EX-99 2 at4729ex99.htm EXHIBIT 99

Exhibit 99

Message

Artesyn Reports Fourth Quarter and Fiscal 2005 Financial Results

          BOCA RATON, Fla., Feb. 7 /PRNewswire-FirstCall/ -- Artesyn Technologies, Inc. (Nasdaq: ATSN) today reported financial results for the fourth quarter and year ended December 30, 2005.

          Sales for the fourth quarter of 2005 were $112.2 million compared to $120.4 million for the corresponding quarter in 2004. Net income for the fourth quarter of 2005 was $3.9 million, or $0.09 per share, compared to net income of $5.3 million, or $0.12 per share for the fourth quarter of 2004.

          For the year ended December 30, 2005, Artesyn reported sales of  $424.7 million compared to $429.4 million for fiscal year 2004. Net income for fiscal year 2005 was $9.9 million, or $0.25 per share, compared to net income of $13.9 million, or $0.34 per share, for fiscal year 2004. Included in net income for fiscal year 2005 are restructuring charges of $3.7 million, or $0.08 per share net of tax.

          Total orders received during the fourth quarter were $115.2 million, yielding a book-to-bill ratio of 1.03. Backlog at the end of the quarter was $84.8 million, with approximately 93% shippable during the first quarter of 2006.  In the fourth quarter of 2005, Artesyn had 27 major design wins that the Company estimates will realize approximately $206 million in lifetime project revenues.  For the year, the Company was awarded 107 design wins that are estimated to generate $965 million of lifetime revenues.

          The Company incurred additional expenses during the quarter related to inventory and merger activities.  A provision of approximately $1.0 million was recorded for inventory not in compliance with the Restriction of Hazardous Substances (RoHS) requirement for products used throughout the European Union. Merger-related expenses for the quarter were approximately $0.9 million. These combined expenses, net of tax, represent $0.03 per share. The Company also realized a net tax benefit of $1.7 million, or $0.03 per share, from the reversal of tax contingencies no longer required.

          During the quarter, it was determined that certain costs previously classified within cost of sales, are more appropriately classified as research and development costs, included within operating expenses.  Accordingly, in the fourth quarter of 2005, $2.7 million was reclassified as research and development costs that related to the first three quarters of 2005. To conform to the 2005 presentation, a reclassification was made for approximately $0.9 million and $3.2 million for the respective quarterly and annual periods in 2004.


          Business Segment Results

          Power Conversion

          Fourth quarter sales for the Power Conversion segment were $87.8 million compared to $96.6 million for the fourth quarter of 2004. The decline in sales is primarily from older programs in the server division going end of life during 2005. Lower sales in this segment, the RoHS related inventory provision of approximately $1.0 million and operating inefficiencies of approximately $1.0 million, related to the closure of the manufacturing facility in Hungary, resulted in an operating loss of $0.4 million compared to operating income of $4.1 million for the same period last year.

          Embedded Systems

          Fourth quarter sales for the Embedded Systems segment were $24.5 million compared to $23.8 million for the fourth quarter of 2004. The improvement in sales is primarily from the realization of revenue from large wireless infrastructure customers supplying 3G deployments and carrier upgrades in North America.  As a result of higher sales, operating income was $8.6 million for the fourth quarter compared to $7.7 million for the same period last year.

          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, networking, wireless and telecommunications systems. The Company’s 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 http://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, which management believes is appropriate to enhance the overall understanding of Artesyn’s past financial performance. These measures are not recognized for US GAAP financial statement presentation and, as required, reconciliations to GAAP are provided in the financial highlights after the written portion of this release.


          Cautionary Statement About Forward-Looking Statements

          Statements in this press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that these forward-looking statements involve certain risks and uncertainties and may differ materially from actual future events or results. Undue reliance should not be placed on such forward-looking statements. Certain risks and uncertainties are identified in Artesyn’s periodic filings with the United States Securities and Exchange Commission, specifically the most recent annual report on Form 10-K, filed on March 16, 2005. Some of these risk factors include, but are not limited to, operating in a volatile, competitive industry characterized by rapidly changing prices, technologies and demands associated with global manufacturing in foreign locations, dependence on a relatively small number of customers, dependence on and volatility of foreign sales, and technological changes which may render our existing products uncompetitive or obsolete.  Any forward-looking statement made in this release is made as of the date of this release and should not be relied upon as representing our estimates as of any subsequent date. Artesyn assumes no obligation to update any such forward-looking statements. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change. For a more detailed discussion of such risks and uncertainties, the Company strongly encourages you to review its SEC filings.

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

 

 

Quarter Ended

 

Fiscal Year Ended

 

 

 

 

 

 

 

Dec. 30,
2005

 

Dec. 31,
2004

 

Dec. 30,
2005

 

Dec. 31,
2004

 

 

 

 

 

 

 

Orders

 

$

115,217

 

$

115,331

 

$

422,487

 

$

429,661

 

Capital Expenditures

 

 

2,857

 

 

3,700

 

 

12,597

 

 

22,140

 

Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

Power Conversion

 

 

87,773

 

 

96,573

 

 

346,440

 

 

354,625

 

Embedded Systems

 

 

24,459

 

 

23,793

 

 

78,261

 

 

74,764

 

Total

 

 

112,232

 

 

120,366

 

 

424,701

 

 

429,389

 

Operating income

 

 

4,047

 

 

8,002

 

 

13,188

 

 

22,640

 

Depreciation and amortization

 

 

5,120

 

 

5,726

 

 

21,887

 

 

22,275

 

EBITDA

 

 

9,167

 

 

13,728

 

 

35,075

 

 

44,915

 

Net Income

 

$

3,895

 

 

5,268

 

 

9,936

 

 

13,873

 

Diluted Earnings Per Share

 

$

0.09

 

$

0.12

 

$

0.25

 

$

0.34

 

Weighted Average Shares Outstanding

 

 

51,860

 

 

51,403

 

 

40,442

 

 

51,140

 


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

 

 

Quarter Ended

 

Fiscal Year Ended

 

 

 

 

 

 

 

Dec. 30,
2005

 

Dec. 31,
2004

 

Dec. 30,
2005

 

Dec. 31,
2004

 

 

 

 

 

 

 

Sales

 

$

112,232

 

$

120,366

 

$

424,701

 

$

429,389

 

Cost of Sales

 

 

80,505

 

 

88,462

 

 

316,596

 

 

316,584

 

Gross Profit

 

 

31,727

 

 

31,904

 

 

108,105

 

 

112,805

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

12,640

 

 

12,678

 

 

42,322

 

 

45,851

 

Research and development

 

 

15,003

 

 

11,224

 

 

48,890

 

 

44,314

 

Restructuring and other charges

 

 

37

 

 

—  

 

 

3,705

 

 

—  

 

Total Operating Expenses

 

 

27,680

 

 

23,902

 

 

94,917

 

 

90,165

 

Operating Income

 

 

4,047

 

 

8,002

 

 

13,188

 

 

22,640

 

Interest Expense, net

 

 

(609

)

 

(1,312

)

 

(3,405

)

 

(5,004

)

Income Before Income Taxes

 

 

3,438

 

 

6,690

 

 

9,783

 

 

17,636

 

Provision (Benefit) for Income Taxes

 

 

(457

)

 

1,422

 

 

(153

)

 

3,763

 

Net Income

 

$

3,895

 

$

5,268

 

$

9,936

 

$

13,873

 

Net Income Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

-Basic

 

$

0.10

 

$

0.13

 

$

0.25

 

$

0.35

 

-Diluted

 

$

0.09

 

$

0.12

 

$

0.25

 

$

0.34

 

Weighted Average Common and Common Equivalent Shares Outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

-Basic

 

 

39,908

 

 

39,270

 

 

39,666

 

 

39,093

 

-Diluted

 

 

51,860

 

 

51,403

 

 

40,442

 

 

51,140

 


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

 

 

December 30,
2005

 

December 31,
2004

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and equivalents

 

$

100,260

 

$

84,811

 

Short term investments

 

 

3,408

 

 

21,125

 

Accounts receivable, net

 

 

79,708

 

 

61,352

 

Inventories, net

 

 

46,273

 

 

50,320

 

Prepaid expenses and other current assets

 

 

8,047

 

 

1,380

 

Deferred income taxes, net

 

 

7,563

 

 

9,137

 

Total current assets

 

 

245,259

 

 

228,125

 

Property, Plant & Equipment, Net

 

 

45,788

 

 

66,124

 

Other Assets

 

 

 

 

 

 

 

Goodwill

 

 

20,546

 

 

22,107

 

Deferred income taxes, net

 

 

5,197

 

 

4,155

 

Other assets

 

 

19,539

 

 

21,128

 

Total long-term liabilities

 

 

29

 

 

—  

 

Total other assets

 

 

45,311

 

 

47,390

 

Total Assets

 

$

336,358

 

$

341,639

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Accounts payable

 

$

56,808

 

$

54,958

 

Accrued and other current liabilities

 

 

38,849

 

 

52,838

 

Total current liabilities

 

 

95,657

 

 

107,796

 

Long-Term Liabilities

 

 

 

 

 

 

 

Convertible subordinated debt

 

 

90,000

 

 

90,000

 

Other long-term liabilities

 

 

7,433

 

 

9,867

 

Total long-term liabilities

 

 

97,433

 

 

99,867

 

Total liabilities

 

 

193,090

 

 

207,663

 

Shareholders’ Equity

 

 

143,268

 

 

133,976

 

Total Liabilities and Shareholders’ Equity

 

$

336,358

 

$

341,639

 

SOURCE  Artesyn Technologies
          -0-                                                            02/07/2006
          /CONTACT:  Gary Larsen, Chief Financial Officer, +1-561-451-1000, or Pamela Rembaum, Director, Investor Relations, +1-561-451-1028, both of Artesyn Technologies, Inc./
          /Photo:  http://www.newscom.com/cgi-bin/prnh/20050117/FLMLOGO
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          /Web site:  http://www.artesyn.com /
          (ATSN)