Power-One CEO Discusses Q3 2010 Results - Earnings Call Transcript

Power-One CEO Discusses Q3 2010 Results - Earnings Call Transcript
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Power One Inc (

PWER

)

Q3 2010 Earnings Call

October 28, 2010 5:00 p.m. ET

Executives

Kevin Trosian – Vice President, Investor Relations

Richard Thompson – President and Chief Executive Officer

Gary R. Larsen – Senior Vice President, Finance, and Chief Financial Officer

Analysts

Colin Rush – Think Equity

Bill Ong – Merriman & Company

Jessie Hitchel

Steve Sanders

Joe Maxa – Dougherty & Company

Bryce Dyl [ph]

Eric Stein

Walter Nasdeo – Ardour Captial

Carter Driscoll

Presentation

Operator

Good day Ladies and Gentlemen, and welcome to your Q3 2010 Power-One Earnings Conference Call. (Operator Instructions)

And now I’d like to introduce your host today, Kevin Trosian, Vice President of Investor Relations.

Name

Kevin Trosian

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» Power-One Inc., Q2 2010 Earnings Call Transcript
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» Power-One Inc. Q1 2009 Earnings Call Transcript

Good afternoon everyone, and thank you for joining us today to discuss Power-One’s 2010 Third Quarter Results. Joining me today are Richard Thompson, Chief Executive Officer, and Gary Larsen, Chief Financial Officer.

By now, you should have received a copy of today’s press release. If not, it is available on the company’s website at

www.power-one.com

.

Before we begin, I would like to remind you that this conference call may contain forward-looking statements reflecting Power-One’s use of future events, projections, or expectations. Any such forward-looking statements may deal with or include matters which involve risks and uncertainties. Power-One’s actual results may differ materially from those results as discussed, or information provided in the forward-looking statements. We refer you to the company’s reporting documents as filed with the SEC for a discussion of the risk factors that may have a material impact on results. Today’s call may also contain historical non-GAAP financial measures.

Additionally, in adherence with Regulation FD, we have opened up this call so that all interested investors are free to listen in. The press release in this conference call will be our only forum to answer questions regarding our estimated performance going forward.

Consequently, should you have any questions regarding our estimates of sales and profits, or other financial matters for the upcoming quarter, as well as how they may affect our income statement models and balance sheet, this is the time that we are able to respond to these questions.

I will now turn the call over to Richard Thompson, the company’s Chief Executive Officer. Please go ahead, Rich.

Richard Thompson

Thank you Kevin. I will begin today’s call with an overview of Power-One’s third quarter performance, provide some metrics and insight into our SBU’s, and discuss how the company is positioned to continue taking global market share while driving increasing cash flow.

After my remarks, Gary Larsen, our Chief Financial Officer, will provide greater detail on the financial statements, including results for the quarter and guidance. We will then answer your questions.

Let me begin by highlighting a few of our key accomplishments this quarter. First, we achieved record profitability posting over $100 million in EBITDA, and $63 million in net income, and $0.40 in earnings per share.

Second, we moved into second place for global and invertor market share as measured by IMS up from ninth place in 2008. These gains were driven by our product yield, technology, reliability, and customer service. For the quarter, we shipped 867 megawatts of inverters. And 1.7 gigawatts year-to-date.

Third, the Power Solutions SBU is near breakeven as we continue to improve our supply chain, and rationalize cost.

And fourth, consistent with goals discussed in prior calls, we launched facilities in the United States and Canada as we’re expanding our geographic footprint. Combined with our China facilities, these locations will provide up to 2 gigawatts of capacity in 2011 for Power-One.

In the third quarter, we executed a number of strategic goals that position the company for the long term profitable growth. These include our acquisition of the assets of Fat Spaniel technology, the launch of our U.S. invertor products, the opening of our facilities in Arizona and Canada, and the continued build out of our service footprint. In particular, the Fat Spaniel acquisition and the growth of our service business enhance our product offerings as we increase the value of the invertor and Power-One to our end customers. Our strategy is simply to create more value add to our customers from the panel to grid connection, and to reduce their total cost of ownership.

First, let me begin by highlighting the value that Fat Spaniel brings to Power-One and our customers. By integrating Fat Spaniel software with our products, we are providing our customers with another tool to drive improved yield permanently renewable energy assets.

Further, our customers, who include utilities, EPC’s, PPA’s, and large commercial owners, view the invertor as a value added and critical component in the solar array. The technology we purchased increases the control the invertor provides while at the same time adding improved communication and management features.

Not only does the Fat Spaniel software gather data and provide alerts to the user, it also offers predictive capabilities, monitoring, security, compliance, and other features that dovetail nicely with our enhanced service offering, which I will describe in a moment.

Second, as many of you at Solar Power International Show in Los Angeles saw, we launched our string and central invertors for the North American markets. We view the U.S. and the Canadian markets as critical to our geographic expansion, which is why we’ve already begun manufacturing in Canada, and will roll our first products off the Arizona lines this quarter. We believe our products, proven successful overseas, will enhance and will enable us to effectively penetrate the market in our own back yard.

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