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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark one)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------



For the quarterly period ended April 1, 2005



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



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Artesyn Technologies, Inc.

(Exact name of registrant as specified in its charter)



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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)                                 



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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 April 29, 2005 was 39,548,901 shares.



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##### Table of Contents

Artesyn Technologies, Inc.



Index to
Form 10-Q



|           |  |                                                                                                                             |  |           
|---------- |  | --------------------------------------------------------------------------------------------------------------------------- |  | ----------
|           |  |                                                                                                                             |  | PageNumber
|PART I.    |  | Financial Information                                                                                                       |  |           
|           |  |                                                                                                                            
|Item 1.    |  | Condensed Consolidated Financial Statements:                                                                                |  |           
|           |  |                                                                                                                            
|           |  | Condensed Consolidated Balance Sheets  As of April 1, 2005 (unaudited) and December 31, 2004                               |  | 3         
|           |  |                                                                                                                            
|           |  | Condensed Consolidated Statements of Operations (unaudited) For the Thirteen Weeks Ended April 1, 2005 and March 26, 2004  |  | 4         
|           |  |                                                                                                                            
|           |  | Condensed Consolidated Statements of Cash Flows (unaudited)  For the Thirteen Weeks Ended April 1, 2005 and March 26, 2004 |  | 5         
|           |  |                                                                                                                            
|           |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                            |  | 6-12      
|           |  |                                                                                                                            
|Item 2.    |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                       |  | 13-18     
|           |  |                                                                                                                            
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                                                                  |  | 18        
|           |  |                                                                                                                            
|Item 4.    |  | Controls and Procedures                                                                                                     |  | 18        
|           |  |                                                                                                                            
|PART II.   |  | Other Information                                                                                                           |  |           
|           |  |                                                                                                                            
|Item 5.    |  | Other Information                                                                                                           |  | 19        
|           |  |                                                                                                                            
|Item 6.    |  | Exhibits                                                                                                                    |  | 19        
|           | 
|Signatures |  |                                                                                                                            



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##### Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements



Artesyn Technologies, Inc.

Condensed Consolidated Balance Sheets

(in thousands except share data)



|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                                    |  | April 1, 2005 |         |   | December 31,2004 |  
|                                                                                                                                                    |  | (unaudited)   |         |   |                  |  
|ASSETS                                                                                                                                              |  |               |         |   |                  |   |         |  
|Current Assets                                                                                                                                      |  |               |         |   |                  |   |         |  
|Cash and cash equivalents                                                                                                                           |  | $             | 65,233  |   |                  | $ | 84,811  |  
|Marketable debt securities                                                                                                                          |  |               | 33,972  |   |                  |   | 21,125  |  
|Accounts receivable, net of allowances of $1,608 in 2005 and $1,633 in 2004                                                                         |  |               | 58,602  |   |                  |   | 61,352  |  
|Inventories                                                                                                                                         |  |               | 52,549  |   |                  |   | 50,320  |  
|Prepaid expenses and other current assets                                                                                                           |  |               | 2,753   |   |                  |   | 1,380   |  
|Deferred income taxes                                                                                                                               |  |               | 9,137   |   |                  |   | 9,137   |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Total current assets                                                                                                                                |  |               | 222,246 |   |                  |   | 228,125 |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Property, Plant & Equipment, Net                                                                                                                    |  |               | 64,635  |   |                  |   | 66,124  |  
|Other Assets                                                                                                                                        |  |               |         |   |                  |   |         |  
|Goodwill, net                                                                                                                                       |  |               | 21,783  |   |                  |   | 22,107  |  
|Deferred income taxes                                                                                                                               |  |               | 3,859   |   |                  |   | 4,155   |  
|Other assets                                                                                                                                        |  |               | 20,697  |   |                  |   | 21,128  |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Total other assets                                                                                                                                  |  |               | 46,339  |   |                  |   | 47,390  |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Total Assets                                                                                                                                        |  | $             | 333,220 |   |                  | $ | 341,639 |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                                                |  |               |         |   |                  |   |         |  
|Current Liabilities                                                                                                                                 |  |               |         |   |                  |   |         |  
|Accounts payable                                                                                                                                    |  | $             | 50,827  |   |                  | $ | 54,958  |  
|Accrued and other current liabilities                                                                                                               |  |               | 46,367  |   |                  |   | 52,838  |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Total current liabilities                                                                                                                           |  |               | 97,194  |   |                  |   | 107,796 |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Long-Term Liabilities                                                                                                                               |  |               |         |   |                  |   |         |  
|Convertible subordinated debt                                                                                                                       |  |               | 90,000  |   |                  |   | 90,000  |  
|Deferred income taxes                                                                                                                               |  |               | 6,229   |   |                  |   | 5,598   |  
|Other long-term liabilities                                                                                                                         |  |               | 4,001   |   |                  |   | 4,269   |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Total long-term liabilities                                                                                                                         |  |               | 100,230 |   |                  |   | 99,867  |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Total liabilities                                                                                                                                   |  |               | 197,424 |   |                  |   | 207,663 |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Commitments and Contingencies                                                                                                                       |  |               |         |   |                  |   |         |  
|Shareholders Equity                                                                                                                                |  |               |         |   |                  |   |         |  
|Common stock, par value $0.01 per share; 80,000,000 shares authorized; 39,535,901 shares issued and outstanding in 2005 (39,304,957 shares in
2004) |  |               | 395     |   |                  |   | 393     |  
|Additional paid-in capital                                                                                                                          |  |               | 133,662 |   |                  |   | 131,787 |  
|Retained earnings                                                                                                                                   |  |               | 7,778   |   |                  |   | 5,832   |  
|Accumulated other comprehensive loss                                                                                                                |  |               | (6,039  | ) |                  |   | (4,036  | )
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Total shareholders equity                                                                                                                          |  |               | 135,796 |   |                  |   | 133,976 |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  
|Total Liabilities and Shareholders Equity                                                                                                          |  | $             | 333,220 |   |                  | $ | 341,639 |  
|                                                                                                                                                    |  |               |         |   |                  |   |         |  



The accompanying
notes are an integral part of these condensed consolidated financial statements.



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##### Table of Contents

Artesyn Technologies, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands except per share
data)



|                                                                 |  |                      |         |   |               |   |        |  
|---------------------------------------------------------------- |  | -------------------- | ------- | - | ------------- | - | ------ | -
|                                                                 |  | Thirteen Weeks Ended |        
|                                                                 |  | April 1,2005         |         |   | March 26,2004 |  
|Sales                                                            |  | $                    | 102,450 |   |               | $ | 96,513 |  
|Cost of sales                                                    |  |                      | 76,617  |   |               |   | 72,040 |  
|                                                                 |  |                      |         |   |               |   |        |  
|Gross profit                                                     |  |                      | 25,833  |   |               |   | 24,473 |  
|                                                                 |  |                      |         |   |               |   |        |  
|Operating expenses                                               |  |                      |         |   |               |   |        |  
|Selling, general and administrative                              |  |                      | 10,536  |   |               |   | 10,447 |  
|Research and development                                         |  |                      | 11,563  |   |               |   | 10,154 |  
|                                                                 |  |                      |         |   |               |   |        |  
|Total operating expenses                                         |  |                      | 22,099  |   |               |   | 20,601 |  
|                                                                 |  |                      |         |   |               |   |        |  
|Operating income                                                 |  |                      | 3,734   |   |               |   | 3,872  |  
|                                                                 |  |                      |         |   |               |   |        |  
|Other expense                                                    |  |                      |         |   |               |   |        |  
|Interest expense, net                                            |  |                      | (1,005  | ) |               |   | (1,247 | )
|                                                                 |  |                      |         |   |               |   |        |  
|Income before income taxes                                       |  |                      | 2,729   |   |               |   | 2,625  |  
|                                                                 |  |                     
|Provision for income taxes                                       |  |                      | 783     |   |               |   | 708    |  
|                                                                 |  |                      |         |   |               |   |        |  
|Net income                                                       |  | $                    | 1,946   |   |               | $ | 1,917  |  
|                                                                 |  |                      |         |   |               |   |        |  
|Earnings per share                                               |  |                      |         |   |               |   |        |  
|Basic                                                            |  | $                    | 0.05    |   |               | $ | 0.05   |  
|                                                                 |  |                      |         |   |               |   |        |  
|Diluted                                                          |  | $                    | 0.05    |   |               | $ | 0.05   |  
|                                                                 |  |                      |         |   |               |   |        |  
|Weighted average common and common equivalent shares outstanding |  |                      |         |   |               |   |        |  
|Basic                                                            |  |                      | 39,408  |   |               |   | 38,845 |  
|                                                                 |  |                      |         |   |               |   |        |  
|Diluted                                                          |  |                      | 40,404  |   |               |   | 39,886 |  
|                                                                 |  |                      |         |   |               |   |        |  



The accompanying
notes are an integral part of these condensed consolidated financial statements.



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Artesyn Technologies, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

(in thousands)



|                                                                                            |  |                      |         |   |               |   |        |  
|------------------------------------------------------------------------------------------- |  | -------------------- | ------- | - | ------------- | - | ------ | -
|                                                                                            |  | Thirteen Weeks Ended |        
|                                                                                            |  | April 1,2005         |         |   | March 26,2004 |  
|Operating Activities                                                                        |  |                      |         |   |               |   |        |  
|Net income                                                                                  |  | $                    | 1,946   |   |               | $ | 1,917  |  
|Adjustments to reconcile net income to net cash (used in) provided by operating activities: |  |                      |         |   |               |   |        |  
|Depreciation and amortization                                                               |  |                      | 5,661   |   |               |   | 5,430  |  
|Other non-cash items                                                                        |  |                      | 619     |   |               |   | 662    |  
|Changes in operating assets and liabilities:                                                |  |                      |         |   |               |   |        |  
|Accounts receivable                                                                         |  |                      | 1,538   |   |               |   | 2,968  |  
|Inventories                                                                                 |  |                      | (2,091  | ) |               |   | (5,709 | )
|Prepaid expenses and other assets                                                           |  |                      | (1,394  | ) |               |   | (447   | )
|Accounts payable and accrued liabilities                                                    |  |                      | (8,614  | ) |               |   | 2,753  |  
|                                                                                            |  |                      |         |   |               |   |        |  
|Net Cash (Used in) Provided by Operating Activities                                         |  |                      | (2,335  | ) |               |   | 7,574  |  
|                                                                                            |  |                      |         |   |               |   |        |  
|Investing Activities                                                                        |  |                      |         |   |               |   |        |  
|Purchases of property, plant & equipment                                                    |  |                      | (4,090  | ) |               |   | (5,713 | )
|Proceeds from sale of property, plant & equipment                                           |  |                      | 5       |   |               |   | 15     |  
|Purchases of marketable debt securities                                                     |  |                      | (48,216 | ) |               |   |       |  
|Proceeds from sale of marketable debt securities                                            |  |                      | 35,337  |   |               |   |       |  
|Earn-out payments related to acquisitions                                                   |  |                      |        |   |               |   | (715   | )
|                                                                                            |  |                      |         |   |               |   |        |  
|Net Cash Used in Investing Activities                                                       |  |                      | (16,964 | ) |               |   | (6,413 | )
|                                                                                            |  |                      |         |   |               |   |        |  
|Financing Activity                                                                          |  |                      |         |   |               |   |        |  
|Proceeds from exercises of stock options                                                    |  |                      | 574     |   |               |   | 377    |  
|                                                                                            |  |                      |         |   |               |   |        |  
|Net Cash Provided by Financing Activity                                                     |  |                      | 574     |   |               |   | 377    |  
|                                                                                            |  |                      |         |   |               |   |        |  
|Effect of Exchange Rate Changes on Cash and Cash Equivalents                                |  |                      | (853    | ) |               |   | (250   | )
|                                                                                            |  |                      |         |   |               |   |        |  
|Increase (Decrease) in Cash and Cash Equivalents                                            |  |                      | (19,578 | ) |               |   | 1,288  |  
|                                                                                            |  |                      |         |   |               |   |        |  
|Cash and Cash Equivalents, Beginning of Period                                              |  |                      | 84,811  |   |               |   | 94,215 |  
|                                                                                            |  |                      |         |   |               |   |        |  
|Cash and Cash Equivalents, End of Period                                                    |  | $                    | 65,233  |   |               | $ | 95,503 |  
|                                                                                            |  |                      |         |   |               |   |        |  



The accompanying
notes are an integral part of these consolidated financial statements.



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Artesyn Technologies, Inc.

Notes to Condensed Consolidated Financial Statements

April 1, 2005

(unaudited)



1. Basis of Presentation



The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in
accordance with United States generally accepted accounting principles for interim financial reporting and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and footnote disclosures required by United States
generally accepted accounting principles for complete financial statements have been condensed or omitted.



In the opinion of management, the accompanying Condensed Consolidated Financial Statements include all adjustments (consisting of normal recurring items) considered necessary to present fairly the consolidated
financial position, results of operations and cash flows of Artesyn Technologies, Inc. The results of operations for the thirteen weeks ended April 1, 2005 are not necessarily indicative of the results that may be expected for the entire fiscal year
2005. In addition, these Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our 2004 Annual Report on Form 10-K filed with the Securities and Exchange
Commission (SEC) on March 16, 2005.



For purposes of clarity, as
used herein, the terms we, us, our, and Artesyn refer to Artesyn Technologies, Inc. and its subsidiaries (unless the context indicates another meaning).



2. Recent Accounting Pronouncements



In December 2004, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) 123R, Share-Based Payments. This statement replaces SFAS 123, and supersedes Accounting Principles Board Opinion (APB) 25. SFAS 123R eliminates the intrinsic value
method under APB 25 as an alternative method of accounting for stock-based awards. The new standard requires that the compensation cost relating to share-based payment be recognized in financial statements at fair value. SFAS 123R also revises the
fair value-based method of accounting for share-based payment liabilities, forfeitures and modifications of stock-based awards and clarifies SFAS 123s guidance in several areas, including measuring fair value, classifying an award as equity or
as a liability and attributing compensation cost to reporting periods. In April 2005, the SEC delayed the implementation of SFAS 123R for public companies until the first annual period beginning after June 15, 2005. We are required to adopt SFAS
123R by the beginning of fiscal year 2006, using a modified version of prospective application or may elect to apply a modified version of retrospective application. We expect that the adoption of this statement will have a material impact on the
financial results. We have not yet determined the method of adoption or the effect of adopting SFAS 123R, and we have not determined whether the adoption will result in future expenses that are similar to the current pro forma disclosures under SFAS
123.



In November 2004, the FASB issued SFAS 151, Inventory Costs 
an Amendment of Accounting Research Bulletin 43, Chapter 4. This standard provides clarification that abnormal amounts of idle facility expense, freight, handling costs and spoilage should be recognized as current-period charges. Additionally,
this standard requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The provisions of this standard are effective for inventory costs incurred during fiscal
years beginning after June 15, 2005. The adoption of this standard is not expected to have a material impact to our financial statements.



3. Earnings Per Share



Basic earnings per share is calculated by dividing income available to shareholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share is computed using the
weighted average number of common and dilutive common share equivalents outstanding during each period. Dilutive common share equivalents consist of shares issuable upon the exercise of stock options (calculated using the treasury stock method).
Certain shares under the Companys stock-based



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Artesyn Technologies, Inc.

Notes to Condensed Consolidated Financial Statements

April 1, 2005

(unaudited)



compensation programs, shares related to common stock potentially issuable upon the conversion of our senior subordinated debt and warrants were excluded from the diluted
earnings per share computation because their effect was antidilutive for the respective periods. The weighted average shares excluded from the diluted earnings per share totaled 14.9 million and 15.6 million for the quarters ended April 1, 2005 and
March 26, 2004, respectively.



4. Inventories



The components of inventories are as follows ($000s):



|                |  |              |        |                  |   |       
|--------------- |  | ------------ | ------ | ---------------- | - | ------
|                |  | April 1,2005 |        | December 31,2004
|Raw materials   |  | $            | 22,917 |                  | $ | 19,736
|Work-in-process |  |              | 9,038  |                  |   | 8,722 
|Finished goods  |  |              | 20,594 |                  |   | 21,862
|                |  |              |        |                  |   |       
|                |  | $            | 52,549 |                  | $ | 50,320
|                |  |              |        |                  |   |       



5. Accrued Liabilities



The components of accrued and other current liabilities are as follows
($000s):



|                                        |  |              |        |                  |   |       
|--------------------------------------- |  | ------------ | ------ | ---------------- | - | ------
|                                        |  | April 1,2005 |        | December 31,2004
|Accrued and other current liabilities:  |  |              |        |                  |   |       
|Compensation and benefits               |  | $            | 14,660 |                  | $ | 16,006
|Income taxes payable                    |  |              | 10,806 |                  |   | 10,868
|Warranty reserve                        |  |              | 5,913  |                  |   | 6,933 
|Restructuring reserve (current portion) |  |              | 4,409  |                  |   | 5,806 
|Other                                   |  |              | 10,579 |                  |   | 13,225
|                                        |  |              |        |                  |   |       
|                                        |  | $            | 46,367 |                  | $ | 52,838
|                                        |  |              |        |                  |   |       



As of April 1, 2005 and December 31,
2004, other accrued liabilities consisted primarily of accruals for professional fees, consulting fees, commissions, interest, deferred income and non-income taxes.



The components of other long-term liabilities are as follows ($000s):



|                             |  |              |       |                  |   |      
|---------------------------- |  | ------------ | ----- | ---------------- | - | -----
|                             |  | April 1,2005 |       | December 31,2004
|Other long-term liabilities: |  |              |       |                  |   |      
|Restructuring reserve        |  | $            | 2,621 |                  | $ | 3,252
|Directors pension plan      |  |              | 1,004 |                  |   | 1,017
|Other long-term liabilities  |  |              | 376   |                  |   |     
|                             |  |              |       |                  |   |      
|                             |  | $            | 4,001 |                  | $ | 4,269
|                             |  |              |       |                  |   |      



6. Restructuring and Related
Charges



Beginning in 2001, we implemented plans to restructure our
operations to ensure that our cost structure matches the anticipated level of demand for our products. Our restructuring plans included closures of several operating and administrative facilities and a reduction of approximately 1,900 positions
worldwide. As of April 1, 2005, the remaining liabilities related to facility closures consisted of continuing lease obligations, the longest of which extends to 2008. Additionally, as of April 1, 2005, almost all affected employees have been
terminated pursuant to our restructuring plans. The remaining terminations and associated termination payments will be made during 2005.



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Artesyn Technologies, Inc.

Notes to Condensed Consolidated Financial Statements

April 1, 2005

(unaudited)





As a result of our restructuring plans, we reduced the workforce at our Ireland location,
which gave rise to a 2.5 million liability for repayment of developmental grants from the Irish government. The development funds were subject to the condition we maintain a workforce of at least 300 employees at the facility in Ireland. Our
restructuring actions at the facility resulted in a headcount significantly below 300 employees, triggering an obligation to repay the grants. In September 2003, we signed an agreement to repay 1.2 million (equivalent to $1.6 million as of
April 1, 2005) to the Irish government over the next four years, with repayment of the remaining liability contingent upon maintaining future workforce levels through 2009. Repayment due in the first quarter of 2006 of approximately $0.4 million is
classified as a current liability as of April 1, 2005, with the remaining payments of $2.4 million recorded in other long-term liabilities. If we maintain current employee levels through 2009, repayment of approximately $1.7 million will be
forgiven.



Restructuring charges incurred in 2005 pursuant to our restructuring
plans were not significant. The 2005 restructuring activity mostly relates to cash payments to settle remaining obligations and is presented in the following table ($000s):



|                                              |  |                                             |       |              |   |        |                                           |  |   |      
|--------------------------------------------- |  | ------------------------------------------- | ----- | ------------ | - | ------ | ----------------------------------------- |  | - | -----
|                                              |  | RestructuringLiabilities atDecember 31,2004 |       | 2005Activity |   |        | RestructuringLiabilities at April 1, 2005
|Employee termination costs                    |  | $                                           | 852   |              | $ | (150   | )                                         |  | $ | 702  
|Liability for payback of developmental grants |  |                                             | 3,386 |              |   | (559   | )                                         |  |   | 2,827
|Facility closures                             |  |                                             | 4,820 |              |   | (1,319 | )                                         |  |   | 3,501
|                                              |  |                                             |       |              |   |        |                                           |  |   |      
|                                              |  | $                                           | 9,058 |              | $ | (2,028 | )                                         |  | $ | 7,030
|                                              |  |                                             |       |              |   |        |                                           |  |   |      



7. Convertible Debt



Convertible debt consists of $90.0 million of 5.5% Convertible Senior Subordinated Notes.
The notes bear interest at 5.5%, payable semi-annually on February 15 and August 15 of each year, and mature on August 15, 2010 at 100% of their principal amount plus accrued and unpaid interest. On or after August 15, 2008, we have the ability to
redeem some or all of the notes at 100% of their principal plus accrued and unpaid interest.



8. Credit Agreement



In March 2003, we
entered into a five-year, $35.0 million asset-based credit facility with Fleet Capital Corporation. While there are no borrowings outstanding at this time, the facility currently would bear interest at LIBOR plus 2.0% or the banks Prime Rate
plus 0.25%. Our asset-based facility is secured by our domestic assets, including a pledge of the stock of our domestic subsidiaries and 65% of the stock of certain of our foreign subsidiaries.



9. Income Taxes



In the thirteen weeks ended April 1, 2005, an income tax provision of 29% of the pretax income was recorded compared to a provision of 27%
in the same period in 2004. The difference between the tax rates is the result of several factors, including the distribution of profits and losses by jurisdiction and adjustments to valuation allowances on deferred tax assets recorded at various
locations.



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Artesyn Technologies, Inc.

Notes to Condensed Consolidated Financial Statements

April 1, 2005

(unaudited)





We have recorded deferred tax assets for net operating loss carry-forwards in certain
locations. We continually evaluate whether our deferred tax assets will be realized, and record valuation allowances where appropriate. If we continue to experience losses or elect to cease operations in certain tax jurisdictions, we may need to
record additional valuation allowances in the appropriate jurisdiction, and our effective tax rate could change significantly.



In 2004, we executed an inter-company sale of intangible assets. As a result of this transaction, a prepaid asset associated with previously recorded deferred tax assets
in our Austrian tax jurisdiction was established, and the related long-term deferred tax assets were reduced by a corresponding amount. The components of the prepaid asset of $17.4 million are amortized to the income tax provision over their useful
lives, ranging from 5 to 15 years, corresponding to the lives of the related intangible assets for tax return purposes. The prepaid asset, included in long-term assets, amounted to $16.0 million and $16.2 million, net of amortization, as of April 1,
2005 and December 31, 2004, respectively.



10. Business Segments and
Geographic Information



We are organized into two business segments, Power
Conversion and Communications Products. All of our products are designed and manufactured to meet the system needs of Original Equipment Manufacturers (OEMs) in voice and data communications applications including computing, enterprise
networking, wireless infrastructure and telecommunications. Our Power Conversion segment designs and manufactures a broad range of power conversion products including AC/DC converters and on-board DC/DC converters as well as power systems including
rectifiers and DC/DC power delivery systems used in wireless infrastructure and RF amplification system applications. The Communications Products segment designs and manufactures embedded board level products and protocol software for applications
including central processing units and wide area network input/output boards. We sell products directly to OEMs and also to a network of industrial and retail distributors throughout the world. Our principal markets are in the United States, Europe
and Asia-Pacific, with the United States and Europe being the largest based on sales. Sales are made in U.S. dollars and certain European currencies.



Corporate expenses include items related to compliance, litigation and other corporate administration. After a reassessment in the second quarter of 2004 due to a change
in segment management, these expenses are no longer considered when management is evaluating the performance of the two segments or when resource allocation decisions are made. Accordingly, corporate expenses are no longer allocated to our
reportable segments and we have restated the segment information for the current and prior year.



The tables below present information about reported segments ($000s):



|                        |  |                      |         |   |               |   |        |  
|----------------------- |  | -------------------- | ------- | - | ------------- | - | ------ | -
|                        |  | Thirteen Weeks Ended |        
|                        |  | April 1,2005         |         |   | March 26,2004 |  
|Sales                   |  |                      |         |   |               |   |        |  
|Power Conversion        |  | $                    | 81,300  |   |               | $ | 83,357 |  
|Communications Products |  |                      | 21,150  |   |               |   | 13,156 |  
|                        |  |                      |         |   |               |   |        |  
|Total                   |  | $                    | 102,450 |   |               | $ | 96,513 |  
|                        |  |                      |         |   |               |   |        |  
|Operating Income (Loss) |  |                      |         |   |               |   |        |  
|Power Conversion        |  | $                    | (1,173  | ) |               | $ | 4,472  |  
|Communications Products |  |                      | 7,023   |   |               |   | 2,297  |  
|Corporate               |  |                      | (2,116  | ) |               |   | (2,897 | )
|                        |  |                      |         |   |               |   |        |  
|Total                   |  | $                    | 3,734   |   |               | $ | 3,872  |  
|                        |  |                      |         |   |               |   |        |  



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Artesyn Technologies, Inc.

Notes to Condensed Consolidated Financial Statements

April 1, 2005

(unaudited)



|                        |  |                    |         |                         |   |        
|----------------------- |  | ------------------ | ------- | ----------------------- | - | -------
|                        |  | As ofApril 1, 2005 |         | As of December 31, 2004
|Assets                  |  |                    |         |                         |   |        
|Power Conversion        |  | $                  | 214,783 |                         | $ | 215,109
|Communications Products |  |                    | 62,357  |                         |   | 64,582 
|Corporate               |  |                    | 56,080  |                         |   | 61,948 
|                        |  |                    |         |                         |   |        
|Total                   |  | $                  | 333,220 |                         | $ | 341,639
|                        |  |                    |         |                         |   |        



11. Legal Proceedings



On February 8, 2001, VLT, Inc. and Vicor Corporation filed a suit against
us in the United States District Court of Massachusetts alleging that we infringed on a U.S. patent entitled Optimal Resetting of The Transformers Core in Single Ended Forward Converters. By agreement, Vicor Corporation
subsequently withdrew as plaintiff. VLT has alleged that it is the owner of the patent and that we have manufactured, used or sold electronic power converters with reset circuits that fall within the claims of the patent. VLT seeks damages,
including royalties, lost profits, interest, attorneys fees and increased damages under 35 U.S.C. § 284. Originally, we challenged the validity of the patent and denied the infringement claims but have since reached an agreement with VLT
on a stipulated judgment, after the Court ruled on the scope of the patent.



In
the stipulated judgment, VLT agreed that, under the Courts construction, most of the Artesyn products that were originally accused of infringement (representing over 90% of the accused sales volume) did not infringe the patent. In exchange, we
agreed that, under the Courts claim construction, the patent is valid and enforceable, and one category of our products (representing less than 10% of the accused sales) did infringe the patent, prior to its expiration in February of 2002. Due
to the patent expiration, the parties agree that no current Artesyn products can infringe.



The respective parties each appealed the stipulated judgment, including the District Courts claim constructions to the United States Court of Appeals for the Federal Circuit. On May 24, 2004, the Federal Circuit
affirmed the rulings of the District Court and subsequently denied all motions for rehearing and reconsideration and remanded the case back to the District Court. The only issue pending at the District Court following the Federal Circuits
decision is what, if any, damages are owed by us to VLT on the limited sales of the remaining category of our products that infringe the patent under the stipulated judgment. At the present time, we are unable to predict the outcome of this matter
or ultimate liability owed by us for damages, if any.



We are a party to
various other legal proceedings, which have arisen in the ordinary course of business. While the results of these matters cannot be predicted with certainty, we believe that losses, if any, resulting from the ultimate resolution of these matters
will not have a material adverse effect on our consolidated results of operations, cash flows or financial position.



12. Stock-Based Compensation



We apply APB 25, Accounting for Stock Issued to Employees and related interpretations in accounting for stock-based compensation for employees and
non-employee directors. In accordance with APB 25, as the exercise price of our stock options equals the market price of the underlying stock on the date of grant, no compensation cost has been recognized for our fixed stock option plans. Pro forma
information regarding net income and earnings per share is required by SFAS 123, Accounting for Stock-Based Compensation as amended by SFAS 148, Accounting for Stock-Based Compensation-Transition and Disclosure, and has been
determined as if we had accounted for our employee and outside directors stock-based compensation plans under the fair value method. The fair value of each option grant was estimated at the date of grant using the Black-Scholes option-pricing model
with the following weighted-average assumptions:



|                        |  |                      |   |  |               |  
|----------------------- |  | -------------------- | - |  | ------------- | -
|                        |  | Thirteen Weeks Ended |  
|                        |  | April 1,2005         |   |  | March 26,2004 |  
|Risk-free interest rate |  | 4.1                  | % |  | 2.6           | %
|Dividend yield          |  |                     |   |  |              |  
|Expected volatility     |  | 66                   | % |  | 83            | %
|Expected life           |  | 3.5 years            |   |  | 3.5 years     |  



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##### Table of Contents

Artesyn Technologies, Inc.

Notes to Condensed Consolidated Financial Statements

April 1, 2005

(unaudited)



Artesyns pro forma information follows ($000s except per share data):



|                                     |  |             |  |                      |       |   |               |   |       |  
|------------------------------------ |  | ----------- |  | -------------------- | ----- | - | ------------- | - | ----- | -
|                                     |  |             |  | Thirteen Weeks Ended |      
|                                     |  |             |  | April 1,2005         |       |   | March 26,2004 |  
|Net income:                          |  | As reported |  | $                    | 1,946 |   |               | $ | 1,917 |  
|Pro forma expense, net of tax effect |  |             |  |                      | (747  | ) |               |   | (932  | )
|                                     |  |             |  |                      |       |   |               |   |       |  
|                                     |  | Pro forma   |  | $                    | 1,199 |   |               | $ | 985   |  
|                                     |  |             |  |                      |       |   |               |   |       |  
|Earnings per share-basic             |  | As reported |  | $                    | 0.05  |   |               | $ | 0.05  |  
|                                     |  |             |  |                      |       |   |               |   |       |  
|                                     |  | Pro forma   |  | $                    | 0.03  |   |               | $ | 0.03  |  
|                                     |  |             |  |                      |       |   |               |   |       |  
|Earnings per share-diluted           |  | As reported |  | $                    | 0.05  |   |               | $ | 0.05  |  
|                                     |  |             |  |                      |       |   |               |   |       |  
|                                     |  | Pro forma   |  | $                    | 0.03  |   |               | $ | 0.02  |  
|                                     |  |             |  |                      |       |   |               |   |       |  



The effects of applying SFAS 123 in
this pro forma disclosure are not necessarily indicative of future results.



13. Issuance of Common Stock



We issued 129,669 and 80,836
shares of common stock in the first quarter of 2005 and 2004, respectively, to match the contributions of employees participating in our 401(k) savings plan as approved by the Board of Directors. The shares issued were registered pursuant to a shelf
registration of 1,000,000 shares of common stock filed with the SEC on Form S-8 (Commission File Number 333-120854) on January 31, 2003.



14. Comprehensive Income (Loss)



Comprehensive income (loss) was ($0.1) million and $2.3 million for the thirteen weeks ended April 1, 2005 and March 26, 2004, respectively. Total comprehensive income
(loss) is comprised primarily of net income and the effects of foreign currency translation adjustments, net of tax where applicable.



15. Product Warranty



We record estimated product warranty costs as revenues are recognized. Warranty expense is generally determined by calculating the historical relationship between sales and warranty costs and by applying the
calculation to the current periods sales. Warranty expense is also recorded based on specific warranty claims.



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##### Table of Contents

Artesyn Technologies, Inc.

Notes to Condensed Consolidated Financial Statements

April 1, 2005

(unaudited)





Changes in our product warranty liability are as follows ($000s):



|                                     |  |                      |        |   |               |   |       |  
|------------------------------------ |  | -------------------- | ------ | - | ------------- | - | ----- | -
|                                     |  | Thirteen Weeks Ended |       
|                                     |  | April 1,2005         |        |   | March 26,2004 |  
|Balance, beginning of period         |  | $                    | 6,933  |   |               | $ | 7,854 |  
|Warranties charged during the period |  |                      | 261    |   |               |   | 963   |  
|Settlements made during the period   |  |                      | (1,281 | ) |               |   | (829  | )
|                                     |  |                      |        |   |               |   |       |  
|Balance, end of period               |  | $                    | 5,913  |   |               | $ | 7,988 |  
|                                     |  |                      |        |   |               |   |       |  



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##### Table of Contents

Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations



The following should be read in conjunction with the condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. With
the exception of historical information, the matters discussed below may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Forward-looking
statements typically use words or phrases such as estimate, plans, projects, anticipates, continuing, ongoing, expects, forecasts, believes,
or words of similar import. We caution readers that a number of important factors, including those identified in the most recently filed Annual Report on Form 10-K, as well as factors discussed in other reports filed with the SEC, could affect our
actual results and cause them to differ materially from those expressed in the forward-looking statements. Forward-looking statements included in this Form 10-Q are made only as of the date hereof, based on information available as of the date
hereof, and subject to applicable law to the contrary, we assume no obligation to update any forward-looking statements.



Results of Operations



Overview



We are a
leading supplier of power conversion equipment and embedded computing solutions. Our products are designed and manufactured to meet the systems needs of OEMs in voice and data communications applications, including server and storage,
enterprise networking, wireless infrastructure and telecommunications. We have a global presence in North America, Europe and Asia, including five manufacturing facilities and nine design centers.



We earned $0.05 per share in the first quarter of 2005, which was equivalent to the earnings
in the same period in 2004 and down $0.07 sequentially compared to $0.12 per share earned in the fourth quarter of 2004. The decrease in net income compared to the fourth quarter of 2004 was due to lower revenue.



Revenue in the first quarter of 2005 was $102.5 million, an increase of 6% from $96.5 million
in the first quarter of 2004. Revenue increased as a result of wireless infrastructure deployments driving demand for embedded systems in our Communications Products segment. Compared to the fourth quarter of 2004, our revenue decreased $17.9
million due primarily to market seasonality and customer delays in launching new products. Overall, we anticipate our annual revenue growth in 2005 to be between 8% and 12% over the level recorded in 2004.



Gross profit increased by $1.4 million in the first quarter of 2005 to $25.8 million,
compared to the same quarter of 2004. The gross profit improvement is attributable to the revenue growth over the prior year. As a percentage of sales, the gross profit decreased slightly to 25.2% in the first quarter of 2005 compared to 25.4% in
the first quarter of 2004. The decrease in gross profit as a percentage of sales is driven by sales of lower margin products in the server and storage sector.



Our cash and cash equivalents decreased from $84.8 million at the end of 2004 to $65.2 million at the end of the first quarter of 2005, of which $12.9 related to
additional investment in short-term marketable securities in order to maximize interest income. The remaining decrease in cash and cash equivalents resulted from cash flows used in operations and capital expenditures for production equipment.



13



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##### Table of Contents

Consolidated



Sales. The following table summarizes revenue by business segment for the thirteen weeks ended April 1, 2005 in comparison with the
same period in 2004 (in millions, except percentages):



|                        |  |                      |       |               |   |      |  |    |  
|----------------------- |  | -------------------- | ----- | ------------- | - | ---- |  | -- | -
|                        |  | Thirteen Weeks Ended |       | %Change       |  
|                        |  | April 1,2005         |       | March 26,2004 |  
|Power Conversion        |  | $                    | 81.3  |               | $ | 83.4 |  | (3 | )
|Communications Products |  |                      | 21.2  |               |   | 13.1 |  | 62 |  
|                        |  |                      |       |               |   |      |  |    |  
|Total                   |  | $                    | 102.5 |               | $ | 96.5 |  | 6  |  
|                        |  |                      |       |               |   |      |  |    |  



The increase in revenue in the
thirteen weeks ended April 1, 2005 compared to the same period in 2004 of approximately $6.0 million reflects higher sales in our Communication Products segment, offset by decreased revenue in Power Conversion. The growth in the Communication
Products segment is driven by the increase in demand for our embedded systems by wireless infrastructure customers, resulting from deployment of 2.5G and 3G networks, and the introduction of related new products. Our Power Conversion segment
experienced a decrease in sales primarily due to a greater than anticipated seasonality in the server and storage sector and rescheduling of new product introductions by our customers to the later quarters of 2005.



Gross Profit. Below is a comparison of gross profit and gross profit as a percent of
revenue for the thirteen weeks ended April 1, 2005 compared to the same period in 2004 (in millions, except percentages):



|                                     |  |                      |      |   |               |   |      |   |  |  
|------------------------------------ |  | -------------------- | ---- | - | ------------- | - | ---- | - |  | -
|                                     |  | Thirteen Weeks Ended |      |   | %Change      
|                                     |  | April 1,2005         |      |   | March 26,2004 |   |     
|Gross profit                         |  | $                    | 25.8 |   |               | $ | 24.5 |   |  | 5
|Gross profit as a percent of revenue |  |                      | 25.2 | % |               |   | 25.4 | % |  |  



The increase in gross profit for the
thirteen weeks ended April 1, 2005 in comparison with the same period in 2004 was due to higher revenue, slightly offset by the negative effect of sales mix and higher initial costs to support new product introductions. Unfavorable sales mix
reflects a larger portion of Power Conversion sales derived from lower margin products in the server and storage sector. The unfavorable sales mix in Power Conversion is partly offset by the growth of our Communication Products segment, which
typically includes higher margin software content, and accounted for 21% of our total sales in the first quarter of 2005 compared to 14% in the same period in 2004.



Operating Expenses. Operating expenses for the thirteen weeks ended April 1, 2005 compared to the same period in the prior year are
as follows (in millions, except percentages):



|                                  |  |                      |      |               |   |      |  |   
|--------------------------------- |  | -------------------- | ---- | ------------- | - | ---- |  | --
|                                  |  | Thirteen Weeks Ended |      | %Change      
|                                  |  | April 1,2005         |      | March 26,2004 |  
|Selling, general & administrative |  | $                    | 10.5 |               | $ | 10.4 |  | 1 
|Research & development            |  |                      | 11.6 |               |   | 10.2 |  | 14
|                                  |  |                      |      |               |   |      |  |   
|Total operating expenses          |  | $                    | 22.1 |               | $ | 20.6 |  | 7 
|                                  |  |                      |      |               |   |      |  |   



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##### Table of Contents

Selling, general and administrative expenses for the thirteen weeks ended April 1, 2005 were comparable to the same
period in 2004. Included in the first quarter of 2005 selling, general and administrative expenses is a $0.9 million reduction representing the recovery of expenses under an indemnification from a previous technology license agreement, offset by
increased headcount costs and increases in consulting expenses related to compliance with the Sarbanes-Oxley Act of 2002.



Research and development expenses for the thirteen weeks ended April 1, 2005 of $11.6 million increased by $1.4 million in comparison to the same period in 2004. The
increase in research and development expenses was due to technology investments made to support revenue growth, including funding of AdvancedTCA® development in our Communications Products segment and the expansion of our design center in Asia. We expect our research and development spending to
be approximately 10% of revenue for the full year.



Interest Expense,
net. Interest expense, net for the thirteen weeks ended April 1, 2005 compared to the same period in the prior year is as follows (in millions, except percentages):



|                      |  |                      |      |   |               |   |      |   |  |     |  
|--------------------- |  | -------------------- | ---- | - | ------------- | - | ---- | - |  | --- | -
|                      |  | Thirteen Weeks Ended |      |   | %Change       |  
|                      |  | April 1,2005         |      |   | March 26,2004 |   |     
|Interest expense      |  | $                    | 1.4  |   |               | $ | 1.4  |   |  |    |  
|Less: Interest income |  |                      | (0.4 | ) |               |   | (0.2 | ) |  | 100 |  
|                      |  |                      |      |   |               |   |      |   |  |     |  
|Net interest expense  |  | $                    | 1.0  |   |               | $ | 1.2  |   |  | (17 | )
|                      |  |                      |      |   |               |   |      |   |  |     |  



The decrease in net interest expense
in the first quarter 2005 compared to the same period in the preceding year is due to higher interest income resulting from increased interest rates and a higher balance of marketable securities in 2005.



Provision for Income Taxes. Below is a comparison of the provision for income tax and
effective tax rate for the thirteen weeks ended April 1, 2005 in comparison with the same period in 2004 (in millions, except percentages):



|                           |  |                      |     |   |               |   |     |   |  |   
|-------------------------- |  | -------------------- | --- | - | ------------- | - | --- | - |  | --
|                           |  | Thirteen Weeks Ended |     |   | %Change      
|                           |  | April 1,2005         |     |   | March 26,2004 |   |    
|Provision for income taxes |  | $                    | 0.8 |   |               | $ | 0.7 |   |  | 14
|Effective tax rate         |  |                      | 29  | % |               |   | 27  | % |  |   



The difference in the 2005 and 2004
tax rates is due to the distribution of profits and losses by jurisdiction and adjustments to valuation allowances on deferred tax assets recorded in various jurisdictions.



Net Income.The net income recorded for the thirteen weeks ended April 1, 2005 was consistent with the same period in the previous
year as a result of the factors disclosed above.



15



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##### Table of Contents

Power Conversion



Results for the Power Conversion segment in the thirteen weeks ended April 1, 2005 in comparison with the same period in the prior year are
as follows (in millions, except percentages):



|                        |  |                      |      |          |               |   |      |  |      |  
|----------------------- |  | -------------------- | ---- | -------- | ------------- | - | ---- |  | ---- | -
|                        |  | Thirteen Weeks Ended |      | % Change |              
|                        |  | April 1,2005         |      |          | March 26,2004 |  
|Revenue                 |  | $                    | 81.3 |          |               | $ | 83.4 |  | (3   | )
|Operating (loss) income |  |                      | (1.2 | )        |               |   | 4.5  |  | (127 | )



Revenues were impacted by lower sales
to customers in the server and storage sector, largely due to a greater than anticipated seasonality and customer delays in launching new products, partly offset by the increased sales of new products to our wireless infrastructure customers. We
expect the wireless infrastructure sector to continue to be a source of revenue growth in 2005, with revenues from rectifiers and amplifiers for base station applications contributing to the revenue growth in the second half of 2005.



Operating income decreased $5.7 million in the first quarter of 2005 compared with the same
period in 2004 as a result of lower revenues, unfavorable sales mix and increased research and development costs. Lower revenues and unfavorable sales mix, primarily in the server and storage sector, contributed approximately $4.6 million to the
decrease in operating income. Research and development increased by approximately $1.1 million and related to the expansion of our design center in Asia and headcount additions to support development of new products for our customers.



Communications Products



Results for the Communications Products segment in the thirteen weeks ended April 1, 2005 in
comparison with the same period in the prior year are as follows (in millions, except percentages):



|                 |  |                      |      |               |   |      |  |    
|---------------- |  | -------------------- | ---- | ------------- | - | ---- |  | ---
|                 |  | Thirteen Weeks Ended |      | %Change      
|                 |  | April 1,2005         |      | March 26,2004 |  
|Revenue          |  | $                    | 21.2 |               | $ | 13.1 |  | 62 
|Operating income |  |                      | 7.0  |               |   | 2.3  |  | 204



The embedded systems sold to wireless
infrastructure customers drove the increase in revenue in our Communications Products segment in the first quarter of 2005 compared to the first quarter of 2004. Communications service providers increased their spending on wireless infrastructure to
support the deployment of 2.5G and 3G networks.



The improvement in operating
income in the first quarter of 2005 is primarily attributable to the increase in revenue and improved sales mix (approximately $5.0 million in total) compared with the same period in 2004. The favorable impacts of increased revenue and improved
sales mix were somewhat offset by increased engineering expenses related to development of products designed to meet AdvancedTCA® standards and higher selling expenses to support the increased revenue base.



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##### Table of Contents

Liquidity and Capital Resources



The following table presents selected financial statement information as of the end of the first quarter of 2005 compared to the end of 2004
(in millions, except statistical data):



|                                                            |  |                    |      |                         |   |     
|----------------------------------------------------------- |  | ------------------ | ---- | ----------------------- | - | ----
|                                                            |  | As ofApril 1, 2005 |      | As of December 31, 2004
|Cash and cash equivalents                                   |  | $                  | 65.2 |                         | $ | 84.8
|Short-term marketable debt securities                       |  |                    | 34.0 |                         |   | 21.1
|Convertible subordinated debt                               |  |                    | 90.0 |                         |   | 90.0
|                                                            |  |                    |      |                         |   |     
|Cash and short-term marketable debt securities, net of debt |  | $                  | 9.2  |                         | $ | 15.9
|                                                            |  |                    |      |                         |   |     
|Working Capital Statistics:                                 |  |                    |      |                         |   |     
|Days of sales outstanding                                   |  |                    | 52   |                         |   | 50  
|Days of inventory on-hand                                   |  |                    | 62   |                         |   | 55  
|Days of accounts payable outstanding                        |  |                    | 60   |                         |   | 60  



Our cash and cash equivalents
decreased from $84.8 million at the end of 2004 to $65.2 million at the end of the first quarter of 2005, with $12.9 million used to purchase short-term marketable securities. Cash provided by net income and adjusted for non-cash expenses was
consumed by working capital, equipment purchases and investments in additional marketable debt securities.



Cash Flows from Operating Activities.During the first quarter of 2005, the cash outflow to fund our operations was $2.3 million. Net income adjusted for non-cash expenses, which includes the effect of
depreciation and amortization and various provisions and reserves, was the primary source of cash, providing us with $8.2 million in operating cash in the period. This cash inflow from net income was offset by decreases in accounts payable and
accruals ($8.6 million) and increase in inventory ($2.1 million).



Overall working capital performance was slightly below the level recorded at the end of 2004. While the balance in accounts receivable decreased in 2005 due to lower sales, our days of sales outstanding was slightly above the 2004 level.
Days of inventory on-hand at the end of the first quarter increased from the end of 2004 due to the purchase of components and materials to support anticipated new product introductions that were rescheduled into later quarters. Days of accounts
payable remained consistent with the end of 2004, while accounts payable balances decreased, reflecting payments for the high level of component purchases made during the fourth quarter of 2004.



Cash Flows from Investing Activities. Cash flows from investing activities reflect a
net cash use of $17.0 million in the first quarter of 2005, comprised primarily of additional purchases of marketable debt securities ($12.9 million) to maximize our investment income and capital expenditures ($4.1 million) to support our product
design and manufacturing requirements.



Cash Flows from Financing
Activities. In the first quarter of 2005, cash flows from financing activities were a source of cash of $0.6 million, resulting primarily from the exercise of stock options.



Our convertible debt consists of $90.0 million of 5.5% convertible senior subordinated notes due in 2010. There are no financial covenant
requirements associated with the convertible senior subordinated notes. For additional information regarding our convertible debt, please see Note 7 of the Condensed Consolidated Financial Statements.



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##### Table of Contents

We currently have a five-year, $35.0 million senior revolving credit facility with Fleet Capital Corporation, which
expires in March 2008. While the total availability under the facility is $35.0 million, the actual amount available to be borrowed is based on our level of qualifying domestic accounts receivable and inventory, which is subject to changing business
conditions. As of the end of the first quarter of 2005, our outstanding balance on the revolving credit facility was zero, and our availability was $18.7 million. In addition to other affirmative and negative covenants customary for asset-based
credit facilities, we are also subject to an EBITDA covenant that is triggered if the amount available to be borrowed under the facility plus cash deposited with the designated bank falls below $20.0 million. As of the end of the first quarter of
2005, the availability and the cash deposited were above the prescribed limit, and we were not subject to the additional covenant. For additional information on the terms of this asset-based credit facility, please see Note 8 of the Condensed
Consolidated Financial Statements.



Our sources of cash are the cash we
currently have on hand, the availability under on our asset-based credit facility and cash generated from net income. These amounts are available to finance capital expenditures, fund working capital needs, and pay interest on our outstanding
convertible senior subordinated debt. We expect to generate cash from net income in 2005, but if our projections are significantly below our expectations, we believe that our other sources of cash are sufficient to cover our operating expenses,
capital expenditures, restructuring requirements and interest payments for the next twelve months. If we are not able to generate cash from operations for a sustained period of time, we would, after our cash on hand and available line of credit were
depleted, need to identify additional sources of cash. These sources could include additional issuances of debt or equity, sales of equipment or portions of the business.



From a long-term perspective, our sources of cash are expected to remain the same. We are dependent on generating cash from operations as
our primary long-term source of cash. We would be required to identify other long-term sources of cash if we were not able to generate cash from operations or if we decided to take on a strategic initiative, such as an acquisition, which would
require cash. We continually evaluate options with respect to additional financing, including the sale of debt or equity instruments and portions of the business. Any such financing or sale transactions could have an adverse effect on our stock
price and could dilute our shareholders ownership interest in our company.



Item 3. Quantitative and Qualitative Disclosures About Market Risk



We are exposed to the impact of interest rate changes and foreign currency fluctuations in the normal course of business. For additional details related to our exposure to changes in interest rates and fluctuations in
the value of foreign currencies, please refer to Item 7A of our 2004 Annual Report on Form 10-K.



Item 4. Controls and Procedures



We have performed
an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under
the Securities Exchange Act of 1934. Based on that evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective as of April 1, 2005 to provide reasonable assurance that information
required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms.



There were no changes in our internal control over financial reporting during our most
recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



Item 5. Other Information



On February 15, 2005,
we issued 129,669 shares of common stock in order to fulfill the commitment made by our Board of Directors to match the contribution of the employees participating in the Artesyn 401(k) savings plan, pursuant to which employees may elect to purchase
our common stock or make other investment elections. The shares were registered pursuant to a shelf registration of 1,000,000 shares of common stock filed with the SEC on Form S-8 (Commission File Number 333-102854) on January 31, 2003. Any
additional information related to the issuance can be obtained by reviewing the Form S-8.



Item 6. Exhibits



|            |  |                                                                                                                                                        
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  |                                                                                                                                                        
|31.1        |  | Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                
|            | 
|31.2        |  | Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                
|            | 
|32.1        |  | Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|            | 
|32.2        |  | Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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##### Table of Contents

SIGNATURE



Pursuant to the requirements of the
Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                  |  |                            |  |                        
|----------------- |  | -------------------------- |  | -----------------------
|                  |  | Artesyn Technologies, Inc.
|                  |  |                           
|Date: May 5, 2005 |  |                            |  |                        
|                  |  |                           
|                  |  | By:                        |  | /s/ Richard J. Thompson
|                  |  |                            |  | Richard J. Thompson    
|                  |  |                            |  | Vice President Finance 
|                  |  |                            |  | Chief Financial Officer



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##### Table of Contents

Exhibit Index



|            |  |                                                                                                                                                        
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                            
|31.1        |  | Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                
|            | 
|31.2        |  | Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                
|            | 
|32.1        |  | Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|            | 
|32.2        |  | Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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