- Revenue of $115.7 million
- Non-GAAP EPS of $0.18
share
- Generated $33.5 million in cash (excluding share
repurchases)
Advanced Energy Industries, Inc. (Nasdaq:AEIS) today announced
financial results for the second quarter ended June 30, 2012. The
company posted second quarter sales of $115.7 million compared to
$105.8 million in the first quarter of 2012 and $138.2 million in
the second quarter of 2011. Income from continuing operations was
$8.8 million or $0.22 per diluted share. On a non-GAAP basis,
income from continuing operations was $7.3 million or $0.18 per
diluted share. The non-GAAP measures exclude the impact of a $1.5
million after tax gain from the sale of mass flow control
manufacturing assets and a $0.1 million restructuring gain. A
reconciliation of non-GAAP income from continuing operations and
earnings per share is provided in the tables below. The company
ended the quarter with $149.0 million in cash and marketable
securities, having generated $33.5 million of cash during the
quarter, excluding share repurchases of $35.2 million.
"Second quarter results were highlighted by the sound
profitability we achieved in both of our business units," said
Garry Rogerson, chief executive officer. "With a record backlog and
a strong pipeline of opportunities, our Solar Energy business
continues to gain momentum in the North American market, which
should help to offset some of the cyclicality in our Thin Films
markets. Our goal of building a sustainable, profitable business is
coming to fruition as we remain focused on managing our costs,
expanding our market presence and growing revenues."
Thin Films Business Unit
Thin Films sales increased 7% to $64.8 million in the second
quarter of 2012 from $60.4 million in the first quarter of 2012,
due to an increase in non-semiconductor sales. Thin Films sales
declined 33% from $97.3 million in the second quarter of 2011,
reflecting lower levels of capital investment by companies in the
Thin Film markets.
Solar Energy Business
Unit
Solar Energy sales were $50.8 million in the second quarter of
2012, an increase of 12% from $45.4 million in the first quarter of
2012. Solar Energy sales increased 24% from $40.8 million in the
second quarter of 2011 due to utility-scale deployments in North
America.
Income from Continuing Operations
Income from continuing operations for the second quarter was
$8.8 million or $0.22 per diluted share, compared to income from
continuing operations of $13.5 million or $0.31 per diluted share
in the same period last year and income from continuing operations
of $0.8 million or $0.02 per diluted share in the first quarter of
2012. In the second quarter of 2012, operating expenses (excluding
restructuring) decreased $4.0 million sequentially, aided by a
reduction in incentive accrual and to a lesser extent a reduction
in other operating expenses. On a non-GAAP basis, excluding the
impact of the restructuring benefit and the one-time gain on the
sale of mass flow control manufacturing assets, income from
continuing operations was $7.3 million or $0.18 per diluted share,
up from $2.4 million or $0.06 per diluted share in the first
quarter of 2012.
Restructuring
During the quarter the company made further progress on the
transfer of manufacturing of certain solar inverter subcomponents
to its Shenzhen, China factory.
The remainder of the restructuring plan is expected to be
implemented over the next 3 to 9 months as the company further
reduces its cost structure by consolidating certain facilities and
centralizing other activities. As a result, the company anticipates
further charges in the amount of $2 to $6 million, principally for
consolidating locations, and another $2 to $3 million in additional
severance costs over this timeframe. Once complete, the
restructuring plan, along with other cost savings initiatives and
margin improvements, is currently expected to deliver annual
savings in excess of $30 million, well ahead of our original
plan.
Third Quarter 2012
Guidance
The company anticipates third quarter 2012 results from
continuing operations to be within the following ranges:
- Sales of $116 million to $124 million
- Non-GAAP per share earnings of $0.17 to $0.20
Second Quarter 2012 Conference Call
Management will host a conference call tomorrow, Tuesday, July
31, 2012, at 8:30 a.m. Eastern Daylight Time to discuss Advanced
Energy's financial results. Domestic callers may access this
conference call by dialing 866-711-8198. International callers may
access the call by dialing 617-597-5327. Participants will need to
provide conference pass code 24038757. For a replay of this
teleconference, please call 888-286-8010 or 617-801-6888, and
enter the pass code 53467364. 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 (Nasdaq:AEIS) is a global leader in
innovative power and control technologies for high-growth,
thin-film manufacturing and solar-power generation. 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. While some of these 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 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 Statements
The company's expectations with respect to guidance to financial
results for the third quarter ending September 30, 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 obtain 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 |
Six
Months Ended |
|
|
June
30, |
March 31, |
June
30, |
|
2012 |
2011 |
2012 |
2012 |
2011 |
|
|
|
|
|
|
SALES |
$ 115,658 |
$ 138,154 |
$ 105,787 |
$ 221,445 |
$ 275,806 |
COST OF SALES |
71,929 |
82,777 |
66,043 |
137,972 |
158,384 |
GROSS PROFIT |
43,729 |
55,377 |
39,744 |
83,473 |
117,422 |
|
37.8% |
40.1% |
37.6% |
37.7% |
42.6% |
OPERATING EXPENSES: |
|
|
|
|
|
Research and development |
14,502 |
17,137 |
15,115 |
29,617 |
32,999 |
Selling, general and
administrative |
16,706 |
20,001 |
20,059 |
36,765 |
40,906 |
Restructuring charges
(benefit) |
(144) |
-- |
2,575 |
2,431 |
-- |
Amortization of intangible
assets |
1,351 |
921 |
1,372 |
2,723 |
1,842 |
Total operating expenses |
32,415 |
38,059 |
39,121 |
71,536 |
75,747 |
|
|
|
|
|
|
Operating income |
11,314 |
17,318 |
623 |
11,937 |
41,675 |
Other income, net |
1,775 |
92 |
411 |
2,186 |
755 |
Income from continuing operations before
income taxes |
13,089 |
17,410 |
1,034 |
14,123 |
42,430 |
Provision for income taxes |
4,288 |
3,898 |
268 |
4,556 |
10,152 |
INCOME FROM CONTINUING OPERATIONS, NET OF
INCOME TAXES |
8,801 |
13,512 |
766 |
9,567 |
32,278 |
|
|
|
|
|
|
Income from discontinued operations, net of
income taxes |
127 |
74 |
303 |
430 |
214 |
|
|
|
|
|
|
NET INCOME |
$ 8,928 |
$ 13,586 |
$ 1,069 |
$ 9,997 |
$ 32,492 |
|
|
|
|
|
|
Basic weighted-average common shares
outstanding |
38,974 |
43,571 |
40,781 |
39,877 |
43,505 |
Diluted weighted-average common shares
outstanding |
39,583 |
44,187 |
41,292 |
40,460 |
44,156 |
|
|
|
|
|
|
EARNINGS PER SHARE: |
|
|
|
|
|
CONTINUING OPERATIONS: |
|
|
|
|
|
BASIC EARNINGS PER SHARE |
$ 0.23 |
$ 0.31 |
$ 0.02 |
$ 0.24 |
$ 0.74 |
DILUTED EARNINGS PER SHARE |
$ 0.22 |
$ 0.31 |
$ 0.02 |
$ 0.24 |
$ 0.73 |
|
|
|
|
|
|
DISCONTINUED OPERATIONS |
|
|
|
|
|
BASIC EARNINGS PER SHARE |
$ 0.00 |
$ 0.00 |
$ 0.01 |
$ 0.01 |
$ 0.00 |
DILUTED EARNINGS PER SHARE |
$ 0.00 |
$ 0.00 |
$ 0.01 |
$ 0.01 |
$ 0.00 |
|
|
|
|
|
|
NET INCOME: |
|
|
|
|
|
BASIC EARNINGS PER
SHARE |
$ 0.23 |
$ 0.31 |
$ 0.03 |
$ 0.25 |
$ 0.75 |
DILUTED EARNINGS PER
SHARE |
$ 0.23 |
$ 0.31 |
$ 0.03 |
$ 0.25 |
$ 0.74 |
ADVANCED ENERGY INDUSTRIES,
INC. |
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
(in thousands) |
|
|
|
|
|
|
June 30, |
December
31, |
|
2012 |
2011 * |
ASSETS |
UNAUDITED |
|
|
|
|
Current assets: |
|
|
Cash and cash
equivalents |
$ 120,266 |
$ 117,639 |
Marketable
securities |
28,754 |
25,567 |
Accounts receivable,
net |
100,850 |
132,485 |
Inventories, net |
80,609 |
80,283 |
Deferred income
taxes |
9,014 |
9,014 |
Income taxes
receivable |
7,712 |
13,826 |
Other current assets |
10,626 |
11,672 |
Total current assets |
357,831 |
390,486 |
|
|
|
Property and equipment, net |
39,668 |
42,338 |
|
|
|
Deposits and other |
9,131 |
8,959 |
Goodwill and intangibles, net |
87,230 |
89,953 |
Deferred income tax assets, net |
1,706 |
1,642 |
Total assets |
$ 495,566 |
$ 533,378 |
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
Accounts payable |
$ 42,031 |
$ 44,828 |
Other accrued
expenses |
40,878 |
46,416 |
Total current liabilities |
82,909 |
91,244 |
|
|
|
Long-term liabilities |
44,898 |
34,795 |
|
|
|
Total liabilities |
127,807 |
126,039 |
|
|
|
Stockholders' equity |
367,759 |
407,339 |
Total liabilities and stockholders'
equity |
$ 495,566 |
$ 533,378 |
|
|
|
* December 31, 2011 amounts are derived from
the December 31, 2011 audited Consolidated Financial
Statements. |
|
|
ADVANCED ENERGY INDUSTRIES,
INC. |
|
|
|
|
|
SEGMENT INFORMATION
(UNAUDITED) |
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Six Months
Ended |
|
June
30, |
March 31, |
June
30, |
|
2012 |
2011 |
2012 |
2012 |
2011 |
SALES: |
|
|
|
|
|
Thin Films |
$ 64,843 |
$ 97,331 |
$ 60,390 |
$ 125,233 |
$ 197,430 |
Solar Energy |
50,815 |
40,823 |
45,397 |
96,212 |
78,376 |
Total Sales |
$ 115,658 |
$ 138,154 |
$ 105,787 |
$ 221,445 |
$ 275,806 |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME: |
|
|
|
|
|
Thin Films |
$ 8,881 |
$ 20,042 |
$ 3,167 |
$ 12,048 |
$ 44,866 |
Solar Energy |
2,740 |
321 |
493 |
3,233 |
2,833 |
Total segment operating income |
11,621 |
20,363 |
3,660 |
15,281 |
47,699 |
Corporate expenses |
(451) |
(3,045) |
(462) |
(913) |
(6,024) |
Restructuring (charges) benefit |
144 |
-- |
(2,575) |
(2,431) |
-- |
Other income, net |
1,775 |
92 |
411 |
2,186 |
755 |
Income from continuing operations before
income taxes |
$ 13,089 |
$ 17,410 |
$ 1,034 |
$ 14,123 |
$ 42,430 |
ADVANCED ENERGY INDUSTRIES,
INC. |
|
|
SELECTED OTHER DATA
(UNAUDITED) |
|
|
(in thousands) |
|
|
|
|
|
Reconciliation of Non-GAAP measure -
income from operations |
Three Months
Ended |
Six Months
Ended |
|
June 30, |
June 30, |
|
2012 |
2012 |
|
|
|
Operating Income, as reported |
$ 11,314 |
$ 11,937 |
Adjustments: |
|
|
Restructuring charges
(benefit) |
(144) |
2,431 |
Income from operations |
$ 11,170 |
$ 14,368 |
|
|
|
|
|
|
Reconciliation of Non-GAAP measure -
income from continuing operations |
Three Months
Ended |
Six Months
Ended |
|
June 30, |
June 30, |
|
2012 |
2012 |
|
|
|
Income from continuing operations, net of
tax, as reported |
$ 8,801 |
$ 9,567 |
Adjustments: |
|
|
Restructuring charges
(benefit), net of tax |
(92) |
1,559 |
Gain on sale of gas flow manufacturing
assets, net of tax |
(1,452) |
(1,452) |
Income from continuing operations, net of
tax |
$ 7,257 |
$ 9,674 |
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP measure -
per share earnings from continuing operations |
Three Months
Ended |
Six Months
Ended |
|
June 30, |
June 30, |
|
2012 |
2012 |
|
|
|
Diluted earnings per share from continuing
operations, as reported |
$ 0.22 |
$ 0.24 |
Adjustments: |
|
|
per share impact of
restructuring charges (benefit), net of tax |
(0.00) |
0.04 |
per share impact of gain on
sale of gas flow manufacturing assets, net of tax |
(0.04) |
(0.04) |
Per share earnings from continuing
operations |
$ 0.18 |
$ 0.24 |
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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