For more information, contact:

Mike El-Hillow Advanced Energy Industries, Inc. 970.407.6570 mike.el-hillow@aei.com

Cathy Kawakami Advanced Energy Industries, Inc. 970.407.6570 cathy.kawakami@aei.com

Advanced Energy Reports Second Quarter 2002 Results

Fort Collins, Colorado (July 22, 2002)—Advanced Energy (Nasdaq: AEIS) today reported financial results for the second quarter ended June 30, 2002. Advanced Energy is a leading global provider of critical components and sub-systems used in the production of semiconductors, flat panel displays, data storage products and other advanced applications.

 

Revenue for the second quarter of 2002 increased 47 percent to $67.9 million, compared to second quarter 2001 revenue of $46.2 million. Revenue for the second quarter of 2002 increased 58 percent compared to first quarter 2002 revenue of $42.9 million.

Net loss for the second quarter of 2002 was $5.1 million, or $0.16 per share compared to the second quarter 2001 net loss of $14.5 million, or $ 0.46 per share. This compares to the first quarter 2002 net loss of $8.7 million, or $0.27 per share. The second quarter of 2002 includes $5.3 million pretax loss related to the previously announced patent infringement judgment against the Company, and associated legal expenses, and $4.5 million pretax gain related to foreign exchange.

Sales for the six months ended June 30, 2002 were $110.8 million versus $120.9 million for the first six months of 2001. Net loss for the 2002 six-month period was $13.9 million, or $0.43 per share, compared with a net loss of $9.5 million, or $0.30 per share, for the 2001 six-month period.

Doug Schatz, chairman and chief executive officer, said, “We are pleased to report 58 percent sequential growth in revenue, and a lower net loss for in the second quarter of 2002. The strength was driven primarily by sales to our US-based semiconductor capital equipment OEM customers, emphasizing our strong technological position and design-win momentum.

“Visibility remains limited due to uncertainty in end market demand, driven by the anticipated slower rate of recovery in PC, consumer electronics and telecommunications markets. Given this uncertainty, we are implementing stringent cost containment and reductions measures, while still investing in the critical areas necessary to meet our strategic goals,” said Mr. Schatz.

Based on information currently available, the Company expects third quarter revenues in the $68 million to $70 million range and a loss per share of $0.10 to $0.12 cents, before any one time charges.

Second Quarter 2002 Conference Call

Management will host a conference call today, Monday, July 22, 2002 at 9:00 am Eastern time to discuss the 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, code 3916952. The replay will be available through Monday, July 29, 2002. There will also be a webcast available at www.advanced-energy.com.

About Advanced Energy

Advanced Energy is a global leader in the development, marketing and support of components and sub-systems critical to plasma-based manufacturing processes used in the production of semiconductors, flat panel displays, data storage products, compact discs, digital video discs, architectural glass, and other applications that require precise thin-film processes.

AE offers a comprehensive line of technology solutions in power, flow and thermal management, plasma and ion beam sources, and integrated process monitoring and control to original equipment manufacturers (OEMs) and end-users around the world.

AE 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, AE is a publicly-held company traded on Nasdaq National Market under the symbol AEIS. For more information, please visit our corporate website: www.advanced-energy.com.

Safe Harbor Statement

 

This press release contains certain forward-looking statements 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, fluctuations in quarterly and annual revenues and operating results, Advanced Energy's ongoing ability to develop new products in a highly competitive industry characterized by increasingly rapid technological changes, our 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 www.sec.gov. Copies may also be obtained by contacting Advanced Energy's investor relations at 970-407-6732. The company assumes no obligation to update the information in this press release.

    CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
(in thousands except per share data)
Three Months Ended June 30, Six Months Ended June 30,
2002          2001          2002         2001
Sales                  $67,893       $46,171     $110,780      $120,885
Cost of sales           43,581        38,390       73,094        81,881
Gross profit            24,312         7,781       37,686        39,004
Operating expenses:
Research and
development           12,587        11,040       23,835        23,429
Sales and marketing     8,712         5,963       15,463        12,592
General and
administrative         7,030         5,645       13,828        11,819
Goodwill impairment        --         5,446           --         5,446
Restructuring charge       --           614           --           614
Litigation damages
(recoveries)           5,313            --        5,313        (1,500)
Total operating
expenses            33,642        28,708       58,439        52,400
Loss from operations    (9,330)      (20,927)     (20,753)      (13,396)
Other income (expense)   1,424           (70)        (573)          117
Net loss before income
taxes and minority
interest               (7,906)      (20,997)     (21,326)      (13,279)
Benefit for income
taxes                  (2,767)       (6,553)      (7,464)       (3,864)
Minority interest in
net income                 --           105           --            40
Net loss               $(5,139)     $(14,549)    $(13,862)      $(9,455)
Net loss per share:
Basic                  $(0.16)       $(0.46)      $(0.43)       $(0.30)
Diluted                $(0.16)       $(0.46)      $(0.43)       $(0.30)
Basic weighted-average
common shares
outstanding            32,045        31,698       31,959        31,623
Diluted weighted-average
common shares
outstanding            32,045        31,698       31,959        31,623
CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)
Other information
(in thousands except per share data)
Three Months Ended June 30, Six Months Ended June 30,
2002          2001          2002          2001
ADDITIONAL INFORMATION -
Pro forma without
exceptional items:
Pro forma net loss
without exceptional
items                 $(4,605)      $(4,887)    $(13,328)        $(730)
Pro forma basic loss
per share              $(0.14)       $(0.15)      $(0.42)       $(0.02)
Pro forma diluted loss
per share              $(0.14)       $(0.15)      $(0.42)       $(0.02)
ADDITIONAL INFORMATION - EBITDA:
(Loss) earnings before
interest, taxes,
depreciation and
amortization            $(943)     $(16,941)     $(8,113)      $(5,722)
Pretax EBITDA
diluted EPS            $(0.03)       $(0.53)      $(0.25)       $(0.18)
After tax EBITDA
diluted EPS            $(0.02)       $(0.37)      $(0.17)       $(0.13)
THE PRO FORMA AMOUNTS
HAVE BEEN ADJUSTED
TO ELIMINATE THE
FOLLOWING:
Excess, obsolete and
warranty inventory
charges                    --         7,116           --         7,116
Goodwill impairment         --         5,446           --         5,446
Restructuring charge        --           614           --           614
Litigation damages
(recoveries)            5,313            --        5,313        (1,500)
Foreign exchange gain   (4,492)           --       (4,492)           --
Income tax effect         (287)       (3,514)        (287)       (2,951)
$534        $9,662         $534        $8,725
EBITDA RECONCILIATION
Loss before income
taxes and minority
interest               (7,906)      (20,997)     (21,326)      (13,279)
Interest income           (776)       (1,347)      (1,716)       (3,116)
Interest expense         3,190         1,234        6,488         2,522
Depreciation and
amortization            4,549         4,169        8,441         8,151
$(943)     $(16,941)     $(8,113)      $(5,722)
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
(in thousands)
June 30,    December 31,
2002            2001
ASSETS
Current Assets:
Cash and cash equivalents                       $36,143        $81,955
Marketable securities                           161,732        190,023
Accounts receivable                              55,135         30,812
Income tax receivable                            18,107         15,862
Inventories                                      65,001         45,248
Other current assets                              3,906          4,178
Deferred income tax assets, net                  10,013         11,200
Total current assets                             350,037        379,278
Property and equipment, net                       44,740         31,095
Deposits and other                                 7,203          6,482
Goodwill and intangibles, net                     92,373         23,072
Demonstration and customer service equipment       5,197          4,532
Deferred debt issuance costs                       5,066          5,736
Total assets                                    $504,616       $450,195
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable                          $19,971        $10,231
Other current liabilities                        23,897         14,778
Current portion of long-term debt                15,406          1,130
Accrued interest payable on convertible
subordinated notes                               2,710          2,696
Total current liabilities                         61,984         28,835
Long-term Liabilities:
Senior borrowings                                16,444             --
Capital leases                                    1,197             --
Convertible subordinated notes payable          206,600        206,600
Deferred income tax liability, net                9,811            415
Total long-term liabilities                      234,052        207,015
Total liabilities                                296,036        235,850
Stockholders' equity                             208,580        214,345
Total liabilities and stockholders' equity      $504,616       $450,195
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)
Six Months Ended June 30,
2002            2001
NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES                           $(13,616)        $9,994
NET CASH USED IN INVESTING ACTIVITIES            (30,701)       (10,708)
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES                             (3,195)           801
EFFECT OF CURRENCY TRANSLATION ON CASH             1,700            645
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS                                (45,812)           732
CASH AND EQUIVALENTS, beginning of period         81,955         31,716
CASH AND EQUIVALENTS, end of period              $36,143        $32,448
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SOURCE Advanced Energy
Web site: http: //www.advanced-energy.com
Photo: NewsCom: http: //www.newscom.com/cgi-bin/prnh/20000609/AEISLOGO AP Archive: http://photoarchive.ap.org PRN Photo Desk, +1-888-776-6555 or +1-212-782-2840
CONTACT: Mike El-Hillow, Senior Vice President, Chief Financial Officer, +1-970-407-6570, mike.el-hillow@aei.com, or Cathy Kawakami, Director of Investor Relations, +1-970-407-6732, cathy.kawakami@aei.com, all of Advanced Energy Industries, Inc.
CAPTION: AEISLOGO ADVANCED ENERGY INDUSTRIES LOGO Development, marketing, and support of critical technology solutions for the manufacture of semiconductors, data storage products, and flat panel displays as well as for surface modification applications and process power control. (PRNewsFoto)[PM] FORT COLLINS, CO USA 06/19/2000