Power-One Reports Third Quarter 2009 Results

Power-One, Inc. (NASDAQ: PWER), a leading provider of traditional and renewable energy power conversion and power management solutions, today announced net sales of $100.1 million for the third quarter ended September 27, 2009, an increase of 10% over the second quarter 2009 and a decrease of 29% from the third quarter 2008. Net loss attributable to common shareholders for the third quarter was $2.9 million, or $0.03 per share, compared to $6.8 million, or $0.08 per share in the second fiscal quarter, and a loss of $1.7 million, or $0.02 for the same period last year.

The renewable energy product line continued to gain traction during the quarter, with increased momentum resulting in record sales of $31.1 million for the quarter, an increase of 63% versus $19.1 million in the third quarter of 2008. Power-One’s traditional power product lines generated revenue of $69.0 million, down 43% from $120.9 million in the third quarter 2008; however, backlog from the power product lines increased at the end of the third quarter to $44 million from $37 million at the end of the second quarter of 2009. The Company ended the third quarter 2009 with a 90-day backlog of $84 million. The third quarter 2009 book-to-bill ratio was 1.34, compared to 0.98 in the second quarter of 2009. The book-to-bill ratio for the third quarter for the renewable energy product line was 1.97 and was 1.06 for the power product line.

Gross margin improved to 23.2% in the third quarter of 2009, compared with 21.4% for the same period last year. Continued cost improvements, as well as a favorable product mix, contributed to the expansion in gross margin. Operating income for the third quarter 2009 was $0.9 million. Operating income included $1.4 million in costs from restructuring charges and other expenses related to the closure of the Dominican Republic facility.

Richard Thompson, Chief Executive Officer, commented, “Demand for renewable energy products increased in the quarter and 90-day backlog improved in both the traditional power conversion and renewable energy markets. The increasing demand, coupled with Power-One’s continued cost initiatives, led to higher gross and operating margins. Additionally, the improved operating performance and more efficient balance sheet management lowered our debt position.”

The cash balance at the end of the third quarter was $75.8 million, approximately equal to last quarter, as Power-One continues to reduce its debt and generate positive cash flow. Due to better working capital management in the quarter, inventory decreased to $77.5 million versus $81.4 million in the second quarter of 2009. As part of Power-One’s overall restructuring, the closure of the Dominican Republic facility and other cost-cutting initiatives remain on track.

Mr. Thompson continued, “Overall, our end markets are beginning to show signs of recovery, with customer demand improving for both power and renewable energy products, as indicated by our 90-day backlog.”

Business Outlook

Consistent with prior quarters, the Company is not providing financial guidance for the fourth quarter of 2009.

Earnings Conference Call

Power-One will discuss its 2009 third quarter results today beginning at 2:00 p.m. Pacific Time. The call will be available over the Internet through the Company’s investor relations Web site at www.power-one.com. To listen to the call, please go to the Web site at least 10 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, the webcast will be available on the investor relations section of the Company’s Web site at www.power-one.com throughout the current quarter.

About Power-One

Power-One designs and manufactures energy-efficient power conversion and power management solutions for alternative/renewable energy, routers, data storage and servers, wireless communications, optical networking, medical diagnostics, military, railway controls, semiconductor test equipment, and custom applications. Power-One, with headquarters in Camarillo, CA, has global sales offices, manufacturing, and R&D operations in Asia, Europe, and the Americas. For information on Power-One and its products, visit the Company’s Web site at www.power-one.com.

Safe Harbor Statement

Statements made in this press release may state the Company's or management's beliefs, expectations or predictions for the future and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, regarding anticipated future demand. It is important to note that future demand for the Company’s products could differ materially expectations underlying such forward-looking statements as a result of risks and uncertainties that cannot be predicted or quantified and that are beyond the Company’s control. Important factors that could cause actual results to differ materially include, but are not limited to: economic conditions in general and business conditions in the power supplies and renewable energy markets; foreign exchange rates; the Company’s ability to improve its operational and supply chain efficiencies; competitive factors such as pricing and technology; the timing and results achieved in completing product manufacturing transitions to Company facilities in China or other low-cost locations; the threat of a prolonged economic slowdown or a lengthy or severe recession; continued volatility of the financial markets, the market growth of product sectors targeted by the Company as sectors of focus; and the Company’s ability to increase working capital. Additional information concerning factors that could impact the Company’s performance are described in the Company's reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 from time to time, which are also available through the Company's Website at www.power-one.com or through the SEC's Electronic Data Gathering and Analysis Retrieval System (EDGAR) at www.sec.gov. Power-One undertakes no obligation to publicly update or revise any forward-looking statement.

POWER-ONE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(UNAUDITED)
			Three Months Ended								Nine Months Ended
			September 27,				September 28,				September 27,				September 28,
				2009				2008				2009				2008
	NET SALES		$	100,129			$	140,056			$	289,138			$	407,087
	COST OF GOODS SOLD			76,940				110,127				233,943				325,251
	GROSS PROFIT			23,189				29,929				55,195				81,836
	GENERAL AND ADMINISTRATIVE
	Selling, general and administrative			14,121				18,203				40,960				57,251
	Engineering and quality assurance			7,164				11,157				21,906				34,981
	Amortization of intangibles			385				518				1,159				1,926
	Restructuring costs			655				-				5,668				-
	Goodwill impairment			-				-				56,999				-
	Total expenses			22,325				29,878				126,692				94,158
	INCOME (LOSS) FROM OPERATIONS			864				51				(71,497	)			(12,322	)
	INTEREST AND OTHER INCOME (EXPENSE):
	Interest income			(1	)			197				221				580
	Interest expense			(2,177	)			(2,446	)			(6,513	)			(7,566	)
	Other income (expense), net			688				210				8,984				(2,476	)
	Total interest and other income (expense)			(1,490	)			(2,039	)			2,692				(9,462	)
	INCOME (LOSS) BEFORE INCOME TAXES			(626	)			(1,988	)			(68,805	)			(21,784	)
	PROVISION (BENEFIT) FOR INCOME TAXES			1,510				(82	)			1,104				(282	)
	EQUITY IN EARNINGS FROM JOINT VENTURE			104				205				379				2,253
	NET LOSS		$	(2,032	)		$	(1,701	)		$	(69,530	)		$	(19,249	)
	PREFERRED STOCK DIVIDEND AND ACCRETION			844				-				1,350			-
	NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	(2,876	)		$	(1,701	)		$	(70,880	)		$	(19,249	)
	BASIC INCOME (LOSS) PER SHARE		$	(0.03	)		$	(0.02	)		$	(0.81	)		$	(0.22	)
	DILUTED INCOME (LOSS) PER SHARE		$	(0.03	)		$	(0.02	)		$	(0.81	)		$	(0.22	)
	BASIC AND DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING			88,134				87,770				88,001				87,572

POWER-ONE, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
	(UNAUDITED)
			September 27,				December 28,
				2009				2008
	ASSETS
	CURRENT ASSETS:
	Cash and cash equivalents		$	75,767			$	28,414
	Accounts receivable:
	Trade (net of allowance)			106,161				143,093
	Other			3,175				2,698
	Inventories			77,517				101,608
	Prepaid expenses and other current assets			13,666				11,037
	Total current assets			276,286				286,850
	PROPERTY AND EQUIPMENT, net			49,798				55,381
	INTANGIBLE ASSETS, net			19,200				79,311
	OTHER ASSETS			7,695				7,417
	TOTAL ASSETS		$	352,979			$	428,959
	LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
	Bank credit facilities and notes payable		$	13,093			$	26,949
	Accounts payable			70,323				100,658
	Restructuring reserve			5,365				3,651
	Long-term debt, current portion			221				472
	Other accrued expenses and current liabilities			34,296				26,544
	Total current liabilities			123,298				158,274
	LONG-TERM DEBT, less current portion			74,717				70,425
	OTHER LONG-TERM LIABILITIES			17,117				16,041
	REDEEMABLE CONVERTIBLE PREFERRED STOCK			18,276				-
	STOCKHOLDERS' EQUITY:
	Common stock			88				88
	Additional paid-in capital			621,530				618,255
	Accumulated other comprehensive income			41,252				39,645
	Accumulated deficit			(543,299	)			(473,769	)
	Total stockholders' equity			119,571				184,219
	TOTAL LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' EQUITY		$	352,979			$	428,959

POWER-ONE, INC.
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
(UNAUDITED)
			Three Months Ended								Nine Months Ended
			September 27,				September 28,				September 27,				September 28,
				2009				2008				2009				2008
	Orders		$	134,175			$	121,415			$	300,030			$	425,801
	Sales		$	100,129			$	140,056			$	289,138			$	407,087
	Operating Income (Loss)		$	864			$	51			$	(71,497	)		$	(12,322	)
	Net Loss Attributable to Common Stockholders		$	(2,876	)		$	(1,701	)		$	(70,880	)		$	(19,249	)
	Basic and Diluted Loss Per Share		$	(0.03	)		$	(0.02	)		$	(0.81	)		$	(0.22	)
	Basic and Diluted Weighted Average Shares Outstanding			88,134				87,770				88,001				87,572