- Q2 Revenue was $134.8 million
- Q2 GAAP EPS from continuing operations was $0.61
- Q2 Non-GAAP EPS was $0.45
Advanced Energy Industries, Inc. (Nasdaq: AEIS) today announced
financial results for the second quarter ended June 30, 2019.
“Our strong operating performance in the face of continued
market weakness enabled us to deliver solid results in the quarter.
Also, we continued to see strong adoption of our technologies into
our customers’ next-generation manufacturing processes,” said Yuval
Wasserman, president and CEO. “Further, we believe the pending
acquisition of Artesyn Embedded Power will provide a platform for
more balanced and steady growth going forward. Despite the current
market slowdown, we are executing our strategy to deliver strong
long-term earnings growth."
Second Quarter Results
Sales were $134.8 million in the second quarter of 2019 compared
with $140.7 million in the first quarter of 2019 and $196.0 million
in the second quarter of 2018.
GAAP net income from continuing operations was $23.4 million or
$0.61 per diluted share, compared with $15.4 million or $0.40 per
diluted share in the prior quarter, and $46.4 million or $1.17 per
diluted share in the second quarter of 2018.
Non-GAAP net income was $17.2 million or $0.45 per diluted share
in the second quarter of 2019. This compares with $22.4 million or
$0.58 per diluted share in the first quarter of 2019, and $49.4
million or $1.25 per diluted share in the second quarter of 2018. A
reconciliation of non-GAAP measures is provided in the tables
below.
The company generated $11.5 million of operating cash from
continuing operations in the quarter.
Discontinued Operations
The company’s financial statements for all periods presented
reflect results for the continuing precision power business, with
the discontinued inverter business included in discontinued
operations for all purposes. Further financial detail regarding the
amounts related to the discontinued inverter business are available
in the company’s 2018 Annual Report on Form 10-K.
Third Quarter 2019
Guidance
Based on the company’s current view, beliefs and assumptions,
guidance for the third quarter of 2019 is within the following
ranges.
Q3 2019
Revenues
$128M +/- $5M
GAAP EPS from continuing operations
$
0.18
-
$
0.28
Non-GAAP EPS
$
0.28
-
$
0.38
Conference Call
Management will host a conference call on Tuesday, August 6,
2019 at 6:30 a.m. Mountain Time/ 8:30 a.m. Eastern Time to discuss
Advanced Energy’s financial results. Domestic callers may access
this conference call by dialing 855-232-8958. International callers
may access the call by dialing +1 315-625-6980. Participants will
need to provide the operator with Conference ID Number 9380226,
which has been reserved for this call. A webcast will also be
available on the company’s Investor Relations web page at
ir.advanced-energy.com.
About Advanced Energy
Advanced Energy (Nasdaq: AEIS) is a global leader in the design
and manufacturing of highly engineered, precision power conversion,
measurement and control solutions for mission-critical applications
and processes. AE’s power solutions enable customer innovation in
complex semiconductor and industrial manufacturing applications.
With engineering know-how and responsive service and support around
the globe, the company builds collaborative partnerships to meet
technology advances, propel growth for its customers and innovate
the future of power. Advanced Energy has devoted more than three
decades to perfecting power for its global customers and is
headquartered in Fort Collins, Colorado, USA. For more information,
visit www.advancedenergy.com.
Advanced Energy | Precision. Power. Performance.
Non-GAAP Measures
This release includes GAAP and non-GAAP income and per-share
earnings data and other GAAP and non-GAAP financial information.
Advanced Energy’s non-GAAP measures exclude the impact of non-cash
related charges such as stock-based compensation and amortization
of intangible assets, as well as discontinued operations, and
non-recurring items such as acquisition-related costs and
restructuring expenses. The non-GAAP measures included in this
release are not in accordance with, or an alternative for, similar
measures calculated under generally accepted accounting principles
and may be different from non-GAAP measures used by other
companies. In addition, these non-GAAP measures are not based on
any comprehensive set of accounting rules or principles. Advanced
Energy believes that these non-GAAP measures provide useful
information to management and investors to evaluate business
performance without the impacts of certain non-cash charges and
other cash charges which are not part of the company’s usual
operations. The company uses these non-GAAP measures to assess
performance against business objectives, make business decisions,
develop budgets, forecast future periods, assess trends and
evaluate financial impacts of various scenarios. In addition,
management’s incentive plans include these non-GAAP measures as
criteria for achievements. Additionally, the company believes that
these non-GAAP measures, in combination with its financial results
calculated in accordance with GAAP, provide investors with
additional perspective. While some of the excluded items may be
incurred and reflected in the company’s GAAP financial results in
the foreseeable future, the company believes that the items
excluded from certain non-GAAP measures do not accurately reflect
the underlying performance of its continuing operations for the
period in which they are incurred. The use of non-GAAP measures has
limitations in that such measures do not reflect all of the amounts
associated with the company’s results of operations as determined
in accordance with GAAP, and these measures should only be used to
evaluate the company’s results of operations in conjunction with
the corresponding GAAP measures. Please refer to the Form 8‑K
regarding this release furnished today to the Securities and
Exchange Commission.
Forward-Looking
Statements
The company’s guidance with respect to anticipated financial
results for the third quarter ending September 30, 2019, potential
future growth and profitability, our future business mix,
expectations regarding future market trends and the company’s
future performance within specific markets, the anticipated closing
of the acquisition of Artesyn Embedded Power and other statements
herein or made on the above-announced conference call 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: (a) the effects of
global macroeconomic conditions upon demand for our products and
services; (b) the volatility and cyclicality of the industries the
company serves, particularly the semiconductor industry; (c) delays
in capital spending by end-users in our served markets; (d) the
risks and uncertainties related to the pending acquisition of
Artesyn Embedded Power all as more fully outlined in our Form 8-K
filed on May 15, 2019; (e) the accuracy of the company’s estimates
related to fulfilling solar inverter product warranty and
post-warranty obligations; (f) the company’s ability to realize its
plan to avoid additional costs after the solar inverter wind-down;
(g) the accuracy of the company’s assumptions on which its
financial statement projections are based; (h) the impact of
product price changes, which may result from a variety of factors;
(i) the timing of orders received from customers; (j) the company’s
ability to realize benefits from cost improvement efforts including
avoided costs, restructuring plans and inorganic growth; (k) the
company’s ability to obtain in a timely manner the materials
necessary to manufacture its products; (l) unanticipated changes to
management’s estimates, reserves or allowances; (m) changes and
adjustments to the tax expense and benefits related to the U.S. tax
reform that was enacted in late 2017; and (n) the effects of U.S.
government trade and export restrictions, Chinese retaliatory trade
actions, and other governmental action related to tariffs upon the
demand for our, and our customers’, products and services and the
U.S. economy. 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 (the “SEC”).
These reports and statements are available on the SEC’s website at
www.sec.gov. Copies may also be obtained from Advanced Energy’s
investor relations page at ir.advanced-energy.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.
Aspirational goals and targets discussed on the conference call or
in the presentation materials should not be interpreted in any
respect as guidance. The company assumes no obligation to update
the information in this press release.
ADVANCED ENERGY INDUSTRIES,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
(in thousands, except per share
data)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
2019
2018
2019
2019
2018
Sales:
Product
$
106,193
$
169,235
$
112,112
$
218,305
$
340,444
Service
28,617
26,797
28,631
57,248
51,205
Total sales
134,810
196,032
140,743
275,553
391,649
Cost of sales:
Product
56,113
80,953
60,801
116,914
160,759
Service
14,571
13,844
14,202
28,773
26,010
Total cost of sales
70,684
94,797
75,003
145,687
186,769
Gross profit
64,126
101,235
65,740
129,866
204,880
47.6
%
51.6
%
46.7
%
47.1
%
52.3
%
Operating expenses:
Research and development
21,840
19,195
21,289
43,129
36,832
Selling, general and administrative
27,612
24,758
29,014
56,626
53,406
Amortization of intangible assets
1,874
1,264
1,973
3,847
2,521
Restructuring expense
1,795
—
1,673
3,468
—
Total operating expenses
53,121
45,217
53,949
107,070
92,759
Operating income
11,005
56,018
11,791
22,796
112,121
Other income (expense), net
15,545
(485
)
743
16,288
(459
)
Income from continuing operations before
income taxes
26,550
55,533
12,534
39,084
111,662
Provision (benefit) for income taxes
3,177
9,133
(2,853)
324
18,892
Income from continuing operations, net of
income taxes
23,373
46,400
15,387
38,760
92,770
Income (loss) from discontinued
operations, net of income taxes
8,324
5
(9
)
8,315
145
Net income
31,697
46,405
15,378
47,075
92,915
Income from continuing operations
attributable to non-controlling interest
11
44
8
19
75
Net income attributable to Advanced
Energy Industries, Inc.
$
31,686
$
46,361
$
15,370
$
47,056
$
92,840
Basic weighted-average common shares
outstanding
38,274
39,349
38,198
38,236
39,484
Diluted weighted-average common shares
outstanding
38,462
39,603
38,426
38,443
39,807
Earnings per share attributable to
Advanced Energy Industries, Inc:
Continuing operations:
Basic earnings per share
$
0.61
$
1.18
$
0.40
$
1.01
$
2.35
Diluted earnings per share
$
0.61
$
1.17
$
0.40
$
1.01
$
2.33
Discontinued operations:
Basic earnings per share
$
0.22
$
—
$
—
$
0.22
$
—
Diluted earnings per share
$
0.22
$
—
$
—
$
0.22
$
—
Net income:
Basic earnings per share
$
0.83
$
1.18
$
0.40
$
1.23
$
2.35
Diluted earnings per share
$
0.82
$
1.17
$
0.40
$
1.22
$
2.33
ADVANCED ENERGY INDUSTRIES,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands)
June 30,
December 31,
2019
2018
Unaudited
ASSETS
Current assets:
Cash and cash equivalents
$
359,070
$
349,301
Marketable securities
746
2,470
Accounts and other receivable, net
93,045
100,442
Inventories, net
92,740
97,987
Income taxes receivable
4,578
2,220
Other current assets
12,776
10,173
Current assets of discontinued
operations
67
5,855
Total current assets
563,022
568,448
Property and equipment, net
34,692
31,269
Operating lease right-of-use assets
52,465
—
Deposits and other assets
11,404
6,874
Goodwill and intangibles, net
159,880
156,810
Deferred income tax assets
40,464
47,099
Non-current assets of discontinued
operations
3,841
5,984
Total assets
$
865,768
$
816,484
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
37,281
$
39,646
Other accrued expenses
48,832
65,377
Current portion of operating lease
liability
9,572
—
Current liabilities of discontinued
operations
812
5,286
Total current liabilities
96,497
110,309
Non-current liabilities of continuing
operations
110,866
88,158
Non-current liabilities of discontinued
operations
2,356
10,715
Long-term liabilities
113,222
98,873
Total liabilities
209,719
209,182
Advanced Energy stockholders’ equity
655,518
606,790
Noncontrolling interest
531
512
Stockholders’ equity
656,049
607,302
Total liabilities and stockholders’
equity
$
865,768
$
816,484
December 31, 2018 amounts are derived from
the December 31, 2018 audited Consolidated Financial
Statements.
ADVANCED ENERGY INDUSTRIES,
INC.
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
(in thousands)
Six Months Ended June
30,
2019
2018
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income
$
47,075
$
92,915
Income from discontinued operations, net
of income taxes
8,315
145
Income from continuing operations, net of
income taxes
38,760
92,770
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
8,396
5,917
Stock-based compensation expense
4,136
6,437
Provision for deferred income taxes
4,509
(96
)
Gain on sale of central inverter service
business
(14,804
)
—
Net loss on disposal of assets
90
158
Changes in operating assets and
liabilities, net of assets acquired
(22,757
)
(17,282
)
Net cash provided by operating activities
from continuing operations
18,330
87,904
Net cash used in operating activities from
discontinued operations
(1,914
)
(2,450
)
Net cash provided by operating
activities
16,416
85,454
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of marketable securities
—
(91
)
Proceeds from sale of marketable
securities
1,742
4
Acquisitions, net of cash acquired
—
(9,072
)
Issuance of notes receivable
(2,800
)
—
Purchases of property and equipment
(8,866
)
(9,426
)
Net cash used in investing activities from
continuing operations
(9,924
)
(18,585
)
Net cash used in investing activities from
discontinued operations
—
—
Net cash used in investing activities
(9,924
)
(18,585
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Purchase and retirement of common
stock
—
(38,059
)
Net payments related to stock-based award
activities
(1,042
)
(2,576
)
Net cash used in financing activities from
continuing operations
(1,042
)
(40,635
)
Net cash used in financing activities from
discontinued operations
—
—
Net cash used in financing activities
(1,042
)
(40,635
)
EFFECT OF CURRENCY TRANSLATION ON
CASH
(932
)
(1,160
)
INCREASE IN CASH AND CASH
EQUIVALENTS
4,518
25,074
CASH AND CASH EQUIVALENTS, beginning of
period
354,552
415,037
CASH AND CASH EQUIVALENTS, end of
period
359,070
440,111
Less cash and cash equivalents from
discontinued operations
—
7,112
CASH AND CASH EQUIVALENTS FROM
CONTINUING OPERATIONS, end of period
$
359,070
$
432,999
ADVANCED ENERGY INDUSTRIES,
INC.
SUPPLEMENTAL INFORMATION
(UNAUDITED)
(in thousands)
Net Sales by Product
Line
Three Months
Ended
Six Months
Ended
June 30,
March 31,
June 30,
2019
2018
2019
2019
2018
Semiconductor equipment
$
65,086
$
127,291
$
67,514
$
132,600
$
263,301
Industrial technology equipment
41,107
41,944
44,598
85,705
77,143
Service
28,617
26,797
28,631
57,248
51,205
Total
$
134,810
$
196,032
$
140,743
$
275,553
$
391,649
Net Sales by Geographic
Region
Three Months
Ended
Six Months
Ended
June 30,
March 31,
June 30,
2019
2018
2019
2019
2018
North America
$
61,393
$
101,942
$
58,506
$
119,899
$
209,839
Asia
50,962
70,165
58,435
109,397
136,329
Europe
22,092
23,815
23,426
45,518
45,264
Other Countries
363
110
376
739
217
Total
$
134,810
$
196,032
$
140,743
$
275,553
$
391,649
ADVANCED ENERGY INDUSTRIES,
INC.
SELECTED OTHER DATA (UNAUDITED)
(in thousands)
Reconciliation of Non-GAAP measure -
operating expenses and operating income, excluding certain
items
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
2019
2018
2019
2019
2018
Gross profit from continuing operations,
as reported
$
64,126
$
101,235
$
65,740
$
129,866
$
204,880
Adjustments to gross profit:
Stock-based compensation
55
149
233
288
500
Facility expansion and relocation
costs
150
249
170
320
249
Non-GAAP gross profit
64,331
101,633
66,143
130,474
205,629
Operating expenses from continuing
operations, as reported
53,121
45,217
53,949
107,070
92,759
Adjustments:
Amortization of intangible assets
(1,874
)
(1,264
)
(1,973
)
(3,847
)
(2,521
)
Stock-based compensation
(883
)
(1,794
)
(2,966
)
(3,848
)
(5,937
)
Acquisition-related costs
(1,531
)
(255
)
(1,511
)
(3,042
)
(605
)
Facility expansion and relocation
costs
—
(13
)
(74
)
(74
)
(489
)
Restructuring charges
(1,795
)
—
(1,673
)
(3,468
)
—
Non-GAAP operating expenses
47,038
41,891
45,752
92,791
83,207
Non-GAAP operating income
$
17,293
$
59,742
$
20,391
$
37,683
$
122,422
Reconciliation of Non-GAAP
measure - operating expenses and operating income, excluding
certain items
Three Months
Ended
Six Months
Ended
June 30,
March 31,
June 30,
2019
2018
2019
2019
2018
Gross profit from continuing operations,
as reported
47.6
%
51.6
%
46.7
%
47.1
%
52.3
%
Adjustments to gross profit:
Stock-based compensation
—
0.1
0.2
0.1
0.1
Facility expansion and relocation
costs
0.1
0.1
0.1
0.1
0.1
Non-GAAP gross profit
47.7
51.8
47.0
47.3
52.5
Operating expenses from continuing
operations, as reported
39.4
23.1
38.3
38.9
23.7
Adjustments:
Amortization of intangible assets
(1.4
)
(0.6
)
(1.4
)
(1.4
)
(0.6
)
Stock-based compensation
(0.7
)
(1.1
)
(2.0
)
(1.4
)
(1.6
)
Acquisition-related costs
(1.1
)
(0.1
)
(1.1
)
(1.2
)
(0.2
)
Facility expansion and relocation
costs
—
—
(0.1
)
—
(0.1
)
Restructuring charges
(1.3
)
—
(1.2
)
(1.3
)
—
Non-GAAP operating expenses
34.9
21.3
32.5
33.6
21.2
Non-GAAP operating income
12.8
%
30.5
%
14.5
%
13.7
%
31.3
%
Reconciliation of Non-GAAP measure -
income excluding certain items
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
2019
2018
2019
2019
2018
Income from continuing operations, less
noncontrolling interest, net of income taxes
$
23,362
$
46,356
$
15,379
$
38,741
$
92,695
Adjustments:
Amortization of intangible assets
1,874
1,264
1,973
3,847
2,521
Acquisition-related costs
1,531
255
1,511
3,042
605
Facility expansion and relocation
costs
150
262
244
394
738
Restructuring charges
1,795
—
1,673
3,468
—
Tax Cuts and Jobs Act Impact
—
—
—
—
1,853
Central inverter services business
sale
(14,804
)
—
—
(14,804
)
—
Tax effect of Non-GAAP adjustments
2,536
(238
)
(851
)
1,685
(547
)
Non-GAAP income, net of income taxes,
excluding stock-based compensation
16,444
47,899
19,929
36,373
97,865
Stock-based compensation, net of taxes
722
1,477
2,463
3,185
4,937
Non-GAAP income, net of income taxes
$
17,166
$
49,376
$
22,392
$
39,558
$
102,802
Reconciliation of Non-GAAP measure -
per share earnings excluding certain items
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
2019
2018
2019
2019
2018
Diluted earnings per share from continuing
operations, as reported
$
0.61
$
1.17
$
0.40
$
1.01
$
2.33
Add back (subtract):
per share impact of Non-GAAP adjustments,
net of tax
(0.16
)
0.08
0.18
0.02
0.25
Non-GAAP per share earnings
$
0.45
$
1.25
$
0.58
$
1.03
$
2.58
Reconciliation of Q3 2019
Guidance
Low End
High End
Revenue
$123
million
$133
million
Reconciliation of Non-GAAP
earnings per share
GAAP earnings per share
$
0.18
$
0.28
Stock-based compensation
0.06
0.06
Amortization of intangible assets
0.05
0.05
Restructuring and other
0.01
0.01
Tax effects of excluded items
(0.02
)
(0.02
)
Non-GAAP earnings per
share
$
0.28
$
0.38
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190805005596/en/
Brian Smith Advanced Energy (970) 407‑6555
brian.smith@aei.com
Advanced Energy Industries (NASDAQ:AEIS)
Historical Stock Chart
From Aug 2024 to Sep 2024
Advanced Energy Industries (NASDAQ:AEIS)
Historical Stock Chart
From Sep 2023 to Sep 2024