UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 24, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File No. 0-4466
Artesyn Technologies, Inc.
(Exact name of registrant as specified in its charter)
Florida
(State or other jurisdiction of incorporation or organization)
| 59-1205269 | 7900 Glades Road, Suite 500, Boca Raton, FL | |
| (I.R.S. Employer Identification Number) | (Address of principal executive offices) | |
| (561) 451-1000 | 33434 | |
| (Registrant’s phone number, including area code) | (Zip Code) | |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No ¨
The number of shares of Common Stock, $.01 par value per share, of the Registrant issued and outstanding as of October 22, 2004 was 39,252,301 shares.
Artesyn Technologies, Inc.
2
Artesyn Technologies, Inc.
Condensed Consolidated Balance Sheets
(in thousands except share data)
| September 24, 2004 |
December 26, 2003 |
|||||||
| (unaudited) | ||||||||
| Assets |
||||||||
| Current Assets |
||||||||
| Cash and cash equivalents |
$ | 98,121 | $ | 94,215 | ||||
| Accounts receivable, net of allowances of $2,291 in 2004 and $2,831 in 2003 |
59,039 | 54,196 | ||||||
| Inventories |
52,447 | 44,047 | ||||||
| Prepaid expenses and other current assets |
1,938 | 2,753 | ||||||
| Deferred income taxes |
11,526 | 11,526 | ||||||
| Total current assets |
223,071 | 206,737 | ||||||
| Property, Plant & Equipment, Net |
66,468 | 64,210 | ||||||
| Other Assets |
||||||||
| Goodwill |
21,051 | 20,806 | ||||||
| Deferred income taxes |
2,156 | 19,211 | ||||||
| Other assets |
18,655 | 5,712 | ||||||
| Total other assets |
41,862 | 45,729 | ||||||
| Total Assets |
$ | 331,401 | $ | 316,676 | ||||
| Liabilities and Shareholders’ Equity |
||||||||
| Current Liabilities |
||||||||
| Accounts payable |
$ | 54,130 | $ | 47,994 | ||||
| Accrued and other current liabilities |
50,844 | 49,224 | ||||||
| Total current liabilities |
104,974 | 97,218 | ||||||
| Long-Term Liabilities |
||||||||
| Convertible subordinated debt |
90,000 | 90,000 | ||||||
| Deferred income taxes |
5,685 | 5,693 | ||||||
| Other long-term liabilities |
5,130 | 9,728 | ||||||
| Total long-term liabilities |
100,815 | 105,421 | ||||||
| Total liabilities |
205,789 | 202,639 | ||||||
| Commitments and Contingencies |
||||||||
| Shareholders’ Equity |
||||||||
| Preferred stock, par value $0.01 per share; 1,000,000 shares authorized; none issued or outstanding |
— | — | ||||||
| Common stock, par value $0.01 per share; 80,000,000 shares authorized; 39,241,651 shares issued and outstanding in 2004 (38,755,365 shares in 2003) |
392 | 387 | ||||||
| Additional paid-in capital |
131,465 | 129,169 | ||||||
| Retained earnings (accumulated deficit) |
563 | (8,041 | ) | |||||
| Accumulated other comprehensive loss |
(6,808 | ) | (7,478 | ) | ||||
| Total shareholders’ equity |
125,612 | 114,037 | ||||||
| Total Liabilities and Shareholders’ Equity |
$ | 331,401 | $ | 316,676 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Artesyn Technologies, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands except per share data)
| Thirteen Weeks Ended |
Thirty-Nine Weeks Ended |
|||||||||||||||
| September 24, 2004 |
September 26, 2003 |
September 24, 2004 |
September 26, 2003 |
|||||||||||||
| Sales |
$ | 107,013 | $ | 88,035 | $ | 309,023 | $ | 257,534 | ||||||||
| Cost of sales |
79,379 | 69,798 | 230,443 | 210,560 | ||||||||||||
| Gross profit |
27,634 | 18,237 | 78,580 | 46,974 | ||||||||||||
| Operating expenses |
||||||||||||||||
| Selling, general and administrative |
11,486 | 9,843 | 33,173 | 28,830 | ||||||||||||
| Research and development |
10,696 | 8,625 | 30,769 | 25,397 | ||||||||||||
| Restructuring and related charges |
— | 1,433 | — | 5,037 | ||||||||||||
| Total operating expenses |
22,182 | 19,901 | 63,942 | 59,264 | ||||||||||||
| Operating income (loss) |
5,452 | (1,664 | ) | 14,638 | (12,290 | ) | ||||||||||
| Other income (expense) |
||||||||||||||||
| Loss on debt extinguishment |
— | (3,095 | ) | — | (3,723 | ) | ||||||||||
| Interest expense, net |
(1,166 | ) | (1,207 | ) | (3,692 | ) | (3,168 | ) | ||||||||
| Income (loss) before for income taxes |
4,286 | (5,966 | ) | 10,946 | (19,181 | ) | ||||||||||
| Provision (benefit) for income taxes |
677 | (722 | ) | 2,342 | (2,323 | ) | ||||||||||
| Net income (loss) |
$ | 3,609 | $ | (5,244 | ) | $ | 8,604 | $ | (16,858 | ) | ||||||
| Earnings (loss) per share |
||||||||||||||||
| Basic |
$ | 0.09 | $ | (0.14 | ) | $ | 0.22 | $ | (0.44 | ) | ||||||
| Diluted |
$ | 0.09 | $ | (0.14 | ) | $ | 0.22 | $ | (0.44 | ) | ||||||
| Weighted average common and common equivalent shares outstanding |
||||||||||||||||
| Basic |
39,210 | 38,709 | 39,029 | 38,542 | ||||||||||||
| Diluted |
51,064 | 38,709 | 39,890 | 38,542 | ||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Artesyn Technologies, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| Thirty-Nine Weeks Ended |
||||||||
| September 24, 2004 |
September 26, 2003 |
|||||||
| Operating Activities |
||||||||
| Net income (loss) |
$ | 8,604 | $ | (16,858 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
16,549 | 17,496 | ||||||
| Loss on debt extinguishment |
— | 3,723 | ||||||
| Other non-cash items |
9,315 | 868 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts receivable |
(6,423 | ) | 2,635 | |||||
| Inventories |
(12,272 | ) | 6,397 | |||||
| Prepaid expenses and other assets |
805 | (436 | ) | |||||
| Accounts payable and accrued liabilities |
4,235 | 862 | ||||||
| Net Cash Provided by Operating Activities |
20,813 | 14,687 | ||||||
| Investing Activities |
||||||||
| Purchases of property, plant & equipment |
(18,440 | ) | (4,246 | ) | ||||
| Proceeds from sale of property, plant & equipment |
877 | 524 | ||||||
| Earn-out payments related to acquisitions |
(714 | ) | (4,259 | ) | ||||
| Net Cash Used in Investing Activities |
(18,277 | ) | (7,981 | ) | ||||
| Financing Activities |
||||||||
| Proceeds from issuance of convertible senior subordinated notes due 2010, net of financing costs |
— | 86,275 | ||||||
| Principal payments on convertible debt |
— | (50,000 | ) | |||||
| Principal payments on debt and capital leases |
— | (23,509 | ) | |||||
| Proceeds from issuance of long-term debt, net of financing costs |
— | 9,439 | ||||||
| Proceeds from exercises of stock options |
1,433 | 104 | ||||||
| Net Cash Provided by Financing Activities |
1,433 | 22,309 | ||||||
| Effect of Exchange Rate Changes on Cash and Cash Equivalents |
(63 | ) | 1,745 | |||||
| Increase in Cash and Cash Equivalents |
3,906 | 30,760 | ||||||