Advanced Energy Reports First Quarter Results; Implements Reduction in Workforce Due to Continued End Market Deterioration

Apr 12, 2001, 01:00 ET from Advanced Energy Industries, Inc.

    FORT COLLINS, Colo., April 12 /PRNewswire/ -- Advanced Energy Industries,
 Inc. (Nasdaq:   AEIS) today reported financial results for the first quarter and
 period ended March 31, 2001.  Advanced Energy is an industry-leading provider
 of critical technology solutions for the manufacture of semiconductors, data
 storage products, and flat panel displays.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000609/AEISLOGO )
     For the first quarter, revenues were $74.7 million, compared to
 $75.0 million in the first quarter of 2000, and $102.7 million for the fourth
 quarter of 2000.  The company's 2000 results have been restated to reflect the
 April 6, 2000 acquisition of Noah Holdings and the August 18, 2000 acquisition
 of Sekidenko, Inc., using the pooling of interests method of accounting.
     "Our financial performance in the first quarter was in line with our
 revised expectations, reflecting the continuing softness in industry demand
 patterns," said Doug Schatz, Chairman and Chief Executive Officer.  "In order
 to continue to meet our operating goals in light of this difficult
 environment, we have taken several cost containment initiatives including ten
 percent salary reductions for senior management, substantial reductions in
 travel, cutbacks in other discretionary spending and two shutdown weeks during
 the second quarter.  The continuing deterioration in all of the industries we
 serve has caused us to implement a ten percent reduction in force or 75 full
 time continuous and 89 temporary employees.  We are providing severance
 packages and job placement services to the employees affected by this industry
 related action."
     Net income for the 2001 first quarter was $5.1 million, or $0.16 per
 diluted share.  Gross margin was 42 percent in the first quarter, down from
 49 percent in the comparable quarter in 2000 and in line with our
 expectations.  This compares to net income of $11.2 million or $0.35 per
 diluted share for the first quarter of 2000, and net income of $19.8 million,
 excluding the extraordinary item, or $0.61 per diluted share, for the fourth
 quarter of 2000.
     "We continue to have limited visibility for the year 2001.  Based on
 current demand forecasts for the second quarter, we anticipate revenue in the
 $60 million to $65 million range and earnings per share in the $0.05 to $0.07
 range.  We expect gross margin to be in the range of 38 percent to 41 percent.
 The reduced revenue level will continue to create pressure on our operating
 margins.  We expect the cost containment actions implemented late in the first
 quarter to have a greater impact during the second quarter, in addition to the
 additional cost reduction measures taken in this current quarter.
     "We remain committed to our ongoing product development efforts through
 continued investments in engineering, strengthening our alliances with
 customers and furthering the integration of our new subsidiaries.  We have
 gained market share in prior industry downturns, and we are well-positioned to
 continue to extend our technology lead throughout this cycle," said Mr.
 Schatz.
 
     First Quarter Conference Call
     Management will host a conference call on Thursday, April 12, 2001 at
 9:30 am Eastern time to discuss the first quarter financial results.  You may
 access this conference call by dialing 800-982-3654.  For a replay of this
 teleconference, please call 703-925-2533, passcode 5063866.  The replay will
 be available through Thursday, April 19, 2001.  There will also be a webcast
 available at www.advanced-energy.com in the "Investor Relations" section.
 
     About Advanced Energy
     Advanced Energy is a global leader in the development, marketing, and
 support of technology solutions that are central in the manufacture of
 semiconductors, data storage products, and flat panel displays.  Original
 equipment manufacturers (OEMs) and end-users around the world depend on AE
 products when plasma-based technology plays a vital role in their
 manufacturing process.  AE offers a comprehensive suite of products for vacuum
 process systems, including power management, temperature sensing, dynamic
 temperature control, gas delivery management, process monitoring and machine
 control tools, ion-beam sources, and plasma abatement technologies.  AE
 technology solutions are sold and supported globally by direct offices,
 representatives, and distributors.  Founded in 1981, AE is a publicly held
 company traded on Nasdaq under the symbol AEIS.  AE's URL is
 www.advanced-energy.com
 
     Safe Harbor Statement
     This press release contains certain forward-looking statements 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: fluctuations in
 quarterly and annual revenues and operating results, Advanced Energy's ongoing
 ability to develop new products in a highly competitive industry characterized
 by increasingly rapid technological changes, the volatility and cyclicality of
 the semiconductor and semiconductor capital equipment industries and other
 risks described in Advanced Energy's 10-K, Forms 10-Q and other reports and
 statements, as filed with the Securities and Exchange Commission.  The company
 assumes no obligation to update the information in this press release.
 
 
     CONSOLIDATED INCOME STATEMENT
     (in thousands except per share data)
 
                                                     Quarter Ended March 31,
                                                     2001              2000
                                                  (unaudited)      (unaudited)
     Sales                                          $74,714           $75,028
     Cost of sales                                   43,491            38,361
     Gross profit                                    31,223            36,667
 
     Operating expenses:
          Research and development                   12,389             8,113
          Sales and marketing                         6,629             5,867
          General and administrative                  6,174             5,639
          Litigation recovery                        (1,500)               --
     Income from operations                           7,531            17,048
 
     Other income (expense)                             187               120
 
     Net income before income taxes and
      minority interest                               7,718            17,168
 
     Provision for income taxes                       2,689             5,947
     Minority interest in net loss                      (65)              (17)
 
     Net income                                      $5,094           $11,238
 
     Net earnings per share:
       Basic                                          $0.16             $0.36
       Diluted                                        $0.16             $0.35
 
     Basic weighted-average common shares
      outstanding                                    31,547            31,161
 
     Diluted weighted-average common
      shares outstanding                             32,187            32,512
 
 
     ADDITIONAL INFORMATION - EBITDA:
     Earnings before interest, taxes,
      depreciation and amortization                 $11,219           $19,163
 
     Pretax cash diluted EPS                          $0.35             $0.59
     After tax cash diluted EPS                        0.23              0.39
 
 
     CONSOLIDATED BALANCE SHEET
     (in thousands)
 
                                                   March 31,       December 31,
                                                     2001              2000
     ASSETS                                       (unaudited)       (audited)
 
     Current Assets:
          Cash and cash equivalents                 $26,773           $31,716
          Marketable securities - trading           130,050           157,811
          Accounts receivable                        62,206            76,545
          Notes receivable                            2,472             2,472
          Income tax receivable                          88                74
          Inventories                                53,018            45,266
          Other current assets                        3,465             2,508
          Deferred income tax assets, net             8,050             7,483
     Total current assets                           286,122           323,875
 
     Property and equipment, net                     32,813            24,101
     Goodwill and intangibles, net                   31,770             9,890
     Investments                                      2,209             1,824
     Deferred debt issuance costs                     2,138             2,261
     Other assets                                     4,368             3,884
     Total assets                                  $359,420          $365,835
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current Liabilities:
          Accounts payable, trade                   $16,078           $18,250
          Other current liabilities                  13,670            16,210
          Accrued income taxes payable                1,248             7,923
          Current portion of long-term
           debt                                       1,104             1,337
          Accrued interest payable on
           convertible subordinated notes             1,600               529
     Total current liabilities                       33,700            44,249
 
     Long-term Liabilities:
         Capital leases and notes payable               892             1,043
         Deferred income tax liability,
          net                                           912                --
         Convertible subordinated notes
          payable                                    81,600            81,600
     Total long-term liabilities                     83,404            82,643
 
     Total liabilities                              117,104           126,892
 
     Minority interest                                   80               145
 
     Stockholders' equity                           242,236           238,798
     Total liabilities and stockholders'
      equity                                       $359,420          $365,835
 
 
     CONSOLIDATED STATEMENT OF CASH FLOWS
     (in thousands)
 
 
                                                   Three Months Ended March 31,
                                                      2001              2000
                                                   (unaudited)      (unaudited)
     CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income                                    $5,094           $11,238
       Depreciation and amortization                  4,105             2,490
       Earnings from marketable
        securities, net                              (1,565)           (2,278)
       Accounts receivable and notes
        receivable                                   15,506            (6,810)
       Inventories                                   (6,074)           (3,058)
       Accounts payable, trade                       (2,527)           (2,526)
       Income taxes                                  (6,770)            5,389
       Other                                         (3,753)            2,737
         Net cash provided by operating
          activities                                  4,016             7,182
 
     CASH FLOWS FROM INVESTING ACTIVITIES:
       Marketable securities                         30,000           (10,000)
       Proceeds from sale of equipment                   --               150
       Purchase of property and equipment,
        net                                          (6,471)           (2,016)
       Purchase of investments                         (592)               --
       Acquisition of EMCO, net of cash
        acquired                                    (29,932)               --
         Net cash used in investing
          activities                                 (6,995)          (11,866)
 
     CASH FLOWS FROM FINANCING ACTIVITIES:
       Net change from notes payable and
        capital lease obligations                      (384)              627
       Proceeds from common stock
        transactions                                    199             2,996
         Net cash (used in) provided by
          financing activities                         (185)            3,623
     EFFECT OF CURRENCY TRANSLATION ON
      CASH FLOW                                      (1,779)             (145)
     DECREASE IN CASH AND CASH EQUIVALENTS           (4,943)           (1,206)
     CASH AND EQUIVALENTS, beginning of
      period                                         31,716            21,043
     CASH AND EQUIVALENTS, end of period            $26,773           $19,837
 
 

SOURCE Advanced Energy Industries, Inc.
    FORT COLLINS, Colo., April 12 /PRNewswire/ -- Advanced Energy Industries,
 Inc. (Nasdaq:   AEIS) today reported financial results for the first quarter and
 period ended March 31, 2001.  Advanced Energy is an industry-leading provider
 of critical technology solutions for the manufacture of semiconductors, data
 storage products, and flat panel displays.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000609/AEISLOGO )
     For the first quarter, revenues were $74.7 million, compared to
 $75.0 million in the first quarter of 2000, and $102.7 million for the fourth
 quarter of 2000.  The company's 2000 results have been restated to reflect the
 April 6, 2000 acquisition of Noah Holdings and the August 18, 2000 acquisition
 of Sekidenko, Inc., using the pooling of interests method of accounting.
     "Our financial performance in the first quarter was in line with our
 revised expectations, reflecting the continuing softness in industry demand
 patterns," said Doug Schatz, Chairman and Chief Executive Officer.  "In order
 to continue to meet our operating goals in light of this difficult
 environment, we have taken several cost containment initiatives including ten
 percent salary reductions for senior management, substantial reductions in
 travel, cutbacks in other discretionary spending and two shutdown weeks during
 the second quarter.  The continuing deterioration in all of the industries we
 serve has caused us to implement a ten percent reduction in force or 75 full
 time continuous and 89 temporary employees.  We are providing severance
 packages and job placement services to the employees affected by this industry
 related action."
     Net income for the 2001 first quarter was $5.1 million, or $0.16 per
 diluted share.  Gross margin was 42 percent in the first quarter, down from
 49 percent in the comparable quarter in 2000 and in line with our
 expectations.  This compares to net income of $11.2 million or $0.35 per
 diluted share for the first quarter of 2000, and net income of $19.8 million,
 excluding the extraordinary item, or $0.61 per diluted share, for the fourth
 quarter of 2000.
     "We continue to have limited visibility for the year 2001.  Based on
 current demand forecasts for the second quarter, we anticipate revenue in the
 $60 million to $65 million range and earnings per share in the $0.05 to $0.07
 range.  We expect gross margin to be in the range of 38 percent to 41 percent.
 The reduced revenue level will continue to create pressure on our operating
 margins.  We expect the cost containment actions implemented late in the first
 quarter to have a greater impact during the second quarter, in addition to the
 additional cost reduction measures taken in this current quarter.
     "We remain committed to our ongoing product development efforts through
 continued investments in engineering, strengthening our alliances with
 customers and furthering the integration of our new subsidiaries.  We have
 gained market share in prior industry downturns, and we are well-positioned to
 continue to extend our technology lead throughout this cycle," said Mr.
 Schatz.
 
     First Quarter Conference Call
     Management will host a conference call on Thursday, April 12, 2001 at
 9:30 am Eastern time to discuss the first quarter financial results.  You may
 access this conference call by dialing 800-982-3654.  For a replay of this
 teleconference, please call 703-925-2533, passcode 5063866.  The replay will
 be available through Thursday, April 19, 2001.  There will also be a webcast
 available at www.advanced-energy.com in the "Investor Relations" section.
 
     About Advanced Energy
     Advanced Energy is a global leader in the development, marketing, and
 support of technology solutions that are central in the manufacture of
 semiconductors, data storage products, and flat panel displays.  Original
 equipment manufacturers (OEMs) and end-users around the world depend on AE
 products when plasma-based technology plays a vital role in their
 manufacturing process.  AE offers a comprehensive suite of products for vacuum
 process systems, including power management, temperature sensing, dynamic
 temperature control, gas delivery management, process monitoring and machine
 control tools, ion-beam sources, and plasma abatement technologies.  AE
 technology solutions are sold and supported globally by direct offices,
 representatives, and distributors.  Founded in 1981, AE is a publicly held
 company traded on Nasdaq under the symbol AEIS.  AE's URL is
 www.advanced-energy.com
 
     Safe Harbor Statement
     This press release contains certain forward-looking statements 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: fluctuations in
 quarterly and annual revenues and operating results, Advanced Energy's ongoing
 ability to develop new products in a highly competitive industry characterized
 by increasingly rapid technological changes, the volatility and cyclicality of
 the semiconductor and semiconductor capital equipment industries and other
 risks described in Advanced Energy's 10-K, Forms 10-Q and other reports and
 statements, as filed with the Securities and Exchange Commission.  The company
 assumes no obligation to update the information in this press release.
 
 
     CONSOLIDATED INCOME STATEMENT
     (in thousands except per share data)
 
                                                     Quarter Ended March 31,
                                                     2001              2000
                                                  (unaudited)      (unaudited)
     Sales                                          $74,714           $75,028
     Cost of sales                                   43,491            38,361
     Gross profit                                    31,223            36,667
 
     Operating expenses:
          Research and development                   12,389             8,113
          Sales and marketing                         6,629             5,867
          General and administrative                  6,174             5,639
          Litigation recovery                        (1,500)               --
     Income from operations                           7,531            17,048
 
     Other income (expense)                             187               120
 
     Net income before income taxes and
      minority interest                               7,718            17,168
 
     Provision for income taxes                       2,689             5,947
     Minority interest in net loss                      (65)              (17)
 
     Net income                                      $5,094           $11,238
 
     Net earnings per share:
       Basic                                          $0.16             $0.36
       Diluted                                        $0.16             $0.35
 
     Basic weighted-average common shares
      outstanding                                    31,547            31,161
 
     Diluted weighted-average common
      shares outstanding                             32,187            32,512
 
 
     ADDITIONAL INFORMATION - EBITDA:
     Earnings before interest, taxes,
      depreciation and amortization                 $11,219           $19,163
 
     Pretax cash diluted EPS                          $0.35             $0.59
     After tax cash diluted EPS                        0.23              0.39
 
 
     CONSOLIDATED BALANCE SHEET
     (in thousands)
 
                                                   March 31,       December 31,
                                                     2001              2000
     ASSETS                                       (unaudited)       (audited)
 
     Current Assets:
          Cash and cash equivalents                 $26,773           $31,716
          Marketable securities - trading           130,050           157,811
          Accounts receivable                        62,206            76,545
          Notes receivable                            2,472             2,472
          Income tax receivable                          88                74
          Inventories                                53,018            45,266
          Other current assets                        3,465             2,508
          Deferred income tax assets, net             8,050             7,483
     Total current assets                           286,122           323,875
 
     Property and equipment, net                     32,813            24,101
     Goodwill and intangibles, net                   31,770             9,890
     Investments                                      2,209             1,824
     Deferred debt issuance costs                     2,138             2,261
     Other assets                                     4,368             3,884
     Total assets                                  $359,420          $365,835
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
 
     Current Liabilities:
          Accounts payable, trade                   $16,078           $18,250
          Other current liabilities                  13,670            16,210
          Accrued income taxes payable                1,248             7,923
          Current portion of long-term
           debt                                       1,104             1,337
          Accrued interest payable on
           convertible subordinated notes             1,600               529
     Total current liabilities                       33,700            44,249
 
     Long-term Liabilities:
         Capital leases and notes payable               892             1,043
         Deferred income tax liability,
          net                                           912                --
         Convertible subordinated notes
          payable                                    81,600            81,600
     Total long-term liabilities                     83,404            82,643
 
     Total liabilities                              117,104           126,892
 
     Minority interest                                   80               145
 
     Stockholders' equity                           242,236           238,798
     Total liabilities and stockholders'
      equity                                       $359,420          $365,835
 
 
     CONSOLIDATED STATEMENT OF CASH FLOWS
     (in thousands)
 
 
                                                   Three Months Ended March 31,
                                                      2001              2000
                                                   (unaudited)      (unaudited)
     CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income                                    $5,094           $11,238
       Depreciation and amortization                  4,105             2,490
       Earnings from marketable
        securities, net                              (1,565)           (2,278)
       Accounts receivable and notes
        receivable                                   15,506            (6,810)
       Inventories                                   (6,074)           (3,058)
       Accounts payable, trade                       (2,527)           (2,526)
       Income taxes                                  (6,770)            5,389
       Other                                         (3,753)            2,737
         Net cash provided by operating
          activities                                  4,016             7,182
 
     CASH FLOWS FROM INVESTING ACTIVITIES:
       Marketable securities                         30,000           (10,000)
       Proceeds from sale of equipment                   --               150
       Purchase of property and equipment,
        net                                          (6,471)           (2,016)
       Purchase of investments                         (592)               --
       Acquisition of EMCO, net of cash
        acquired                                    (29,932)               --
         Net cash used in investing
          activities                                 (6,995)          (11,866)
 
     CASH FLOWS FROM FINANCING ACTIVITIES:
       Net change from notes payable and
        capital lease obligations                      (384)              627
       Proceeds from common stock
        transactions                                    199             2,996
         Net cash (used in) provided by
          financing activities                         (185)            3,623
     EFFECT OF CURRENCY TRANSLATION ON
      CASH FLOW                                      (1,779)             (145)
     DECREASE IN CASH AND CASH EQUIVALENTS           (4,943)           (1,206)
     CASH AND EQUIVALENTS, beginning of
      period                                         31,716            21,043
     CASH AND EQUIVALENTS, end of period            $26,773           $19,837
 
 SOURCE  Advanced Energy Industries, Inc.