- Q4 revenue was a record $397 million, above high end of
guidance range
- Q4 GAAP EPS from continuing operations was $1.05
- Q4 Non-GAAP EPS was $1.36, above the high end of guidance
range
- 2021 revenue was a record $1.46 billion
- 2021 GAAP EPS from continuing operations was $3.51; non-GAAP
EPS was $4.78
- 2021 cash flow from continuing operations was $141
million
Advanced Energy Industries, Inc. (Nasdaq: AEIS), a global leader
in highly engineered, precision power conversion, measurement, and
control solutions, today announced financial results for the fourth
quarter and fiscal year ended December 31, 2021.
“We delivered strong revenue and earnings in the fourth quarter,
largely due to improved availability of critical ICs,” said Steve
Kelley, president and CEO of Advanced Energy. “We enter 2022 with
robust demand for our industry-leading power solutions. Although
our business continues to be impacted by supply constraints, our
fourth quarter results demonstrate that we can respond quickly as
conditions improve. With a solid pipeline of new technologies and
products, Advanced Energy is well positioned for long-term
profitable growth.”
Fourth Quarter Results
Sales were $396.9 million in the fourth quarter of 2021,
compared with $346.1 million in the third quarter of 2021 and
$371.0 million in the fourth quarter of 2020. Fourth quarter 2021
GAAP and non-GAAP gross margins were 35.2% and 35.5%, respectively.
Revenue and gross margin in the fourth quarter of 2021 were
impacted by partial recovery of material cost premiums.
GAAP net income from continuing operations was $39.7 million or
$1.05 per diluted share in the quarter, compared with $21.0 million
or $0.55 per diluted share in the prior quarter, and $41.9 million
or $1.09 per diluted share a year ago.
Non-GAAP net income was $51.5 million or $1.36 per diluted share
in the fourth quarter of 2021. This compares with $34.0 million or
$0.89 per diluted share in the third quarter of 2021, and $57.3
million or $1.49 per diluted share in the fourth quarter of
2020.
The company generated $34.5 million of cash flow from continuing
operations during the quarter, repurchased $21.5 million of common
stock, and paid $3.8 million in a quarterly dividend.
Full Year 2021 Results
2021 revenue was $1.46 billion, a 3% increase from $1.42 billion
in 2020. 2021 GAAP and non-GAAP gross margins were 36.6% and 37.3%,
respectively
GAAP net income from continuing operations was $134.7 million or
$3.51 per diluted share in 2021, compared with $135.2 million or
$3.51 per diluted share in 2020.
Non-GAAP net income was $183.2 million or $4.78 per diluted
share in 2021, compared to $201.5 million or $5.23 per diluted
share in 2020.
The company generated $140.9 million of operating cash from
continuing operations in 2021, repurchased $78.1 million of common
stock and paid $15.4 million in dividends. Cash and marketable
securities at ended the year were $546.7 million.
A reconciliation of non-GAAP measures is provided in the tables
below.
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 all purposes. Further financial detail regarding the
amounts related to the discontinued inverter business is available
in the company’s 2021 Annual Report on Form 10‑K.
First Quarter 2022
Guidance
Based on the company’s current view, beliefs and assumptions,
guidance for the first quarter of 2022 is within the following
ranges.
Q1 2022
Revenues
$360M +/- $20M
GAAP EPS from continuing operations
$0.61 +/- $0.25
Non-GAAP EPS
$0.94 +/- $0.25
Conference Call
Management will host a conference call today, February 9, 2022
at 4:30 p.m. Eastern Time to discuss Advanced Energy’s financial
results. To participate in the live conference call, please dial
(877) 407-0890 approximately five minutes prior to the start of the
meeting and an operator will connect you. International
participants can dial +1 (201) 389-0918. A webcast will also be
available on the company’s investors web page at
ir.advancedenergy.com.
About Advanced Energy
Advanced Energy (Nasdaq: AEIS) is a global leader in the design
and manufacturing of highly engineered, precision power conversion,
measurement and control solutions for mission-critical applications
and processes. AE’s power solutions enable customer innovation in
complex applications for a wide range of industries including
semiconductor equipment, industrial, manufacturing,
telecommunications, data center computing and healthcare. With
engineering know-how and responsive service and support around the
globe, the company builds collaborative partnerships to meet
technology advances, propel growth for its customers and innovate
the future of power. Advanced Energy has devoted four decades to
perfecting power for its global customers and is headquartered in
Denver, Colorado, USA. For more information, visit
www.advancedenergy.com.
Advanced Energy | Precision. Power. Performance.
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 and amortization
of intangible assets, as well as discontinued operations, and
non-recurring items such as acquisition-related costs and
restructuring expenses. Beginning in the second quarter of 2020,
Advanced Energy’s non-GAAP measures exclude non-cash unrealized
foreign currency gains or losses that result from remeasurement to
functional currency long-term obligations related to pension and
operating lease liabilities as the remeasurement does not represent
current economic exposure and is unrelated to our overall operating
performance. These long-term obligations were acquired in
connection with the Artesyn acquisition and the company previously
used derivatives to hedge the exposure; however, the company has
determined it will no longer hedge these non-economic exposures.
The tax effect of our non-GAAP adjustments represents the
anticipated annual tax rate applied to each non-GAAP adjustment
after consideration of their respective book and tax
treatments.
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, non-economic foreign currency
remeasurements, and other cash 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, potential future growth and profitability, future business
mix, expectations regarding future market trends, future
performance within specific markets and other statements herein or
made on the above-announced conference call 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) supply chain disruptions and component
shortages that may impact the company’s ability to obtain in a
timely manner the materials necessary to manufacture its products;
(b) the effects of global macroeconomic conditions upon demand for
our products and services; (c) the volatility and cyclicality of
the industries the company serves, particularly the semiconductor
industry; (d) delays in capital spending by end-users in our served
markets; (e) the risks and uncertainties related to the integration
of Artesyn Embedded Power including the optimization and reduction
of our global manufacturing sites; (f) the continuing spread of
COVID-19 and its potential adverse impact on our product
manufacturing, research and development, supply chain, services and
administrative operations; (g) the accuracy of the company’s
estimates related to fulfilling solar inverter product warranty and
post-warranty obligations; (h) the company’s ability to realize its
plan to avoid additional costs after the solar inverter wind-down;
(i) the accuracy of the company’s assumptions on which its
financial statement projections are based; (j) the impact of
product price changes, which may result from a variety of factors;
(k) the timing of orders received from customers; (l) the company’s
ability to realize benefits from cost improvement efforts including
avoided costs, restructuring plans and inorganic growth; (m)
unanticipated changes to management’s estimates, reserves or
allowances; (n) changes and adjustments to the tax expense and
benefits related to the U.S. tax reform that was enacted in late
2017; and (o) the impact of political, economic and policy tensions
and conflicts between China and the United States including, but
not limited to, trade wars and export restrictions between the two
countries, China’s national security law for Hong Kong, and China’s
expansion of control over the South China Sea, any of which could
negatively impact our customers’ and our presence, operations, and
financial results. 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 ir.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.
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
Year Ended
December 31,
September 30,
December 31,
2021
2020
2021
2021
2020
Sales, net
$
396,930
$
370,969
$
346,093
$
1,455,954
$
1,415,826
Cost of sales
257,183
225,420
226,054
923,632
873,957
Gross profit
139,747
145,549
120,039
532,322
541,869
Gross margin %
35.2
%
39.2
%
34.7
%
36.6
%
38.3
%
Operating expenses:
Research and development
40,966
36,529
40,578
161,831
143,961
Selling, general, and administrative
48,784
42,944
48,373
191,998
188,590
Amortization of intangible assets
5,556
5,065
5,607
22,060
20,129
Restructuring expense
2,231
5,226
1,272
4,752
13,166
Total operating expenses
97,537
89,764
95,830
380,641
365,846
Operating income
42,210
55,785
24,209
151,681
176,023
Other income (expense), net
704
(6,221
)
495
(2,970
)
(17,876
)
Income from continuing operations, before
income taxes
42,914
49,564
24,704
148,711
158,147
Provision for income taxes
3,187
7,703
3,657
14,004
22,996
Income from continuing operations
39,727
41,861
21,047
134,707
135,151
Income (loss) from discontinued
operations, net of income taxes
(98
)
—
(37
)
73
(421
)
Net income
39,629
41,861
21,010
134,780
134,730
Income (loss) from continuing operations
attributable to noncontrolling interest
(26
)
20
6
44
55
Net income attributable to Advanced
Energy Industries, Inc.
$
39,655
$
41,841
$
21,004
$
134,736
$
134,675
Basic weighted-average common shares
outstanding
37,672
38,280
38,183
38,143
38,314
Diluted weighted-average common shares
outstanding
37,866
38,533
38,363
38,355
38,542
Earnings per share attributable to
Advanced Energy Industries, Inc:
Continuing operations:
Basic earnings per share
$
1.06
$
1.09
$
0.55
$
3.53
$
3.53
Diluted earnings per share
$
1.05
$
1.09
$
0.55
$
3.51
$
3.51
Discontinued operations:
Basic earnings (loss) per share
$
—
$
—
$
—
$
—
$
(0.01
)
Diluted earnings (loss) per share
$
—
$
—
$
—
$
—
$
(0.01
)
Net income:
Basic earnings per share
$
1.05
$
1.09
$
0.55
$
3.53
$
3.52
Diluted earnings per share
$
1.05
$
1.09
$
0.55
$
3.51
$
3.50
ADVANCED ENERGY INDUSTRIES,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(in thousands)
December 31,
December 31,
2021
2020
ASSETS
Current assets:
Cash and cash equivalents
$
544,372
$
480,368
Marketable securities
2,296
2,654
Accounts and other receivable, net
237,227
235,178
Inventories
338,410
221,346
Income taxes receivable
10,768
4,804
Other current assets
29,161
35,899
Total current assets
1,162,234
980,249
Property and equipment, net
114,830
114,731
Operating lease right-of-use assets
101,769
103,858
Deposits and other assets
19,669
19,101
Goodwill and intangible assets, net
371,596
378,922
Deferred income tax assets
47,242
50,801
Total assets
$
1,817,340
$
1,647,662
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
193,708
$
125,224
Other accrued expenses
140,666
137,081
Current portion of long-term debt
20,000
17,500
Current portion of operating lease
liabilities
15,843
16,592
Total current liabilities
370,217
296,397
Long-term debt
372,733
304,546
Non-current liabilities
202,894
231,379
Long-term liabilities
575,627
535,925
Total liabilities
945,844
832,322
Advanced Energy stockholders' equity
870,851
814,739
Noncontrolling interest
645
601
Total stockholders’ equity
871,496
815,340
Total liabilities and stockholders’
equity
$
1,817,340
$
1,647,662
ADVANCED ENERGY INDUSTRIES,
INC.
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)
Year Ended December
31,
2021
2020
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income
$
134,780
$
134,730
Less: income (loss) from discontinued
operations, net of income taxes
73
(421
)
Income from continuing operations, net of
income taxes
134,707
135,151
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization
52,893
47,770
Stock-based compensation expense
15,739
12,272
Provision for deferred income taxes
1,326
(622
)
Discount on notes receivable
(638
)
721
Loss on disposal of assets
1,496
1,296
Changes in operating assets and
liabilities, net of assets acquired
(64,609
)
5,571
Net cash from operating activities from
continuing operations
140,914
202,159
Net cash from operating activities from
discontinued operations
(669
)
(923
)
Net cash from operating activities
140,245
201,236
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net proceeds from sale of marketable
securities
—
3
Receipt (issuance) of notes receivable
3,050
(1,000
)
Proceeds from sale of assets
3,060
116
Purchases of property and equipment
(31,877
)
(36,483
)
Acquisitions, net of cash acquired
(21,535
)
(5,476
)
Net cash from investing activities from
continuing operations
(47,302
)
(42,840
)
Net cash from investing activities from
discontinued operations
—
—
Net cash from investing activities
(47,302
)
(42,840
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from long-term borrowings
85,000
-
Payment of debt-issuance costs
(1,350
)
-
Payments on long-term borrowings
(13,750
)
(17,500
)
Dividend payments
(15,385
)
—
Purchase and retirement of common
stock
(78,125
)
(11,630
)
Net payments related to stock-based
awards
(1,762
)
(482
)
Net cash from financing activities from
continuing operations
(25,372
)
(29,612
)
Net cash from financing activities from
discontinued operations
—
—
Net cash from in financing activities
(25,372
)
(29,612
)
EFFECT OF CURRENCY TRANSLATION ON
CASH
(3,567
)
5,143
NET CHANGE IN CASH AND CASH
EQUIVALENTS
64,004
133,927
CASH AND CASH EQUIVALENTS, beginning of
period
480,368
346,441
CASH AND CASH EQUIVALENTS, end of
period
544,372
480,368
Less cash and cash equivalents from
discontinued operations
—
—
CASH AND CASH EQUIVALENTS FROM
CONTINUING OPERATIONS, end of period
$
544,372
$
480,368
ADVANCED ENERGY INDUSTRIES,
INC.
SUPPLEMENTAL INFORMATION
(UNAUDITED)
(in thousands)
Net Sales by Product Line
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
2021
2020
2021
2021
2020
Semiconductor Equipment
$
179,346
$
165,757
$
173,441
$
710,174
$
611,864
Industrial and Medical
98,764
93,769
80,800
341,176
313,646
Data Center Computing
80,081
65,299
62,231
270,924
322,539
Telecom and Networking
38,739
46,144
29,621
133,680
167,777
Total
$
396,930
$
370,969
$
346,093
$
1,455,954
$
1,415,826
Net Sales by Geographic Region
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
2021
2020
2021
2021
2020
United States
$
151,100
$
141,957
$
139,089
$
561,312
$
530,965
North America (excluding U.S.)
27,100
41,144
24,708
104,167
156,856
Asia
163,598
144,505
135,838
597,830
606,893
Europe
49,305
41,919
44,838
179,056
117,989
Other
5,827
1,444
1,620
13,589
3,123
Total
$
396,930
$
370,969
$
346,093
$
1,455,954
$
1,415,826
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
Year Ended
December 31,
September 30,
December 31,
2021
2020
2021
2021
2020
Gross profit from continuing operations,
as reported
$
139,747
$
145,549
$
120,039
$
532,322
$
541,869
Adjustments to gross profit:
Stock-based compensation
(19
)
122
218
764
567
Facility expansion, relocation costs and
other
997
741
1,357
6,189
4,349
Acquisition-related costs
234
25
3,259
3,585
5,381
Non-GAAP gross profit
140,959
146,437
124,873
542,860
552,166
Non-GAAP gross margin
35.5
%
39.5
%
36.1
%
37.3
%
39.0
%
Operating expenses from continuing
operations, as reported
97,537
89,764
95,830
380,641
365,846
Adjustments:
Amortization of intangible assets
(5,556
)
(5,065
)
(5,607
)
(22,060
)
(20,129
)
Stock-based compensation
(2,939
)
(2,483
)
(3,456
)
(14,975
)
(11,705
)
Acquisition-related costs
(679
)
387
(1,768
)
(6,803
)
(10,209
)
Facility expansion, relocation costs and
other
(17
)
(443
)
(98
)
(229
)
(2,213
)
Restructuring charges
(2,231
)
(5,226
)
(1,272
)
(4,752
)
(13,166
)
Non-GAAP operating expenses
86,115
76,934
83,629
331,822
308,424
Non-GAAP operating income
$
54,844
$
69,503
$
41,244
$
211,038
$
243,742
Non-GAAP operating margin
13.8
%
18.7
%
11.9
%
14.5
%
17.2
%
Reconciliation of Non-GAAP measure -
income excluding certain items
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
2021
2020
2021
2021
2020
Income from continuing operations, less
non-controlling interest, net of income taxes
$
39,753
$
41,841
$
21,041
$
134,663
$
135,096
Adjustments:
Amortization of intangible assets
5,556
5,065
5,607
22,060
20,129
Acquisition-related costs
913
(362
)
5,027
10,388
15,590
Facility expansion, relocation costs, and
other
1,014
1,184
1,455
6,418
6,562
Restructuring charges
2,231
5,226
1,272
4,752
13,166
Unrealized foreign currency (gain)
loss
(134
)
3,786
(2,092
)
(3,543
)
8,384
Acquisition-related costs and other
included in other income (expense), net
(3,093
)
90
(79
)
(2,186
)
716
Tax effect of non-GAAP adjustments
3,017
(1,532
)
(1,036
)
(1,346
)
(7,611
)
Non-GAAP income, net of income taxes,
excluding stock-based compensation
49,257
55,298
31,195
171,206
192,032
Stock-based compensation, net of taxes
2,233
1,993
2,811
12,042
9,418
Non-GAAP income, net of income taxes
$
51,490
$
57,291
$
34,006
$
183,248
$
201,450
Reconciliation of non-GAAP measure -
per share earnings excluding certain items
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
2021
2020
2021
2021
2020
Diluted earnings per share from continuing
operations, as reported
$
1.05
$
1.09
$
0.55
$
3.51
$
3.51
Add back (subtract):
Per share impact of non-GAAP adjustments,
net of tax
0.31
0.40
0.34
1.27
1.72
Non-GAAP per share earnings
$
1.36
$
1.49
$
0.89
$
4.78
$
5.23
Quarterly results may not sum to year to
date due to rounding
Reconciliation of Q1 2022 Guidance
Low End
High End
Revenue
$340 million
$380 million
Reconciliation of non-GAAP earnings per
share
GAAP earnings per share
$
0.36
$
0.86
Stock-based compensation
0.11
0.11
Amortization of intangible assets
0.15
0.15
Restructuring and other
0.13
0.13
Tax effects of excluded items
(0.06
)
(0.06
)
Non-GAAP earnings per share
$
0.69
$
1.19
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220209005924/en/
Edwin Mok Advanced Energy Industries, Inc. (970) 407-6555
ir@aei.com
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