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Technology Stocks : Artesyn Technologies (ATSN) -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (588)	10/16/2001 3:12:50 PM
From: JakeStraw	Read Replies (1) \| Respond to of 603

Artesyn Reports Third Quarter Financial Results biz.yahoo.com BOCA RATON, Fla.--(BUSINESS WIRE)--Oct. 16, 2001--Artesyn Technologies, Inc. (Nasdaq:ATSN) today reported financial results for the third quarter ended September 28, 2001. Revenue for the quarter totaled $108.6 million, down from $182.5 million a year ago. The company incurred a cash loss for the quarter of $0.17 per diluted share, compared to cash earnings of $0.37 per diluted share in 2000. These results were in line with analyst expectations and exclude the impact of restructuring and other special charges taken during the quarter. Total orders in the quarter were $102.2 million. Customer cancellations that were prevalent during the first half of the year were minimal in the third quarter, as the book-to-bill ratio improved to 0.94. Total backlog at the end of the quarter was $84.5 million. ``Aggressive cost reduction efforts initiated over the last six months allowed us to meet earnings expectations, even with lower than anticipated revenues,'' commented Artesyn's President and CEO, Joseph M. O'Donnell. ``Total operating costs during the quarter were reduced by approximately 22% versus the second quarter, with selling and administrative expenses at their lowest level since 1996. Actions taken in the third quarter will further reduce operating and overhead costs, as we position the company to return to profitability. For the fourth quarter, we are estimating a reduction in the cash EPS loss to between $0.08 and $0.12 on flat revenues.'' ``While these efforts are critical to improving Artesyn's financial performance, we continue to invest for the future and bring new products to market,'' O'Donnell continued. ``During the third quarter, we introduced several new industry-leading DC/DC products and believe Artesyn now has one of the most comprehensive AC/DC and DC/DC product lines in the industry. This is evidenced by the 78 new design wins received so far this year. The combination of strong customer relationships, an expanded product portfolio and improved cost structure has positioned Artesyn to emerge from this downturn as a market leader.'' Additional Cost Reductions Announced During the third quarter, the company identified additional actions to further streamline operations and align costs with current market conditions. These actions include reductions in the number of facilities and hourly/salaried positions globally. Year-to-date initiatives have resulted in the elimination of approximately 3,300 positions, or 36% of the company's workforce. Total pre-tax charges for the year, related to these ongoing restructuring initiatives and inventory reserve adjustments, are now estimated at $33.0 million compared to previous estimates of $25 million. The restructuring component is expected to total approximately $17.0 million pre-tax, with $8.2 million recorded in the second quarter. A $5.0 million pre-tax charge was recorded in the third quarter, with the balance of the charge, or approximately $3.8 million, expected in the fourth quarter. These actions should generate close to $50 million in annual overhead and operating cost savings when fully implemented in the first quarter of 2002. Pre-tax charges to increase excess and obsolete inventory reserves total $16 million, with $10 million previously recorded during the second quarter. The remaining $6 million was recorded in the third quarter as a special charge to cost of sales. Including the impact of all items, the net cash loss in the third quarter was $0.38 per diluted share. Operating Cash Flow and Liquidity Improved Significant improvements were made during the quarter in strengthening the company's balance sheet and liquidity position. Artesyn ended the third quarter with over $41 million in cash and short-term investments, an increase of approximately $11 million, or 36%, over the previous quarter-ending balance. Contributing to the improvement was a substantial reduction in the accounts receivable balance and a $14 million reduction in global inventory levels before charges. A continued focus on cash management is expected to enable additional balance sheet improvements over the next several quarters. Working closely with its banking group, Artesyn obtained a waiver through December 1, 2001, for the financial covenant tests under its existing revolving credit agreement. Negotiations are underway on an amendment to the agreement with revised terms and pricing structure. The company expects to have an amendment in place by the waiver expiration date. As part of the waiver, the size of the facility was reduced from $275 million to $150 million. The company has not made a drawing under the agreement since May 2001 and believes that, along with its current cash position, this amount will be sufficient for its needs. Investors will have the opportunity to listen to management's discussion of this release in a conference call to be held on October 16, 2001 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.