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AVX Corporation Announces Second Quarter Results

MYRTLE BEACH, S.C.--(BUSINESS WIRE)--AVX Corporation (NYSE: AVX):

Quarter highlights:

* Revenue increased $17.5 million, or 4.6%, to $400.7 million compared to the previous quarter and also increased $26.1 million, or 7.0%, over the same quarter last year.
* Non-GAAP diluted earnings per share, excluding special charges, were $0.23 per diluted share compared to earnings per share of $0.22 in the same quarter last year.
* Dividends of $6.9 million, or $0.04 per share, were paid during the current quarter.
* Completed the acquisition of American Technical Ceramics Corp. (“ATC”) on September 25, 2007.

AVX today reported that net sales for the quarter ended September 30, 2007 were $400.7 million which represents a 7.0% increase over the same quarter last year and a 4.6% increase over the previous quarter. Net income excluding special charges was $39.3 million, or $0.23 per diluted share, compared to $38.8 million, or $0.22 per diluted share for the same quarter last year. On a U.S. GAAP basis (including special charges), net income was $37.4 million, or $0.22 per diluted share for the current quarter.

Management believes that in order to better understand its short-term and long-term financial trends, investors may find it useful to consider results excluding special charges related to the estimated write off of in-process research and development (“IPR&D”) in connection with the acquisition of ATC, and other operations’ restructuring charges for headcount reductions. Management believes that the resulting non-GAAP financial measure provides useful information to investors regarding the underlying business trends and performance of the Company’s ongoing operations and is useful for period over period comparisons of such operations. Management eliminates such charges when evaluating the operating performance of the Company. Investors should consider the non-GAAP measure in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition, the non-GAAP financial measure may not be the same as similar measures presented by other companies. Detail of the Company’s non-GAAP measure is provided in the table below.
(unaudited)
(in thousands, except per share data)

Three Months Ended
September 30,
Six Months Ended
September 30,
2006 2007 2006 2007
Net Sales (GAAP) $ 374,648 $ 400,706 $ 741,056 $ 783,864

Excluding special charges (Non-GAAP)
Special charges
Restructuring (after tax) $ - $ 1,439 $ - $ 1,552
IPR&D (after tax) $ - $ 390 $ - $ 390
Net Income $ 38,785 $ 39,270 $ 75,018 $ 78,542
Diluted income per share $ 0.22 $ 0.23 $ 0.43 $ 0.46

Including special charges (GAAP)
Net income $ 38,785 $ 37,441 $ 75,018 $ 76,600
Diluted Income per share $ 0.22 $ 0.22 $ 0.43 $ 0.44

Chief Executive Officer and President, John Gilbertson stated, "Revenues for the quarter exceeded $400 million for the first time since the fourth quarter of fiscal 2001 during the tech boom. Revenue increases over the same quarter in the prior year and over the previous quarter continue to be driven by increased end-user demand in the expanding electronics marketplace.”

On September 25, 2007, the Company acquired by merger all of the outstanding capital stock of ATC in exchange for approximately $231 million in cash, plus related transaction costs. ATC designs, develops, manufactures and markets electronic components, including ceramic multilayer capacitors, custom thin film circuits and resistive products. ATC's products are utilized in a broad range of commercial and military applications, including wireless infrastructure, fiber optics, medical electronics, semiconductor manufacturing equipment and satellite equipment. ATC has manufacturing facilities and sales offices in New York, manufacturing and research and development facilities in Florida, and sales offices in Sweden and China.

Commenting on the Company’s acquisition, John Gilbertson went on to state, “We believe that the addition of ATC will enhance our Advanced product group with offerings of additional components for our end-user’s sophisticated electronic needs.”

The Company incurred an estimated charge of $0.4 million in the current quarter related to the write off of IPR&D, included in its GAAP financial statements, related to the acquisition of ATC.

In addition, the Company incurred restructuring charges of $2.1 million related to other operations’ headcount reductions as we continue to realign production capability.

AVX, headquartered in Myrtle Beach, South Carolina, is a leading manufacturer and supplier of a broad line of passive electronic components and related products.

Please visit our website at www.avx.com.