QUARTERLY REPORT ON FORM 10-Q
U.S. 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 April 2, 2000
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
401-789-5735
(Address and telephone number of principal executive offices)
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 [ ]
Registrant's Common Stock outstanding, $.01 par value, at May 11, 2000 -
193,840,000 shares
1
<PAGE>
FORM 10-Q
April 2, 2000
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
INDEX
Page No.
Part I - Financial Information:
Item 1. Consolidated Condensed Financial Statements:
Consolidated Condensed Balance Sheets -
April 2, 2000 (Unaudited) and December 31, 1999 3 - 4
Consolidated Condensed Statements of Income -
Three Months Ended
April 2, 2000 and March 28, 1999 (Unaudited) 5
Consolidated Condensed Statements of Cash Flows -
Three Months Ended
April 2, 2000 and March 28, 1999 (Unaudited) 6
Notes to Consolidated Condensed Financial Statements
(Unaudited) 7 - 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 12
Item 3. Quantitative and Qualitative Disclosures About
Market Risk 12
Part II - Other Information:
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
2
<PAGE>
FORM 10-Q
April 2, 2000
PART I - CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
ASSETS
<CAPTION>
April 2, December 31,
2000 1999
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $423,307 $456,325
Short term investments 75,000 -
Accounts receivable,
less allowance for doubtful accounts of
$19,087 in 2000 and $19,543 in 1999 207,897 216,810
Inventories:
Raw materials 68,541 60,708
Work-in-process and finished goods 124,562 115,769
Total inventories 193,103 176,477
Prepaid expenses and other current assets 20,312 18,283
Deferred income taxes 28,815 31,962
Total current assets 948,434 899,857
Property, plant, and equipment:
Land, buildings and improvements 58,673 58,220
Machinery and equipment 135,015 130,031
Office equipment, furniture, and fixtures 58,184 55,284
Purchased software 18,404 17,114
270,276 260,649
Less accumulated depreciation and amortization 109,610 103,422
Net property, plant, and equipment 160,666 157,227
Goodwill and other intangibles 47,348 48,239
Other assets 2,201 1,615
Total assets $1,158,649 $1,106,938
</TABLE>
See accompanying notes to consolidated condensed financial statements.
<3>
<PAGE>
FORM 10-Q
April 2, 2000
<TABLE>
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (CONTINUED)
(In thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
April 2, December 31,
2000 1999
(Unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable $91,476 $78,641
Accrued expenses 38,528 41,966
Accrued compensation 20,223 25,743
Accrued sales and marketing programs 17,242 16,853
Income taxes payable 23,554 30,616
Total current liabilities 191,023 193,819
Deferred tax liability 11,917 11,029
Total liabilities 202,940 204,848
Shareholders' equity:
Common stock, $.01 par value;
authorized 450,000 shares; issued 193,960
shares in 2000 and 193,339 shares in 1999 1,940 1,933
Additional paid-in capital 90,285 82,989
Retained earnings 867,631 820,525
Treasury stock, 250 shares, at cost (1,551) (1,551)
Accumulated other comprehensive income (loss) (2,596) (1,806)
Total shareholders' equity 955,709 902,090
Total liabilities and shareholders' equity $1,158,649 $1,106,938
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE>
FORM 10-Q
April 2, 2000
<TABLE>
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In thousands, except earnings per share)
<CAPTION>
Three months ended
April 2, March 28,
2000 1999
(Unaudited)
<S> <C> <C>
Net sales $309,413 $277,185
Cost of goods sold 163,444 155,030
Gross profit 145,969 122,155
Operating expenses:
Marketing, selling, general and administrative 76,487 66,324
Research and development 9,305 8,952
Total operating expenses 85,792 75,276
Operating income 60,177 46,879
Other income, net 6,170 2,471
Earnings before income taxes 66,347 49,350
Income taxes 19,241 14,559
Net income $47,106 $34,791
Basic earnings per share $ .24 $ .18
Basic weighted average shares outstanding 193,450 191,760
Diluted earnings per share $ .24 $ .18
Diluted weighted average shares outstanding 199,530 195,576
</TABLE>
See accompanying notes to consolidated condensed financial statements.
5
<PAGE>
FORM 10-Q
April 2, 2000
<TABLE>
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
<CAPTION>
Three months ended
April 2, March 28,
2000 1999
(Unaudited)
<S> <C> <C>
Cash flows from operating activities
Net income $47,106 $34,791
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 7,134 4,944
Deferred income taxes 4,035 925
Other non-cash items, net 846 3,175
Changes in operating assets and liabilities:
Accounts receivable 8,913 (19,381)
Inventories (16,626) (14,840)
Prepaid expenses and other current assets (2,029) (535)
Other assets (586) 329
Accounts payable 12,835 259
Accrued expenses (8,569) 10,377
Income taxes payable (7,062) 1,091
Net cash provided by operating activities 45,997 21,135
Cash flows from investing activities
Purchases of held-to-maturity debt securities (75,000) -
Capital expenditures, net of capital grants (11,318) (4,324)
Acquisition of minority interest - (8,165)
Net cash used in investing activities (86,318) (12,489)
Cash flows from financing activities
Proceeds from issuances of common stock 7,303 1,167
Repayment of short term debt - (3,735)
Net cash provided by (used in) financing activities 7,303 (2,568)
Net change in cash and cash equivalents (33,018) 6,078
Cash and cash equivalents at beginning of period 456,325 219,908
Cash and cash equivalents at end of period $423,307 $225,986
Supplemental cash flow disclosures
Cash paid during the period for:
Income taxes (net of refunds) $21,855 $11,323
</TABLE>
See accompanying notes to consolidated condensed financial statements.
6
<PAGE>
FORM 10-Q
April 2, 2000
AMERICAN POWER CONVERSION CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Management Representation
The accompanying unaudited consolidated condensed financial statements should be
read in conjunction with the consolidated financial statements included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1999. In
the opinion of management, the accompanying unaudited consolidated condensed
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the consolidated financial
position and the consolidated results of operations and cash flows for the
interim periods. The results of operations for the interim periods 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 are eliminated in
consolidation.
3. Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding during the period. Diluted earnings
per share is computed by dividing net income by the weighted average number of
common shares and dilutive potential common shares outstanding during the
period. Under the treasury stock method, the unexercised options are assumed to
be exercised at the beginning of the period or at issuance, if later. The
assumed proceeds are then used to purchase common shares at the average market
price during the period. Potential common shares for which inclusion would have
the effect of increasing diluted earnings per share (i.e., antidilutive) are
excluded from the computation.
<TABLE>
<CAPTION>
In thousands Three months ended
April 2, March 28,
2000 1999
<S> <C> <C>
Basic weighted average shares outstanding 193,450 191,760
Net effect of dilutive potential common shares
outstanding based on the treasury stock
method using the average market price 6,080 3,816
Diluted weighted average shares outstanding 199,530 195,576
Antidilutive potential common shares excluded
from the computation above - 326
</TABLE>
4. 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.
7
<PAGE>
5. Comprehensive Income
The components of comprehensive income, net of tax, are as follows:
<TABLE>
<CAPTION>
Three months ended
April 2, March 28,
2000 1999
<S> <C> <C>
Net income $47,106 $34,791
Other comprehensive income (loss), net of tax:
Change in foreign currency translation adjustment (790) 74
Other comprehensive income (loss) (790) 74
Comprehensive income $46,316 $34,865
</TABLE>
6. Short Term Investments
At April 2, 2000, short term investments consisted of U.S. Government debt
securities with maturities greater than three months and less than or equal to
one year. Such securities were classified as held-to-maturity and carried at
amortized cost. Management determines the appropriate classification of debt
securities at the time of purchase and re-evaluates such designation as of each
balance sheet date. Debt securities are classified as held-to-maturity when the
Company has the positive intent and ability to hold such securities to maturity.
7. Operating Segment Information
Basis for presentation
The Company's operating businesses design, manufacture, and market power
protection equipment and related software and accessories for computer and
computer-related equipment. The Company manages its businesses based on the
nature of products provided. These businesses share similar economic
characteristics and have been aggregated into one reportable operating segment.
The Company evaluates the performance of its businesses based on direct
contribution margin. Direct contribution margin includes research and
development ("R&D"), marketing, and administrative expenses directly
attributable to the segment and excludes certain expenses which are managed
outside the reportable segment. Costs excluded from segment profit are indirect
operating expenses, primarily consisting of selling and corporate expenses, and
income taxes. Expenditures for additions to long-lived assets are not reported
to management by the operating businesses.
Summary operating segment information is as follows:
<TABLE>
<CAPTION>
In thousands Three months ended
April 2, March 28,
2000 1999
<S> <C> <C>
Net sales $309,413 $277,185
Segment direct contribution margin $134,060 $109,657
Indirect operating expenses 73,883 62,778
Other income, net 6,170 2,471
Earnings before incomes taxes $66,347 $49,350
</TABLE>
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
Revenues
Net sales were $309.4 million for the first quarter of 2000, an increase of
11.6% compared to $277.2 million for the same period in 1999. First quarter net
sales growth over last year was led by the Asia Pacific region which was up 43%,
and represented 17% of total first quarter 2000 net sales. The Americas (North
and Latin America) grew 10%, and represented 57% of first quarter 2000 net
sales, while EMEA (Europe, Middle East and Africa) grew 1%, and represented 27%
of first quarter 2000 net sales. First quarter 2000 North American and European
net sales growth was constrained by lower distributor sales which were impacted
by an early first quarter 2000 IT industry slowdown; however, order rates from
distributors were up toward the end of the quarter.
Cost of Goods Sold
Cost of goods sold was $163.4 million or 52.8% of net sales in the first quarter
of 2000 compared to $155.0 million or 55.9% in the first quarter of 1999. First
quarter 2000 gross margin was 47.2% of sales, approximately 310 basis points
higher than the comparable period in 1999. The improvement was driven primarily
by manufacturing cost reductions, particularly material cost reductions, and the
ongoing transition of production from the U.S. and Ireland to the Philippines.
Total inventory reserves at April 2, 2000 were $17.4 million compared to $17.1
million at December 31, 1999. The Company's reserve estimate methodology
involves quantifying the total inventory position having potential loss
exposure, reduced by an amount reasonably forecasted to be sold, and adjusting
its interim reserve provisioning to cover the net loss exposure.
Operating Expenses
Operating expenses include marketing, selling, general and administrative
(SG&A), and R&D expenses.
SG&A expenses were $76.5 million or 24.7% of net sales for the first quarter of
2000 compared to $66.3 million or 23.9% of net sales for the first quarter of
1999. The increase in total spending over last year was due primarily to costs
associated with increased staffing and operating expenses of selling,
administrative, and marketing functions, as well as increased advertising and
promotional costs. The allowance for doubtful accounts at April 2, 2000 was
8.4% of accounts receivable, compared to 8.3% at December 31, 1999. The Company
continues to experience strong collection performance. Accounts receivable
balances outstanding over 60 days represented 13.2% of total receivables at
April 2, 2000, up from 9.0% at December 31, 1999. This increase reflects a
growing portion of the Company's business originating in areas where longer
payment terms are customary, including a growing contribution from international
markets as well as large system enterprise sales primarily associated with
Silcon products. Write-offs of uncollectible accounts have historically
represented less than 1% of total net sales. A majority of international
customer balances are covered by receivables insurance.
R&D expenses were $9.3 million or 3.0% of net sales and $9.0 million or 3.2% of
net sales for the first quarters of 2000 and 1999, respectively. The slight
increase in total R&D spending primarily reflects increased numbers of software
and hardware engineers and costs associated with new product development and
engineering support, while the slight decrease as a percentage of sales is
attributable to certain fixed R&D expenses spread over a higher revenue base.
Other Income, Net and Income Taxes
Other income is comprised principally of interest income, which was
substantially higher during the first quarter of 2000 compared to the first
quarter of 1999 due to higher average cash balances available for investment
during the first quarter of 2000.
The Company's effective income tax rates were approximately 29.0% and 29.5% for
the quarters ended April 2, 2000 and March 28, 1999, respectively. The decrease
in the effective tax rate from last year is due to the expected tax savings from
an increasing portion of taxable earnings being generated from the Company's
operations in jurisdictions currently having a lower income tax rate than the
present U.S. statutory income tax rate.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Working capital at April 2, 2000 was $757.4 million compared to $706.0 million
at December 31, 1999. The Company has been able to increase its working capital
position as the result of continued strong operating results and despite
internally financing the capital investment required to expand its operations.
The Company's cash and short term investments position increased to $498.3
million at April 2, 2000 from $456.3 million at December 31, 1999.
Worldwide inventories were $193.1 million at April 2, 2000 compared to $176.5
million at December 31, 1999. The first quarter 2000 inventory build was
primarily related to anticipation of increased demand patterns during the second
half of the year which result from typical seasonal factors. Inventory levels
as a percentage of quarterly sales were 62% in the first quarter of 2000, up
from 45% in the fourth quarter of 1999. This increase was due to the first
quarter 2000 inventory build combined with the typical seasonal decline in net
sales from the fourth quarter to the first quarter of each year.
At April 2, 2000, the Company had $50 million available for future borrowings
under an unsecured line of credit agreement at a floating interest rate equal to
the bank's cost of funds rate plus .625% and an additional $15 million and $7
million under unsecured line of credit agreements with a second and third bank
at similar interest rates. No borrowings were outstanding under these
facilities at April 2, 2000. The Company had no significant financial
commitments, other than those required in the normal course of business, at
April 2, 2000.
Capital investment for the first quarter of 2000 consisted primarily of
manufacturing and office equipment, buildings and improvements, and purchased
software applications. The nature and level of capital spending was made to
improve manufacturing capabilities, principally in the U.S. and the Far East,
and to support the increased marketing, selling, and administrative efforts
necessitated by the Company's growth. Net capital expenditures were financed
from available operating cash. The Company had no material capital commitments,
other than those required in the normal course of business, at April 2, 2000.
The Company has agreements with the Industrial Development Authority of Ireland
("IDA") under which the Company receives grant monies for costs incurred for
machinery, equipment, and building improvements for its Galway and Castlebar
facilities equal to 40% and 60%, respectively, of such costs up to a maximum of
$13.1 million and $1.3 million, respectively. Such grant monies are subject to
the Company meeting certain employment goals and maintaining operations in
Ireland until termination of the respective agreements.
On May 17, 2000, the Company agreed to license worldwide patent rights relating
to uninterruptible power supply technology for a lump-sum cash payment of
$48 million, as more fully described under Part II, Item 1 - Legal Proceedings.
The purchase price is expected to be paid by June 30, 2000 and will be paid from
operating cash. The Company anticipates that the license will be a long-term
asset on the Company's balance sheet at a value to be determined by an
independent economic analysis. In the event that the puchase price exceeds
the value assigned to the license, the difference will be recognized in the
Company's income statement for the second quarter of 2000 as a special charge
to earnings. The capitalized value of the license is expected to be amortized
over the estimated future economic life of the underlying technology.
Management believes that current internal cash flows together with available
cash, available credit facilities or, if needed, the proceeds from the sale of
additional equity, will be sufficient to support anticipated capital spending
and other working capital requirements for the foreseeable future.
Acquisitions
Advance Power
Early in the second quarter of 2000, the Company acquired Advance International
Group subsidiary, Advance Power, a U.K.-based manufacturer of DC-based power
solutions used in telecommunications and Internet applications, for $75 million
in cash. The Company's cash outlays associated with the acquisition were
financed from operating cash. The acquisition will be accounted for as a
purchase and, accordingly, the purchase price will be allocated to the net
tangible and identifiable intangible assets acquired, and Advance Power's
results of operations will be included in the Company's consolidated financial
statements from the date of acquisition.
10
<PAGE>
ABL Electronics Corporation
Early in the second quarter of 2000, the Company acquired privately-held ABL
Electronics Corporation, a North American provider of computer and network
cables, switches, and other connectivity products, for $8 million paid in a
combination of cash and stock. The Company's cash outlays associated with the
acquisition were financed from operating cash. The acquisition will be
accounted for as a purchase and, accordingly, the purchase price will be
allocated to the net tangible and identifiable intangible assets acquired, and
ABL Electronics' results of operations will be included in the Company's
consolidated financial statements from the date of acquisition.
Foreign Currency Activity
The Company invoices its customers in various 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 quarters
of 2000 and 1999.
At April 2, 2000, the Company's unhedged foreign currency accounts receivable,
by currency, were as follows:
<TABLE>
<CAPTION>
In thousands Foreign Currency US Dollars
<S> <C> <C>
Japanese Yen 1,624,047 $15,369
European Euros 15,025 14,282
German Marks 21,663 10,515
British Pounds 5,983 9,543
French Francs 42,461 6,154
Swiss Francs 8,681 5,179
</TABLE>
The Company also had non-trade receivables of 3.3 million Irish Pounds
(approximately US$4.0 million) and liabilities denominated in various European
currencies of US$38.9 million, as well as Yen denominated liabilities of
approximately US$5.7 million.
The Company continually reviews its foreign exchange exposure and considers
various risk management techniques, including the netting of foreign currency
receipts and disbursements, rate protection agreements with customers/vendors
and derivatives arrangements, including foreign exchange contracts. The Company
presently does not utilize rate protection agreements or derivative
arrangements.
Recently Issued Accounting Standard
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin ("SAB") No. 101, which provides guidance on the recognition,
presentation, and disclosure of revenue in financial statements filed with the
Commission. This SAB is effective beginning in the second quarter of 2000, as
provided for in SAB 101A. Compliance with this SAB is not expected to have a
material impact on the Company's consolidated financial position or results of
operations.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative
Instruments and Hedging Activities, which establishes accounting and reporting
standards for derivative instruments, including certain derivative instruments
embedded in other contracts (collectively referred to as derivatives), and for
hedging activities. This Statement is effective for all fiscal quarters of
fiscal years beginning after June 15, 2000, as provided for in SFAS No. 137.
The adoption of this Statement is not expected to have a material impact on the
Company's consolidated financial position or results of operations.
11
<PAGE>
Factors That May Affect Future Performance
Statements contained in this document which are not historical facts may
constitute forward-looking statements as that term is defined under the
provisions of the "safe harbor" section of the Private Securities Litigation
Reform Act of 1995. All forward-looking statements are subject to risks and
uncertainties which could cause actual results to differ from those projected.
The factors that could cause actual results to differ materially include the
following: APC's ability to successfully integrate Advance Power and ABL
Electronic's operations; the timely development and acceptance of new products;
ramp up, expansion, and rationalization of global manufacturing capacity;
general worldwide economic conditions; growth rates in the power protection
industry and related industries, including but not limited to the PC, server,
networking, telecommunications, and enterprise hardware industries; competitive
factors and pricing pressures; changes in product mix; changes in the
seasonality of demand patterns; inventory risks due to shifts in market demand;
the effects of any other possible acquisitions; component constraints and
shortages; risk of nonpayment of accounts receivable; changes in customer order
patterns and product demand related to year 2000 purchasing issues; impact on
the Company's business due to internal systems or systems of suppliers and other
third parties adversely affected by year 2000 problems; the uncertainty of the
litigation process including risk of an unexpected, unfavorable result of
current or future litigation including, without limitation, the pending Anthony
F. Coppola litigation, as more fully described under Part II, Item I - Legal
Proceedings; financial impact during any period of the Company's purchase of the
license to certain patent rights under a worldwide patent license from General
Signal Power Systems; and the risks described from time to time in the
Company's filings with the Securities and Exchange Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company, in the normal course of business, is exposed to market risks
relating to fluctuations in foreign currency exchange rates. The information
required under this section related to such risks is included in the Foreign
Currency Activity section of Management's Discussion and Analysis of Financial
Condition and Results of Operations in Item 2 of this Report and is incorporated
herein by reference.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On or about August 20, 1999, General Signal Power Systems, Inc, former
parent company of Best Power, ("General Signal") filed suit against
the Company in the United States District Court for the Western
District of Wisconsin alleging patent infringement and false
advertising. General Signal sought unspecified damages, costs, fees, and
injunctive relief. During March and April 2000, the court dismissed four of the
five patent infringement claims. On or about May 12, 2000, General Signal
voluntarily dismissed with prejudice the false advertising claims. On May 17,
2000, the parties agreed to the voluntary dismissal of the remaining claim in
the lawsuit with prejudice. In connection with the resolution of this dispute,
the Company agreed to license from General Signal worldwide patent rights
relating to uninterruptible power supply technology for a lump-sum cash payment
of $48 million due to be paid by June 30, 2000.
On or about January 27, 1999, the Company was served with a lawsuit filed by an
individual in the United States District Court for the Central District of
California alleging patent infringement. The plaintiff, Anthony F. Coppola,
claims sole ownership of the patent referenced in the lawsuit. Coppola seeks
unspecified damages, costs, fees, and injunctive relief. On or about April 14,
1999, the Company removed the case from the United States District Court for the
Central District of California to the United States District Court for the
District of Massachusetts. The Company intends to vigorously defend against the
suit and believes the ultimate disposition of this matter will not have a
material adverse effect on the Company's consolidated financial position or
results of operations or liquidity. No provision for any liability that may
result from this action has been recognized in the Company's consolidated
financial statements.
The Company is also involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
Company's consolidated financial position or results of operations or liquidity.
12
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
Exhibit No. 27 - Financial Data Schedule (For SEC EDGAR Filing Only;
Intentionally Omitted)
(B) Reports on Form 8-K
No reports on Form 8-K were filed by American Power Conversion Corporation
during the quarter ended April 2, 2000.
13
<PAGE>
FORM 10-Q
April 2, 2000
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
Date: May 17, 2000
/s/ Donald M. Muir
Donald M. Muir
Chief Financial Officer
(Principal Accounting And Financial Officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED BALANCE SHEET AT APRIL 2, 2000 AND CONSOLIDATED CONDENSED
STATEMENT OF INCOME FOR THE THREE MONTHS ENDED APRIL 2, 2000 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> APR-02-2000
<EXCHANGE-RATE> 1.00
<CASH> 423,307
<SECURITIES> 75,000
<RECEIVABLES> 226,984
<ALLOWANCES> 19,087
<INVENTORY> 193,103
<CURRENT-ASSETS> 948,434
<PP&E> 270,276
<DEPRECIATION> 109,610
<TOTAL-ASSETS> 1,158,649
<CURRENT-LIABILITIES> 191,023
<BONDS> 0
0
0
<COMMON> 1,940
<OTHER-SE> 953,769
<TOTAL-LIABILITY-AND-EQUITY> 1,158,649
<SALES> 309,413
<TOTAL-REVENUES> 309,413
<CGS> 163,444
<TOTAL-COSTS> 249,236
<OTHER-EXPENSES> (6,170)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 66,347
<INCOME-TAX> 19,241
<INCOME-CONTINUING> 47,106
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 47,106
<EPS-BASIC> .24
<EPS-DILUTED> .24
</TABLE>
