Advanced Energy Announces 45.5% Sequential Revenue Growth in Third Quarter 2009 Results

FORT COLLINS, Colo., Oct. 28 /PRNewswire-FirstCall/ -- Advanced Energy Industries, Inc. (Nasdaq: AEIS) today announced financial results for the third quarter ended September 30, 2009.

Sales for the third quarter of 2009 increased 45.5% to $51.8 million from $35.6 million in the second quarter of 2009, and decreased 38.8% from $84.5 million in the third quarter of 2008.

Growth in several markets drove the increased revenues in the third quarter. The primary drivers were sales to the semiconductor capital equipment market, which rose 70.7% sequentially to $20.8 million, representing 40.2% of total sales for the quarter, and sales to the non-semiconductor markets, which increased 39.2% sequentially to $20.3 million, representing 39.2% of total sales for the quarter. Service sales were also strong at $10.7 million or 20.6% of total sales for the quarter. Our book to bill ratio for the third quarter was 1.16:1 up from 1.06:1 in the second quarter of 2009 which drove a 32.1% sequential increase in our backlog to $34.6 million at the end of the third quarter compared to $26.2 million at the end of the second quarter.

Our gross margin was 30.1% in the third quarter, up from 22.3% in the second quarter of 2009, and down from 41.7% for the third quarter of 2008. The sequential improvement was driven by product mix increased revenue as well as continued cost controls.

The third quarter net loss was $8.4 million or $0.20 loss per share, compared to a net loss of $16.0 million or $0.38 loss per share in the second quarter of 2009. In the third quarter of 2008, net income was $5.4 million or $0.13 earnings per diluted share.

We ended the quarter with $177.3 million in cash, cash equivalents, and marketable securities; a $2.0 million increase sequentially.

"Our strong sales performance in the third quarter was driven by the continued recovery in the semiconductor market as factory utilization at chip manufacturers rose, driving orders for new equipment. The majority of our non-semi markets also grew, reflecting improvement in the broader economy over the first half of the year," said Hans Betz, president and CEO.

"The Solaron inverter took the spotlight once again this quarter, as our market penetration deepened, reflected by increased bookings and backlog. We increased our production capacity for inverters as our order volume outstripped our capacity in the third quarter. We also expanded the Solaron product family in the quarter with the introduction of our European 500KW inverter and today's announcement of the Solaron 250KW inverter, addressing expanding another portion of the commercial solar market."

Fourth Quarter 2009 Guidance

The Company anticipates fourth quarter 2009 results to be within the following ranges:

  • Sales of $56.0 million to $62.0 million
  • Loss per share of $0.07 to $0.14

Third Quarter 2009 Conference Call

Management will host a conference call today, Wednesday, October 28, 2009, at 8:30 am Eastern Daylight Time to discuss Advanced Energy's financial results. Domestic callers may access this conference call by dialing (888) 713-4717. International callers may access the call by dialing (816) 650-2836. Participants will need to provide a conference passcode 35702731. For a replay of this teleconference, please call (800) 642-1687 or (706) 645-9291, and enter the passcode 35702731. The replay will be available through 12:00 a.m. Eastern Daylight Time, October 30, 2009. A webcast will also be available on the Investor Relations webpage at www.advancedenergy.com.

About Advanced Energy

Advanced Energy® is a global leader in innovative power and control technologies for high-growth, thin-film manufacturing and solar-power generation. Specifically, AE targets solar grid-tie inverters, solar cells, semiconductors, flat panel displays, data storage products, architectural glass and other advanced applications.

The Company's expectations with respect to guidance to financial results for the fourth quarter ending December 31, 2009 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 from the global operations initiatives underway, 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,
                                -------------    --------      -------------
                                2009     2008      2009       2009      2008
                                ----     ----      ----       ----      ----

    Sales                    $51,762  $84,510    $35,567   $119,956  $261,393
    Cost of sales             36,181   49,249     27,636     90,056   155,008
                              ------   ------     ------     ------   -------
    Gross profit              15,581   35,261      7,931     29,900   106,385
                                30.1%    41.7%      22.3%      24.9%     40.7%
    Operating expenses:
      Research and
       development            10,195   14,681     10,742     32,035    41,528
      Selling, general
       and administrative     10,788   14,337     10,166     30,349    42,760
      Amortization of
       intangible assets         123      223        120        465       689
      Impairment of goodwill       -        -          -     63,260         -
      Restructuring charges      235      522        739      4,370     1,589
                                 ---      ---        ---      -----     -----
        Total operating
         expenses             21,341   29,763     21,767    130,479    86,566

    Income (loss) from
     operations               (5,760)   5,498    (13,836)  (100,579)   19,819

    Other income, net            506      429        627      1,415     2,330
                                 ---      ---        ---      -----     -----
    Income (loss) from
     operations before
     income taxes             (5,254)   5,927    (13,209)   (99,164)   22,149
    Provision for income
     taxes                     3,177      558      2,825      5,064     4,951
                               -----      ---      -----      -----     -----

    Net income (loss)        $(8,431)  $5,369   $(16,034) $(104,228)  $17,198
                             =======   ======   ========  =========   =======

    Basic earnings (loss)
     per share                $(0.20)   $0.13     $(0.38)    $(2.48)    $0.40

    Diluted earnings (loss)
     per share                $(0.20)   $0.13     $(0.38)    $(2.48)    $0.40

    Basic weighted-average
     common shares
     outstanding              42,004   41,787     41,948     41,944    42,773

    Diluted weighted-average
     common shares
     outstanding              42,004   42,201     41,948     41,944    43,183



    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands)

                                          September 30,   December 31,
                                               2009           2008
                                               ----           ----
                                           (unaudited)
    ASSETS

    Current assets:
         Cash and cash equivalents          $139,679       $116,448
         Marketable securities                37,601         33,266
         Accounts receivable, net             37,160         56,549
         Inventories, net                     36,472         46,659
         Deferred income taxes                 4,392         13,253
         Other current assets                  5,241          5,324
                                               -----          -----
    Total current assets                     260,545        271,499

    Property and equipment, net               29,916         31,322

    Long-term investments                          -         30,401
    Deposits and other                         7,527          7,528
    Goodwill and intangibles, net              6,355         72,918
    Deferred income tax assets, net           14,727          6,969
                                              ------          -----
    Total assets                            $319,070       $420,637
                                            ========       ========


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
         Accounts payable                    $14,983         $8,005
         Other accrued expenses               19,194         23,928
                                              ------         ------
    Total current liabilities                 34,177         31,933

    Long-term liabilities                     11,655         12,155
                                              ------         ------

    Total liabilities                         45,832         44,088

    Stockholders' equity                     273,238        376,549
                                             -------        -------
    Total liabilities and
     stockholders' equity                   $319,070       $420,637
                                            ========       ========



SOURCE Advanced Energy Industries, Inc.



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http://www.advanced-energy.com

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