Artesyn Reports Third Quarter Financial Results
Monday October 28, 7:00 am ET
biz.yahoo.com
BOCA RATON, Fla., Oct. 28 /PRNewswire-FirstCall/ -- Artesyn Technologies, Inc. (Nasdaq: ATSN) today reported financial results for the quarter ended September 27, 2002. Revenue for the quarter totaled $86 million, compared to $109 million in the same period a year ago. The company incurred a cash loss of $(0.16) per share for the quarter, excluding the impact of restructuring and goodwill impairment charges of $53.4 million. These results were in line with analyst expectations and compares to a cash loss of $(0.17) per diluted share in 2001, excluding charges. Including the impact of all charges, the third quarter net loss was $55.7 million or $(1.45) per diluted share compared to a net loss of $16.6 million in the same period a year ago.
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Total orders in the quarter were $80.2 million, with a book-to-bill ratio of 0.93. Backlog at the end of the quarter stood at $70.8 million, with approximately $66 million of this amount shippable in the fourth quarter.
"In spite of the difficult end-market conditions, we continued to strengthen our balance sheet, bring industry leading products to market and win new business in the third quarter," commented Artesyn's President and CEO, Joseph M. O'Donnell. "Our strategy of focusing the company on generating cash has proven successful, as operating cash flow exceeded $11 million in the third quarter. We have now reported positive operating cash flow for the past six consecutive quarters. At the same time, we have reduced bank debt to $56 million and improved cash balances to $89 million."
"Competitively, we expanded our leadership position in the point-of-load segment of the market during the quarter by announcing a broad new line of ultra-efficient non-isolated converters," O'Donnell continued. "This is projected to be one of the fastest growing segments of the power industry in the future and one-third of our design wins in the power business this year are for point-of-load products. Year-to-date we have won a total of 49 major new projects, worth over $300 million in estimated lifetime revenue. Improving our balance sheet and increasing market share were key initiatives coming into the year and they will continue to be a focus in the future."
"Looking forward, while many in the industry had hoped for a second-half recovery, it now appears that IT spending levels will remain constrained for the foreseeable future. In this environment, we believe that fourth quarter revenue will be relatively flat with the third. Given the prolonged nature of the downturn, we will continue our focus on cash creation and returning the company to profitability at the current revenue levels."
Beginning in the second quarter of 2001, Artesyn initiated a series of restructuring actions to align operating costs with the lower levels of end- market demand. As previously announced, the company is currently in the process of reducing its manufacturing capacity and closing its Kindberg, Austria manufacturing facility. Affected production will be moved to the company's low-cost facilities in Hungary and China. In conjunction with these actions, Artesyn recorded a charge of $7.1 million in the second quarter and an additional charge of $1.4 million in the recently completed third quarter. The remaining $1 million balance of the charge is expected to be recorded over the succeeding two quarters. The company continues to evaluate a number of additional potential actions to further streamline operations and lower operating costs. The results of this analysis should be completed during the fourth quarter.
The prolonged weakness in the company's primary end markets has resulted in a deterioration of market values across the technology industry. As discussed in the most recent 10-Q, the company is required to periodically assess the carrying value of previously recorded goodwill in accordance with SFAS 142. As a result of this assessment, Artesyn recognized a non-cash impairment charge of $52 million during the third quarter. Net goodwill assets after the impairment charge are approximately $18 million, while total book value exceeds $156 million.
Investors will have the opportunity to listen to management's discussion of this release in a conference call to be held on October 28, 2002 at 8:30 a.m. Eastern time either by calling (800) 711-4000 (passcode: O'Donnell) or over the Internet at artesyn.com. To listen to the live call, please go to the web site at least 15 minutes early to register, download and install any necessary audio software. The web cast will be available for replay immediately following the teleconference. |
