- Revenue of $117.5 million
- Non-GAAP EPS of $0.20 per diluted
share
- Generated $25 million in cash
Advanced Energy Industries, Inc. (Nasdaq:AEIS) today announced
financial results for the third quarter ended September 30, 2012.
The company posted third quarter sales of $117.5 million compared
to $115.7 million in the second quarter of 2012 and $128.5 million
in the third quarter of 2011. Income from continuing operations was
$5.7 million or $0.15 per diluted share. On a non-GAAP basis,
income from continuing operations was $7.6 million or $0.20 per
diluted share. The non-GAAP measures exclude a $3.0 million
restructuring charge taken in the third quarter. 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 $173.7 million in cash and marketable securities,
having generated $24.7 million of cash during the quarter.
"The record performance of our Solar Energy business unit
bolstered our results this quarter, driving higher sequential sales
and profitability, and balancing out the cyclicality of our Thin
Films business," said Garry Rogerson, CEO. "The third quarter
marked the one-year anniversary of the implementation of our
strategic plan to reduce our cost structure, position us to grow
revenues and more effectively utilize our cash. This quarter's
results demonstrate the significant progress we have made. Our new
financial model gives us the ability to profitably weather the
peaks and troughs of our revenue."
Thin Films Business Unit
Thin Films sales decreased 12% to $56.8 million in the third
quarter of 2012 from $64.8 million in the second quarter of 2012,
primarily driven by capital spending reductions in the
semiconductor market, and ongoing oversupply in the solar panel
market. Thin Films sales declined 26% from $76.8 million in the
third quarter of 2011.
Solar Energy Business Unit
Solar Energy sales were $60.7 million in the third quarter of
2012, an increase of 20% from $50.8 million in the second quarter
of 2012. Solar Energy sales increased 17% from $51.7 million in the
third quarter of 2011 as large scale commercial and utility
deployments and growing demand in North America continued to fuel
growth.
Income from Continuing
Operations
Income from continuing operations for the third quarter was $5.7
million or $0.15 per diluted share, compared to income from
continuing operations of $8.8 million or $0.22 per diluted share in
the second quarter of 2012 and $7.2 million or $0.16 per diluted
share in the same period last year. On a non-GAAP basis, excluding
the impact of the $3.0 million restructuring charge, income from
continuing operations was $7.6 million or $0.20 per diluted share,
up from $7.3 million or $0.18 per diluted share in the second
quarter of 2012.
Restructuring Charge
The company incurred a $3.0 million charge this quarter related
to the restructuring plan that was announced on September 28, 2011.
During the quarter the company completed 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 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 $1 to $2 million, principally for
consolidating locations, and another $1 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.
Fourth Quarter 2012
Guidance
The company anticipates fourth quarter 2012 results from
continuing operations to be within the following ranges:
- Sales of $105 million to $115 million
- Non-GAAP per share earnings of $0.13 to $0.18
Third Quarter 2012 Conference
Call
Management will host a conference call tomorrow, Tuesday,
October 30, 2012, at 8:30 a.m. Eastern Time to discuss Advanced
Energy's financial results. Domestic callers may access this
conference call by dialing 888-713-4216. International callers may
access the call by dialing 617-213-4868. Participants will need to
provide conference pass code 30390582. For a replay of this
teleconference, please call 888-286-8010 or 617-801-6888, and
enter the pass code 20587244. 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 fourth quarter ending December 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 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 |
Nine
Months Ended |
|
September
30, |
June 30, |
September
30, |
|
2012 |
2011 |
2012 |
2012 |
2011 |
|
|
|
|
|
|
SALES |
$ 117,515 |
$ 128,498 |
$ 115,658 |
$ 338,960 |
$ 404,304 |
COST OF SALES |
71,788 |
79,651 |
71,929 |
209,760 |
238,035 |
GROSS PROFIT |
45,727 |
48,847 |
43,729 |
129,200 |
166,269 |
|
38.9% |
38.0% |
37.8% |
38.1% |
41.1% |
OPERATING EXPENSES: |
|
|
|
|
|
Research and development |
14,564 |
17,592 |
14,502 |
44,181 |
50,591 |
Selling, general and administrative |
16,806 |
16,473 |
16,706 |
53,571 |
57,379 |
Restructuring charges (benefit) |
3,003 |
3,119 |
(144) |
5,434 |
3,119 |
Amortization of intangible assets |
1,416 |
989 |
1,351 |
4,139 |
2,831 |
Total operating expenses |
35,789 |
38,173 |
32,415 |
107,325 |
113,920 |
|
|
|
|
|
|
Operating income |
9,938 |
10,674 |
11,314 |
21,875 |
52,349 |
Other income (expense), net |
65 |
(259) |
1,775 |
2,251 |
496 |
Income from continuing operations before
income taxes |
10,003 |
10,415 |
13,089 |
24,126 |
52,845 |
Provision for income taxes |
4,268 |
3,244 |
4,288 |
8,824 |
13,396 |
INCOME FROM CONTINUING OPERATIONS, NET OF
INCOME TAXES |
5,735 |
7,171 |
8,801 |
15,302 |
39,449 |
|
|
|
|
|
|
Income (loss) from discontinued operations,
net of income taxes |
-- |
(579) |
127 |
430 |
(365) |
|
|
|
|
|
|
NET INCOME |
$ 5,735 |
$ 6,592 |
$ 8,928 |
$ 15,732 |
$ 39,084 |
|
|
|
|
|
|
Basic weighted-average common shares
outstanding |
37,807 |
43,535 |
38,974 |
39,148 |
43,515 |
Diluted weighted-average common shares
outstanding |
38,330 |
43,819 |
39,583 |
39,720 |
44,056 |
|
|
|
|
|
|
EARNINGS PER SHARE: |
|
|
|
|
|
CONTINUING OPERATIONS: |
|
|
|
|
|
BASIC EARNINGS PER SHARE |
$ 0.15 |
$ 0.16 |
$ 0.23 |
$ 0.39 |
$ 0.91 |
DILUTED EARNINGS PER SHARE |
$ 0.15 |
$ 0.16 |
$ 0.22 |
$ 0.39 |
$ 0.90 |
|
|
|
|
|
|
DISCONTINUED OPERATIONS |
|
|
|
|
|
BASIC EARNINGS/(LOSS) PER SHARE |
$ -- |
$ (0.01) |
$ 0.00 |
$ 0.01 |
$ (0.01) |
DILUTED EARNINGS/(LOSS) PER SHARE |
$ -- |
$ (0.01) |
$ 0.00 |
$ 0.01 |
$ (0.01) |
|
|
|
|
|
|
NET INCOME: |
|
|
|
|
|
BASIC EARNINGS PER
SHARE |
$ 0.15 |
$ 0.15 |
$ 0.23 |
$ 0.40 |
$ 0.90 |
DILUTED EARNINGS PER
SHARE |
$ 0.15 |
$ 0.15 |
$ 0.23 |
$ 0.40 |
$ 0.89 |
|
|
|
|
|
|
ADVANCED ENERGY
INDUSTRIES, INC. |
SELECTED OTHER
DATA (UNAUDITED) |
(in
thousands) |
|
|
|
Reconciliation of Non-GAAP
measure - income from continuing operations |
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
September
30, |
|
2012 |
2012 |
|
|
|
Income from continuing operations, net of
tax, as reported |
$ 5,735 |
$ 15,302 |
Adjustments: |
|
|
Restructuring charges, net of tax |
1,852 |
3,411 |
Gain on sale of gas flow manufacturing
assets, net of tax |
-- |
(1,452) |
Income from continuing operations, net of
tax |
$ 7,587 |
$ 17,261 |
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP
measure - per share earnings from continuing
operations |
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
September
30, |
|
2012 |
2012 |
|
|
|
Diluted earnings per share from continuing
operations, as reported |
$ 0.15 |
$ 0.39 |
Adjustments: |
|
|
per share impact of restructuring
charges, net of tax |
0.05 |
0.09 |
per share impact of gain on sale of gas
flow manufacturing assets, net of tax |
|
(0.04) |
Per share earnings from continuing
operations |
$ 0.20 |
$ 0.44 |
|
|
|
|
ADVANCED ENERGY
INDUSTRIES, INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(in
thousands) |
|
|
|
|
September
30, |
December
31, |
|
2012 |
2011 * |
ASSETS |
UNAUDITED |
|
|
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 151,034 |
$ 117,639 |
Marketable securities |
22,631 |
25,567 |
Accounts receivable, net |
101,412 |
132,485 |
Inventories, net |
87,611 |
80,283 |
Deferred income taxes |
9,027 |
9,014 |
Income taxes receivable |
7,971 |
13,826 |
Other current assets |
6,340 |
11,672 |
Total current assets |
386,026 |
390,486 |
|
|
|
Property and equipment, net |
38,779 |
42,338 |
|
|
|
Deposits and other |
9,326 |
8,959 |
Goodwill and intangibles, net |
85,814 |
89,953 |
Deferred income tax assets |
1,708 |
1,642 |
Total assets |
$ 521,653 |
$ 533,378 |
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
Accounts payable |
$ 50,343 |
$ 44,828 |
Other accrued expenses |
43,228 |
46,416 |
Total current liabilities |
93,571 |
91,244 |
|
|
|
Long-term liabilities |
49,606 |
34,795 |
|
|
|
Total liabilities |
143,177 |
126,039 |
|
|
|
Stockholders' equity |
378,476 |
407,339 |
Total liabilities and stockholders'
equity |
$ 521,653 |
$ 533,378 |
|
|
|
* December 31, 2011 amounts are
derived from the December 31, 2011 audited Consolidated Financial
Statements. |
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT INFORMATION
(UNAUDITED) |
(in
thousands) |
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
June 30, |
September
30, |
|
2012 |
2011 |
2012 |
2012 |
2011 |
SALES: |
|
|
|
|
|
Thin Films |
$ 56,780 |
$ 76,764 |
$64,843 |
$ 182,013 |
$ 274,194 |
Solar Energy |
60,735 |
51,734 |
50,815 |
156,947 |
130,110 |
Total Sales |
$ 117,515 |
$ 128,498 |
$ 115,658 |
$ 338,960 |
$ 404,304 |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME: |
|
|
|
|
|
Thin Films |
$ 6,065 |
$ 16,015 |
$8,881 |
$ 18,113 |
$ 60,881 |
Solar Energy |
7,410 |
1,259 |
2,740 |
10,643 |
4,092 |
Total segment operating income |
13,475 |
17,274 |
11,621 |
28,756 |
64,973 |
Corporate expenses |
(534) |
(3,481) |
(451) |
(1,447) |
(9,505) |
Restructuring (charges) benefit |
(3,003) |
(3,119) |
144 |
(5,434) |
(3,119) |
Other income (expense), net |
65 |
(259) |
1,775 |
2,251 |
496 |
Income from continuing operations before
income taxes |
$ 10,003 |
$ 10,415 |
$13,089 |
$ 24,126 |
$ 52,845 |
|
|
|
|
|
|
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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