FORT COLLINS, Colo., July 26 /PRNewswire-FirstCall/ -- Advanced Energy Industries, Inc. (Nasdaq: AEIS) today announced financial results for the second quarter ended June 30, 2006. (Logo: http://www.newscom.com/cgi-bin/prnh/20030825/AEISLOGO) Sales were $104.6 million for the second quarter of 2006, up 11.3% compared to $94.0 million for the first quarter of 2006, and up 24.2% compared to $84.2 million in the second quarter of 2005. Gross profit was $44.8 million, or 42.8% of sales, in the second quarter of 2006, compared to $38.6 million, or 41.0% of sales, in the first quarter of 2006, and $30.6 million, or 36.4% of sales, in the second quarter of 2005. Second quarter 2006 income from operations was $19.2 million, or 18.4% of sales, an increase of 45.9% compared to $13.2 million, or 14.0% of sales in the first quarter of 2006. This compares to second quarter 2005 income from operations of $5.0 million, or 6.0% of sales. Second quarter 2005 income from operations includes $1.1 million of restructuring charges. Second quarter 2006 net income was $18.2 million, or $0.40 per diluted share, up 42.3% compared to net income of $12.8 million, or $0.28 per diluted share in the first quarter of 2006, and $5.9 million, or $0.18 per diluted share in the second quarter of 2005. Revenue for the six months ended June 30, 2006 was $198.5 million compared to $166.3 million for the first six months of 2005. Net income for the first six months of 2006 was $30.9 million, or $0.69 per diluted share, compared to $6.7 million, or $0.20 per diluted share for the first six months of 2005. Dr. Hans Betz, president and chief executive officer of Advanced Energy, said, "Sales to semiconductor, flat panel display and architectural glass customers drove much of the second quarter demand with double-digit sequential growth in all three of these core markets. Unit sales of our Pinnacle DC power conversion system, a long-time market leader for a range of PVD applications in our core markets, reached an all-time record level. The recent announcements of power system orders from three solar panel manufacturers further demonstrate our success in leveraging our product portfolio across core and emerging market opportunities." Dr. Betz continued, "The results of our second quarter exceeded our target financial performance. We delivered 43 percent incremental operating margins for every revenue dollar above $60 million. These are goals that we've been driving toward for the past twelve months, and I thank Advanced Energy's employees for their major contributions and successful execution of these critical corporate objectives. We continue to focus on further improving our financial performance and expanding our market presence in profitable growth areas." Third Quarter 2006 Guidance The Company anticipates third quarter sales in the range of $102 million to $106 million, and earnings per share in the range of $0.34 to $0.37, assuming a 12% effective tax rate. Second Quarter 2006 Conference Call Management will host a conference call today, Wednesday, July 26, 2006 at 5:00 pm Eastern 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 2629324. The replay will be available through August 2, 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 Global 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 third quarter of 2006 as well as other matters discussed in this news release that are not purely historical data. 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, and unanticipated changes to our effective tax rate. 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.advanced-energy.com or by contacting Advanced Energy's investor relations at 970-221-4670. Forward-looking statements are made and based on information available to us 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 Six Months Ended June 30, March 31, June 30, 2006 2005 2006 2006 2005 Sales $104,571 $84,163 $93,950 $198,521 $166,339 Cost of sales 59,811 53,517 55,400 115,211 108,371 Gross profit 44,760 30,646 38,550 83,310 57,968 Operating expenses: Research and development 10,804 10,220 10,459 21,263 20,475 Selling, general and administrative 14,241 13,814 14,405 28,646 26,539 Amortization of intangible assets 453 518 477 930 1,065 Restructuring charges 31 1,068 29 60 2,330 Total operating expenses 25,529 25,620 25,370 50,899 50,409 Income from operations 19,231 5,026 13,180 32,411 7,559 Other income (expense), net 741 (719) 1,833 2,574 (2,806) Income from continuing operations before income taxes 19,972 4,307 15,013 34,985 4,753 Provision for income taxes (1,947) (1,430) (2,252) (4,199) (1,959) Income from continuing operations 18,025 2,877 12,761 30,786 2,794 Gain on sale of discontinued assets 138 2,645 -- 138 2,645 Results of discontinued operations -- 427 -- -- 1,244 Provision for income taxes -- -- -- -- -- Income from discontinued operations 138 3,072 -- 138 3,889 Net income $18,163 $5,949 $12,761 $30,924 $6,683 Net income per basic share Income from continuing operations $0.40 $0.09 $0.29 $0.69 $0.09 Income from discontinued operations $0.00 $0.09 $-- $0.00 $0.12 Basic earnings per share $0.41 $0.18 $0.29 $0.69 $0.20 Net income per diluted share Income from continuing operations $0.40 $0.09 $0.28 $0.68 $0.08 Income from discontinued operations $0.00 $0.09 $-- $-- $0.12 Diluted earnings per share $0.40 $0.18 $0.28 $0.69 $0.20 Basic weighted-average common shares outstanding 44,704 32,797 44,571 44,638 32,776 Diluted weighted-average common shares outstanding 45,108 33,094 45,004 45,098 32,986 CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands) June 30, December 31, 2006 2005 ASSETS Current assets: Cash and cash equivalents $50,837 $52,874 Marketable securities 43,175 6,811 Accounts receivable, net 77,719 68,992 Inventories 59,822 56,199 Other current assets 4,170 6,773 Total current assets 235,723 191,649 Property and equipment, net 35,461 39,294 Deposits and other 1,784 3,808 Goodwill and intangibles, net 69,360 69,843 Customer service equipment, net 1,632 2,407 Deferred income tax assets, net 5,339 3,116 Total assets $349,299 $310,117 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Trade accounts payable $22,283 $22,028 Other accrued expenses 26,975 23,977 Current portion of capital leases and senior borrowings 1,136 2,011 Total current liabilities 50,394 48,016 Long-term liabilities: Capital leases and senior borrowings 1,982 2,179 Other long-term liabilities 1,280 2,492 Total long-term liabilities 3,262 4,671 Total liabilities 53,656 52,687 Stockholders' equity 295,643 257,430 Total liabilities and stockholders' equity $349,299 $310,117
SOURCE Advanced Energy Industries, Inc.