Artesyn Issues Revised 2001 Financial Guidance
Artesyn Technologies Inc. (Boca Raton, FL) has issued revised financial guidance for 2001. Due to continued market softness, Artesyn now expects second-quarter revenues of approximately $120.0 million, with a cash EPS loss of approximately $0.15 to $0.0 per share, before charges. The company further anticipates only modest revenue growth in the second half of the year.
Artesyn is continuing a program of aggressive cost reductions to align operating costs with current revenue expectations. When fully implemented in the fourth quarter, these actions are designed to allow the company to be profitable on $125.0 million in quarterly revenue. Specifications include the elimination of 12 to 15 percent of the company’s workforce, with reduced work weeks, facility consolidations and asset write-downs. The company anticipates recording a pre-tax charge of $20.0 to $25.0 million during the second quarter in connection with these and other actions.
In addition, Artesyn is consolidating its power business into two market-focused groups. The communications infrastructure group will target opportunities in the telecommunications, wireless and access markets. The enterprise-computing group will focus on customer applications in the computing, storage and networking markets.
“Demand in our end-markets has been running appreciably below customer-forecasted levels. At this point, we feel it is appropriate to discount current customer forecasts, assuming that demand will remain flat for the foreseeable future,” stated Artesyn President and CEO Joseph M. O’Donnell. “We will use this slowdown as an opportunity to improve our competitive position by realigning our management and cost structure. While these actions, unfortunately, require a special charge, the improvement in operation efficiency and customer focus will enable us to provide better service to customers, while aggressively targeting new business opportunities.”