Gross Margin Increases to 43.7%, Cash Increases $22.7 Million
Sequentially FORT COLLINS, Colo., Oct. 25 /PRNewswire-FirstCall/ --
Advanced Energy Industries, Inc. (NASDAQ:AEIS) today announced
financial results for the third quarter ended September 30, 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030825/AEISLOGO )
Sales were $107.7 million for the third quarter of 2006, up 3.0%
compared to $104.6 million for the second quarter of 2006, and up
36.7% compared to $78.8 million for the third quarter of 2005.
Gross profit was $47.0 million, or 43.7% of sales, compared to
$44.8 million, or 42.8% of sales, in the second quarter of 2006,
and $28.9 million, or 36.7% of sales in the third quarter of 2005.
Third quarter 2006 income from operations was $18.3 million or
17.0% of sales, compared to $19.2 million, or 18.4% of sales, in
the second quarter of 2006. This compares to third quarter 2005
income from operations of $2.2 million, or 2.8% of sales. Third
quarter 2005 income from operations includes a $3.0 million
litigation settlement expense. Third quarter 2006 net income was
$17.0 million, or $0.38 per diluted share, compared to $18.2
million, or $0.40 per diluted share, in the second quarter of 2006,
and compared to a net loss of $3.9 million, or a net loss of $0.10
per share in the third quarter of 2005. Dr. Hans Betz, president
and chief executive officer of Advanced Energy, said, "Sales
continued at record levels in the third quarter, driven by
continued strength in sales to semiconductor and advanced products
customers. Within the advanced products category, sales to solar
panel customers increased 42% sequentially as our strategy to grow
our presence in this market continues to progress. Our operational
focus drove additional efficiency gains, highlighted by a 90 basis
point sequential improvement in gross margin. Cash increased by
$22.7 million in the third quarter." Dr. Betz continued, "As you
have seen from our guidance, following four quarters of increasing
sales to the semiconductor industry, we expect semiconductor levels
to decrease modestly in the fourth quarter as semiconductor
manufacturers carefully manage inventory levels. We expect growing
demand in our emerging markets, such as solar and architectural
glass, as these markets continue their capital investment cycle to
adopt leading edge technology. We will leverage the strength of our
financial model, combined with technology innovation and optimized
global operations, to pursue an expanding set of opportunities
within core and emerging markets." Fourth Quarter 2006 Guidance The
Company anticipates fourth quarter sales in the range of $101
million to $105 million, and earnings per share in the range of
$0.33 to $0.36. Third Quarter 2006 Conference Call Management will
host a conference call today, Wednesday, October 25, 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 7811538. The replay will be available through November 1,
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:
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 fourth 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 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
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.
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 Nine Months Ended September 30, June 30, September 30, 2006
2005 2006 2006 2005 Sales $107,688 $78,757 $104,571 $306,209
$245,095 Cost of sales 60,674 49,835 59,811 175,885 158,205 Gross
profit 47,014 28,922 44,760 130,324 86,890 Operating expenses:
Research and development 11,345 9,610 10,804 32,608 30,085 Selling,
general and administrative 16,856 13,421 14,241 45,502 39,960
Amortization of intangible assets 453 504 453 1,383 1,569
Restructuring charges 31 210 31 91 2,540 Litigation settlement --
3,000 -- -- 3,000 Total operating expenses 28,685 26,745 25,529
79,584 77,154 Income from operations 18,329 2,177 19,231 50,740
9,736 Other income (expense), net 1,044 (4,796) 741 3,617 (7,602)
Income from continuing operations before income taxes 19,373
(2,619) 19,972 54,357 2,134 Provision for income taxes (2,381)
(1,584) (1,947) (6,580) (3,543) Income from continuing operations
16,992 (4,203) 18,025 47,777 (1,409) Gain on sale of discontinued
assets -- -- 138 138 2,645 Results of discontinued operations --
312 -- -- 1,556 Income from discontinued operations -- 312 138 138
4,201 Net income $16,992 $(3,891) $18,163 $47,915 $2,792 Net income
per basic share Income from continuing operations $0.38 $(0.11)
$0.40 $1.07 $(0.04) Income from discontinued operations $-- $0.01
$-- $-- $0.12 Basic earnings per share $0.38 $(0.10) $0.41 $1.07
$0.08 Net income per diluted share Income from continuing
operations $0.38 $(0.11) $0.40 $1.06 $(0.04) Income from
discontinued operations $-- $0.01 $-- $-- $0.12 Diluted earnings
per share $0.38 $(0.10) $0.40 $1.06 $0.08 Basic weighted-average
common shares outstanding 44,762 38,366 44,704 44,679 34,639
Diluted weighted-average common shares outstanding 45,166 38,366
45,108 45,168 34,932 CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) (in thousands) September 30, December 31, 2006 2005
ASSETS Current assets: Cash and cash equivalents $52,789 $52,874
Marketable securities 63,939 6,811 Accounts receivable, net 74,864
68,992 Inventories 58,079 56,199 Other current assets 5,463 6,773
Total current assets 255,134 191,649 Property and equipment, net
33,602 39,294 Deposits and other 1,829 3,808 Goodwill and
intangibles, net 68,720 69,843 Customer service equipment, net
1,476 2,407 Deferred income tax assets, net 6,109 3,116 Total
assets $366,870 $310,117 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities: Trade accounts payable $19,669 $22,028 Other
accrued expenses 31,273 23,977 Current portion of capital leases
and senior borrowings 616 2,011 Total current liabilities 51,558
48,016 Long-term liabilities: Capital leases and senior borrowings
226 2,179 Other long-term liabilities 1,690 2,492 Total long-term
liabilities 1,916 4,671 Total liabilities 53,474 52,687
Stockholders' equity 313,396 257,430 Total liabilities and
stockholders' equity $366,870 $310,117
http://www.newscom.com/cgi-bin/prnh/20030825/AEISLOGO
http://photoarchive.ap.org/ DATASOURCE: Advanced Energy Industries,
Inc. CONTACT: Larry Firestone, Executive Vice President, CFO,
+1-970-407-6570, , or Cathy Kawakami, Director, Investor Relations,
+1-970-407-6732, , both of Advanced Energy Industries, Inc. Web
site: http://www.advanced-energy.com/
http://ir.advanced-energy.com/
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