.56
<EPS-DILUTED> 0.56
</TABLE>
<PAGE>
Exhibit 10.1
October 11, 1995
Mr. Donald Muir
Chief Financial Officer
American Power Conversion Corporation
132 Fairgrounds Road
West Kingston, Rhode Island 02892
Dear Don:
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"). Reference is also
hereby made to the amendment letter made as of June 22, 1995
by and between the Bank and the Borrower (the "Amendment
Letter"). All terms defined therein shall be incorporated
by reference herein.
Whereas, Borrower desires to increase the existing unsecured
demand line of credit, with the Bank, from $25,000,000 to
$50,000,000; and
Whereas, the Bank is willing to reduce the rate of interest
charged on outstanding loans advanced pursuant to the
existing unsecured demand line of credit, as amended hereby, and
Whereas, the Bank is willing to make such a loan and rate
reduction 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, as amended by the
Amendment Letter, 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 Fifty Million Dollars
($50,000,000) outstanding, (the "Credit Limit").
14
<PAGE>
Section 1.2 - The Note
The first sentence of Section 1.2 of the Loan Agreement, as
amended by the Amendment Letter, 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
Fifty Million Dollars ($50,000,000) of even date herewith
(the "Note").
Section 1.4 (a) - Interest
The third paragraph of Section 1.4 (a) of the Loan
Agreement, as amended by the Amendment Letter, 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) 0.625%.
In addition, the second (2nd) sentence of Section 1.4(b) of
the Loan Agreement, as amended by the Amendment Letter, is
hereby amended in its entirety to read as follows:
If the Borrower elects the Cost of Funds Rate, the written
election shall specify a period of 7, 14, 30, 60, 90 or 180
days during which the Cost of Funds Rate shall be in effect
(the "applicable period").
The aforementioned amendment to Section 1.4 of the Loan
Agreement shall apply only to loans made after October 11,
1995.
The Line of Credit Demand Note
The Line of Credit Demand Note, as amended by the Amendment
Letter, shall be hereby amended such that all references to
a principal amount of Twenty-Five Million dollars
($25,000,000) are hereby amended to read as Fifty Million
Dollars ($50,000,000).
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.
15
<PAGE>
Witness: Fleet National Bank
/s/ Robert K. Brown By: /s/ Timothy J. McCormick
Date: 10/11/95
/s/ Robert K. Brown By: /s/ Neil W. Steinberg
Date: 10/11/95
American Power Conversion Corporation
/s/ Michael J. Ricci By: /s/ Rodger B. Dowdell, Jr., CEO
Date: 10/13/95
16
FORM 10-Q
SEPTEMBER 30, 1995
EXHIBIT 11
American Power Conversion Corporation
Computation of Earnings Per Share
(Unaudited)
Nine months Ended Three months ended
September 30, September 30,
1995 1994 1995 1994
Primary:
Weighted average
shares outstanding 92,839,686 91,649,969 93,111,856 92,039,392
Net effect of
dilutive stock
options and
warrants based on
the treasury stock
method using
the average market price 652,579 1,250,118 653,620 1,080,276
---------- ---------- --------- ----------
Total 93,492,265 92,900,087 93,765,475 93,119,668
Net Income $52,779,799 48,349,069 17,129,440 19,190,259
Per share amount $0.56 0.52 0.18 0.21
Fully Diluted:
Weighted average shares
outstanding 92,839,686 91,649,969 93,111,856 92,039,392
Net effect of
dilutive stock
options and
warrants based
on the treasury
stock method
using the period
end market price 450,946 1,194,072 450,946 1,194,072
---------- ---------- --------- ----------
Total 93,290,632 92,844,041 93,562,802 93,233,464
Net income $52,779,799 48,349,069 17,129,440 19,190,259
Per share amount $0.56 0.52 0.18 0.21
17
