- Revenue of $112.5 million
- Cash and investments of $143 million
- Repurchased 1.7 million shares (at an average price of
$10.26 per share for an aggregate purchase price of $18
million)
- Annualized restructuring cost savings reached $12 million
Advanced Energy Industries, Inc. (Nasdaq:AEIS) today announced
financial results for the fourth quarter ended December 31, 2011.
The company posted fourth quarter sales of $112.5 million compared
to $148.7 million in the fourth quarter of 2010 and $128.5 million
in the third quarter of 2011. Loss from continuing operations was
$2.6 million or $0.06 per diluted share. On a non-GAAP basis,
income generated from operations was 1.0% of sales, and earnings
from our continuing operations on a per share basis was $0.01. The
non-GAAP measures exclude the impact of the $4.2 million
restructuring charge recorded in the fourth quarter. A
reconciliation of non-GAAP income from operations and per share
earnings is provided in the tables. We also generated $6.3 million
in cash during the quarter before the share repurchase of $18
million.
"During the fourth quarter we made great strides executing on
our strategic plan by consolidating facilities, redesigning
incentive plans and repurchasing stock and we are well on our way
to achieving our initial goals and exceeding our cost savings
targets," said Garry Rogerson, chief executive officer. "While
market conditions remain uncertain in the near-term, our focus is
centered on accomplishing the objectives we laid out at our analyst
day to realign our cost structure, accelerate revenue growth and
effectively utilize our cash. Once implemented, these actions
should improve our profitability and deliver exceptional value to
our shareholders."
Thin Films Business Unit
Thin Films sales declined 29.1% to $54.4 million in the fourth
quarter of 2011 from $76.8 million in the third quarter of 2011,
primarily due to continued weak market conditions in solar panel
and flat panel displays. In general, capital spending across all of
our thin films end markets weakened this quarter. Year-over-year,
Thin Films sales declined from $97.0 million in the fourth quarter
of 2010.
Solar Energy Business
Unit
Solar Energy sales were $58.1 million in the quarter, an
increase of 12.3% from $51.7 million in both the third quarter of
2011 and the fourth quarter of 2010. The strongest area of growth
continues to be in the utility-scale market where our Solaron
inverters have been selected on some of the largest projects in
North America.
Income/Loss from Continuing Operations
Loss from continuing operations for the fourth quarter was $2.6
million or $0.06 per diluted share, compared to income from
continuing operations of $19.7 million or $0.45 per diluted share
in the same period last year and income from continuing operations
of $7.2 million or $0.16 in the third quarter of 2011. On a
non-GAAP basis, excluding the impact of the restructuring charge,
continuing operations generated income for the fourth quarter of
2011 of $0.5 million or per share earnings of $0.01.
Restructuring Charge
During the fourth quarter, the company incurred $4.2 million in
charges related to the restructuring plan that was announced on
September 28, 2011. Under the first phase of the plan, the company
consolidated certain facilities and began aligning its engineering
resources with the geographic footprint of its customer base by
localizing R&D within the major geographies it serves. During
the quarter, the company also started the transfer of manufacturing
of certain solar inverter subcomponents to its Shenzhen, China
factory. These and other efforts have resulted in savings from the
first phase of the restructuring of approximately $12 million
annually.
The second phase is expected to be implemented over the next 9
to 15 months as the company further reduces its cost structure,
closes facilities, and relocates other functions to different
regions worldwide. As a result, the company anticipates further
charges in the amount of $4 to $8 million, principally for space
consolidation, and another $1 million in additional severance costs
over this timeframe. Once complete, the two phases of the
restructuring plan, along with other cost savings initiatives and
margin improvements, are expected to deliver annual savings higher
than the originally anticipated $16 to $20 million.
First Quarter 2012
Guidance
The Company anticipates first quarter 2012 results from
continuing operations to be within the following ranges:
- Sales of $95 million to $105 million
- Non-GAAP per share earnings of approximately break-even
Fourth Quarter 2011 Conference
Call
Management will host a conference call tomorrow, Tuesday,
January 31, 2012, at 8:30 a.m. Eastern Standard Time to discuss
Advanced Energy's financial results. Domestic callers may access
this conference call by dialing 888-713-4215. International callers
may access the call by dialing 617-213-4867. Participants will need
to provide conference pass code 60038080. For a replay of this
teleconference, please call 888-286-8010 or 617-801-6888, and enter
the pass code 45077705. The replay will be available for two weeks
following the conference call. A webcast will also be available on
the Investor Relations web page at
http://ir.advanced-energy.com.
About Advanced Energy
Advanced Energy is a global leader in innovative power and
control technologies for high-growth, thin-films manufacturing and
solar-power generation. Founded in 1981, Advanced Energy is
headquartered in Fort Collins, Colorado, with dedicated support and
service locations around the world. For more information, go to
www.advanced-energy.com.
This release includes GAAP and non-GAAP operating income and per
share earnings data. These non-GAAP measures 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 regarding financial and business trends relating to its
financial condition and results of operations. Additionally, the
Company believes that these non-GAAP measures, in combination with
its financial results calculated in accordance with GAAP, provides
investors with additional perspective. The Company further 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, even though
some of these excluded items may be incurred and reflected in the
Company's GAAP financial results in the foreseeable future. The use
of non-GAAP measures has limitations in that they do not reflect
all of the amounts associated with its 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.
For additional information on the items excluded from one or
more of its non-GAAP financial measures, refer to the Form 8-K
regarding this release furnished today to the Securities and
Exchange Commission.
Forward-Looking Language
The Company's expectations with respect to guidance to financial
results for the first quarter ending March 31, 2012, anticipated
cost savings and restructuring activities and other statements 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: the effects of
global macroeconomic conditions upon demand for our products, the
volatility and cyclicality of the industries the company serves,
particularly the semiconductor industry, the continuation of RPS
(renewable portfolio standards), the timing and availability of
incentives and grant programs in North America and Europe related
to the renewable energy market, renewable energy project delays
resulting from solar panel price declines and increased competition
in the solar inverter equipment market, the timing of orders
received from customers, the Company's ability to realize benefits
from cost improvement efforts and any restructuring plans, the
ability to source materials and manufacture products, 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
www.sec.gov. Copies may also be obtained from Advanced Energy's
website at www.advancedenergy.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.
ADVANCED ENERGY INDUSTRIES,
INC. |
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED) |
|
|
|
|
|
(in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
September 30, |
December
31, |
|
2011 |
2010 |
2011 |
2011 |
2010 |
|
|
|
|
|
|
SALES |
$ 112,495 |
$ 148,653 |
$ 128,498 |
$ 516,799 |
$ 459,414 |
COST OF SALES |
73,607 |
83,910 |
79,651 |
311,642 |
260,215 |
GROSS PROFIT |
38,888 |
64,743 |
48,847 |
205,157 |
199,199 |
|
34.6% |
43.6% |
38.0% |
39.7% |
43.4% |
OPERATING EXPENSES: |
|
|
|
|
|
Research and development |
14,393 |
15,275 |
17,592 |
64,984 |
56,604 |
Selling, general and
administrative |
22,343 |
24,586 |
16,473 |
79,722 |
74,543 |
Restructuring charges |
4,229 |
-- |
3,119 |
7,348 |
-- |
Amortization of intangible
assets |
1,021 |
920 |
989 |
3,852 |
2,864 |
Total operating expenses |
41,986 |
40,781 |
38,173 |
155,906 |
134,011 |
|
|
|
|
|
|
Operating income (loss) |
(3,098) |
23,962 |
10,674 |
49,251 |
65,188 |
|
|
|
|
|
|
Other income (loss), net |
721 |
392 |
(259) |
1,217 |
2,221 |
Income (loss) from continuing operations
before income taxes |
(2,377) |
24,354 |
10,415 |
50,468 |
67,409 |
Provision for income taxes |
218 |
4,624 |
3,244 |
13,614 |
13,816 |
INCOME (LOSS) FROM CONTINUING OPERATIONS, NET
OF INCOME TAXES |
(2,595) |
19,730 |
7,171 |
36,854 |
53,593 |
|
|
|
|
|
|
Gain on sale of discontinued operations, net
of tax |
-- |
12,531 |
-- |
-- |
12,531 |
Income (loss) from discontinued operations,
net of income taxes |
(175) |
(853) |
(579) |
(540) |
5,068 |
INCOME (LOSS) FROM DISCONTINUED OPERATIONS,
NET OF INCOME TAXES |
(175) |
11,678 |
(579) |
(540) |
17,599 |
|
|
|
|
|
|
NET INCOME (LOSS) |
$ (2,770) |
$ 31,408 |
$ 6,592 |
$ 36,314 |
$ 71,192 |
|
|
|
|
|
|
Basic weighted-average common shares
outstanding |
43,316 |
43,315 |
43,535 |
43,465 |
42,862 |
Diluted weighted-average common shares
outstanding |
43,546 |
43,796 |
43,819 |
43,954 |
43,419 |
|
|
|
|
|
|
EARNINGS PER SHARE: |
|
|
|
|
|
CONTINUING OPERATIONS: |
|
|
|
|
|
BASIC EARNINGS PER SHARE |
$ (0.06) |
$ 0.46 |
$ 0.16 |
$ 0.85 |
$ 1.25 |
DILUTED EARNINGS PER SHARE |
$ (0.06) |
$ 0.45 |
$ 0.16 |
$ 0.84 |
$ 1.23 |
|
|
|
|
|
|
DISCONTINUED OPERATIONS |
|
|
|
|
|
BASIC EARNINGS PER SHARE |
$ (0.00) |
$ 0.27 |
$ (0.01) |
$ (0.01) |
$ 0.41 |
DILUTED EARNINGS PER SHARE |
$ (0.00) |
$ 0.27 |
$ (0.01) |
$ (0.01) |
$ 0.41 |
|
|
|
|
|
|
NET INCOME: |
|
|
|
|
|
BASIC EARNINGS PER
SHARE |
$ (0.06) |
$ 0.73 |
$ 0.15 |
$ 0.84 |
$ 1.66 |
DILUTED EARNINGS PER
SHARE |
$ (0.06) |
$ 0.72 |
$ 0.15 |
$ 0.83 |
$ 1.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADVANCED ENERGY INDUSTRIES,
INC. |
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
December
31, |
December
31, |
|
|
|
|
2011 |
2010 |
|
|
|
ASSETS |
UNAUDITED |
AUDITED |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash
equivalents |
$ 117,639 |
$ 130,914 |
|
|
|
Marketable
securities |
25,567 |
9,640 |
|
|
|
Accounts receivable,
net |
132,485 |
119,893 |
|
|
|
Inventories, net |
80,283 |
77,593 |
|
|
|
Deferred income
taxes |
9,014 |
7,510 |
|
|
|
Income taxes
receivable |
13,826 |
6,061 |
|
|
|
Other current assets |
11,672 |
10,156 |
|
|
|
Total current assets |
390,486 |
361,767 |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
42,338 |
34,569 |
|
|
|
|
|
|
|
|
|
Deposits and other |
8,959 |
8,874 |
|
|
|
Goodwill and intangibles, net |
89,953 |
96,781 |
|
|
|
Deferred income tax assets, net |
1,642 |
3,166 |
|
|
|
Total assets |
$ 533,378 |
$ 505,157 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ 44,828 |
$ 56,185 |
|
|
|
Other accrued
expenses |
46,416 |
46,140 |
|
|
|
Total current liabilities |
91,244 |
102,325 |
|
|
|
|
|
|
|
|
|
Long-term liabilities |
34,795 |
28,864 |
|
|
|
|
|
|
|
|
|
Total liabilities |
126,039 |
131,189 |
|
|
|
|
|
|
|
|
|
Stockholders' equity |
407,339 |
373,968 |
|
|
|
Total liabilities and stockholders'
equity |
$ 533,378 |
$ 505,157 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADVANCED ENERGY INDUSTRIES,
INC. |
|
|
|
|
|
SEGMENT INFORMATION
(UNAUDITED) |
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Twelve Months
Ended |
|
December
31, |
September 30, |
December
31, |
|
2011 |
2010 |
2011 |
2011 |
2010 |
SALES: |
|
|
|
|
|
Thin Films |
$ 54,420 |
$ 96,960 |
$ 76,764 |
$ 328,614 |
$ 353,696 |
Solar Energy |
58,075 |
51,693 |
51,734 |
188,185 |
105,718 |
Total Sales |
112,495 |
148,653 |
128,498 |
516,799 |
459,414 |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME: |
|
|
|
|
|
Thin Films |
$ 7,360 |
|
$ 16,015 |
$ 68,241 |
|
Solar Energy |
231 |
|
1,259 |
4,323 |
|
Total segment operating income |
7,591 |
|
17,274 |
72,564 |
|
Corporate expenses |
(10,689) |
|
(6,600) |
(23,313) |
|
Other income (loss), net |
721 |
|
(259) |
1,217 |
|
Income (loss) from continuing operations
before income taxes |
$ (2,377) |
|
$ 10,415 |
$ 50,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADVANCED ENERGY INDUSTRIES,
INC. |
|
|
|
|
|
SELECTED OTHER DATA
(UNAUDITED) |
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP measure -
income from operations without restructuring charge |
Three Months
Ended |
Twelve Months
Ended |
|
|
|
|
December 31, |
December 31, |
|
|
|
|
2011 |
2011 |
|
|
|
|
|
|
|
|
|
Operating Income (loss), as reported |
$ (3,098) |
$ 49,251 |
|
|
|
Add back: |
|
|
|
|
|
Restructuring charge |
4,229 |
7,348 |
|
|
|
Income from operations without restructuring
charge |
$ 1,131 |
$ 56,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP measure -
income from continuing operations without restructuring
charge |
Three Months
Ended |
Twelve Months
Ended |
|
|
|
|
December 31, |
December 31, |
|
|
|
|
2011 |
2011 |
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations, net
of tax, as reported |
$ (2,595) |
$ 36,854 |
|
|
|
Add back: |
|
|
|
|
|
Restructuring charge, net of
tax benefit |
3,116 |
5,252 |
|
|
|
Income from continuing operations, net of tax
without restructuring charge |
$ 521 |
$ 42,106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP measure -
per share earnings from continuing operations without restructuring
charge |
Three Months
Ended |
Twelve Months
Ended |
|
|
|
|
December 31, |
December 31, |
|
|
|
|
2011 |
2011 |
|
|
|
|
|
|
|
|
|
Diluted earnings per share from continuing
operations, as reported |
$ (0.06) |
$ 0.84 |
|
|
|
Add back: |
|
|
|
|
|
per share impact of restructuring charge, net
of tax benefit |
0.07 |
0.12 |
|
|
|
Per share earnings from continuing operations
without restructuring charge |
$ 0.01 |
$ 0.96 |
|
|
|
CONTACT: Danny Herron
Advanced Energy Industries, Inc.
970.407.6570
danny.herron@aei.com
Annie Leschin/Vanessa Lehr
Advanced Energy Industries, Inc.
970.407.6555
ir@aei.com
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