EX-99.1 2 at1961ex991.htm

Exhibit 99.1

Message

Company Contacts

 

Richard Thompson

Pamela Rembaum

Chief Financial Officer

Director, Investor Relations

(561) 451-1000

(561) 451-1028

Artesyn Reports Fourth Quarter Revenue of $120 Million
And Quarterly Earnings of $0.12 Per Share

Boca Raton, Fla., February 3, 2005 - - Artesyn Technologies, Inc. (Nasdaq: ATSN) today reported financial results for the fourth quarter and fiscal year ended December 31, 2004.

Sales for the fourth quarter of 2004 were $120.4 million, a 21% increase from the $99.3 million reported in the fourth quarter last year. Net income for the fourth quarter of 2004 was $5.3 million, or $0.12 per share, compared to net income of $1.2 million, or $0.03 per share, for the fourth quarter of 2003.

For the year ended December 31, 2004, Artesyn reported sales of $429.4 million, a 20% increase from fiscal year 2003 revenues of $356.9 million. Net income for fiscal year 2004 was $13.9 million, or $0.34 per share, compared to a net loss of $15.6 million, or $(0.40) per share, for fiscal year 2003.

Total orders received during the fourth quarter of 2004 were $115.3 million, yielding a book-to-bill ratio of 0.96, which is within the Company’s typical range and slightly above last quarter’s ratio. Backlog at the end of the year was $87.0 million with approximately 95% shippable during the first quarter 2005. For the fourth quarter of 2004, Artesyn reported 19 major design wins which Artesyn estimates will realize lifetime revenues of approximately $329 million.  For the year, 82 major design wins were awarded which the Company estimates will generate nearly $700 million of lifetime revenues.

Commenting on the quarter, Artesyn’s Chairman and CEO, Joe O’Donnell noted, “We are pleased with the quarter’s solid results. Demand for power and embedded systems was strong across our IT and wireless end markets. As anticipated, gross margins of 25.8% during the fourth quarter reached our expectations set at the beginning of the year.”

Artesyn’s commitment to investing in new technologies and product development continued during the quarter with more than $10 million spent on R&D. New product announcements included the world’s first 200W, fully regulated non-intermediate bus converter series of quarter-brick DC/DC converters from our Typhoon™ family of products. Additionally, a remotely configurable point-of-load converter with a built-in I2C bus interface was introduced into the market. This converter simplifies set-up and control and enables an open-architecture for digital control.

The Company is an advocate of open architecture systems to support customers seeking ways to improve time to market and streamline their costs and standard platforms. Utilizing open architectures offer the most effective alternatives. Within the power conversion division, Artesyn led the formation, along with a number of power supply and semiconductor companies, of the Power Management Bus (PMBus) coalition. The objective of this group of market leaders is to develop and support a new open communications standard for power systems control within a digital control framework. The protocol is nearing completion and products should be introduced during the first half of 2005. Artesyn’s embedded systems business is also a supporter of open architectures as seen by the significant investments in AdvancedTCA® - the new industry standard for next generation telecommunications equipment.


Turning to the results for fiscal 2004, Mr. O’Donnell commented, “At the beginning of the year, we outlined to our investors objectives for 2004. These objectives were to increase profitability, grow market share, enter new communication market segments and continue our industry leading position in technology. As of year-end, each of the objectives was achieved. Each quarter was profitable and had incremental growth in net earnings and revenue during the year. Top line growth was a result of growing market share at our current customer base, adding new customers and product segments – as in rectifiers, amplifiers and site solutions. Finally, our ongoing commitment to R&D investments of nearly 10% of sales gives our customers the ability to choose from a large breadth of innovative new products. During 2004, a total of 68 new product models were released including 31 POL modules.”

“As fiscal year 2005 begins, we continue to be optimistic in the rebound and growth of our target sectors within communications and look forward to continued growth of our market leading position in both power conversion and embedded systems solutions. We expect revenue growth between 15% and 20% during the year, with the first quarter historically being our slowest quarter of the year, yet still resulting in strong year-over-year growth. We anticipate that gross margins will improve modestly during 2005 and intend to maintain R&D investments near 10% of sales. With cash and short-term investments of $106 million at year-end, we are excited at the growth opportunities for Artesyn during 2005,” concluded Mr. O’Donnell.

Conference Call Information
A conference call will be held at 8:30 a.m. Eastern Time on today’s date to discuss the information in this release. Investors may listen by either calling 800-711-4000 or over the Internet at www.artesyn.com. The webcast will be available for replay immediately following the conference call. For further information on the call, please call the Company at 561-451-1000.

About Artesyn Technologies, Inc.
Artesyn Technologies, Inc., headquartered in Boca Raton, FL., is a world leader in the design, manufacture and sale of power conversion and embedded board solutions for infrastructure applications in server and storage, wireless and telecommunications systems. Our products are used in middle to high-end servers, data storage devices, routers, hubs, high-speed modems, RF amplification systems, base station controllers and transceivers. The Company has a global sales reach with design and manufacturing facilities in Asia, Europe and North America. Artesyn is a public company whose common stock is traded on the Nasdaq stock market under the symbol ATSN. For more information, please visit the Company’s web site at www.artesyn.com.

Use of Non-GAAP Financial Measures
To supplement the Company’s financial statements presented on a GAAP basis, Artesyn uses non-GAAP financial measures to give the reader a clearer picture of Artesyn’s current operating performance from management’s perspective. These non-GAAP financial measures include EBITDA. This measure is not recognized for US GAAP financial statement presentation and, as required, reconciliations to GAAP are provided after the written portion of this release.

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Cautionary Statement About Forward-Looking Statements
This release contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve certain risks and uncertainties.  Readers are cautioned that these forward-looking statements may differ materially from actual future events or results. These risks and uncertainties are identified within Artesyn’s periodic filings with the United States Securities and Exchange Commission, specifically the most recent reports on Form 10-K, filed on March 10, 2004, Forms 10-Q, 8-K and other filings. Some of these risk factors include, but are not limited to, fluctuations in end-market demand, risks associated with consolidating our global manufacturing operations and production in foreign locations, ability to meet increasing technology demands, market acceptance of existing and new products, dependence on a relatively small number of customers, dependence on and volatility of foreign sales, the potential for fluctuations in operating results and general technological changes which may render our existing products uncompetitive or obsolete, and changes in accounting practices and policies including expensing of share-based compensation.  Any forward-looking statement made in this release is made as of the date of this release and Artesyn assumes no obligation to update any such forward-looking statement. For a more detailed discussion of such risks and uncertainties, the Company strongly encourages you to review such filings, which are readily available at no charge on a number of commercial web sites including www.sec.gov and at www.freeEDGAR.com.

Artesyn Technologies, Inc.
Financial Highlights
(In Thousands Except per Share Data)
(Unaudited)

 

 

Quarter Ended

 

Fiscal Year Ended

 

 

 

 

 

 

 

Dec. 31,
2004

 

Dec. 26,
2003

 

Dec. 31,
2004

 

Dec. 26,
2003

 

 

 

 

 

 

 

Orders

 

$

115,331

 

$

106,984

 

$

429,661

 

$

370,881

 

 

 

 

 

 

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

Power Conversion

 

 

96,573

 

 

87,392

 

 

354,625

 

 

314,412

 

Communications Products

 

 

23,793

 

 

11,945

 

 

74,764

 

 

42,459

 

 

 

 

 

 

 

Total

 

 

120,366

 

 

99,337

 

 

429,389

 

 

356,871

 

Operating income (loss)

 

 

8,002

 

 

2,706

 

 

22,640

 

 

(9,584

)

Depreciation and amortization

 

 

5,726

 

 

5,441

 

 

22,275

 

 

22,937

 

 

 

 

 

 

 

EBITDA

 

 

13,728

 

 

8,147

 

 

44,915

 

 

13,353

 

 

 

 

 

 

 

Net Income (Loss)

 

$

5,268

 

$

1,236

 

$

13,873

 

$

(15,622

)

 

 

 

 

 

 

Earnings (Loss) Per Share - Diluted

 

$

0.12

 

$

0.03

 

$

0.34

 

$

(0.40

)

 

 

 

 

 

 

3


Artesyn Technologies, Inc.
Condensed Consolidated Statements of Operations
(In Thousands Except per Share Data)
(Unaudited)

 

 

Quarter Ended

 

Year Ended

 

 

 

 

 

 

 

Dec 31,
2004

 

Dec 26,
2003

 

Dec 31,
2004

 

Dec 26,
2003

 

 

 

 

 

 

 

Sales

 

$

120,366

 

$

99,337

 

$

429,389

 

$

356,871

 

Cost of Sales

 

 

89,314

 

 

77,057

 

 

319,757

 

 

287,617

 

 

 

 

 

 

 

Gross Profit

 

 

31,052

 

 

22,280

 

 

109,632

 

 

69,254

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

12,678

 

 

10,067

 

 

45,851

 

 

38,898

 

Research and development

 

 

10,372

 

 

8,932

 

 

41,141

 

 

34,329

 

Restructuring and other charges

 

 

—  

 

 

575

 

 

—  

 

 

5,611

 

 

 

 

 

 

 

Total Operating Expenses

 

 

23,050

 

 

19,574

 

 

86,992

 

 

78,838

 

 

 

 

 

 

 

Operating Income (Loss)

 

 

8,002

 

 

2,706

 

 

22,640

 

 

(9,584

)

Debt Extinguishment Expense

 

 

—  

 

 

—  

 

 

—  

 

 

(3,723

)

Interest Expense, Net

 

 

(1,312

)

 

(1,301

)

 

(5,004

)

 

(4,469

)

 

 

 

 

 

 

Income (Loss) Before Income Taxes

 

 

6,690

 

 

1,405

 

 

17,636

 

 

(17,776

)

Provision (Benefit) for Income Taxes

 

 

1,422

 

 

169

 

 

3,763

 

 

(2,154

)

 

 

 

 

 

 

Net Income (Loss)

 

$

5,268

 

$

1,236

 

$

13,873

 

$

(15,622

)

 

 

 

 

 

 

Earnings (Loss) Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.13

 

$

0.03

 

$

0.35

 

$

(0.40

)

 

 

 

 

 

 

Diluted

 

$

0.12

 

$

0.03

 

$

0.34

 

$

(0.40

)

 

 

 

 

 

 

Weighted Average Common and Common Equivalent Shares Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

39,270

 

 

38,744

 

 

39,093

 

 

38,678

 

Diluted

 

 

51,403

 

 

39,522

 

 

51,140

 

 

38,678

 

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Artesyn Technologies, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)
(Unaudited)

 

 

December 31,
 2004

 

December 26,
2003

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and equivalents

 

$

84,811

 

$

94,215

 

Investments

 

 

21,125

 

 

—  

 

Accounts receivable, net

 

 

61,352

 

 

54,196

 

Inventories, net

 

 

50,320

 

 

44,047

 

Prepaid expenses and other current assets

 

 

1,380

 

 

2,753

 

Deferred income taxes, net

 

 

9,137

 

 

11,526

 

 

 

 

 

Total current assets

 

 

228,125

 

 

206,737

 

 

 

 

 

Property, Plant & Equipment, Net

 

 

66,124

 

 

64,210

 

 

 

 

 

Other Assets

 

 

 

 

 

 

 

Goodwill

 

 

22,107

 

 

20,806

 

Deferred income taxes

 

 

4,155

 

 

19,211

 

Other assets

 

 

21,128

 

 

5,712

 

 

 

 

 

Total other assets

 

 

47,390

 

 

45,729

 

 

 

 

 

Total Assets

 

$

341,639

 

$

316,676

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Accounts payable

 

$

54,958

 

$

47,994

 

Accrued and other current liabilities

 

 

52,838

 

 

49,224

 

 

 

 

 

Total current liabilities

 

 

107,796

 

 

97,218

 

 

 

 

 

Long-Term Liabilities

 

 

 

 

 

 

 

Convertible subordinated debt

 

 

90,000

 

 

90,000

 

Deferred income taxes

 

 

5,598

 

 

5,693

 

Other long-term liabilities

 

 

4,269

 

 

9,728

 

 

 

 

 

Total long-term liabilities

 

 

99,867

 

 

105,421

 

 

 

 

 

Total liabilities

 

 

207,663

 

 

202,639

 

Shareholders’ Equity

 

 

133,976

 

 

114,037

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

341,639

 

$

316,676

 

 

 

 

 

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