Advanced Energy Reaffirms Fourth Quarter Guidance and Announces Workforce Reduction and Other Cost-Saving Measures
December 11 2008 - 4:00PM
PR Newswire (US)
FORT COLLINS, Colo., Dec. 11 /PRNewswire-FirstCall/ -- Advanced
Energy Industries, Inc. (NASDAQ:AEIS) announced today that, in
order to better align its cost structure with current market
conditions, the company will reduce its global workforce by
approximately 114 people or 7 percent of its total workforce. This
reduction will be across all functional areas and geographies;
however the company remains committed to its product development
strategy and remains focused on investing in key market
opportunities. The company is also taking this opportunity to
reconfirm its revenue guidance of $66 to $72 million for the fourth
quarter of 2008. Coupled with the workforce reductions that were
implemented during the first three quarters, this realignment
brings the total reduction to 185 employees during 2008. This is
one of many cost-saving measures the company is implementing in the
fourth quarter and the first half of 2009. Others include a 10% pay
cut for all executives and a 10% reduction in Board of Directors
fees, minimizing discretionary spending, consolidating of certain
sales and service offices, and driving efficiencies throughout the
organization including in its manufacturing processes. The
workforce reduction will result in restructuring charges of
approximately $1.9 million in the fourth quarter of 2008,
approximately $1.3 million for the first quarter of 2009 and
approximately $300,000 for the second quarter of 2009, consisting
of severance costs and related expenses. The actions taken today
are expected to amount to annual cost savings of approximately $10
million. The overall cost reductions taken during 2008 and targeted
for 2009 are expected to amount to annual cost savings of
approximately $25 million. Given the current market conditions and
changing customer demand, Advanced Energy has also reviewed its end
of life product and inventory strategies and its excess and
obsolete inventory reserve policies. As a result, the company will
record a charge of approximately $3.5 million to cost of goods sold
in the fourth quarter of 2008. "Advanced Energy is taking proactive
steps to manage its cost structure, streamline operations and
improve efficiencies during these challenging times. These short
and long term cost-cutting actions are expected to lower our
quarterly break-even point to approximately $65 million by the end
of the second quarter of 2009. Despite the reduction in our
workforce, we remain committed to investing in key new products
that have the greatest potential in our markets. These actions will
position us to capitalize on our opportunities when the markets and
economy begin to recover," said Dr. Hans Betz, president and chief
executive officer of Advanced Energy. "These are unfortunate
circumstances and challenging market conditions, and we would like
to thank our employees for their service and dedication to Advanced
Energy." Conference Call Management will host a conference call
today, Thursday, December 11, at 4:30 pm Eastern Standard Time to
discuss this release further. 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 the conference passcode 77444635. To listen to a replay of
this teleconference by telephone, please dial 800-642-1687 or
706-645-9291, and enter passcode 77444635. The replay will be
available through 12:00 a.m. Eastern Standard Time, December 13,
2008. A live and archived webcast will also be available on the
Investor Relations webpage at http://ir.advanced-energy.com/. About
Advanced Energy Advanced Energy(R) 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. Certain statements contained herein 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 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
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 970-407-6555.
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.
http://www.newscom.com/cgi-bin/prnh/20030825/AEISLOGO
http://photoarchive.ap.org/ DATASOURCE: Advanced Energy Industries,
Inc. CONTACT: Lawrence D. Firestone, +1-970-407-6570, , or Annie
Leschin or Vanessa Lehr, +1-970-407-6555, , all of Advanced Energy
Industries, Inc. Web site: http://www.advanced-energy.com/
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