FORT COLLINS, Colo., April 26 /PRNewswire-FirstCall/ -- Advanced Energy Industries, Inc. (Nasdaq: AEIS) today announced financial results for the first quarter ended March 31, 2006. (Logo: http://www.newscom.com/cgi-bin/prnh/20030825/AEISLOGO ) Sales were $94.0 million for the first quarter of 2006, up 16.9% compared to $80.4 million in the fourth quarter of 2005, and up 14.3% compared to $82.2 million in the first quarter of 2005. Gross profit was $38.6 million, or 41.0% of sales, compared to $30.2 million, or 37.6% of sales for the fourth quarter of 2005, and $27.3 million, or 33.2% of sales in the first quarter of 2005. First quarter 2006 income from operations was $13.2 million, or 14.0% of sales, an increase of 111.3% compared to $6.2 million, or 7.8% of sales, in the fourth quarter of 2005. This compares to first quarter 2005 income from operations of $2.5 million, or 3.1% of sales. First quarter 2006 income from operations includes $641,000 of stock-based compensation expense due to the adoption of SFAS 123(R). First quarter 2005 income from operations includes $1.3 million of restructuring charges related to employee severance and termination costs. First quarter 2006 net income was $12.8 million, or $0.28 per diluted share, compared to net income of $10.0 million, or $0.22 per diluted share in the fourth quarter of 2005, and $734,000 in the first quarter of 2005, or $0.02 per diluted share. First quarter 2006 net income includes a $1.4 million gain, primarily related to the sale of equity securities, which favorably impacts diluted earnings per share by approximately $0.02. First quarter 2006 net income reflects a tax rate of 15%, which is lower than the Company's anticipated tax rate of 20% due to the mix of foreign and domestic income in the respective taxing jurisdictions and the utilization of the net operating loss carryforwards which had valuation allowances recorded against them. Dr. Hans Betz, president and chief executive officer of Advanced Energy, said, "Our first quarter performance demonstrates a strong demand environment for our innovative power generation solutions. The sequential sales increase was primarily driven by sales to the semiconductor industry. Shipments of our Pinnacle(R) DC power supply for use in semiconductor and Generation 5 flat panel display applications were at near record levels. Today, we announced a significant win for our Crystal(R) AC power solutions for a major architectural glass retrofit opportunity that is expected to drive increased sales to this market over the next twelve months. Outside of our core markets, we also marked another milestone in our objective to penetrate the solar cell manufacturing market, winning a new position at ECD Ovonics to provide process power using our Cesar(R) RF generators and VarioMatch(TM) matching networks." Dr. Betz continued, "We also continue to make significant progress in our financial performance. We were encouraged by the operating performance as our factory in Shenzhen, China is fully ramped, and gross margin this quarter was at its highest level in five years. Based on the continued strength in end market demand, we currently expect second quarter 2006 sales to be in the range of $98 million to $102 million. We anticipate earnings per share in the range of $0.27 to $0.29." First Quarter 2006 Conference Call Management will host a conference call today, Wednesday, April 26, 2006 at 5:00 pm Eastern time to discuss Advanced Energy's financial results. You may access this conference call by dialing 888-713-4717. International callers may access the call by dialing 706-679-7720. For a replay of this teleconference, please call 706-645-9291, and enter the pass code 7779721. The replay will be available through May 3, 2006. There will also be a webcast available on the Investor Relations webpage at http://ir.advanced-energy.com. About Advanced Energy Advanced Energy is a global leader in the development and support of technologies critical to high-technology, high-growth manufacturing processes used in the production of semiconductors, flat panel displays, data storage products, solar cells, architectural glass, and other advanced product applications. Leveraging a diverse product portfolio and technology leadership, Advanced Energy creates solutions that maximize process impact, improve productivity and lower the cost of ownership for its customers. This portfolio includes a comprehensive line of technology solutions in power, flow, thermal management, and plasma and ion beam sources for original equipment manufacturers (OEMs) and end-users around the world. Advanced Energy operates in regional centers in North America, Asia and Europe and offers global sales and support through direct offices, representatives and distributors. Founded in 1981, Advanced Energy is a publicly held company traded on the Nasdaq National Market under the symbol AEIS. For more information, please visit our corporate website: www.advanced-energy.com. This press release contains certain forward-looking statements, including the company's expectations with respect to Advanced Energy's financial results for the second quarter of 2006 as well as other matters discussed in this news release that are not purely historical data, are forward-looking statements. 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 volatility and cyclicality of the industries we serve including the semiconductor capital equipment and flat panel display industries, the timing of orders received from our customers, our ability to realize cost improvement benefits from the manufacturing initiatives underway, unanticipated changes to our effective tax rate, and other risks described in Advanced Energy's Form 10-K, Forms 10-Q and other reports and statements, as filed with the Securities and Exchange Commission. Forward-looking statements are made and based on information available to us on the date of this press release. We do not assume, and expressly disclaim, any obligation to update this information. 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.advanced-energy.com or by contacting Advanced Energy's investor relations at 970-221-4670. 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 March 31, December 31, 2006 2005 2005 Sales $93,950 $82,176 $80,387 Cost of sales 55,400 54,854 50,196 Gross profit 38,550 27,322 30,191 Operating expenses: Research and development 10,459 10,255 9,635 Selling, general and administrative 14,405 12,725 13,671 Amortization of intangible assets 477 547 481 Restructuring charges 29 1,262 166 Total operating expenses 25,370 24,789 23,953 Income from operations 13,180 2,533 6,238 Other income (expense), net 1,833 (2,087) 123 Income from continuing operations before income taxes 15,013 446 6,361 Provision for income taxes (2,252) (529) (1,330) Income (loss) from continuing operations 12,761 (83) 5,031 Gain on sale of discontinued assets -- -- 5,210 Results of discontinued operations -- 817 (216) Provision for income taxes -- -- -- Income from discontinued operations -- 817 4,994 Net income $12,761 $734 $10,025 Net income (loss) per basic share Income (loss) from continuing operations $0.29 $-- $0.11 Income from discontinued operations $-- $0.02 $0.11 Basic earnings per share $0.29 $0.02 $0.23 Net income (loss) per diluted share Income (loss) from continuing operations $0.28 $-- $0.11 Income from discontinued operations $-- $0.02 $0.11 Diluted earnings per share $0.28 $0.02 $0.22 Basic weighted-average common shares outstanding 44,571 32,755 44,416 Diluted weighted-average common shares outstanding 45,004 32,878 44,902 CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands) March 31, December 31, 2006 2005 ASSETS Current assets: Cash and cash equivalents $67,965 $52,874 Marketable securities 8,815 6,811 Accounts receivable, net 72,240 68,992 Inventories 55,940 56,199 Other current assets 4,700 6,773 Total current assets 209,660 191,649 Property and equipment, net 37,502 39,294 Deposits and other 1,877 3,808 Goodwill and intangibles, net 69,716 69,843 Customer service equipment, net 1,848 2,407 Deferred income tax assets, net 5,059 3,116 Total assets $325,662 $310,117 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade accounts payable $21,567 $22,028 Other accrued expenses 23,928 23,977 Current portion of capital leases and senior borrowings 1,601 2,011 Total current liabilities 47,096 48,016 Long-term liabilities: Capital leases and senior borrowings 2,028 2,179 Other long-term liabilities 2,556 2,492 Total long-term liabilities 4,584 4,671 Total liabilities 51,680 52,687 Stockholders' equity 273,982 257,430 Total liabilities and stockholders' equity $325,662 $310,117 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) Three Months Ended March 31, 2006 2005 NET CASH PROVIDED BY OPERATING ACTIVITIES $14,767 $18,140 NET CASH USED IN INVESTING ACTIVITIES (728) (3,355) NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 879 (1,051) EFFECT OF CURRENCY TRANSLATION ON CASH 173 (772) INCREASE IN CASH AND CASH EQUIVALENTS 15,091 12,962 CASH AND EQUIVALENTS, beginning of period 52,874 38,404 CASH AND EQUIVALENTS, end of period $67,965 $51,366
SOURCE Advanced Energy Industries, Inc.