Power-One Inc. announced net sales of $64.3 million and net income was $3.4 million, or $0.04 per diluted share, including a gain on the sale of certain Company assets of $0.03 per diluted share and $0.01 per share of income due to foreign exchange for the quarter ended December 31, 2005. While meeting the net income goal for the quarter, revenue came in under forecast primarily due to customer forecast shortfalls in the Company's power systems business. The Company believes that the realignment of its cost structure has solidly positioned it for future sales and earnings growth.
For the fiscal year ended December 31, 2005, net sales were $261.6 million with a net loss of $0.45 per share, compared with net sales of $280.3 million and a net loss of $0.25 per share during fiscal 2004. The focus on restructuring operations and realignment of the cost structure during the first half of 2005 contributed substantially to the Company's profitability in the second half of 2005.
For fiscal year 2006, the Company expects revenue growth in the low double-digits levels, which includes a revenue ramp-up projected to follow from significant design wins secured during 2005. The success of 2005's design wins, new opportunities supporting storage/server customers, growth in the power systems market and the adoption of Z-One™ digital power management products should all contribute to the Company's significant growth opportunities.
"We are excited about our prospects for sales growth and profitability in 2006. With our restructuring behind us, we have turned our focus on expanding sales relationships with new and existing customers," said Steve Goldman, Chairman of Power-One. "With the accelerating revenue anticipated from new customers this year, we expect to exit fiscal 2006 with at least two new top-five customers representing incremental sales and with increased market share due to the design wins over the past 18 months.
"In recognition of the success of both the restructuring and the design wins and sales efforts over the past year, the Company is pleased to announce some exciting changes to its organizational structure. In order to better address growing market demands, we will now separate the roles of Chairman and Chief Executive Officer. Effective immediately, Bill Yeates, our current Chief Operating Officer, will become Chief Executive Officer. Additionally, Brad Godfrey will become Chief Operating Officer. I will remain as Chairman of the Board and remain very active in the Company's overall strategy and in the area of mergers/acquisitions."
Mr. Yeates added, "Having recently restructured the business and lowered our cost structure, we look forward to delivering profitable results to our shareholders over the coming year. Last year was painful for our entire industry and it forced Power-One to become a better company in many respects. We executed extremely well on the cost side of the equation with a tremendous focus on restructuring and we are looking at 2006 as the entry point into what we expect to be a growth cycle for both our traditional and digital business lines. Design win activity continues to be strong across all of our business lines, and our exceptional portfolio of intellectual property continues to grow and keep us technologically ahead of the competition. Our current portfolio of patents either issued or applied for now consists of over 25 patents in the area of digital power for electrical, circuit and system patents, and more are coming. We continue to aggressively defend our valuable IP portfolio with our lawsuit against Artesyn and Silicon Labs. We are also now capturing Z-One design wins with some of our Top 10 customers, and are approaching 50 design wins in total for the Company. In summary, costs are definitely under control; we have significant new customers in new markets; and we are capturing design wins in both traditional and Z-One digital power -- 2006 looks to be a great year."
For 2006, the Company expects revenue to increase 10% to 15% over fiscal 2005 revenue with sales and profitability accelerating throughout the year. For the first quarter of 2006, which has historically been a soft season in the telecom power systems market, the Company anticipates that net sales will be in the range of $65 million to $68 million. The Company expects approximately breakeven net results.
