Sales Up 17%, Operating Income Up 111% Compared to 2005 Fourth
Quarter 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:
http://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
http://www.sec.gov/. Copies may also be obtained from Advanced
Energy's website at http://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 http://www.newscom.com/cgi-bin/prnh/20030825/AEISLOGO
http://photoarchive.ap.org/ DATASOURCE: Advanced Energy Industries,
Inc. CONTACT: Cathy Kawakami, Director, Corporate & Investor
Relations of Advanced Energy Industries, Inc., +1-970-407-6732, Web
site: http://www.advanced-energy.com/
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