Aavid Thermal Technologies, Inc.(the "Company" or
"Aavid"), a leading developer of computational fluid dynamics software
and provider of thermal management solutions, today announced
preliminary and unaudited operating results for its first quarter
ended March 31, 2006. For the first quarter of 2006, the Company's
total sales were $70.8 million, or 16.8% higher than the $60.6 million
in sales for the first quarter of 2005. Sales for the Company's
software subsidiary, Fluent, Inc. ("Fluent"), were $33.3 million, or
11.7 % higher than the $29.8 million in sales reported for the first
quarter of 2005. First quarter sales for the Company's thermal
management products operation ("Aavid Thermalloy") totaled $37.5
million, or 21.9% higher than the $30.8 million in sales reported for
the first quarter of 2005.
The Company's operating income for the first quarter of 2006 was $10.2 million, or 20.2 % higher than the $8.5 million of operating income for the first quarter of 2005. Fluent's operating income was $10.1 million in the first quarter of 2006, or 24.7% higher than the $8.1 million of operating income reported for the first quarter of 2005. Aavid Thermalloy's first quarter operating income was $0.7 million, compared to operating income of $0.4 million reported for the first quarter of 2005. Aavid Thermalloy's operating income in the first quarter in 2006 included approximately $1.2 million of restructuring charges associated with the reduction of manufacturing activities in the U.K. and Canada.
Dr. Bharatan Patel, CEO of ATTI, commented that "Aavid Thermalloy continues to grow and strengthen its position as a leading global supplier of thermal management products for electronics, and I am pleased with the progress it is making." Further, Dr. Patel, who founded Fluent, remarked that "Fluent has grown in revenues and profitability quarter over quarter for more than ten years, and the prospects for continued growth remain strong."
Company depreciation and amortization, including amortization of deferred financing fees and bond discount, for the first quarter of 2006 was $2.3 million, a decrease of $0.2 million from the $2.5 million of depreciation and amortization for the first quarter of 2005. Depreciation and amortization for Fluent was $0.8 million in the first quarter of 2006 which compares with $0.7 million in the first quarter of 2005. Depreciation and amortization for Aavid Thermalloy was $1.0 million in the first quarter of 2006 which compares with $1.4 million reported in the comparable period of 2005. The attached financial schedules further describe the business performance presented in this release.
On February 15, 2006, Aavid Thermal Technologies, Inc. ("ATTI") entered into a definitive merger agreement (the "Merger Agreement") with ANSYS, Inc. ("ANSYS"), ANSYS XL, LLC ("Merger LLC"), a wholly-owned subsidiary of ANSYS, BEN I, Inc., a wholly-owned subsidiary of Merger LLC, HINES II, Inc., a wholly-owned subsidiary of Merger LLC, Heat Holdings Corp. ("Holding"), TROY III, Inc., a wholly-owned subsidiary of ATTI, Fluent Inc. ("Fluent", and together with Holding and ATTI, the "Selling Companies"), and, for certain limited purposes described therein, Willis Stein & Partners II, L.P., Willis Stein & Partners III, L.P., Willis Stein & Partners Dutch, L.P., Willis Stein & Partners Dutch III-A, L.P., Willis Stein & Partners Dutch III-B, L.P., and Willis Stein & Partners III-C, L.P., and Willis Stein & Partners II, L.P., as Stockholders' Representative. Pursuant to the Merger Agreement and through a series of mergers, ANSYS shall acquire directly or indirectly all of the outstanding stock of Holding, ATTI and Fluent. Following the mergers, each of Holding, ATTI and Fluent shall be indirect subsidiaries of ANSYS.
Pursuant to the terms of the Merger Agreement, ANSYS will issue 6,000,000 shares of its common stock and pay approximately $300 million in net cash, subject to certain adjustments at closing, to acquire the Selling Companies. The transaction is valued at approximately $565 million based on the $44.11 per share closing price of ANSYS' common stock on February 15, 2006.
Company Background
Aavid is a leading developer and marketer of computational fluid dynamics ("CFD") software and a global provider of thermal management solutions for electronic products. Each of these businesses has an established reputation for high product quality, service excellence and engineering innovation in its market. CFD software is used in complex computer-generated modeling of fluid flows, heat and mass transfer and chemical reactions. Fluent's CFD software is used in a variety of industries, including the automotive, aerospace, chemical processing, power generation, material processing, electronics and HVAC industries.
Aavid Thermalloy designs, manufactures and distributes on a worldwide basis thermal management products that dissipate unwanted heat, which can degrade system performance and reliability, from microprocessors and industrial electronics products.
Overall, the Company services a highly diversified base of national and international customers including OEMs, distributors, and contract manufacturers through a highly integrated network of software, development, manufacturing, sales and distribution locations throughout North America, Europe, and the Far East.
Additional information on Aavid is available on the World Wide Web at http://www.aatt.com.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
The matters discussed in this release contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and information relating to the Company that is based on the beliefs of the management of the Company, as well as assumptions made by and information currently available to the management of the Company. The words "estimate," "project," "believe," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events, and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. The Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. -0- Aavid Thermal Technologies, Inc. Summary Financial Statements Quarter and Year Ended March 31, 2006 Consolidated Statements of Operations Quarter Ended Quarter Ended March 31, 2006 March 31, 2005 (Unaudited) (Unaudited) (in thousands) Net sales $70,779 $60,578 Cost of goods sold 35,082 29,174 -------------- -------------- Gross profit 35,697 31,404 S,G&A expenses 19,466 18,541 Restructuring charges 1,183 - Research and development 4,894 4,412 -------------- -------------- Operating income 10,154 8,451 Interest expense, net (4,561) (4,578) Other (expense) income, net (22) (367) -------------- -------------- Income before taxes 5,571 3,506 Income tax expense (3,611) (1,764) -------------- -------------- Net income $1,960 $1,742 ============== ============== Consolidated Condensed Balance Sheets March 31, December 31, 2006 2005 (in thousands) (Unaudited) (Historical) ASSETS Cash $37,611 $40,968 Accounts receivable 55,883 53,972 Inventory 14,393 13,132 Property, plant and equipment 25,739 25,669 Goodwill, net 39,433 39,433 Other assets 12,601 11,278 ------------ ------------ Total assets $185,660 $184,452 ============ ============ LIABILITES, MINORITY INTEREST AND STOCKHOLDERS' DEFICIT Accounts payable 24,473 26,292 Accrued expenses 22,356 30,079 Bank debt and capital leases 12,520 12,704 12 3/4% senior subordinated notes 122,938 122,687 Deferred revenue 51,082 44,858 Accrued taxes 10,597 8,345 Deferred taxes 141 187 ------------ ------------ Total liabilities 244,107 245,152 Minority interest in consolidated subsidiaries 585 585 Preferred stock - - Common stock - - Warrants 3,764 3,764 Additional paid in capital 188,007 188,007 Cumulative translation Adjustment (2,283) (2,576) Accumulated Deficit (248,520) (250,480) ------------ ------------ Total stockholders' deficit (59,032) (61,285) Total liabilities, minority interest and stockholders' deficit $185,660 $184,452 ============ ============ Consolidated Condensed Statements of Cash Flows Quarter Ended Quarter Ended Mar 31, Mar 31, 2006 2005 (Unaudited) (Historical) (in thousands) Net Income $1,960 $1,742 Depreciation 1,585 1,768 Amortization and accretion 670 715 Accounts receivable (1,483) 3,047 Inventories (1,147) 928 Accounts payable (2,028) (2,562) Deferred revenue 5,924 3,717 Accrued expenses and other current liabilities (9,078) (8,333) Other operating cash flows 1,709 (103) ------------- ------------- Total cash flows from operations (1,888) 919 ------------- ------------- Purchase of property, plant and equipment (1,153) (901) Proceeds from sale of property 36 29 ------------- ------------- Total cash flows from investing activities (1,117) (872) ------------- ------------- Advances (repayments) under line of credit (113) 452 Advances under other debt obligations - 547 Repayments other debt obligations (493) (642) ------------- ------------- Cash flows from financing activities (606) 357 ------------- ------------- Foreign exchange effect 254 (381) Net increase (decrease) in cash (3,357) 23 Cash at beginning of year 40,968 28,312 ------------- ------------- Cash at end of year $37,611 $28,335 ============= =============
The Company's operating income for the first quarter of 2006 was $10.2 million, or 20.2 % higher than the $8.5 million of operating income for the first quarter of 2005. Fluent's operating income was $10.1 million in the first quarter of 2006, or 24.7% higher than the $8.1 million of operating income reported for the first quarter of 2005. Aavid Thermalloy's first quarter operating income was $0.7 million, compared to operating income of $0.4 million reported for the first quarter of 2005. Aavid Thermalloy's operating income in the first quarter in 2006 included approximately $1.2 million of restructuring charges associated with the reduction of manufacturing activities in the U.K. and Canada.
Dr. Bharatan Patel, CEO of ATTI, commented that "Aavid Thermalloy continues to grow and strengthen its position as a leading global supplier of thermal management products for electronics, and I am pleased with the progress it is making." Further, Dr. Patel, who founded Fluent, remarked that "Fluent has grown in revenues and profitability quarter over quarter for more than ten years, and the prospects for continued growth remain strong."
Company depreciation and amortization, including amortization of deferred financing fees and bond discount, for the first quarter of 2006 was $2.3 million, a decrease of $0.2 million from the $2.5 million of depreciation and amortization for the first quarter of 2005. Depreciation and amortization for Fluent was $0.8 million in the first quarter of 2006 which compares with $0.7 million in the first quarter of 2005. Depreciation and amortization for Aavid Thermalloy was $1.0 million in the first quarter of 2006 which compares with $1.4 million reported in the comparable period of 2005. The attached financial schedules further describe the business performance presented in this release.
On February 15, 2006, Aavid Thermal Technologies, Inc. ("ATTI") entered into a definitive merger agreement (the "Merger Agreement") with ANSYS, Inc. ("ANSYS"), ANSYS XL, LLC ("Merger LLC"), a wholly-owned subsidiary of ANSYS, BEN I, Inc., a wholly-owned subsidiary of Merger LLC, HINES II, Inc., a wholly-owned subsidiary of Merger LLC, Heat Holdings Corp. ("Holding"), TROY III, Inc., a wholly-owned subsidiary of ATTI, Fluent Inc. ("Fluent", and together with Holding and ATTI, the "Selling Companies"), and, for certain limited purposes described therein, Willis Stein & Partners II, L.P., Willis Stein & Partners III, L.P., Willis Stein & Partners Dutch, L.P., Willis Stein & Partners Dutch III-A, L.P., Willis Stein & Partners Dutch III-B, L.P., and Willis Stein & Partners III-C, L.P., and Willis Stein & Partners II, L.P., as Stockholders' Representative. Pursuant to the Merger Agreement and through a series of mergers, ANSYS shall acquire directly or indirectly all of the outstanding stock of Holding, ATTI and Fluent. Following the mergers, each of Holding, ATTI and Fluent shall be indirect subsidiaries of ANSYS.
Pursuant to the terms of the Merger Agreement, ANSYS will issue 6,000,000 shares of its common stock and pay approximately $300 million in net cash, subject to certain adjustments at closing, to acquire the Selling Companies. The transaction is valued at approximately $565 million based on the $44.11 per share closing price of ANSYS' common stock on February 15, 2006.
Company Background
Aavid is a leading developer and marketer of computational fluid dynamics ("CFD") software and a global provider of thermal management solutions for electronic products. Each of these businesses has an established reputation for high product quality, service excellence and engineering innovation in its market. CFD software is used in complex computer-generated modeling of fluid flows, heat and mass transfer and chemical reactions. Fluent's CFD software is used in a variety of industries, including the automotive, aerospace, chemical processing, power generation, material processing, electronics and HVAC industries.
Aavid Thermalloy designs, manufactures and distributes on a worldwide basis thermal management products that dissipate unwanted heat, which can degrade system performance and reliability, from microprocessors and industrial electronics products.
Overall, the Company services a highly diversified base of national and international customers including OEMs, distributors, and contract manufacturers through a highly integrated network of software, development, manufacturing, sales and distribution locations throughout North America, Europe, and the Far East.
Additional information on Aavid is available on the World Wide Web at http://www.aatt.com.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995
The matters discussed in this release contain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and information relating to the Company that is based on the beliefs of the management of the Company, as well as assumptions made by and information currently available to the management of the Company. The words "estimate," "project," "believe," "anticipate," "intend," "expect," and similar expressions are intended to identify forward-looking statements. Such statements reflect the current views of the Company with respect to future events, and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. The Company does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. -0- Aavid Thermal Technologies, Inc. Summary Financial Statements Quarter and Year Ended March 31, 2006 Consolidated Statements of Operations Quarter Ended Quarter Ended March 31, 2006 March 31, 2005 (Unaudited) (Unaudited) (in thousands) Net sales $70,779 $60,578 Cost of goods sold 35,082 29,174 -------------- -------------- Gross profit 35,697 31,404 S,G&A expenses 19,466 18,541 Restructuring charges 1,183 - Research and development 4,894 4,412 -------------- -------------- Operating income 10,154 8,451 Interest expense, net (4,561) (4,578) Other (expense) income, net (22) (367) -------------- -------------- Income before taxes 5,571 3,506 Income tax expense (3,611) (1,764) -------------- -------------- Net income $1,960 $1,742 ============== ============== Consolidated Condensed Balance Sheets March 31, December 31, 2006 2005 (in thousands) (Unaudited) (Historical) ASSETS Cash $37,611 $40,968 Accounts receivable 55,883 53,972 Inventory 14,393 13,132 Property, plant and equipment 25,739 25,669 Goodwill, net 39,433 39,433 Other assets 12,601 11,278 ------------ ------------ Total assets $185,660 $184,452 ============ ============ LIABILITES, MINORITY INTEREST AND STOCKHOLDERS' DEFICIT Accounts payable 24,473 26,292 Accrued expenses 22,356 30,079 Bank debt and capital leases 12,520 12,704 12 3/4% senior subordinated notes 122,938 122,687 Deferred revenue 51,082 44,858 Accrued taxes 10,597 8,345 Deferred taxes 141 187 ------------ ------------ Total liabilities 244,107 245,152 Minority interest in consolidated subsidiaries 585 585 Preferred stock - - Common stock - - Warrants 3,764 3,764 Additional paid in capital 188,007 188,007 Cumulative translation Adjustment (2,283) (2,576) Accumulated Deficit (248,520) (250,480) ------------ ------------ Total stockholders' deficit (59,032) (61,285) Total liabilities, minority interest and stockholders' deficit $185,660 $184,452 ============ ============ Consolidated Condensed Statements of Cash Flows Quarter Ended Quarter Ended Mar 31, Mar 31, 2006 2005 (Unaudited) (Historical) (in thousands) Net Income $1,960 $1,742 Depreciation 1,585 1,768 Amortization and accretion 670 715 Accounts receivable (1,483) 3,047 Inventories (1,147) 928 Accounts payable (2,028) (2,562) Deferred revenue 5,924 3,717 Accrued expenses and other current liabilities (9,078) (8,333) Other operating cash flows 1,709 (103) ------------- ------------- Total cash flows from operations (1,888) 919 ------------- ------------- Purchase of property, plant and equipment (1,153) (901) Proceeds from sale of property 36 29 ------------- ------------- Total cash flows from investing activities (1,117) (872) ------------- ------------- Advances (repayments) under line of credit (113) 452 Advances under other debt obligations - 547 Repayments other debt obligations (493) (642) ------------- ------------- Cash flows from financing activities (606) 357 ------------- ------------- Foreign exchange effect 254 (381) Net increase (decrease) in cash (3,357) 23 Cash at beginning of year 40,968 28,312 ------------- ------------- Cash at end of year $37,611 $28,335 ============= =============