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Fort Collins, Colo, February 7, 2008 -
Lawrence D. Firestone
Advanced Energy Industries, Inc.
Annie Leschin/Brooke Deterline
Advanced Energy Industries, Inc.
Advanced Energy Industries, Inc. (Nasdaq GM: AEIS) today announced financial results for the fourth quarter and year ended December 31, 2007. Sales were $83.8 million for the fourth quarter of 2007, in line with the Company’s revised guidance announced on January 22, 2008. This represented a decrease of 19.8% from $104.5 million in the fourth quarter of 2006, and a sequential decline of 7.4% from $90.5 million in the third quarter of 2007, driven primarily by further declines in the semiconductor equipment industry and order delays by key OEMs.
Gross margin for the fourth quarter of 2007 was 39.1%, down from 42.9% in the fourth quarter of 2006, and down from 40.6% in the third quarter of 2007, due to lower sales.
Net income from continuing operations for the fourth quarter of 2007 was $4.2 million, or $0.09 per diluted share, compared to $39.4 million, or $0.87 per diluted share, in the fourth quarter of 2006, which includes a tax benefit of $23.5 million related to the reversal of a valuation allowance for deferred taxes. Net income from continuing operations for the fourth quarter of 2006, adjusted to exclude such tax benefit, was $15.9 million or $0.35 per diluted share. Net income from continuing operations also decreased sequentially from $5.9 million, or $0.13 per diluted share, in the third quarter of 2007.
Sales were $384.7 million for 2007, a 6.3% decrease from $410.7 million in 2006. Net income from continuing operations for 2007 was $34.4 million, or $0.75 per diluted share, compared to $87.2 million, or $1.93 per diluted share, in 2006. Net income from continuing operations for 2006, adjusted to exclude the tax benefit mentioned above, was $63.7 million, or $1.41 per diluted share.
“While 2007 was a challenging year for Advanced Energy, we have seen growth in our solar business including the successful launch of our Solaron™ inverter product. However, declines in the semiconductor equipment market pressured our sales once again in the fourth quarter,” said Dr. Hans Betz, president and chief executive officer of Advanced Energy. “As we move into 2008, we continue to focus on the diversification of our business and are working to drive down our costs, thereby positioning Advanced Energy for growth and profitability."
First Quarter 2008 Guidance
The Company anticipates first quarter 2008 financial results to be within the following ranges:
•Sales of $82 million to $88 million
•Earnings per share of $0.07 to $0.11
•Effective tax rate of 32%
Fourth Quarter 2007 Conference Call
Management will host a conference call today, Thursday, February 7, 2008 at 5:00 pm eastern standard 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) 634-7937. Participants will need to provide a conference passcode 31990872. For a replay of this teleconference, please call (800)-642-1687 or (706) 645-9291 utilizing the same passcode. The replay will be available through February 11, 2008. A webcast will also be available on Advanced Energy’s Investor Relations webpage at http://ir.advanced-energy.com.
About Advanced Energy
Advanced Energy® develops innovative power and control technologies that enable high-growth, plasma-based thin-film manufacturing processes worldwide, including semiconductors, flat panel displays, data storage products, solar cells, architectural glass, and other advanced product applications. Advanced Energy® also develops grid-connect inverters for the solar energy market.
This press release presents the company’s net income from continuing operations for the fourth quarter and year ended December 31, 2006, as adjusted to exclude a tax benefit of $23.5 million related to the reversal of a valuation allowance for deferred taxes. Such adjusted financial information for each period is a non-GAAP financial measure. Net income from continuing operations, also presented in this press release, is the most directly comparable financial measure calculated in accordance with U.S. generally accepted accounting principles (GAAP). A reconciliation of the differences between the non-GAAP financial measures we reference with such comparable GAAP financial measures are included at the end of this press release. Management believes that the non-GAAP financial measures included in this press release provide a useful measure of the company’s operating results and a meaningful comparison with the company’s 2007 operating results. Management and the board of directors of the company utilize these non-GAAP financial measures, in addition to GAAP financial measures, to evaluate and compare the company’s operating performance against internal financial forecasts and budgets, as well as current operating performance. Management and the board of directors, however, do not consider the non-GAAP financial measures to be a substitute for, or superior to, measures of financial performance calculated in accordance with GAAP.
The Company’s expectations with respect to financial results for the first quarter of 2008 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, particularly the semiconductor equipment industry, 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. Implementation of the board-authorized repurchase of up to $75 million of the company’s stock also may affect the anticipated earnings per share set forth in this press release. 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 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.