Artesyn Technologies Announces Record Results in Fourth Quarter.Business Editors BOCA RATON Boca Raton (bō`kə rətōn`), city (1990 pop. 61,492), Palm Beach co., SE Fla., on the Atlantic; inc. 1925. Boca Raton is a popular resort and retirement community that experienced significant industrial development in the 1970s and 80s. , Fla.--(BUSINESS WIRE)--Jan. 20, 2000 Sales Increase 12%; Net Income Up 37% Artesyn Technologies, Inc. (Nasdaq:ATSN ATSN Apprenticeship and Training Support Network (Australia) ) today reported earnings for the fourth quarter and year ended December December: see month. 31, 1999. Net income for the fourth quarter of 1999 was a record $13.2 million, or $0.34 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, improving 37% from the $9.6 million, or $0.24 per diluted share, reported in the fourth quarter of 1998. Net income for 1999 was also a record at $43.4 million, or $1.11 per diluted share, compared to $27.0 million, or $0.67 per diluted share, reported for 1998, which included $9.6 million pre-tax restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and inventory charges taken in the first quarter of 1998 as a result of the merger with Zytec Corporation. Sales for the fourth quarter of 1999 were $155.8 million compared to $138.8 million a year ago. For 1999, sales totaled $594.2 million, up 12% from $532.4 million in 1998. Sales increased principally as a result of higher shipments into mass storage, routers and Digital Subscriber Line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and (&uot;DSL&uot;) applications. Orders for fiscal 1999 increased 21.5% to $639.9 million compared to $526.5 million in fiscal 1998. Gross margin for the fourth quarter of 1999 improved to 26.4% from 25.1% reported for the year-ago fourth quarter. This improvement was largely attributable to a more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. sales mix sales mix See product mix. and continued savings achieved through material cost reductions and plant rationalizations. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (EBIT EBIT See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). ) improved 30% to $19.1 million, or 12.3% of sales, for the fourth quarter of 1999 compared to 10.6% for the corresponding quarter a year ago. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Joseph M. O'Donnell, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , commented, &uot;We are pleased with our improved performance over a year ago yet disappointed with overall revenue growth in the fourth quarter. In a number of instances, our OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and customers forecasted higher fourth quarter product requirements than they actually consumed con·sume v. con·sumed, con·sum·ing, con·sumes v.tr. 1. To take in as food; eat or drink up. See Synonyms at eat. 2. a. resulting in lower than planned sales for Artesyn and higher finished goods on hand. We suspect that some of our customers' over forecasting was to hedge against possible supply disruptions associated with Y2K See Y2K problem and Y2K compliant. Y2K - Year 2000 . As a result, we expect inventories to return to more normalized levels by the end of the second quarter of 2000.&uot; As part of the previously announced three-year, 4.0 million-share repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. program, the Company repurchased an additional 287,500 shares of its common stock for a total price of $5.5 million during the fourth quarter of 1999. To date, the Company has repurchased 3.1 million of the approved 4.0 million shares for a total of approximately $51.3 million. All of such repurchases were funded with cash from operations. The Company expects to complete the share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. during the next two quarters, a year ahead of its original plan. Artesyn Technologies, Inc., headquartered in Boca Raton, Fla., is a leading provider of power conversion equipment, real-time systems Real-time systems Computer systems in which the computer is required to perform its tasks within the time restraints of some process or simultaneously with the system it is assisting. and logistics management Logistics Management is that part of Supply Chain Management that plans, implements, and controls the efficient, effective, forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet for the communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. . For more information about Artesyn Technologies and its products, please visit the Company's web site at http://www.artesyn.com. Investors will have the opportunity to listen to management's discussion of the quarterly results in a conference call be to held on Thursday, January 20 at 8:30 a.m. ET over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through Vcall at http://www.vcall.com. To listen to the live call, please go to the web site at least fifteen minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. This release may contain certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve certain risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by the Company with the Securities and Exchange Commission, specifically the most recent reports on Form S-4, Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including, but not limited to, integration of operations and technology, market acceptance of existing and new products, dependence on and volatility of foreign sales, the potential for fluctuations in operating results, and the volatility of the trading price Trading price The price at which a security is currently selling. of the Company's stock.
Artesyn Technologies, Inc.
Financial Highlights
(In Thousands Except per Share Data)
(Unaudited)
Thirteen Weeks Ended Year Ended
Dec. 31, Jan. 1, Dec. 31, Jan. 1,
1999 1999 1999 1999
-------- -------- -------- --------
(a)
Orders $171,042 $132,706 $639,914 $526,470
Sales 155,819 138,808 594,155 532,392
Operating Income 19,108 14,698 64,861 41,981
EBITDA 24,131 19,140 84,971 58,879
Net Income 13,172 9,633 43,362 27,044
Earnings per Share
- Diluted 0.34 0.24 1.11 0.67
Weighted shares
-diluted 38,697 39,561 38,999 40,635
(a) Includes a $9.6 million pre-tax restructuring charge taken in the
first quarter of 1998.
Artesyn Technologies, Inc.
Consolidated Statements of Operations
(In Thousands Except per Share Data)
(Unaudited)
Thirteen Weeks Ended Year Ended
-------------------- --------------------
Dec. 31, Jan. 1, Dec. 31, Jan. 1,
1999 1999 1999 1999
--------- --------- --------- ---------
Sales $ 155,819 $ 138,808 $ 594,155 $ 532,392
Cost of Sales 114,723 103,954 440,477 395,273
--------- --------- --------- ---------
Gross Profit 41,096 34,854 153,678 137,119
--------- --------- --------- ---------
Operating Expenses
Selling, general
and administrative 13,039 12,412 52,404 54,548
Research and development 8,949 7,744 36,413 33,401
Restructuring charge 0 0 0 7,189
--------- --------- --------- ---------
Total Operating
Expenses 21,988 20,156 88,817 95,138
--------- --------- --------- ---------
Operating Income 19,108 14,698 64,861 41,981
Interest Expense, net (408) (542) (1,651) (1,617)
--------- --------- --------- ---------
Income Before Income
taxes 18,700 14,156 63,210 40,364
Provision for Income
Taxes 5,528 4,523 19,848 13,320
--------- --------- --------- ---------
Net Income $ 13,172 $ 9,633 $ 43,362 $ 27,044
========= ========= ========= =========
Earnings per Share
Basic $ 0.35 $ 0.25 $ 1.16 $ 0.70
========= ========= ========= =========
Diluted $ 0.34 $ 0.24 $ 1.11 $ 0.67
========= ========= ========= =========
Weighted Shares
Outstanding
Basic 37,175 37,866 37,272 38,369
Diluted 38,697 39,561 38,999 40,635
Artesyn Technologies, Inc.
Consolidated Statements of Financial Condition
(In Thousands)
(Unaudited)
Dec. 31, Jan. 1,
1999 1999
-------- --------
ASSETS
Current Assets
Cash and equivalents $ 37,562 $ 41,525
Accounts receivable, net 90,334 88,828
Inventories 89,370 62,460
Prepaid expenses and other 5,263 4,832
Deferred income taxes, net 9,866 7,685
-------- --------
Total current assets 232,395 205,330
-------- --------
Property, Plant &Equipment, Net 88,468 75,032
-------- --------
Other Assets
Goodwill, net 32,436 40,039
Deferred income taxes, net 3,573 2,682
Other assets, net 2,178 2,309
-------- --------
Total other assets 38,187 45,030
-------- --------
Total Assets $359,050 $325,392
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term
debt and capital leases $ 1,956 $ 2,707
Accounts payable and accrued
liabilities 102,802 81,653
-------- --------
Total current liabilities 104,758 84,360
-------- --------
Long-Term Liabilities
Long-term debt and capital leases 44,154 50,283
Other long-term liabilities 10,226 9,661
-------- --------
Total long-term liabilities 54,380 59,944
-------- --------
Total liabilities 159,138 144,304
Shareholders' Equity 199,912 181,088
-------- --------
Total Liabilities and
Shareholders' Equity $359,050 $325,392
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