Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________

FORM 8-K

________________________________________________

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 2, 2015

________________________________________________

Advanced Energy Industries, Inc.

(Exact name of registrant as specified in its charter)

________________________________________________



Delaware	000-26966	84-0846841
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)



1625 Sharp Point Drive, Fort Collins, Colorado				80525
(Address of principal executive offices)				(Zip Code)



(970) 221-4670
(Registrant's telephone number, including area code)

Not applicable
(Former name or former address, if changed since last report)

________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):



o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

The information in this Form 8-K that is furnished under “Item 2.02 Results of Operations and Financial Condition” and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

On February 2, 2015, Advanced Energy Industries, Inc. announced via press release its financial results for the quarter ended December 31, 2014. A copy of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.



(d)	Exhibits

99.1		Press release dated February 2, 2015 by Advanced Energy Industries, Inc., reporting its financial results for the quarter ended December 31, 2014.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.




		/s/ Danny C. Herron
Date: February 2, 2015		Danny C. Herron
		Executive Vice President and Chief Financial Officer

EXHIBIT INDEX



Exhibit Number		Description
99.1		Press release dated February 2, 2015 by Advanced Energy Industries, Inc., reporting its financial results for the quarter ended December 31, 2014.

Financial News Release



CONTACTS:
Danny Herron		Annie Leschin
Advanced Energy Industries, Inc.		Advanced Energy Industries, Inc.
970.407.6570		970.407.6555
danny.herron@aei.com		ir@aei.com

ADVANCED ENERGY ANNOUNCES FOURTH QUARTER RESULTS


•	Revenue of $153 million


•	GAAP earnings of $0.23 per diluted share


•	Non-GAAP earnings of $0.50 per diluted share


•	Ended quarter with $128 million in cash

Fort Collins, Colo., February 2, 2015 - Advanced Energy Industries, Inc. (Nasdaq: AEIS) today announced financial results for the fourth quarter ended December 31, 2014. The company reported fourth quarter sales of $152.7 million compared with $143.1 million in the third quarter of 2014 and $152.6 million in the fourth quarter of 2013. Net income was $9.3 million or $0.23 per diluted share. On a non-GAAP basis, adjusted net income was $20.6 million or $0.50 per diluted share. A reconciliation of non-GAAP net income and earnings per share is provided in the tables below. The company ended the quarter with $128.4 million in cash and marketable securities, a sequential increase of $22.6 million.

“We ended 2014 with a strong quarter,” said Yuval Wasserman, President and CEO of Advanced Energy. “Our investment in new semiconductor products targeting key technology inflection points is enabling accelerated growth in existing and new applications, and drove record revenues for the quarter. Having made three strategic acquisitions in the last 12 months, we have entered several new and adjacent industrial markets, expanding our total available market and increasing our diversification. We are in the process of evaluating strategic alternatives for our solar inverter business given some of the near-term challenges facing the industry. With a strong pipeline of opportunities and choices for our business, we believe that we are well positioned for 2015.”

Precision Power Products

Precision Power Products sales were $105.9 million in the fourth quarter of 2014, a 16.1% increase from $91.2 million in the third quarter of 2014 and a 20.8% increase from $87.6 million in the fourth quarter of 2013. This was driven by a record quarter in semiconductor sales and a recovery in our industrial applications.

Inverters

Inverter sales were $46.8 million in the fourth quarter of 2014, down 9.8% from $52.0 million in the third quarter of 2014, and down 27.9% from $64.9 million in the fourth quarter of 2013. The solar inverter business was impacted by a number of macroeconomic factors including economic weakness in Europe, pricing pressure, changes in currency exchange rate and increased competition.

Net Income

Net income for the fourth quarter of 2014 was $9.3 million or $0.23 per diluted share, compared with net income of $12.3 million or $0.30 per diluted share in the third quarter of 2014, and $34.4 million or $0.83 per diluted share in the fourth quarter last year. On a non-GAAP basis adjusted net income this quarter increased to $20.6 million or $0.50 per diluted share from $16.9 million or $0.42 per diluted share in the third quarter of 2014, and decreased from $27.8 million or $0.67 per diluted share in the same period last year.

First Quarter 2015 Guidance

Based on the company’s current view, guidance for the first quarter of 2015 is within the following ranges:


•	Sales of $137 million to $147 million


•	GAAP earnings per share of $0.32 to $0.40


•	Non-GAAP earnings per share of $0.38 to $0.46

Fourth Quarter 2014 Conference Call

Management will host a conference call tomorrow morning, Tuesday, February 3, 2015, at 8:30 a.m. Eastern Time to discuss Advanced Energy's financial results. Domestic callers may access this conference call by dialing 855-232-8958. International callers may access the call by dialing 315-625-6980. Participants will need to provide conference pass code 63429946. For a replay of this teleconference, please call 855-859-2056 or 404-537-3406 and enter pass code 63429946. The replay will be available for one week 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, precision power conversion solutions. 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, provide investors with additional perspective. While some of the 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 such measures do not reflect all of the amounts associated with the company’s 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 guidance with respect to anticipated financial results for the first quarter ending March 31, 2015, 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: (a) the effects of global macroeconomic conditions upon demand for our products; (b) the volatility and cyclicality of the industries the company serves, particularly the semiconductor industry; (c) the volatility, seasonality and delays of renewable energy projects and inverter sales; (d) our ability to integrate successfully the operations of companies we acquire, including the retention of key employees of such companies, realization of the benefits of such companies’ products, the total available market and expected sales of such products, and product cost expectations surrounding the fabless manufacturing models for REFUsol and the power control modules product line we acquired from AEG Power Solutions GmbH; (e) opportunities that might present themselves, or

actions we might take, as a result of our exploration of strategic alternatives for our solar inverter business, (f) with regard to the renewable energy market, tariffs on Chinese & Taiwanese solar panels, the continuation of feed-in-tariffs and other incentives in Europe and elsewhere for inverters, including the RPS (renewable portfolio standards), the timing and availability of grant programs in North America and Europe and the reduction of the investment tax credit for solar facilities in the United States after 2016; (g) the impact of price changes resulting from a variety of factors including increased competition in the solar inverter equipment market; (h) the timing of orders received from customers; (i) the company’s ability to realize benefits from cost improvement efforts including avoided costs, restructuring plans and inorganic growth; (j) the company’s ability to obtain materials and manufacture products; and (k) 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 (the “SEC”). These reports and statements are available on the SEC's website at www.sec.gov. Copies may also be obtained from Advanced Energy's investor relations page at http://ir.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. 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									Twelve Months Ended
	December 31,						September 30,			December 31,
	2014			2013			2014			2014			2013

SALES	$	152,718		$	152,580		$	143,147		$	583,098		$	547,004
COST OF SALES	111,839			93,753			95,204			389,069			336,868
GROSS PROFIT	40,879			58,827			47,943			194,029			210,136
	26.8		%	38.6		%	33.5		%	33.3		%	38.4		%
OPERATING EXPENSES:
Research and development	14,080			13,216			15,074			59,032			58,314
Selling, general and administrative	21,070			21,960			20,223			83,852			84,662
Restructuring charges	929			2,305			1,183			2,356			46,395
Amortization of intangible assets	2,027			1,328			2,238			8,366			6,142
Total operating expenses	38,106			38,809			38,718			153,606			195,513
OPERATING INCOME	2,773			20,018			9,225			40,423			14,623
OTHER INCOME (EXPENSE), NET	(56		)	30			(618		)	(745		)	(339		)
Income before income taxes	2,717			20,048			8,607			39,678			14,284
Provision (benefit) for income taxes	(6,602		)	(14,307		)	(3,695		)	(7,304		)	(17,802		)
NET INCOME	$	9,319		$	34,355		$	12,302		$	46,982		$	32,086

Basic weighted-average common shares outstanding	40,329			40,284			39,998			40,420			39,597
Diluted weighted-average common shares outstanding	40,757			41,332			40,470			41,034			40,667

EARNINGS PER SHARE:

BASIC EARNINGS PER SHARE	$	0.23		$	0.85		$	0.31		$	1.16		$	0.81
DILUTED EARNINGS PER SHARE	$	0.23		$	0.83		$	0.30		$	1.14		$	0.79

ADVANCED ENERGY INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)



	December 31,		December 31,
	2014		2013*
ASSETS	UNAUDITED

Current assets:
Cash and cash equivalents	$	125,285	$	138,125
Marketable securities	3,083		11,568
Accounts receivable, net	124,150		125,782
Inventories, net	95,082		109,771
Deferred income tax assets	14,011		10,746
Income taxes receivable	5,555		10,027
Other current assets	9,588		10,950
Total current assets	376,754		416,969

Property and equipment, net	28,976		34,888

Deposits and other	2,052		2,421
Goodwill and intangibles, net	250,403		177,211
Deferred income tax assets	26,384		21,488
Total assets	$	684,569	$	652,977

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable	$	53,040	$	55,623
Other accrued expenses	59,530		66,734
Total current liabilities	112,570		122,357

Long-term liabilities	97,034		66,158

Total liabilities	209,604		188,515

Stockholders' equity	474,965		464,462
Total liabilities and stockholders' equity	$	684,569	$	652,977

* December 31, 2013 amounts are derived from the December 31, 2013 audited Consolidated Financial Statements.

ADVANCED ENERGY INDUSTRIES, INC.

SEGMENT INFORMATION (UNAUDITED)

(in thousands)




	Three Months Ended									Twelve Months Ended
	December 31,						September 30,			December 31,
	2014			2013			2014			2014			2013
SALES:
Precision Power Products	$	105,873		$	87,647		$	91,192		$	361,769		$	296,535
Inverters	46,845			64,933			51,955			221,329			250,469
Total Sales	$	152,718		$	152,580		$	143,147		$	583,098		$	547,004


OPERATING INCOME (LOSS):
Precision Power Products	$	30,759		$	24,723		$	22,882		$	95,214		$	64,790
Inverters	(27,057		)	(2,400		)	(12,474		)	(52,435		)	(3,772		)
Total segment operating income	3,702			22,323			10,408			42,779			61,018
Restructuring charges and asset impairment	(929		)	(2,305		)	(1,183		)	(2,356		)	(46,395		)
Other income (expense), net	(56		)	30			(618		)	(745		)	(339		)
Income (loss) before income taxes	$	2,717		$	20,048		$	8,607		$	39,678		$	14,284

ADVANCED ENERGY INDUSTRIES, INC.

SELECTED OTHER DATA (UNAUDITED)

(in thousands)



Reconciliation of Non-GAAP measure - operating expenses and operating income, excluding certain items	Three Months Ended									Twelve Months Ended
	December 31,						September 30,			December 31,
	2014			2013			2014			2014			2013

Gross Profit, as reported	$	40,879		$	58,827		$	47,943		$	194,029		$	210,136
Operating expenses, as reported	38,106			38,809			38,718			153,606			195,513
Adjustments:
Restructuring charges	(929		)	(2,305		)	(1,183		)	(2,356		)	(46,395		)
Acquisition-related costs	—			—			(60		)	(730		)	(1,093		)
Stock-based compensation	(245		)	(4,432		)	(1,488		)	(4,993		)	(13,742		)
Amortization of intangible assets	(2,027		)	(1,328		)	(2,238		)	(8,366		)	(6,142		)
Nonrecurring inventory impairment	(13,320		)	—			—			(13,320		)	—
Nonrecurring executive severance	—			—			—			(867		)	—
Non-GAAP operating expenses	21,585			30,744			33,749			122,974			128,141
Non-GAAP operating income	$	19,294		$	28,083		$	14,194		$	71,055		$	81,995



Reconciliation of Non-GAAP measure - income excluding certain items	Three Months Ended							Twelve Months Ended
	December 31,					September 30,		December 31,
	2014		2013			2014		2014		2013

Income (loss), net of tax, as reported	$	9,319	$	34,355		$	12,302	$	46,982	$	32,086
Adjustments, net of tax
Restructuring charges	604		(11,785		)	1,102		1,931		30,235
Acquisition-related costs	—		—			56		718		993
Stock-based compensation	159		4,038			1,385		4,468		12,010
Amortization of intangible assets	1,427		1,210			2,084		7,205		5,342
Nonrecurring tax release items	—		—			—		—		(5,608		)
Nonrecurring inventory impairment	9,058		—			—		9,058		—
Nonrecurring executive severance	—		—			—		800		—
Non-GAAP income, net of tax	$	20,567	$	27,818		$	16,929	$	71,162	$	75,058



Reconciliation of Non-GAAP measure - per share earnings excluding certain items	Three Months Ended							Twelve Months Ended
	December 31,					September 30,		December 31,
	2014		2013			2014		2014		2013

Diluted earnings per share, as reported	$	0.23	$	0.83		$	0.30	$	1.14	$	0.79
Add back:
per share impact of Non-GAAP adjustments, net of tax	0.27		(0.16		)	0.12		0.59		1.06
Non-GAAP per share earnings	$	0.50	$	0.67		$	0.42	$	1.73	$	1.85