Advanced Energy Announces Fourth Quarter Results

Mon Feb 4, 2013 4:35pm EST

* Reuters is not responsible for the content in this press release.

http://pdf.reuters.com/htmlnews/8knews.asp?i=43059c3bf0e37541&u=urn:newsml:reuters.com:20130204:nGNXUXCEIa

* Revenue of $113 million 
* Non-GAAP EPS of $0.16 per diluted share
* Generated $19 million in cash during the fourth quarter 
* Generated $111 million in cash during fiscal 2012

FORT COLLINS, Colo., Feb. 4, 2013 (GLOBE NEWSWIRE) -- Advanced Energy Industries, Inc.
(Nasdaq:AEIS) today announced financial results for the fourth quarter ended December 31, 2012.
The company posted fourth quarter sales of $113.0 million compared to $117.5 million in the third
quarter of 2012 and $112.5 million in the fourth quarter of 2011. Income from continuing
operations was $4.9 million or $0.13 per diluted share. On a non-GAAP basis, income from
continuing operations was $6.2 million or $0.16 per diluted share. The non-GAAP measures exclude a
$2.0 million restructuring charge taken in the fourth quarter. A reconciliation of non-GAAP income
from continuing operations and earnings per share is provided in the tables below. The company
ended the quarter with $172.2 million in cash and marketable securities, having generated $110.8
million of cash during 2012.

"With the majority of our restructuring efforts successfully implemented and a strong financial
and operational platform in place, we begin the year focused on driving revenue growth," said
Garry Rogerson, CEO. "Demand for our large scale inverters in the North American market remains
strong, and we continue to look at expansion opportunities. In our Thin Films business, we are
beginning to see signs that point to recovery in some of our markets as the year progresses.
Together, these market conditions position us well for 2014, as we remain committed to our 2014
aspirational goals and actively pursue both organic and inorganic opportunities."

Thin Films Business Unit

Thin Films sales decreased 6.1% to $53.3 million in the fourth quarter of 2012 from $56.8 million
in the third quarter of 2012, and 2.0% from $54.4 million in the fourth quarter of 2011. Sales to
the semiconductor market remained flat in the fourth quarter, while declines in the industrial and
service markets offset the increases in flat panel display and solar panel equipment markets.

Solar Energy Business Unit                                                                        
                  

Solar Energy sales were $59.6 million in the fourth quarter of 2012, a decrease of 1.8% from $60.7
million in the third quarter of 2012, and an increase of 2.6% from $58.1 million in the fourth
quarter of 2011. Demand for our products in the North American market remained solid despite the
absence of year-end tax credits and incentives.

Income from Continuing Operations

Income from continuing operations for the fourth quarter was $4.9 million or $0.13 per diluted
share, compared to income from continuing operations of $5.7 million or $0.15 per diluted share in
the third quarter of 2012, and loss from continuing operations of $2.6 million or $0.06 per
diluted share in the same period last year. On a non-GAAP basis, excluding the impact of the $2.0
million restructuring charge, income from continuing operations was $6.2 million or $0.16 per
diluted share, down from $7.6 million or $0.20 per diluted share in the third quarter of 2012.

Restructuring Charge

The company incurred a $2.0 million charge this quarter related to the restructuring plan that was
announced on September 28, 2011. During the quarter the company consolidated certain facilities
and centralized other activities. 

Over time, existing cost savings along with other manufacturing cost savings initiatives and cost
of goods improvements are currently expected to deliver annual savings of approximately $55
million by the end of 2014.

First Quarter 2013 Guidance            

The company anticipates first quarter 2013 results from continuing operations to be within the
following ranges:

* Sales of $105 million to $115 million
* Non-GAAP per share earnings of $0.14 to $0.18

Fourth Quarter 2012 Conference Call

Management will host a conference call tomorrow, Tuesday, February 5, 2013, at 8:30 a.m. Eastern
Time to discuss Advanced Energy's financial results. Domestic callers may access this conference
call by dialing 800-591-6930. International callers may access the call by dialing 617-614-4908.
Participants will need to provide conference pass code 45866756. For a replay of this
teleconference, please call 888-286-8010 or 617-801-6888, and enter the pass code 87376844. The
replay will be available for two weeks following the conference call. A webcast will also be
available on the Investor Relations web page at http://ir.advanced-energy.com
http://www.globenewswire.com/newsroom/ctr?d=10020487&l=15&u=http%3A%2F%2Fir.advanced-energy.com .

About Advanced Energy 

Advanced Energy (Nasdaq:AEIS) is a global leader in innovative power and control technologies for
high-growth, thin-film manufacturing and solar-power generation. 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 operating income and per share earnings data. 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,
provides investors with additional perspective. While some of these 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 they do not reflect all of the amounts associated
with its 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.

For additional information on the items excluded from one or more of its non-GAAP financial
measures, refer to the Form 8-K regarding this release furnished today to the Securities and
Exchange Commission.

Forward-Looking Statements 

The company's expectations with respect to guidance to financial results for the first quarter
ending March 31, 2013, anticipated cost savings, market performance, future charges 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: the effects of global
macroeconomic conditions upon demand for our products, the volatility and cyclicality of the
industries the company serves, particularly the semiconductor industry, the continuation of RPS
(renewable portfolio standards), the timing and availability of incentives and grant programs in
North America and Europe related to the renewable energy market, renewable energy project delays
resulting from solar panel price declines and increased competition in the solar inverter
equipment market, the timing of orders received from customers, the company's ability to realize
benefits from cost improvement efforts including avoided costs, any restructuring plans and any
inorganic growth, the ability to obtain materials and manufacture products, and 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. These reports and statements are available on the SEC's website at
www.sec.gov
http://www.globenewswire.com/newsroom/ctr?d=10020487&l=21&a=www.sec.gov&u=http%3A%2F%2Fwww.sec.gov
. Copies may also be obtained from Advanced Energy's website at www.advancedenergy.com
http://www.globenewswire.com/newsroom/ctr?d=10020487&l=21&a=www.advancedenergy.com&u=http%3A%2F%2Fwww.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. 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,           
                                                                  2012       2011       2012           2012       2011       
                                                                                                                             
 SALES                                                            $ 112,971  $ 112,495  $ 117,515      $ 451,931  $ 516,799  
 COST OF SALES                                                    74,425     73,607     71,788         284,185    311,642    
 GROSS PROFIT                                                     38,546     38,888     45,727         167,746    205,157    
                                                                  34.1%      34.6%      38.9%          37.1%      39.7%      
 OPERATING EXPENSES:                                                                                                         
 Research and development                                         13,895     14,393     14,564         58,076     64,984     
 Selling, general and administrative                              15,556     22,343     16,806         69,127     79,722     
 Restructuring charges                                            2,039      4,229      3,003          7,473      7,348      
 Amortization of intangible assets                                1,557      1,021      1,416          5,696      3,852      
 Total operating expenses                                         33,047     41,986     35,789         140,372    155,906    
                                                                                                                             
 Operating income (loss)                                          5,499      (3,098)    9,938          27,374     49,251     
 Other income, net                                                181        721        65             2,432      1,217      
 Income (loss) from continuing operations before income taxes     5,680      (2,377)    10,003         29,806     50,468     
 Provision for income taxes                                       806        218        4,268          9,630      13,614     
 INCOME (LOSS) FROM CONTINUING OPERATIONS, NET OF INCOME TAXES    4,874      (2,595)    5,735          20,176     36,854     
 Income (loss) from discontinued operations, net of income taxes  (25)       (175)      --             405        (540)      
 NET INCOME (LOSS)                                                $ 4,849    $ (2,770)  $ 5,735        $ 20,581   $ 36,314   
                                                                                                                             
 Basic weighted-average common shares outstanding                 37,955     43,465     37,807         38,879     43,465     
 Diluted weighted-average common shares outstanding               38,484     43,954     38,330         39,447     43,954     
                                                                                                                             
 EARNINGS PER SHARE:                                                                                                         
 CONTINUING OPERATIONS:                                                                                                      
 BASIC EARNINGS (LOSS) PER SHARE                                  $ 0.13     $ (0.06)   $ 0.15         $ 0.52     $ 0.85     
 DILUTED EARNINGS (LOSS) PER SHARE                                $ 0.13     $ (0.06)   $ 0.15         $ 0.51     $ 0.84     
                                                                                                                             
 DISCONTINUED OPERATIONS                                                                                                     
 BASIC EARNINGS (LOSS) PER SHARE                                  $ 0.00     $ (0.00)   $ 0.00         $ 0.01     $ (0.01)   
 DILUTED EARNINGS (LOSS) PER SHARE                                $ 0.00     $ (0.00)   $ 0.00         $ 0.01     $ (0.01)   
                                                                                                                             
 NET INCOME:                                                                                                                 
 BASIC EARNINGS (LOSS) PER SHARE                                  $ 0.13     $ (0.06)   $ 0.15         $ 0.53     $ 0.84     
 DILUTED EARNINGS (LOSS) PER SHARE                                $ 0.13     $ (0.06)   $ 0.15         $ 0.52     $ 0.83     


                                                                           
 ADVANCED ENERGY INDUSTRIES, INC.                                          
 CONDENSED CONSOLIDATED BALANCE SHEETS                                     
 (in thousands)                                                            
                                                                         
                                             December 31,  December 31,  
                                             2012          2011 *        
 ASSETS                                      UNAUDITED                   
                                                                         
 Current assets:                                                         
 Cash and cash equivalents                   $ 146,564     $ 117,639     
 Marketable securities                       25,683        25,567        
 Accounts receivable, net                    83,914        132,485       
 Inventories, net                            81,482        80,283        
 Deferred income taxes                       19,477        9,014         
 Income taxes receivable                     4,315         13,826        
 Other current assets                        9,075         11,672        
 Total current assets                        370,510       390,486       
                                                                         
 Property and equipment, net                 39,523        42,338        
                                                                         
 Deposits and other                          7,529         8,959         
 Goodwill and intangibles, net               106,600       89,953        
 Deferred income tax assets                  13,998        1,642         
 Total assets                                $ 538,160     $ 533,378     
                                                                         
 LIABILITIES AND STOCKHOLDERS' EQUITY                                    
                                                                         
 Current liabilities:                                                    
 Accounts payable                            $ 41,044      $ 44,828      
 Other accrued expenses                      47,602        46,416        
 Total current liabilities                   88,646        91,244        
                                                                         
 Long-term liabilities                       61,883        34,795        
                                                                         
 Total liabilities                           150,529       126,039       
                                                                         
 Stockholders' equity                        387,631       407,339       
 Total liabilities and stockholders' equity  $ 538,160     $ 533,378     
                                                                         
 * December 31, 2011 amounts are derived from the December 31, 2011 audited Consolidated Financial Statements. 


                                                                                                                               
 ADVANCED ENERGY INDUSTRIES, INC.                                                                                              
 SEGMENT INFORMATION (UNAUDITED)                                                                                               
 (in thousands)                                                                                                                
                                                                                                                          
                                                               Three Months Ended                     Year Ended             
                                                               December 31,           September 30,  December 31,           
                                                               2012       2011       2012           2012       2011       
 SALES:                                                                                                                   
 Thin Films                                                    $ 53,322   $ 54,420   $ 56,780       $ 235,335  $ 328,614  
 Solar Energy                                                  59,649     58,075     60,735         216,596    188,185    
 Total Sales                                                   $ 112,971  $ 112,495  $ 117,515      $ 451,931  $ 516,799  
                                                                                                                          
                                                                                                                          
 OPERATING INCOME:                                                                                                        
 Thin Films                                                    $ 4,691    $ 7,360    $ 6,065        $ 22,804   $ 68,241   
 Solar Energy                                                  3,360      231        7,410          14,003     4,323      
 Total segment operating income                                8,051      7,591      13,475         36,807     72,564     
 Corporate expenses                                            (513)      (6,460)    (534)          (1,960)    (15,965)   
 Restructuring charges                                         (2,039)    (4,229)    (3,003)        (7,473)    (7,348)    
 Other income, net                                             181        721        65             2,432      1,217      
 Income (loss) from continuing operations before income taxes  $ 5,680    $ (2,377)  $ 10,003       $ 29,806   $ 50,468   


                                                                                                                                
 ADVANCED ENERGY INDUSTRIES, INC.                                                                                               
 SELECTED OTHER DATA (UNAUDITED)                                                                                                
 (in thousands)                                                                                                                 
                                                                                                                              
 Reconciliation of Non-GAAP measure - income from continuing operations              Three Months Ended  Twelve Months Ended  
                                                                                     December 31,        December 31,         
                                                                                     2012                2012                 
                                                                                                                              
 Income from continuing operations, net of tax, as reported                          $ 4,874             $ 20,176             
 Adjustments:                                                                                                                 
 Restructuring charges, net of tax                                                   1,367               4,778                
 Gain on sale of gas flow manufacturing assets, net of tax                           --                  (1,452)              
 Income from continuing operations, net of tax                                       $ 6,241             $ 23,502             
                                                                                                                              
                                                                                                                              
                                                                                                                              
 Reconciliation of Non-GAAP measure - per share earnings from continuing operations  Three Months Ended  Twelve Months Ended  
                                                                                     December 31,        December 31,         
                                                                                     2012                2012                 
                                                                                                                              
 Diluted earnings per share from continuing operations, as reported                  $ 0.13              $ 0.51               
 Adjustments:                                                                                                                 
 per share impact of restructuring charges, net of tax                               0.03                0.13                 
 per share impact of gain on sale of gas flow manufacturing assets, net of tax       --                  (0.04)               
 Per share earnings from continuing operations                                       $ 0.16              $ 0.60               


CONTACT: Danny Herron
         Advanced Energy Industries, Inc.
         970.407.6570
         danny.herron@aei.com

         Annie Leschin/Vanessa Lehr
         Advanced Energy Industries, Inc.
         970.407.6555
         ir@aei.com