- Q4 revenue was $491 million, above the high end of
guidance
- Q4 GAAP EPS from continuing operations was $1.20; Q4
Non-GAAP EPS was $1.70, above the mid-point of guidance
- 2022 revenue was a record $1.85 billion, with each end
market up 20% or more
- 2022 GAAP EPS from continuing operations was $5.35; 2022
Non-GAAP EPS was a record $6.49
- 2022 cash flow from continuing operations was $184
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 year ended December 31, 2022.
“We delivered strong financial results in the fourth quarter,
taking advantage of improved component availability and solid
manufacturing execution,” said Steve Kelley, president and CEO of
Advanced Energy. “For the full year, we achieved record revenue and
earnings, thanks to strong demand in all of our markets and
improved execution across the company. Although we expect lower
revenue in the near-term due to a downturn in the semiconductor
equipment market, we anticipate a record level of design-in
activity, leveraging our strong pipeline of technology-leading
products.”
Quarter Results
Sales were $490.7 million in the fourth quarter of 2022,
compared with $516.3 million in the third quarter of 2022 and
$396.9 million in the fourth quarter of 2021.
GAAP net income from continuing operations was $45.3 million or
$1.20 per diluted share in the quarter, compared with $74.9 million
or $1.99 per diluted share in the prior quarter, and $39.7 million
or $1.05 per diluted share a year ago.
Non-GAAP net income was $64.2 million or $1.70 per diluted share
in the fourth quarter of 2022. This compares with $79.6 million or
$2.12 per diluted share in the third quarter of 2022, and $51.5
million or $1.36 per diluted share in the fourth quarter of
2021.
Advanced Energy generated $70.7 million of cash flow from
continuing operations during the quarter, repurchased $0.7 million
of common stock and paid $3.8 million in a quarterly dividend.
Full Year 2022 Results
2022 revenue was a record $1.85 billion, a 27% increase from
$1.46 billion in 2021.
GAAP net income from continuing operations was a record $201.9
million or $5.35 per diluted share in 2022, compared with $134.7
million or $3.51 per diluted share in 2021.
Non-GAAP net income was a record $244.8 million or $6.49 per
diluted share in 2022, compared to $183.2 million or $4.78 per
diluted share in 2021.
The company generated $183.7 million of operating cash from
continuing operations in 2022, repurchased $26.6 million of common
stock and paid $15.2 million in dividends. Cash and equivalents
including long-term marketable securities at ended the year were
$460.9 million.
A reconciliation of GAAP to non-GAAP measures is provided in the
tables below.
First Quarter 2023 Guidance
Based on the Company’s current view, beliefs, and assumptions,
guidance for the first quarter of 2023 is within the following
ranges:
Q1 2023
Revenues
$415 million +/- $20 million
GAAP EPS from continuing operations
$0.76 +/- $0.25
Non-GAAP EPS
$1.10 +/- $0.25
Conference Call
Management will host a conference call today, February 8, 2023,
at 4:30 p.m. Eastern Time to discuss the fourth quarter and full
year financial results. To participate in the live earnings
conference call, please dial 877-407-0890 approximately ten 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 our investor web page at ir.advancedenergy.com
in the Events & Presentations section. The archived webcast
will be available approximately two hours following the end of the
live event.
About Advanced Energy
Advanced Energy Industries, Inc. (Nasdaq: AEIS) is a global
leader in the design and manufacture of highly engineered,
precision power conversion, measurement and control solutions for
mission-critical applications and processes. Advanced Energy’s
power solutions enable customer innovation in complex applications
for a wide range of industries including semiconductor equipment,
industrial production, medical and life sciences, data center
computing, networking, and telecommunications. With engineering
know-how and responsive service and support for customers around
the globe, the company builds collaborative partnerships to meet
technology advances, propels growth of its customers and innovates
the future of power. Advanced Energy has devoted four decades to
perfecting power. It is headquartered in Denver, Colorado, USA. For
more information, visit www.advancedenergy.com.
Advanced Energy | Precision. Power. Performance. Trust.
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. 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. We believe
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 our usual operations. We use 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, we believe that these
non-GAAP measures, in combination with its financial results
calculated in accordance with GAAP, provide investors with
additional perspective. To gain a complete picture of all effects
on our financial results from any and all events, management does
(and investors should) rely upon the GAAP measures as well, as the
items excluded from non-GAAP measures may contribute to not
accurately reflecting the underlying performance of the company’s
continuing operations for the period in which they are incurred.
Furthermore, the use of non-GAAP measures has limitations in that
such measures do not reflect all of the amounts associated with our
results of operations as determined in accordance with GAAP, and
these measures should only be used to evaluate our results of
operations in conjunction with the corresponding GAAP measures.
Forward-Looking Statements
This release and statements we make on the above announced
conference call contain, in addition to historical information,
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Statements in this
report that are not historical information are forward-looking
statements. For example, statements relating to our beliefs,
expectations and plans are forward-looking statements, as are
statements that certain actions, conditions, or circumstances will
continue. The inclusion of words such as "anticipate," "expect,"
"estimate," "can," "may," "might," "continue," "enables," "plan,"
"intend," "should," "could," "would," "likely," "potential," or
"believe," as well as statements that events or circumstances
"will" occur or continue, indicate forward-looking statements.
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 our
ability to timely manufacture products and deliver to customers;
(b) the effects of global macroeconomic conditions upon demand for
our products and services, including supply chain cost increases,
inflationary pressures, economic downturns, and volatility and
cyclicality of the industries we serve; (c) the impact of political
and geographical risks, including trade and export regulations,
other effects of international disputes, war, terrorism, or
geopolitical tensions; (d) managing backlog orders; (e) our ability
to develop new products expeditiously and be successful in the
design win process; (f) delays in capital spending by end-users in
our served markets; (g) the risks and uncertainties related to the
integration of acquired companies including SL Power Electronics;
(h) the continuing spread of COVID-19 and its potential adverse
impact on our operations; (i) our ability to avoid additional costs
and lawsuits after the solar inverter wind-down; (j) the accuracy
of our assumptions on which our financial statement projections are
based; (k) the timing of orders received from customers; (l) our
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; and (n) changes and adjustments to the tax expense and
benefits related to the U.S. tax law changes, 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 us 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. We assume 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,
2022
2021
2022
2022
2021
Sales, net
$
490,740
$
396,930
$
516,274
$
1,845,422
$
1,455,954
Cost of sales
312,926
257,183
325,056
1,169,916
923,632
Gross profit
177,814
139,747
191,218
675,506
532,322
Gross margin %
36.2
%
35.2
%
37.0
%
36.6
%
36.6
%
Operating expenses:
Research and development
49,637
40,966
49,760
191,020
161,831
Selling, general, and administrative
57,407
48,784
56,716
218,463
191,998
Amortization of intangible assets
7,033
5,556
7,049
26,114
22,060
Restructuring expense
5,636
2,231
121
6,814
4,752
Total operating expenses
119,713
97,537
113,646
442,411
380,641
Operating income
58,101
42,210
77,572
233,095
151,681
Other income (expense), net
(2,701
)
704
8,940
8,646
(2,970
)
Income from continuing operations, before
income taxes
55,400
42,914
86,512
241,741
148,711
Provision for income taxes
10,055
3,187
11,639
39,850
14,004
Income from continuing operations
45,345
39,727
74,873
201,891
134,707
Income (loss) from discontinued
operations, net of income taxes
(1,600
)
(98
)
(697
)
(2,215
)
73
Net income
43,745
39,629
74,176
199,676
134,780
Income from continuing operations
attributable to noncontrolling interest
—
(26
)
9
16
44
Net income attributable to Advanced
Energy Industries, Inc.
$
43,745
$
39,655
$
74,167
$
199,660
$
134,736
Basic weighted-average common shares
outstanding
37,405
37,672
37,379
37,463
38,143
Diluted weighted-average common shares
outstanding
37,683
37,866
37,630
37,721
38,355
Earnings per share attributable to
Advanced Energy Industries, Inc:
Continuing operations:
Basic earnings per share
$
1.21
$
1.06
$
2.00
$
5.39
$
3.53
Diluted earnings per share
$
1.20
$
1.05
$
1.99
$
5.35
$
3.51
Discontinued operations:
Basic earnings (loss) per share
$
(0.04
)
$
—
$
(0.02
)
$
(0.06
)
$
—
Diluted earnings (loss) per share
$
(0.04
)
$
—
$
(0.02
)
$
(0.06
)
$
—
Net income:
Basic earnings per share
$
1.17
$
1.05
$
1.98
$
5.33
$
3.53
Diluted earnings per share
$
1.16
$
1.05
$
1.97
$
5.29
$
3.51
ADVANCED ENERGY INDUSTRIES,
INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
December 31,
December 31,
2022
2021
ASSETS
Current assets:
Cash and cash equivalents
$
458,818
$
544,372
Accounts and other receivable, net
300,683
237,227
Inventories
376,012
338,410
Other current assets
53,001
42,225
Total current assets
1,188,514
1,162,234
Property and equipment, net
148,462
114,830
Operating lease right-of-use assets
100,177
101,769
Other assets
84,056
66,911
Goodwill and intangible assets, net
470,959
371,596
Total assets
$
1,992,168
$
1,817,340
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
170,467
$
193,708
Other accrued expenses
185,805
140,645
Current portion of long-term debt
20,000
20,000
Current portion of operating lease
liabilities
16,771
15,843
Total current liabilities
393,043
370,196
Long-term debt
353,262
372,733
Other long-term liabilities
179,596
202,915
Long-term liabilities
532,858
575,648
Total liabilities
925,901
945,844
Advanced Energy Industries, Inc.
stockholders' equity
1,066,267
870,851
Noncontrolling interest
—
645
Total stockholders’ equity
1,066,267
871,496
Total liabilities and stockholders’
equity
$
1,992,168
$
1,817,340
ADVANCED ENERGY INDUSTRIES,
INC.
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS (UNAUDITED)
(in thousands)
Year Ended December
31,
2022
2021
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income
$
199,676
$
134,780
Less: income (loss) from discontinued
operations, net of income taxes
(2,215
)
73
Income from continuing operations, net of
income taxes
201,891
134,707
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization
60,296
52,893
Stock-based compensation expense
19,849
15,739
Provision for deferred income taxes
(5,736
)
1,326
Discount on notes receivable
—
(638
)
(Gain) loss on disposal and sale of
assets
(3,962
)
1,496
Changes in operating assets and
liabilities, net of assets acquired
(88,607
)
(64,609
)
Net cash from operating activities from
continuing operations
183,731
140,914
Net cash from operating activities from
discontinued operations
(144
)
(669
)
Net cash from operating activities
183,587
140,245
CASH FLOWS FROM INVESTING
ACTIVITIES:
Receipt of notes receivable
—
3,050
Purchases of property and equipment
(58,885
)
(28,817
)
Acquisitions, net of cash acquired
(149,387
)
(21,535
)
Net cash from investing activities
(208,272
)
(47,302
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from long-term borrowings
—
85,000
Payment of debt-issuance costs
—
(1,350
)
Payments on long-term borrowings
(20,000
)
(13,750
)
Dividend payments
(15,204
)
(15,385
)
Purchase and retirement of common
stock
(26,635
)
(78,125
)
Net payments related to stock-based
awards
(26
)
(1,762
)
Net cash from financing activities
(61,865
)
(25,372
)
EFFECT OF CURRENCY TRANSLATION ON
CASH
996
(3,567
)
NET CHANGE IN CASH AND CASH
EQUIVALENTS
(85,554
)
64,004
CASH AND CASH EQUIVALENTS, beginning of
period
544,372
480,368
CASH AND CASH EQUIVALENTS, end of
period
$
458,818
$
544,372
ADVANCED ENERGY INDUSTRIES,
INC.
SUPPLEMENTAL INFORMATION
(UNAUDITED)
(in thousands)
Net Sales by Market
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
2022
2021
2022
2022
2021
Semiconductor Equipment
$
232,455
$
179,346
$
266,600
$
930,809
$
710,174
Industrial and Medical
119,327
98,764
119,587
426,763
341,176
Data Center Computing
94,525
80,081
87,542
327,466
270,924
Telecom and Networking
44,433
38,739
42,545
160,384
133,680
Total
$
490,740
$
396,930
$
516,274
$
1,845,422
$
1,455,954
Net Sales by Geographic Region
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
2022
2021
2022
2022
2021
North America
$
230,461
$
178,200
$
238,115
$
857,490
$
665,479
Asia
197,368
163,598
215,401
754,997
597,830
Europe
61,146
49,305
61,456
219,119
179,056
Other
1,765
5,827
1,302
13,816
13,589
Total
$
490,740
$
396,930
$
516,274
$
1,845,422
$
1,455,954
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,
2022
2021
2022
2022
2021
Gross profit from continuing operations,
as reported
$
177,814
$
139,747
$
191,218
$
675,506
$
532,322
Adjustments to gross profit:
Stock-based compensation
391
(19
)
454
1,478
764
Facility expansion, relocation costs and
other
1,162
997
1,662
5,295
6,189
Acquisition-related costs
73
234
66
(299
)
3,585
Non-GAAP gross profit
179,440
140,959
193,400
681,980
542,860
Non-GAAP gross margin
36.6
%
35.5
%
37.5
%
37.0
%
37.3
%
Operating expenses from continuing
operations, as reported
119,713
97,537
113,646
442,411
380,641
Adjustments:
Amortization of intangible assets
(7,033
)
(5,556
)
(7,049
)
(26,114
)
(22,060
)
Stock-based compensation
(4,450
)
(2,939
)
(5,568
)
(18,371
)
(14,975
)
Acquisition-related costs
(1,660
)
(679
)
(1,150
)
(8,637
)
(6,803
)
Facility expansion, relocation costs and
other
—
(17
)
—
—
(229
)
Restructuring charges
(5,636
)
(2,231
)
(121
)
(6,814
)
(4,752
)
Non-GAAP operating expenses
100,934
86,115
99,758
382,475
331,822
Non-GAAP operating income
$
78,506
$
54,844
$
93,642
$
299,505
$
211,038
Non-GAAP operating margin
16.0
%
13.8
%
18.1
%
16.2
%
14.5
%
Reconciliation of Non-GAAP measure -
income excluding certain items
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
2022
2021
2022
2022
2021
Income from continuing operations, less
non-controlling interest, net of income taxes
$
45,345
$
39,753
$
74,864
$
201,875
$
134,663
Adjustments:
Amortization of intangible assets
7,033
5,556
7,049
26,114
22,060
Acquisition-related costs
1,733
913
1,216
8,338
10,388
Facility expansion, relocation costs, and
other
1,162
1,014
1,662
5,295
6,418
Restructuring charges
5,636
2,231
121
6,814
4,752
Unrealized foreign currency (gain)
loss
5,378
(134
)
(6,169
)
(7,645
)
(3,543
)
Acquisition-related costs and other
included in other (income) expense, net
(3,817
)
(3,093
)
(4,685
)
(8,417
)
(2,186
)
Tax effect of non-GAAP adjustments
(2,042
)
3,017
855
(3,008
)
(1,346
)
Non-GAAP income, net of income taxes,
excluding stock-based compensation
60,428
49,257
74,913
229,366
171,206
Stock-based compensation, net of taxes
3,776
2,233
4,697
15,444
12,042
Non-GAAP income, net of income taxes
$
64,204
$
51,490
$
79,610
$
244,810
$
183,248
ADVANCED ENERGY INDUSTRIES,
INC.
SELECTED OTHER DATA (UNAUDITED)
Reconciliation of non-GAAP measure -
per share earnings excluding certain items
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
2022
2021
2022
2022
2021
Diluted earnings per share from continuing
operations, as reported
$
1.20
$
1.05
$
1.99
$
5.35
$
3.51
Add back:
Per share impact of non-GAAP adjustments,
net of tax
0.50
0.31
0.13
1.14
1.27
Non-GAAP earnings per share
$
1.70
$
1.36
$
2.12
$
6.49
$
4.78
Reconciliation of Q1 2023
Guidance
Low End
High End
Revenue
$395 million
$435 million
Reconciliation of non-GAAP earnings per
share
GAAP earnings per share
$
0.51
$
1.01
Stock-based compensation
0.17
0.17
Amortization of intangible assets
0.19
0.19
Restructuring and other
0.04
0.04
Tax effects of excluded items
(0.06
)
(0.06
)
Non-GAAP earnings per share
$
0.85
$
1.35
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230208005835/en/
Andrew Huang Advanced Energy Industries, Inc. 970-407-6555
ir@aei.com
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