- Revenue of $143 million
- GAAP earnings of $0.02 per diluted share
- Non-GAAP earnings of $0.53 per diluted
share
- Ended quarter with $105 million in cash
Advanced Energy Industries, Inc. (Nasdaq:AEIS) today announced
financial results for the third quarter ended September 30, 2013.
The company reported third quarter sales of $142.9 million compared
with $139.7 million in the second quarter of 2013 and $117.5
million in the third quarter of 2012. Income from continuing
operations was $687,000 or $0.02 per diluted share. On a non-GAAP
basis, income from continuing operations was $21.7 million or $0.53
per diluted share. The non-GAAP measures exclude, on an after tax
basis, $22.4 million in restructuring charges, $3.6 million of
stock-based compensation, $549,000 of intangible amortization and a
$5.6 million benefit from a non-recurring tax release item. A
reconciliation of non-GAAP income from continuing operations and
earnings per share is provided in the tables below. It is important
to note that based on our current mix of profits our effective tax
rate has declined to approximately 12.5%. The company ended the
quarter with $104.7 million in cash and marketable securities, a
sequential increase of $5.6 million.
"As we approach the end of 2013, we had yet another sound
quarter reflecting the significant progress we are making towards
our strategic objectives," said Garry Rogerson, CEO. "Once again,
we returned value to our shareholders by continuing to grow
operating profit and earnings per share on a non-GAAP basis. Since
the beginning of 2013, we have increased our operating income
excluding restructuring by nearly 140%, from $7.7 million in the
first quarter, to $12.6 million in the second quarter, to $18.3
million in the third quarter. Clearly, we are demonstrating the
effectiveness of our low-cost, distributed R&D, centralized
manufacturing model. With increasing backlog, a growing number of
new products and entrance into new applications and geographies, we
believe we are poised for continued profitable growth opportunities
as we head into 2014."
Thin Films
Thin Films sales were $75.4 million in the third quarter of
2013, a 5.2% increase from $71.7 million in the second quarter of
2013 and a 32.8% increase from $56.8 million in the third quarter
of 2012. The increase was driven by improved conditions across all
of our served markets with the exception of flat panel display
applications, where OEMs digested recent capital investments. In
addition, we are increasing our penetration of existing
applications and expanding into new ones such as environmental and
hard coating applications.
Solar Energy
Solar Energy sales were $67.5 million in the third quarter of
2013, roughly flat with $68.0 million in the second quarter of 2013
and an increase of 11.1% from $60.7 million in the third quarter of
2012. Backlog continued to build due to the growing demand for the
one megawatt product slated to begin shipping at the end of the
fourth quarter and the three-phase string product line.
Income from Continuing Operations
Income from continuing operations for the third quarter was
$687,000 or $0.02 per diluted share, compared with a loss from
continuing operations of $9.8 million or $0.24 per diluted share in
the second quarter of 2013, and income from continuing operations
of $5.7 million or $0.15 per diluted share in the same period last
year. On a non-GAAP basis, excluding the impact of the items
mentioned above, income from continuing operations grew to $21.7
million or $0.53 per diluted share, from $13.9 million or $0.35 per
diluted share in the second quarter of 2013.
Restructuring Activities
After the acquisition of the three-phase string product line in
April 2013, the company undertook a major restructuring to take
advantage of additional future cost saving opportunities. These
activities include the consolidation of certain facilities, product
rationalization and further centralization of manufacturing. During
the third quarter, the company recorded a pre-tax restructuring
charge of $19.9 million, $18.5 million of which was non-cash. The
company has now completed virtually all of these restructuring
actions. The total charges related to these activities were $44
million, of which $36.2 million was non-cash. We expect this
restructuring to provide additional cost savings in the range of
$20 to $22 million annually, including approximately $14 million of
cash savings. These cost savings activities, along with those
previously announced are expected to deliver annual savings of
approximately $72 to $77 million by 2014.
Fourth Quarter 2013 Guidance
The company anticipates fourth quarter 2013 results from
continuing operations to be within the following ranges assuming a
fourth quarter actual tax rate of 0%:
- Sales of $145 million to $155 million
- Earnings per share of $0.47 to $0.52, excluding restructuring
charges of approximately $500,000
- Non-GAAP earnings per share of $0.59 to $0.63
Third Quarter 2013 Conference Call
Management will host a conference call tomorrow, Tuesday,
November 5, 2013, at 8:30 a.m. Eastern Time to discuss Advanced
Energy's financial results. Domestic callers may access this
conference call by dialing 877-703-6104. International callers may
access the call by dialing 857-244-7303. Participants will need to
provide conference pass code 58950433. For a replay of this
teleconference, please call 888-286-8010 or 617-801-6888 and enter
pass code 33676878. 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 income and per share
earnings data. Please note that beginning in 2013, Advanced Energy
redefined its non-GAAP measures to exclude restructuring charges,
acquisition –related costs, stock based compensation and
amortization of intangibles and tax release items. 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.
Please 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, 2013,
anticipated cost savings, market performance, future charges,
positioning of the company 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 acquisition of
REFUsol including the successful integration
of operations of REFUsol and associated restructuring
costs; the retention of key employees of REFUsol, expectations
surrounding the benefits of the REFUsol products, the total
available market for 3-phase string solar inverters particularly
in Europe, India and the United States,
expectations regarding sales of the REFUsol products, the
continuation of feed-in-tariffs and other incentives
in Europe and elsewhere, expectations surrounding REFUsol
's fabless manufacturing model, as well as the effects of global
macroeconomic conditions upon demand for such products, 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 including avoided
costs, any restructuring plans and any inorganic growth, 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. As reiterated previously, aspirational goals and
targets discussed on the conference call or in the presentation
materials should not be interpreted in any respect as guidance. 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, |
|
2013 |
2012 |
2013 |
2013 |
2012 |
|
|
|
|
|
|
SALES |
$ 142,899 |
$ 117,515 |
$ 139,711 |
$ 394,424 |
$ 338,960 |
COST OF SALES |
86,688 |
71,788 |
86,452 |
243,115 |
209,760 |
GROSS PROFIT |
56,211 |
45,727 |
53,259 |
151,309 |
129,200 |
|
39.3% |
38.9% |
38.1% |
38.4% |
38.1% |
OPERATING EXPENSES: |
|
|
|
|
|
Research and development |
15,105 |
14,564 |
15,740 |
45,098 |
44,181 |
Selling, general and administrative |
22,138 |
16,806 |
22,910 |
62,702 |
53,571 |
Restructuring charges and asset
impairment |
19,884 |
3,003 |
24,206 |
44,090 |
5,434 |
Amortization of intangible assets |
626 |
1,416 |
1,975 |
4,814 |
4,139 |
Total operating expenses |
57,753 |
35,789 |
64,831 |
156,704 |
107,325 |
|
|
|
|
|
|
Operating income (loss) |
(1,542) |
9,938 |
(11,572) |
(5,395) |
21,875 |
|
|
|
|
|
|
Other income (expense), net |
164 |
65 |
(330) |
(369) |
2,251 |
Income (loss) from continuing operations
before income taxes |
(1,378) |
10,003 |
(11,902) |
(5,764) |
24,126 |
Provision (benefit) for income taxes |
(2,065) |
4,268 |
(2,120) |
(3,495) |
8,824 |
INCOME (LOSS) FROM CONTINUING OPERATIONS, NET
OF INCOME TAXES |
687 |
5,735 |
(9,782) |
(2,269) |
15,302 |
|
|
|
|
|
|
Income from discontinued operations, net of
income taxes |
-- |
-- |
-- |
-- |
430 |
|
|
|
|
|
|
NET INCOME (LOSS) |
$ 687 |
$ 5,735 |
$ (9,782) |
$ (2,269) |
$ 15,732 |
|
|
|
|
|
|
Basic weighted-average common shares
outstanding |
39,878 |
37,807 |
39,453 |
39,369 |
39,148 |
Diluted weighted-average common shares
outstanding |
40,577 |
38,330 |
40,150 |
40,150 |
39,720 |
|
|
|
|
|
|
EARNINGS PER SHARE: |
|
|
|
|
|
CONTINUING OPERATIONS: |
|
|
|
|
|
BASIC EARNINGS (LOSS) PER SHARE |
$ 0.02 |
$ 0.15 |
$ (0.25) |
$ (0.06) |
$ 0.39 |
DILUTED EARNINGS (LOSS) PER SHARE |
$ 0.02 |
$ 0.15 |
$ (0.24) |
$ (0.06) |
$ 0.39 |
|
|
|
|
|
|
DISCONTINUED OPERATIONS |
|
|
|
|
|
BASIC EARNINGS PER SHARE |
$ -- |
$ -- |
$ -- |
$ -- |
$ 0.01 |
DILUTED EARNINGS PER SHARE |
$ -- |
$ -- |
$ -- |
$ -- |
$ 0.01 |
|
|
|
|
|
|
NET INCOME (LOSS): |
|
|
|
|
|
BASIC EARNINGS (LOSS) PER
SHARE |
$ 0.02 |
$ 0.15 |
$ (0.25) |
$ (0.06) |
$ 0.40 |
DILUTED EARNINGS (LOSS) PER
SHARE |
$ 0.02 |
$ 0.15 |
$ (0.24) |
$ (0.06) |
$ 0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADVANCED ENERGY INDUSTRIES,
INC. |
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
December
31, |
|
|
|
|
2013 |
2012 * |
|
|
|
ASSETS |
UNAUDITED |
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ 92,449 |
$ 146,564 |
|
|
|
Marketable securities |
12,277 |
25,683 |
|
|
|
Accounts receivable, net |
130,311 |
83,914 |
|
|
|
Inventories, net |
123,152 |
81,482 |
|
|
|
Deferred income tax assets |
19,465 |
19,477 |
|
|
|
Income taxes receivable |
9,249 |
4,315 |
|
|
|
Other current assets |
13,908 |
9,075 |
|
|
|
Total current assets |
400,811 |
370,510 |
|
|
|
|
|
|
|
|
|
Property and equipment, net |
36,348 |
39,523 |
|
|
|
|
|
|
|
|
|
Deposits and other |
7,641 |
7,529 |
|
|
|
Goodwill and intangibles, net |
168,926 |
106,600 |
|
|
|
Deferred income tax assets |
13,953 |
13,998 |
|
|
|
Total assets |
$ 627,679 |
$ 538,160 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ 67,563 |
$ 41,044 |
|
|
|
Other accrued expenses |
51,235 |
47,602 |
|
|
|
Notes payable to banks |
11,436 |
-- |
|
|
|
Total current liabilities |
130,234 |
88,646 |
|
|
|
|
|
|
|
|
|
Long-term liabilities |
82,604 |
61,883 |
|
|
|
|
|
|
|
|
|
Total liabilities |
212,838 |
150,529 |
|
|
|
|
|
|
|
|
|
Stockholders' equity |
414,841 |
387,631 |
|
|
|
Total liabilities and stockholders'
equity |
$ 627,679 |
$ 538,160 |
|
|
|
|
|
|
|
|
|
* December 31, 2012 amounts are derived from
the December 31, 2012 audited Consolidated Financial
Statements. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADVANCED ENERGY INDUSTRIES,
INC. |
|
|
|
|
|
SEGMENT INFORMATION
(UNAUDITED) |
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
June 30, |
September
30, |
|
2013 |
2012 |
2013 |
2013 |
2012 |
SALES: |
|
|
|
|
|
Thin Films |
$ 75,409 |
$ 56,780 |
$ 71,702 |
$ 208,888 |
$ 182,013 |
Solar Energy |
67,490 |
60,735 |
68,009 |
185,536 |
156,947 |
Total Sales |
$ 142,899 |
$ 117,515 |
$ 139,711 |
394,424 |
338,960 |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME: |
|
|
|
|
|
Thin Films |
$ 18,150 |
$ 6,065 |
$ 14,406 |
$ 40,067 |
$ 18,113 |
Solar Energy |
192 |
7,410 |
(1,772) |
(1,372) |
10,643 |
Total segment operating income |
18,342 |
13,475 |
12,634 |
38,695 |
28,756 |
|
|
|
|
|
|
Corporate expenses |
-- |
(534) |
-- |
|
(1,447) |
Restructuring charges |
(19,884) |
(3,003) |
(24,206) |
(44,090) |
(5,434) |
Other income (expense), net |
164 |
65 |
(330) |
(369) |
2,251 |
Income (loss) from continuing operations
before income taxes |
$ (1,378) |
$ 10,003 |
$ (11,902) |
$ (5,764) |
$ 24,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADVANCED ENERGY INDUSTRIES,
INC. |
|
|
|
|
|
SELECTED OTHER DATA
(UNAUDITED) |
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP measure -
operating expenses and income from operations, excluding certain
items |
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
June 30, |
September
30, |
|
2013 |
2012 |
2013 |
2013 |
2012 |
|
|
|
|
|
|
Gross Profit, as reported |
$ 56,211 |
$ 45,727 |
$ 53,259 |
$ 151,309 |
$ 129,200 |
Operating expenses, as reported |
57,753 |
35,789 |
64,831 |
156,704 |
107,325 |
Adjustments: |
|
|
|
|
|
Restructuring charges |
(19,884) |
(3,003) |
(24,206) |
(44,090) |
(5,434) |
Acquisition-related costs |
-- |
-- |
-- |
(1,093) |
-- |
Stock-based compensation |
(4,106) |
(2,835) |
(3,170) |
(9,310) |
(10,072) |
Amortization of intangible assets |
(626) |
(1,416) |
(1,975) |
(4,814) |
(4,139) |
Non-GAAP operating expenses |
33,137 |
28,535 |
35,480 |
97,397 |
87,680 |
Non-GAAP income from operations |
$ 23,074 |
$ 17,192 |
$ 17,779 |
$ 53,912 |
$ 41,520 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP measure -
income from continuing operations excluding certain
items |
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
June 30, |
September
30, |
|
2013 |
2012 |
2013 |
2013 |
2012 |
|
|
|
|
|
|
Income (loss) from continuing operations, net
of tax, as reported |
$ 687 |
$ 5,735 |
$ (9,782) |
$ (2,269) |
$ 15,302 |
Adjustments, net of tax |
|
|
|
|
|
Restructuring charges |
22,441 |
1,849 |
19,579 |
42,020 |
3,408 |
One-time gain on sale of flow assets |
-- |
-- |
-- |
-- |
(1,452) |
Acquisition-related costs |
-- |
-- |
-- |
993 |
-- |
Stock-based compensation |
3,601 |
1,806 |
2,524 |
7,972 |
6,416 |
Amortization of intangible assets |
549 |
902 |
1,573 |
4,132 |
2,637 |
Nonrecurring tax release items |
(5,608) |
-- |
-- |
(5,608) |
-- |
Non-GAAP income from continuing operations,
net of tax |
$ 21,670 |
$ 10,292 |
$ 13,894 |
$ 47,240 |
$ 26,311 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP measure -
per share earnings from continuing operations excluding certain
items |
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
June 30, |
September
30, |
|
2013 |
2012 |
2013 |
2013 |
2012 |
|
|
|
|
|
|
Diluted earnings (loss) per share from
continuing operations, as reported |
$ 0.02 |
$ 0.15 |
$ (0.24) |
$ (0.06) |
$ 0.39 |
Add back: |
|
|
|
|
|
per share impact of Non-GAAP adjustments,
net of tax benefit |
0.51 |
0.12 |
0.59 |
1.24 |
0.27 |
Non-GAAP per share earnings from continuing
operations |
$ 0.53 |
$ 0.27 |
$ 0.35 |
$ 1.18 |
$ 0.66 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP measure -
operating income excluding restructuring |
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
June 30, |
September
30, |
|
2013 |
2012 |
2013 |
2013 |
2012 |
|
|
|
|
|
|
Operating income (loss), as reported |
$ (1,542) |
$ 9,938 |
$ (11,572) |
$ (5,395) |
$ 21,875 |
Adjustment: |
|
|
|
|
|
Restructuring charges |
19,884 |
3,003 |
24,206 |
44,090 |
5,434 |
Non-GAAP operating income excluding
restructuring charges |
$ 18,342 |
$ 12,941 |
$ 12,634 |
$ 38,695 |
$ 27,309 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP measure -
income from operations and per share earnings excluding
restructuring |
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
June 30, |
September
30, |
|
2013 |
2012 |
2013 |
2013 |
2012 |
|
|
|
|
|
|
Net income (loss) from continuing operations,
as reported |
$ 687 |
$ 5,735 |
$ (9,782) |
$ (2,269) |
$ 15,302 |
Adjustments, net of tax: |
|
|
|
|
|
Restructuring charges |
22,441 |
1,849 |
19,579 |
42,020 |
3,408 |
Non-GAAP income from continuing operations,
net of tax excluding restructuring charges |
$ 23,128 |
$ 7,584 |
$ 9,797 |
$ 39,751 |
$ 18,710 |
|
|
|
|
|
|
Diluted weighted-average common shares
outstanding |
40,577 |
38,330 |
40,150 |
40,150 |
39,720 |
Non-GAAP per share earnings from continuing
operations excluding restructuring charges |
$ 0.57 |
$ 0.20 |
$ 0.24 |
$ 0.99 |
$ 0.47 |
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
Advanced Energy Industries (NASDAQ:AEIS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Advanced Energy Industries (NASDAQ:AEIS)
Historical Stock Chart
From Jul 2023 to Jul 2024