Advanced Energy Announces Third Quarter Results
October 31 2016 - 4:05PM
Advanced Energy Industries, Inc. (Nasdaq:AEIS) today announced
financial results for the third quarter ended September 30, 2016.
The company reported third quarter sales of $126.6 million. Third
quarter GAAP income from continuing operations was $29.0 million,
or $0.73 per diluted share. Non-GAAP income from continuing
operations was $30.8 million, or $0.77 per diluted share.
“After a third straight quarter of compelling top and bottom
line performance driven by strength in semiconductors, flat panel
display and services, 2016 is shaping up to be an impressive year
for AE,” said Yuval Wasserman, president and CEO of Advanced
Energy. “Our leading precision power products and services continue
to be chosen by our customers to support their move to
next-generation technologies such as 3DNAND and 10nm Logic. With
our semiconductor business showing no signs of slowing and the
diversity of our Industrial applications growing, we are getting
closer to our near-term aspirational goals.”
Third Quarter
Results
Sales were $126.6 million compared with $118.8 million in the
second quarter of 2016 and $109.8 million in the third quarter of
2015.
GAAP income from continuing operations was $29.0 million or
$0.73 per diluted share in the third quarter of 2016 compared to
$27.3 million or $0.68 per diluted share in the second quarter, and
$23.3 million or $0.56 per diluted share in the third quarter of
2015.
Non-GAAP income from continuing operations was $30.8 million or
$0.77 per diluted share in the third quarter of 2016 compared to
$29.2 million or $0.73 per diluted share in the second quarter, and
$24.9 million or $0.60 per diluted share in the same period last
year. A reconciliation of non-GAAP measures is provided in the
tables below.
The company ended the quarter with $249.8 million in cash and
marketable securities.
Discontinued Operations
The company’s financial statements for all periods presented
reflect results for the continuing precision power business, with
the discontinued inverter business included in discontinued
operations for both the balance sheet and income statement. Further
financial detail regarding the amounts related to the discontinued
inverter business are available in the company’s 2015 Annual Report
on Form 10-K.
Fourth Quarter 2016
Guidance
Based on the company's current view, beliefs and assumptions,
guidance for the fourth quarter of 2016 is within the following
ranges:
|
|
Q4 2016 |
Revenues |
|
$124M
- $134M |
GAAP
operating margins from continuing operations |
|
26% -
29% |
GAAP EPS
from continuing operations |
|
$0.70
- $0.80 |
Non-GAAP
operating margins from continuing operations |
|
28% -
30% |
Non-GAAP
EPS from continuing operations |
|
$0.75
- $0.85 |
|
|
|
Third Quarter 2016 Conference Call
Management will host a conference call tomorrow morning,
Tuesday, November 1, 2016, 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 the operator with the Conference ID Number 93755134,
which has been reserved for this call. For a replay of this
teleconference, please call 855-859-2056 or 404-537-3406 and enter
Conference ID Number 93755134. The replay will be available for one
week following the conference call. A webcast will also be
available on the company’s 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, precision power
solutions for thin films processes and industrial applications.
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.
Non-GAAP Measures
This release includes GAAP and non-GAAP income and per-share
earnings data and other GAAP and non-GAAP financial information.
Advanced Energy’s non-GAAP measures exclude the impact of non-cash
related charges such as stock based compensation, amortization of
intangible assets and restructuring costs, as well as acquisition
related costs and other non-recurring items. For the fourth quarter
ending December 31, 2016 guidance, the company expects stock based
compensation of $1.3 million and amortization of intangibles of
$1.0 million. The non-GAAP measures included in this release 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 to evaluate business
performance without the impacts of certain non-cash charges and
other charges which are not part of the company’s usual operations.
The company uses these non-GAAP measures to assess performance
against business objectives, make business decisions, develop
budgets, forecast future periods, assess trends and evaluate
financial impacts of various scenarios. In addition, management's
incentive plans include these non-GAAP measures as criteria for
achievements. 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 fourth quarter ending December 31, 2016,
expectations regarding future market trends and the company’s
future performance within specific markets (e.g., statements
regarding anticipated semiconductor and industrial market growth)
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 and services; (b) the volatility and
cyclicality of the industries the company serves, particularly the
semiconductor industry; (c) delays in capital spending by end-users
in our served markets; (d) the accuracy of the company’s estimates
related to fulfilling solar inverter product warranty and
post-warranty obligations; (e) the company’s ability to realize its
plan to avoid additional costs after the solar inverter wind-down;
(f) the accuracy of the company's assumptions on which its
financial statement projections are based; (g) the impact of price
changes, which may result from a variety of factors; (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 in a timely manner the materials necessary to
manufacture its 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 |
|
Nine Months Ended |
|
September 30, |
|
June 30, |
|
September 30, |
|
2016 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
Sales: |
|
|
|
|
|
|
|
|
|
Product |
$ |
107,650 |
|
|
$ |
94,238 |
|
|
$ |
100,752 |
|
|
$ |
294,695 |
|
|
$ |
279,270 |
|
Service |
18,902 |
|
|
15,518 |
|
|
18,013 |
|
|
53,666 |
|
|
48,650 |
|
Total
sales |
126,552 |
|
|
109,756 |
|
|
118,765 |
|
|
348,361 |
|
|
327,920 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
Product |
49,835 |
|
|
43,770 |
|
|
47,334 |
|
|
137,984 |
|
|
129,840 |
|
Service |
10,594 |
|
|
7,448 |
|
|
9,385 |
|
|
28,748 |
|
|
23,894 |
|
Total
cost of sales |
60,429 |
|
|
51,218 |
|
|
56,719 |
|
|
166,732 |
|
|
153,734 |
|
Gross profit |
66,123 |
|
|
58,538 |
|
|
62,046 |
|
|
181,629 |
|
|
174,186 |
|
|
52.2 |
% |
|
53.3 |
% |
|
52.2 |
% |
|
52.1 |
% |
|
53.1 |
% |
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research
and development |
11,293 |
|
|
10,370 |
|
|
11,266 |
|
|
33,324 |
|
|
30,114 |
|
Selling,
general and administrative |
19,421 |
|
|
16,585 |
|
|
19,377 |
|
|
56,814 |
|
|
49,976 |
|
Amortization of intangible assets |
1,048 |
|
|
1,098 |
|
|
1,074 |
|
|
3,180 |
|
|
3,298 |
|
Restructuring benefit |
— |
|
|
317 |
|
|
— |
|
|
— |
|
|
315 |
|
Total
operating expenses |
31,762 |
|
|
28,370 |
|
|
31,717 |
|
|
93,318 |
|
|
83,703 |
|
Operating Income |
34,361 |
|
|
30,168 |
|
|
30,329 |
|
|
88,311 |
|
|
90,483 |
|
Other
income, net |
(55 |
) |
|
(722 |
) |
|
836 |
|
|
1,138 |
|
|
447 |
|
Income from continuing
operations before income taxes |
34,306 |
|
|
29,446 |
|
|
31,165 |
|
|
89,449 |
|
|
90,930 |
|
Provision for income
taxes |
5,268 |
|
|
6,133 |
|
|
3,911 |
|
|
12,937 |
|
|
18,938 |
|
Income from continuing
operations, net of income taxes |
29,038 |
|
|
23,313 |
|
|
27,254 |
|
|
76,512 |
|
|
71,992 |
|
Income (loss) from
discontinued operations, net of income taxes |
1,323 |
|
|
(6,881 |
) |
|
3,277 |
|
|
6,661 |
|
|
(266,743 |
) |
Net income
(loss) |
$ |
30,361 |
|
|
$ |
16,432 |
|
|
$ |
30,531 |
|
|
$ |
83,173 |
|
|
$ |
(194,751 |
) |
|
|
|
|
|
|
|
|
|
|
Basic weighted-average
common shares outstanding |
39,681 |
|
|
41,027 |
|
|
39,672 |
|
|
39,723 |
|
|
40,905 |
|
Diluted
weighted-average common shares outstanding |
39,967 |
|
|
41,319 |
|
|
39,969 |
|
|
40,015 |
|
|
40,905 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations: |
|
|
|
|
|
|
|
|
|
Basic
earnings per share |
$ |
0.73 |
|
|
$ |
0.57 |
|
|
$ |
0.69 |
|
|
$ |
1.93 |
|
|
$ |
1.76 |
|
Diluted
earnings per share |
$ |
0.73 |
|
|
$ |
0.56 |
|
|
$ |
0.68 |
|
|
$ |
1.91 |
|
|
$ |
1.76 |
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
Basic
earnings (loss) per share |
$ |
0.03 |
|
|
$ |
(0.17 |
) |
|
$ |
0.08 |
|
|
$ |
0.17 |
|
|
$ |
(6.52 |
) |
Diluted
earnings (loss) per share |
$ |
0.03 |
|
|
$ |
(0.17 |
) |
|
$ |
0.08 |
|
|
$ |
0.17 |
|
|
$ |
(6.52 |
) |
|
|
|
|
|
|
|
|
|
|
Net income: |
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share |
$ |
0.77 |
|
|
$ |
0.40 |
|
|
$ |
0.77 |
|
|
$ |
2.09 |
|
|
$ |
(4.76 |
) |
Diluted earnings (loss) per share |
$ |
0.76 |
|
|
$ |
0.40 |
|
|
$ |
0.76 |
|
|
$ |
2.08 |
|
|
$ |
(4.76 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADVANCED ENERGY INDUSTRIES, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(in
thousands) |
|
|
|
|
|
September 30, |
|
December 31, |
|
2016 |
|
2015 |
ASSETS |
Unaudited |
|
|
|
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
244,292 |
|
|
$ |
158,443 |
|
Marketable securities |
5,538 |
|
|
11,986 |
|
Accounts
receivable, net |
69,410 |
|
|
54,959 |
|
Inventories, net |
56,025 |
|
|
52,573 |
|
Deferred
income tax assets |
6,044 |
|
|
6,004 |
|
Income
taxes receivable |
7,902 |
|
|
9,040 |
|
Other
current assets |
8,166 |
|
|
7,868 |
|
Current
assets of discontinued operations |
23,491 |
|
|
41,902 |
|
Total current
assets |
420,868 |
|
|
342,775 |
|
|
|
|
|
Property and equipment,
net |
11,988 |
|
|
9,645 |
|
|
|
|
|
Deposits and other |
1,673 |
|
|
1,729 |
|
Goodwill and
intangibles, net |
73,796 |
|
|
76,870 |
|
Deferred income tax
assets |
30,184 |
|
|
30,398 |
|
Non-current assets of
discontinued operations |
163 |
|
|
1,271 |
|
Total assets |
$ |
538,672 |
|
|
$ |
462,688 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
37,180 |
|
|
$ |
27,246 |
|
Other
accrued expenses |
41,070 |
|
|
40,357 |
|
Current
liabilities of discontinued operations |
17,232 |
|
|
36,481 |
|
Total current
liabilities |
95,482 |
|
|
104,084 |
|
|
|
|
|
Non-current liabilities of continuing operations |
63,041 |
|
|
67,722 |
|
Non-current liabilities of discontinued operations |
25,362 |
|
|
27,302 |
|
Long-term
liabilities |
88,403 |
|
|
95,024 |
|
|
|
|
|
Total liabilities |
183,885 |
|
|
199,108 |
|
|
|
|
|
Stockholders'
equity |
354,787 |
|
|
263,580 |
|
Total liabilities and
stockholders' equity |
$ |
538,672 |
|
|
$ |
462,688 |
|
December 31, 2015 amounts are derived from the December 31, 2015
audited Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
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 |
|
Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Gross Profit from
continuing operations, as reported |
|
$ |
66,123 |
|
|
$ |
58,538 |
|
|
$ |
62,046 |
|
|
$ |
181,629 |
|
|
$ |
174,186 |
|
Operating expenses from
continuing operations, as reported |
|
31,762 |
|
|
28,370 |
|
|
31,717 |
|
|
93,318 |
|
|
83,703 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Restructuring charges |
|
— |
|
|
(317 |
) |
|
— |
|
|
— |
|
|
(314 |
) |
Stock-based compensation |
|
(1,301 |
) |
|
(733 |
) |
|
(1,569 |
) |
|
(4,299 |
) |
|
(1,913 |
) |
Amortization of intangible assets |
|
(1,048 |
) |
|
(1,098 |
) |
|
(1,074 |
) |
|
(3,180 |
) |
|
(3,298 |
) |
Non-GAAP operating
expenses from continuing operations |
|
29,413 |
|
|
26,222 |
|
|
29,074 |
|
|
85,839 |
|
|
78,178 |
|
Non-GAAP operating
income from continuing operations |
|
$ |
36,710 |
|
|
$ |
32,316 |
|
|
$ |
32,972 |
|
|
$ |
95,790 |
|
|
$ |
96,008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Non-GAAP measure - income excluding certain items |
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations, net of income taxes, as reported |
|
$ |
29,038 |
|
|
$ |
23,313 |
|
|
$ |
27,254 |
|
|
$ |
76,512 |
|
|
$ |
71,992 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Restructuring charges |
|
— |
|
|
317 |
|
|
— |
|
|
— |
|
|
314 |
|
Stock-based compensation |
|
1,301 |
|
|
733 |
|
|
1,569 |
|
|
4,299 |
|
|
1,913 |
|
Amortization of intangible assets |
|
1,048 |
|
|
1,098 |
|
|
1,074 |
|
|
3,180 |
|
|
3,298 |
|
Tax
effect of Non-GAAP adjustments |
|
(608 |
) |
|
(512 |
) |
|
(711 |
) |
|
(1,973 |
) |
|
(1,184 |
) |
Non-GAAP income from
continuing operations, net of income taxes |
|
$ |
30,779 |
|
|
$ |
24,949 |
|
|
$ |
29,186 |
|
|
$ |
82,018 |
|
|
$ |
76,333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Non-GAAP measure - per share earnings excluding certain
items |
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations, as reported |
|
$ |
0.73 |
|
|
$ |
0.56 |
|
|
$ |
0.68 |
|
|
$ |
1.91 |
|
|
$ |
1.76 |
|
Add back: |
|
|
|
|
|
|
|
|
|
|
per share
impact of Non-GAAP adjustments, net of tax |
|
0.04 |
|
|
0.04 |
|
|
0.05 |
|
|
0.14 |
|
|
0.11 |
|
Non-GAAP per share
earnings from continuing operations |
|
$ |
0.77 |
|
|
$ |
0.60 |
|
|
$ |
0.73 |
|
|
$ |
2.05 |
|
|
$ |
1.87 |
|
Reconciliation
of Q4 2016 Guidance |
|
|
|
|
|
|
|
Low End |
|
|
High End |
|
|
|
|
|
|
Revenue |
|
$124 million |
|
|
$134 million |
|
|
|
|
|
|
Reconciliation
of Non-GAAP operating margin |
|
|
|
|
|
GAAP operating
margin |
|
26 |
% |
|
|
29 |
% |
Stock-based compensation |
|
1 |
% |
|
|
1 |
% |
Amortization of intangible assets |
|
1 |
% |
|
|
- |
|
Non-GAAP
operating margin |
|
28 |
% |
|
|
30 |
% |
|
|
|
|
|
|
Reconciliation
of Non-GAAP earnings per share |
|
|
|
|
|
GAAP earnings per
share |
|
$ |
0.70 |
|
|
|
$ |
0.80 |
|
Stock-based compensation |
|
0.04 |
|
|
|
0.04 |
|
Amortization of intangible assets |
|
0.03 |
|
|
|
0.03 |
|
Tax
effects of excluded items |
|
(0.02 |
) |
|
|
(0.02 |
) |
Non-GAAP
earnings per share |
|
$ |
0.75 |
|
|
|
$ |
0.85 |
|
CONTACTS:
Tom Liguori
Advanced Energy Industries, Inc.
970.407.6570
Tom.liguori@aei.com
Annie Leschin
Advanced Energy Industries, Inc.
970.407.6555
ir@aei.com
Advanced Energy Industries (NASDAQ:AEIS)
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From Jun 2024 to Jul 2024
Advanced Energy Industries (NASDAQ:AEIS)
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From Jul 2023 to Jul 2024