For more information, contact:

Annie Leschin/Brooke Deterline
StreetSmart Investor Relations
415.775.1788/ir@aei.com

 

Advanced Energy Announces 2007 Second Quarter Financial Results
Fort Collins, Colo., July 25, 2007– Advanced Energy Industries, Inc. (Nasdaq GM: AEIS) today announced financial results for the second quarter ended June 30, 2007. Sales were $103.0 million for the second quarter of 2007, a decrease of 1.5% from $104.6 million in the second quarter of 2006, and a sequential decline of 4.0% compared to $107.3 million in the first quarter of 2007.

Gross margin for the second quarter was 43.6%, up from 42.8% in the second quarter of 2006, and down from 45.0% in the first quarter of 2007 due to lower revenues, and the transition of manufacturing from Stolberg, Germany to China.

Net income for the second quarter of 2007 was $11.7 million, or $0.25 per diluted share, a 35.7% decrease compared to $18.2 million, or $0.40 per diluted share in the second quarter of 2006. This was primarily due to an increase in research and development spending and the change in the effective tax rate from 11% in 2006 to 35% in 2007. Net income also decreased 8.0% from $12.7 million, or $0.28 in the first quarter of 2007, due to lower revenues. The first quarter of 2007 included a restructuring charge of $2.8 million related to the closure of the Company’s Stolberg, Germany facility.

"Second quarter revenues came in at the low end of our guidance as we began to experience the impacts of a decline in our business as demand from the semiconductor capital equipment industry was lower than previously anticipated. As a result, earnings came in lower than expected and gross margins were lower due to the costs associated with the transition of production from Stolberg, Germany to China, which will be complete by the end of the year. We increased our R&D spending in the quarter which was driven by several strategic initiatives that are in process. However, we experienced strong growth from our non-semi business, which was up 11% sequentially, and dampened the effect of the down semi revenues for the quarter." said Dr. Hans Betz, president and chief executive officer of Advanced Energy. "As we look ahead, we remain highly confident in our growth strategy, including our current product pipeline, our excellent position in our markets and our future growth opportunities."

Third Quarter 2007 Guidance

The Company anticipates third quarter 2007 results to be within the following ranges:

  • Sales of $95 million to $100 million.
  • Earnings per share of $0.19 to $0.22.

Second Quarter 2007 Conference Call

Management will host a conference call today, Wednesday, July 25, 2007 at 5:00 pm eastern daylight 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 (800)-642-1687 or (706) 645-9291, and enter the passcode 7322751. The replay will be available through July 27, 2007. There will also be a webcast available on the Investor Relations webpage at http://ir.advanced-energy.com.

About Advanced Energy


Advanced Energy is a global leader in the development and support of technologies critical to thin film deposition manufacturing processes used in the production of semiconductors, flat panel displays, data storage products, solar cells, architectural glass, and other advanced product applications. Advanced Energy is a publicly held company traded on the Nasdaq Global Market under the symbol AEIS. For more information, please visit our corporate website: www.advanced-energy.com.

The Company’s expectations with respect to financial results for the third quarter of 2007 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 volatility and cyclicality of the industries the company serves, the timing of orders received from customers, the company's ability to realize cost improvement benefits from the global operations initiatives underway, 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. Copies may also be obtained from Advanced Energy's website at www.advanced-energy.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.

    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
    (in thousands, except per share data)


                                   Three Months Ended        Six Months Ended
                                   June 30,      March 31,       June 30,
                                2007      2006      2007      2007      2006

    Sales                    $103,049  $104,571  $107,323  $210,372  $198,521
    Cost of sales              58,094    59,811    59,014   117,108   115,211
    Gross profit               44,955    44,760    48,309    93,264    83,310

    Operating expenses:
         Research and
          development          12,911    10,804    12,035    24,946    21,263
         Selling, general
          and administrative   15,414    14,241    15,218    30,632    28,646
         Amortization of
          intangible assets       202       453       324       526       930
         Restructuring
          charges                 158        31     2,792     2,950        60
              Total operating
               expenses        28,685    25,529    30,369    59,054    50,899

    Income from operations     16,270    19,231    17,940    34,210    32,411

    Other income, net           1,505       741     1,554     3,059     2,574
    Income from continuing
     operations before
     income taxes              17,775    19,972    19,494    37,269    34,985
    Provision for income
     taxes                     (6,108)   (1,947)   (6,823)  (12,931)   (4,199)
    Income from continuing
     operations                11,667    18,025    12,671    24,338    30,786

    Gain on sale of
     discontinued assets          -         138       -         -         138

      Income from discontinued
       operations                 -         138       -         -         138

    Net income                $11,667   $18,163   $12,671   $24,338   $30,924

    Net income per basic share
    Income from continuing
     operations                 $0.26     $0.40     $0.28     $0.54     $0.69
    Income from discontinued
     operations                  $-        $-        $-        $-        $-
    Basic earnings per share    $0.26     $0.41     $0.28     $0.54     $0.69

    Net income per diluted
     share
    Income from continuing
     operations                 $0.25     $0.40     $0.28     $0.53     $0.68
    Income from discontinued
     operations                  $-        $-        $-        $-        $-
    Diluted earnings per
     share                      $0.25     $0.40     $0.28     $0.53     $0.69

    Basic weighted-average
     common shares
     outstanding               45,161    44,704    44,941    45,051    44,638

    Diluted weighted-average
     common shares
     outstanding               45,992    45,108    45,636    45,834    45,098




    CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
    (in thousands)

                                                  June 30,        December 31,
                                                    2007              2006
    ASSETS

    Current assets:
         Cash and cash equivalents                 $73,080           $58,240
         Marketable securities                     105,407            85,978
         Accounts receivable, net                   73,491            74,794
         Inventories, net                           56,896            52,778
         Deferred income taxes                      22,692            24,434
         Other current assets                        4,463             4,503
    Total current assets                           336,029           300,727

    Property and equipment, net                     30,659            33,571

    Deposits and other                               8,105             2,640
    Goodwill and intangibles, net                   64,404            65,584
    Customer service equipment, net                    617               832
    Deferred income tax assets, net                  3,897             8,549

    Total assets                                  $443,711          $411,903


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
         Trade accounts payable                    $16,656           $16,310
         Other accrued expenses                     34,324            36,619
    Total current liabilities                       50,980            52,929

    Long-term liabilities                            9,643             3,184

    Total liabilities                               60,623            56,113

    Stockholders' equity                           383,088           355,790
    Total liabilities and stockholders' equity    $443,711          $411,903

 

 

 

 CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
    (in thousands)

                                                  June 30,        December 31,
                                                    2007              2006
    ASSETS

    Current assets:
         Cash and cash equivalents                 $73,080           $58,240
         Marketable securities                            105,407            85,978
         Accounts receivable, net                       73,491            74,794
         Inventories, net                                       56,896            52,778
         Deferred income taxes                           22,692            24,434
         Other current assets                                 4,463             4,503
    Total current assets                                   336,029           300,727

    Property and equipment, net                         30,659            33,571

    Deposits and other                                          8,105             2,640
    Goodwill and intangibles, net                         64,404            65,584
    Customer service equipment, net                       617                832
    Deferred income tax assets, net                     3,897             8,549

    Total assets                                               $443,711          $411,903


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
         Trade accounts payable                    $16,656           $16,310
         Other accrued expenses                     34,324            36,619
    Total current liabilities                                50,980            52,929

    Long-term liabilities                                      9,643               3,184

    Total liabilities                                             60,623            56,113

    Stockholders' equity                                383,088           355,790
    Total liabilities and stockholders' equity $443,711          $411,903

SOURCE Advanced Energy Industries, Inc. - 07/25/2007

CONTACT:
Annie Leschin or Brooke Deterline, both of StreetSmart Investor Relations,
+1-415-775-1788, ir@aei.com, for Advanced Energy Industries, Inc.
Web site: http://www.advanced-energy.com