BOCA RATON, Fla., April 24 /PRNewswire-FirstCall/ -- Artesyn
Technologies, Inc. (NASDAQ:ATSN) today reported financial results
for the first quarter ending on March 31, 2006. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050117/FLMLOGO ) Sales
reported for the first quarter of 2006 were $114.2 million compared
to $102.5 million for the same quarter last year. Net income and
earnings per share for the first quarter of 2006 were $4.8 million
and $0.11 per share, respectively, compared to net income of $1.9
million and earnings per share of $0.05 for the first quarter of
2005. The results for the quarter reflect strong performance of the
Embedded Systems segment, somewhat offset by the operating losses
incurred by the Power Conversion segment. Included in net income
for the first quarter of 2006 is approximately $1.3 million of
restructuring expenses, related to the closure of the Company's
manufacturing facility in Hungary in December 2005, and $2.6
million of merger-related expenses. Additionally, we recorded a tax
benefit during the quarter of $3.6 million, resulting from the
resolution of an IRS examination of previous tax years. The impact
of these items, net of tax, where applicable, attributed $0.02 to
our earnings per share. Total orders received during the first
quarter of 2006 were $138.2 million, yielding a book-to-bill ratio
of 1.21. Backlog at the end of the quarter was $104.0 million with
approximately 93% shippable during the second quarter. There were
22 major design wins during the first quarter, which Artesyn
estimates will realize approximately $238 million in revenues over
the next two to four years. The Company adopted Statement of
Financial Accounting Standards (SFAS) 123R, "Share-Based Payments",
in the first quarter of 2006 and recorded compensation expense
related to stock options, net of tax, of approximately $0.01 per
share. Prior to adopting SFAS 123R, the Company had not recognized
compensation expense related to stock options. At the end of the
quarter, cash and short-term investments increased to $118.5
million. The Company's net debt position also improved to $57.0
million, as bondholders converted $28.5 million of convertible
subordinated notes into approximately 3.5 million shares of common
stock during the first quarter. Business Segment Results Power
Conversion First quarter sales reported for the Power Conversion
segment were $79.9 million, representing a decline of $1.4 million
from the first quarter in 2005. While rectifier sales continue to
be incremental for the Power Conversion segment, older server
programs going end of life in late 2005 offset this growth. Also
contributing to lower than anticipated revenues during the quarter
were delays in manufacturing RoHS compliant standard products for
the distribution channel and delays in shipments by our European
outsourcing partner on production transferred from our Hungary
factory. Operating performance in the Power Conversion segment was
adversely impacted by lower revenue, including the loss of higher
margin revenue through the distribution channel due to the delays
in manufacturing of RoHS compliant standard products, restructuring
expenses related to the closure of the Hungary facility and a $0.6
million charge to dispose of non-repairable inventory returned by a
customer. As a result, the Power Conversion segment had a quarterly
operating loss of $5.0 million compared to an operating loss of
$1.2 million for the same period last year. Embedded Systems First
quarter sales reported for the Embedded Systems segment were $34.2
million, an increase of $13.0 million from the first quarter of
2005. The improvement in revenue was due to increased demand from
customers supplying 3G deployments and carrier upgrades in North
America during the quarter. As a result of higher sales, operating
income for the quarter was $13.2 million compared to operating
income of $7.0 million for the same period last year. Special
Meeting of Shareholders A special meeting of shareholders of
Artesyn Technologies, Inc. will be held on April 28, 2006, at 10:00
a.m. ET to vote on a proposal to approve and adopt the merger
agreement, as amended, and the merger of Artesyn into a wholly
owned subsidiary of Emerson Electric Co. If approved, the closing
of the merger transaction will take place shortly after the meeting
is adjourned. The financial information included herein does not
include any adjustments that would result from the consummation of
the merger transaction. 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.
Artesyn'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. 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.
Proxy Information This news release is being filed by Artesyn with
the Securities and Exchange Commission (the "SEC") in accordance
with Rule 14a-12 of the Securities Exchange Act of 1934, as
amended, and is not intended to be a proxy solicitation. On March
22, 2006, Artesyn filed a proxy statement and other documents with
the SEC relating to the proposed acquisition via merger of Artesyn
by Emerson Electric Co. A definitive proxy statement was sent to
each of Artesyn's stockholders on or about March 24, 2006, seeking
their approval of the merger and the merger agreement. A special
meeting of the shareholders of Artesyn will be held on April 28,
2006 to consider and vote on a proposal to approve and adopt the
merger and the merger agreement. A copy of the proxy statement and
any other relevant documents filed by Artesyn with the SEC are
available free of charge at the SEC's website, http://www.sec.gov/
, and at the Investor Relations page of Artesyn's website,
http://www.artesyn.com/ . Artesyn stockholders are urged to read
the proxy statement because it contains important information.
Artesyn and its directors, officers and certain of its employees
may be deemed to be participants in the solicitation of proxies of
Artesyn stockholders. These individuals may have an interest in the
merger, including as a result of holding options or shares of
Artesyn common stock. A list of the names, affiliations and
interests of the participants in the solicitation are contained in
the proxy statement relating to these transactions that has been
filed with the SEC. 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 13, 2006. 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) Thirteen Weeks Ended
March 31, 2006 April 1, 2005 Orders $138,197 $101,004 Sales - Power
Conversion 79,922 81,300 - Communications Products 34,231 21,150
Total 114,153 102,450 Operating Income 2,542 3,734 Depreciation and
amortization 4,713 5,661 EBITDA 7,255 9,395 Net Income $4,795
$1,946 Earnings Per Share Data - Diluted $0.11 $0.05 Weighted
Average Shares Outstanding 52,315 40,404 Artesyn Technologies, Inc.
Condensed Consolidated Statements of Operations (In Thousands
Except per Share Data) (Unaudited) Quarter Ended March 31, April 1,
2006 2005 Sales $114,153 $102,450 Cost of Sales 82,037 75,733 Gross
Profit 32,116 26,717 Operating Expenses Selling, general and
administrative 11,920 10,536 Research and development (1) 13,809
12,447 Restructuring and related charges 1,293 -- Merger costs
2,552 -- Total Operating Expenses 29,574 22,983 Operating Income
2,542 3,734 Interest Expense, Net (400) (1,005) Income Before
Income Taxes 2,142 2,729 (Benefit) Provision for Income Taxes
(2,653) 783 Net Income $4,795 $1,946 Earnings Per Share, Diluted
$0.11 $0.05 Weighted Average Shares Outstanding 52,315 40,404 (1)
Certain costs, mainly related to proto-type development and design
integrity testing were previously recorded as cost of sales. In the
fourth quarter of 2005, these costs were determined to be more
appropriately classified as research and development expenses. The
costs related to the quarter ended April 1, 2005 were reclassified
from cost of sales to research and development expenses to conform
with the first quarter of 2006 presentation. Artesyn Technologies,
Inc. Condensed Consolidated Balance Sheets (In Thousands)
(Unaudited) March 31, December 30, 2006 2005 ASSETS Current Assets
Cash and equivalents $88,524 $100,260 Short term marketable debt
securities 29,950 3,408 Trade accounts receivable, net 66,058
67,702 Inventories, net 48,888 46,273 Prepaid expenses and other
current assets 7,204 14,253 Deferred income taxes 7,563 7,563
Assets held for sale 4,809 5,800 Total current assets 252,996
245,259 Property, Plant & Equipment, Net 45,142 45,788 Other
Assets Goodwill 20,602 20,546 Deferred income taxes 5,394 5,197
Other assets 18,270 19,568 Total other assets 44,266 45,311 Total
Assets $342,404 $336,358 LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities Accounts payable $56,231 $56,808 Accrued and
other current liabilities 33,205 38,849 Total current liabilities
89,436 95,657 Long-Term Liabilities Convertible subordinated debt
61,500 90,000 Other long-term liabilities 7,105 7,433 Total
long-term liabilities 68,605 97,433 Total liabilities 158,041
193,090 Shareholders' Equity 184,363 143,268 Total Liabilities and
Shareholders' Equity $342,404 $336,358
http://www.newscom.com/cgi-bin/prnh/20050117/FLMLOGO
http://photoarchive.ap.org/ DATASOURCE: Artesyn Technologies
CONTACT: Gary Larsen, Chief Financial Officer, +1-561-451-1000, or
Pamela Rembaum, Director, Investor Relations, +1-561-451-1028, both
of Artesyn Technologies Web site: http://www.artesyn.com/
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