Artesyn down in Q3 but seeing improvement

Artesyn Technologies has reported financial results for the third quarter ended 28th September 2001.

Artesyn Technologies has reported financial results for the third quarter ended 28th September 2001.

Revenue for the quarter totalled $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 with 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".

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.

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