EX-99.1 3 d77344exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(ADVANCED ENERGY LOGO)

Financial News Release         
     
CONTACTS:
    
Danny Herron
  Annie Leschin/Vanessa Lehr
Advanced Energy Industries, Inc.
  Advanced Energy Industries, Inc.
970.407.6570
  970.407.6555
danny.herron@aei.com
  ir@aei.com
ADVANCED ENERGY ANNOUNCES RECORD REVENUES AND INVERTER SALES
FOR THE THIRD QUARTER 2010
Fort Collins, Colo., October 31, 2010 — Advanced Energy Industries, Inc. (Nasdaq GM: AEIS) today announced financial results for the third quarter ended September 30, 2010. Total sales for the third quarter were $141.0 million, another record for the company, with earnings of $0.40 per diluted share from continuing operations. The financials highlighted in this release exclude results from the Aera® mass flow controller business, which was sold to Hitachi Metals, Ltd. on October 15, 2010. Results for the quarter include a full quarter of operations from PV Powered, Inc.
“We had another exceptional quarter with all key areas of our business growing significantly. This record performance was highlighted by the sixth straight quarter of growth in semiconductor revenues, significant acceleration of our inverter business, now 27% of sales, and strong operating leverage,” said Dr. Hans Betz, chief executive officer. “The aggressive capacity additions and investment in our inverter business have proven very successful, as Advanced Energy was recently ranked #1 in the 3-phase North America solar PV inverter market, according to IMS Research. With the diversification of Advanced Energy into high growth power conversion markets, particularly inverters, we are well positioned to capitalize on future opportunities and expand our business.”
Semiconductor sales rose 12.5% sequentially to $49.4 million, representing 35.0% of total sales for the quarter. Sales to the non-semiconductor thin film markets increased 49.8% sequentially to $41.1 million, representing 29.2% of total sales for the quarter. Inverter sales grew substantially to $37.4 million, or 26.5% of total sales compared to $14.4 million in the second quarter. Service revenue also exhibited healthy growth, increasing to $13.2 million, or 9.3% of total sales, compared to $10.7 million last quarter.
Bookings for the third quarter reached a record $160.3 million, increasing 17.2% compared to $136.7 million in the second quarter of 2010. This resulted in a book-to-bill ratio of 1.14:1 for the third quarter. Ending backlog for the third quarter increased 17.7% sequentially to $128.5 million, compared to $109.2 million at the end of the second quarter of 2010.

 

 

Gross margin for the third quarter was 43.1%, compared with 44.5% in the second quarter of 2010 and 31.9% in the same period last year. The strong growth in inverter revenues this quarter drove inverters to a larger percentage of total sales, pushing margins down in the short-term.
Operating expenses for the third quarter increased to $38.4 million compared to $31.5 million in the second quarter in order to support higher sales volumes, and as a result of an additional full quarter of PV Powered expenses compared to just two months in the second quarter. As a percent of sales, operating costs were 27.2% compared to 31.4% of sales in the prior quarter. Operating costs during the quarter also included $1.2 million in amortization of acquired intangible assets related to the acquisition of PV Powered.
Third quarter net income from continuing operations was $17.6 million or $0. 40 per diluted share, compared to net income from continuing operations of $11.5 million or $0.26 per diluted share in the second quarter of 2010. In the same period a year ago, net loss from continuing operations was $8.4 million or a loss of $0.20 per share.
Cash and investments were $112.4 million at the end of the third quarter, compared to $128.9 million in the second quarter due to investment in capital equipment as well as inventory purchases to support our growing backlog of inverter sales.
Fourth Quarter 2010 Guidance
The Company anticipates fourth quarter 2010 results from continuing operations, to be within the following ranges:
  •   Sales of $140 million to $150 million
 
  •   Gross profit of 41% to 43%
 
  •   Earnings per share of $0.36 to $0.42
Third Quarter 2010 Conference Call
Management will host a conference call tomorrow, Monday, November 1, 2010, at 8:30 a.m. Eastern Daylight Time to discuss Advanced Energy’s financial results. Domestic callers may access this conference call by dialing (888) 771-4371. International callers may access the call by dialing (847) 585-4405. Participants will need to provide a conference pass code 28184917. For a replay of this teleconference, please call (888) 843-7419 or (630) 652-3042, and enter the pass code 28184917. The replay will be available for two weeks following the conference call. A webcast will also be available on the Investor Relations web page at http://ir.advanced-energy.com.

 

 

About Advanced Energy
Advanced Energy (NASDAQ: AEIS — News) is a global leader in innovative power and control technologies for high-growth, thin-film manufacturing and solar-power generation. Advanced Energy is headquartered in Fort Collins, Colorado, with dedicated support and service locations around the world. For more information, go to www.advanced-energy.com.
Forward-Looking Language
The Company’s expectations with respect to guidance to financial results for the fourth quarter ending December 31, 2010 and statements that are not historical information are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to: the effects of global macroeconomic conditions upon demand for our products, the volatility and cyclicality of the industries the company serves, particularly the semiconductor industry, the timing of orders received from customers, the company’s ability to realize cost improvement benefits, the ability to source materials and manufacture products, and unanticipated changes to management’s estimates, reserves or allowances. These and other risks are described in Advanced Energy’s Form 10-K, Forms 10-Q and other reports and statements filed with the Securities and Exchange Commission. These reports and statements are available on the SEC’s website at www.sec.gov. Copies may also be obtained from Advanced Energy’s website at www.advancedenergy.com or by contacting Advanced Energy’s investor relations at 970-407-6555. Forward-looking statements are made and based on information available to the company on the date of this press release. The company assumes no obligation to update the information in this press release.
###

 

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
                                         
    Three Months Ended     Nine Months Ended  
    September 30,     June 30,     September 30,  
    2010     2009     2010     2010     2009  
 
                                        
Sales
   $ 140,966     $ 43,452     $ 100,107     $ 310,760     $ 103,766  
Cost of sales
     80,276       29,597       55,548       176,304       77,244  
 
                              
Gross profit
     60,690       13,855       44,559       134,456       26,522  
 
     43.1 %     31.9 %     44.5 %     43.3 %     25.6 %
 
                                        
Operating expenses:
                                        
Research and development
     16,672       9,448       13,515       41,329       30,413  
Selling, general and administrative
     20,545       9,801       17,183       49,956       27,723  
Impairment of goodwill
     —       —       —       —       63,260  
Amortization of intangible assets
     1,177       —       767       1,944       102  
Restructuring charges
     —       235       —       —       4,370  
 
                              
Total operating expenses
     38,394       19,484       31,465       93,229       125,868  
 
                              
 
                                        
Income (loss) from operations
     22,296       (5,629 )     13,094       41,227       (99,346 )
 
                                        
Other income, net
     1,224       506       220       1,828       1,415  
 
                              
Income (loss) from operations before income taxes
     23,520       (5,123 )     13,314       43,055       (97,931 )
Provision for income taxes
     5,964       3,229       1,857       9,192       5,557  
 
                              
Net income (loss) from continuing operations
     17,556       (8,352 )     11,457       33,863       (103,488 )
 
                              
 
                                        
Basic earnings (loss) per share from continuing operations
   $ 0.41     $ (0.20 )   $ 0.27     $ 0.79     $ (2.47 )
Diluted earnings (loss) per share from continuing operations
   $ 0.40     $ (0.20 )   $ 0.26     $ 0.78     $ (2.47 )
 
                              
 
                                        
Gain (loss) from discontinued operations, net of income taxes
     2,392       (79 )     2,162       5,921       (740 )
 
                              
 
                                        
Basic earnings (loss) per share from discontinuing operations
   $ 0.06     $ (0.00 )   $ 0.05     $ 0.14     $ (0.02 )
Diluted earnings (loss) per share from discontinuing operations
   $ 0.05     $ (0.00 )   $ 0.05     $ 0.14     $ (0.02 )
 
                              
 
                                        
Net Income (loss)
   $ 19,948     $ (8,431 )   $ 13,619     $ 39,784     $ (104,228 )
 
                              
 
                                        
Basic earnings (loss) per share
   $ 0.46     $ (0.20 )   $ 0.32     $ 0.93     $ (2.48 )
Diluted earnings (loss) per share
   $ 0.45     $ (0.20 )   $ 0.31     $ 0.92     $ (2.48 )
 
                                        
Basic weighted-average common shares outstanding
     43,254       42,004       42,806       42,711       41,944  
Diluted weighted-average common shares outstanding
     43,849       42,004       43,327       43,293       41,944  

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
                 
    September 30,     December 31,  
    2010     2009  
 
                
ASSETS
                
 
                
Current assets:
                
Cash and cash equivalents
   $ 101,566     $ 133,106  
Marketable securities
     10,834       44,401  
Accounts receivable, net
     112,457       50,267  
Inventories, net
     66,691       28,567  
Deferred income taxes
     9,669       9,222  
Income taxes receivable
     4,325       —  
Assets held for sale
     30,315       26,460  
Other current assets
     8,857       5,641  
 
            
Total current assets
     344,714       297,664  
 
                
Property and equipment, net
     24,732       18,687  
 
                
Deposits and other
     8,829       9,295  
Goodwill and intangibles, net
     97,068       —  
Deferred income tax assets, net
     20,549       19,479  
 
            
Total assets
   $ 495,892     $ 345,125  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
 
                
Current liabilities:
                
Accounts payable
   $ 36,153     $ 23,802  
Other accrued expenses
     37,816       24,055  
Acquisition related contingent liability
     38,967       —  
Liabilities of business held for sale
     1,992       1,477  
 
            
Total current liabilities
     114,928       49,334  
 
                
Long-term liabilities
     43,224       17,457  
 
            
 
                
Total liabilities
     158,152       66,791  
 
                
Stockholders’ equity
     337,740       278,334  
 
            
Total liabilities and stockholders’ equity
   $ 495,892     $ 345,125