Advanced Energy Reports Second Quarter 2004 Results FORT COLLINS,
Colo., July 21 /PRNewswire-FirstCall/ -- Advanced Energy
Industries, Inc. (NASDAQ:AEIS) today reported financial results for
the second quarter ended June 30, 2004. Advanced Energy offers a
comprehensive suite of process-centered solutions critical to the
production of semiconductors, flat panel displays, data storage
products, architectural glass and other advanced product
applications. (Logo:
http://www.newscom.com/cgi-bin/prnh/20030825/AEISLOGO) For the 2004
second quarter, revenues were $108.9 million, up 73 percent from
$62.9 million for the second quarter of 2003, and up 4 percent
compared to revenues of $104.5 million for the first quarter of
2004. Net income for the second quarter of 2004 was $4.5 million,
or $0.13 per diluted share, compared to a net loss of $5.8 million,
or $0.18 per share in the second quarter of 2003. This compares to
first quarter 2004 net income of $6.9 million, or $0.21 per diluted
share, which includes $1.0 million in pretax gains resulting from
the sale of certain marketable securities and the sale of the
Company's thermal control business. Revenue for the six months
ended June 30, 2004 was $213.4 million versus $119.1 million for
the first six months of 2003. Net income for the 2004 six-month
period was $11.4 million, or $0.34 per diluted share, compared to a
net loss for the 2003 six-month period of $14.4 million, or $0.45
per share. Doug Schatz, chairman and chief executive officer, said,
"As we had anticipated, semiconductor order momentum leveled
quarter-to-quarter, as end users entered an absorption phase
following several months of robust 200mm-driven equipment
shipments. While we had a modest increase in sales, we are
disappointed by our operating results. The continuation of higher
than expected China-related and Asian-based supplier transition
costs, and product mix, negatively impacted gross margin. The
decision to manufacture high volume products in China is the right
strategic move long term. However, the continuation of dual
manufacturing with our US-based facility on certain product lines
is negatively impacting gross margin to a greater degree than we
planned. We are committed to reducing these transition costs and
expect gross margin improvement by the end of 2004. "Looking ahead,
we continue to experience the effect of semiconductor
manufacturers' cautious capital equipment purchasing patterns,
despite some positive longer-term indicators. We anticipate third
quarter revenue to be down 2 to 5 percent relative to the second
quarter, with earnings per share in the range of $0.08 to $0.12.
"Advanced Energy is well-positioned with innovative products that
drive advanced technology in all of our target markets. We continue
to increase our market share, particularly through key design wins
on 300mm tools in high-growth semiconductor applications and new
generation flat panel display equipment. Our focus on innovation
enables technological and market leadership, and we continue to
extend that lead as our customers adopt increasingly complex
manufacturing processes, requiring increased precision and
control," said Mr. Schatz. Second Quarter Conference Call
Management will host a conference call today, Wednesday, July 21,
2004 at 5:00 pm Eastern time to discuss Advanced Energy's financial
results. You may access this conference call by dialing
888-713-4717. International callers may access the call by dialing
706-679-7720. For a replay of this teleconference, please call
706-645-9291, and enter the pass code 6231797. The replay will be
available through Wednesday, July 28, 2004. There will also be a
webcast available at http://www.advanced-energy.com/. About
Advanced Energy Advanced Energy is a global leader in the
development and support of technologies critical to high-technology
manufacturing processes used in the production of semiconductors,
flat panel displays, data storage products, compact discs, digital
video discs, architectural glass, and other advanced product
applications. Leveraging a diverse product portfolio and technology
leadership, Advanced Energy creates solutions that maximize process
impact, improve productivity and lower the cost of ownership for
its customers. This portfolio includes a comprehensive line of
technology solutions in power, flow, thermal management, and plasma
and ion beam sources for original equipment manufacturers (OEMs)
and end-users around the world. Advanced Energy operates in
regional centers in North America, Asia and Europe and offers
global sales and support through direct offices, representatives
and distributors. Founded in 1981, Advanced Energy is a publicly
held company traded on the Nasdaq National Market under the symbol
AEIS. For more information, please visit our corporate website:
http://www.advanced-energy.com/. Safe Harbor Statement This press
release contains certain forward-looking statements, including the
company's expectations with respect to Advanced Energy's financial
results for the third quarter of 2004. 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 volatility and cyclicality of the
semiconductor and semiconductor capital equipment industries,
Advanced Energy's ongoing ability to develop new products in a
highly competitive industry characterized by increasingly rapid
technological changes, Advanced Energy's ability to successfully
integrate acquired companies' operations, and other risks described
in Advanced Energy's Form 10-K, Forms 10-Q and other reports and
statements, as filed with the Securities and Exchange Commission.
These reports and statements are available on the SEC's website at
http://www.sec.gov/. Copies may also be obtained from Advanced
Energy's website at http://www.advanced-energy.com/ or by
contacting Advanced Energy's investor relations at 970-221-4670.
The company assumes no obligation to update the information in this
press release. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) (in thousands, except per share data) Three Months
Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 Sales
$108,869 $62,946 $213,356 $119,104 Cost of sales 71,907 42,673
137,980 80,881 Gross profit 36,962 20,273 75,376 38,223 Operating
expenses: Research and development 12,809 12,551 26,219 25,918
Sales and marketing 8,012 8,261 16,049 16,591 General and
administrative 6,075 4,347 11,842 8,876 Amortization of intangible
assets 1,125 1,171 2,295 2,271 Restructuring charges 187 768 407
2,277 Total operating expenses 28,208 27,098 56,812 55,933 Income
(loss) from operations 8,754 (6,825) 18,564 (17,710) Other expense,
net (2,417) (2,340) (3,572) (5,090) Income (loss) before income
taxes 6,337 (9,165) 14,992 (22,800) (Provision) Benefit for income
taxes (1,867) 3,391 (3,598) 8,436 Net income (loss) $4,470 $(5,774)
$11,394 $(14,364) Basic earnings (loss) per share $0.14 $(0.18)
$0.35 $(0.45) Diluted earnings (loss) per share 0.13 (0.18) 0.34
(0.45) Basic weighted-average common shares outstanding 32,644
32,206 32,612 32,183 Diluted weighted-average common shares
outstanding 33,188 32,206 33,435 32,183 CONDENSED CONSOLIDATED
BALANCE SHEETS (UNAUDITED) (in thousands) June 30, December 31,
2004 2003 ASSETS Current Assets: Cash and cash equivalents $40,508
$41,522 Marketable securities 83,880 93,370 Accounts receivable,
net 79,025 61,927 Inventories 83,720 65,703 Other current assets
4,665 5,637 Total current assets 291,798 268,159 Property and
equipment, net 44,782 44,725 Deposits and other 7,527 5,951
Goodwill and intangibles, net 82,077 88,943 Demonstration and
customer service equipment, net 4,845 3,934 Deferred debt issuance
costs 2,596 3,019 Total assets $433,625 $414,731 LIABILITIES AND
STOCKHOLDERS' EQUITY Current Liabilities: Trade accounts payable
$39,530 $23,066 Other current liabilities 26,404 28,216 Current
portion of capital leases and senior borrowings 4,596 8,582 Accrued
interest payable on convertible subordinated notes 2,460 2,460
Total current liabilities 72,990 62,324 Long-term Liabilities:
Capital leases and senior borrowings 4,077 6,168 Deferred income
tax liability, net 3,312 4,672 Convertible subordinated notes
payable 187,718 187,718 Other long-term liabilities 2,045 2,015
Total long-term liabilities 197,152 200,573 Total liabilities
270,142 262,897 Stockholders' equity 163,483 151,834 Total
liabilities and stockholders' equity $433,625 $414,731 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
Six Months Ended June 30, 2004 2003 NET CASH USED IN OPERATING
ACTIVITIES $(271) $(10,785) NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES 4,117 (9,672) NET CASH USED IN FINANCING
ACTIVITIES (4,814) (3,692) EFFECT OF CURRENCY TRANSLATION ON CASH
(46) 344 DECREASE IN CASH AND CASH EQUIVALENTS (1,014) (23,805)
CASH AND EQUIVALENTS, beginning of period 41,522 70,188 CASH AND
EQUIVALENTS, end of period $40,508 $46,383
http://www.newscom.com/cgi-bin/prnh/20030825/AEISLOGO
http://photoarchive.ap.org/ DATASOURCE: Advanced Energy Industries,
Inc. CONTACT: Mike El-Hillow, Executive Vice President, Chief
Financial Officer, +1-970-407-6570, , or Cathy Kawakami, Director
of Investor Relations, +1-970-407-6732, , both of Advanced Energy
Industries, Inc. Web site: http://www.advanced-energy.com/
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