For more information, contact:

Lawrence D. Firestone
Advanced Energy Industries, Inc.
970.407.6570
lawrence.firestone@aei.com
Annie Leschin/Vanessa Lehr
Advanced Energy Industries, Inc.
970.407.6555
ir@aei.com

Advanced Energy Announces First Quarter 2009 Results
FORT COLLINS, Colo., April 23, 2009—Advanced Energy Industries, Inc. (Nasdaq: AEIS) today announced financial results for the first quarter ended March 31, 2009. Sales for the first quarter of 2009 were $32.6 million, representing a 63.3% decline from $88.9 million in the same quarter a year ago and a 51.7% decline from $67.5 million in the fourth quarter of 2008. Sales were lower across all of the Company's markets, as the global financial crisis reduced consumer and commercial spending, resulting in limited capital expansion in our markets. Our book to bill ratio for the quarter increased sequentially to 0.87:1, from quarter's 0.70:1, from the fourth quarter of 2008, though on a much lower revenue base.

Our gross margins in the first quarter were impacted by the lower revenues, resulting in lower absorption of manufacturing overhead in the first quarter. Margins fell to 19.6%, down from 40.3% in the first quarter of 2008 and 27.2% in the fourth quarter of 2008.

During the quarter we implemented a restructuring plan that resulted in a charge of $3.4 million or $0.08 per share related to a reduction in workforce. Due to the current economic downturn and a significant decline in the Company's market capitalization, we recorded an estimated non-cash impairment charge in the first quarter of $63.3 million or $1.51 per share related to our goodwill. These charges do not affect our cash balance, liquidity, or operating cash flow.

The result was a net loss for the first quarter of 2009 of $79.8 million, or $1.90 loss per diluted share, compared to net income of $6.0 million, or $0.13 earnings per diluted share, in the first quarter of 2008. The quarterly net loss increased from $19.0 million, or $0.45 per diluted share, in the fourth quarter of 2008. Our balance sheet remained strong as we closed the quarter with $173.4 million of cash and investments.

"This was an exceptionally difficult quarter as we experienced revenue levels not seen since the late 1990s. We responded once again by reducing our cost structure, yet maintaining our critical technology development and product initiatives. Our healthy balance sheet remains a key strategic asset, which we plan to leverage during these difficult times," said Hans Betz, president and CEO. "Although we experienced a significant drop in all of our markets during the quarter and visibility remains limited, we have seen some positive signs of investment in some markets, which we hope will provide some near-term stability. We remain committed to our strategy of being the strong and healthy supplier of choice to all of our OEM and end user customers."

Second Quarter 2009 Guidance

The Company anticipates second quarter 2009 results to be within the following ranges:

  • Sales of $30.0 million to $36.0 million
  • Loss per share of $0.41 to $0.34

First Quarter 2009 Conference Call

Management will host a conference call today, Thursday, April 23, 2009, at 5:00 pm Eastern Daylight Time to discuss Advanced Energy's financial results. Domestic callers may access this conference call by dialing (888) 713-4717. International callers may access the call by dialing (816) 650-2836. Participants will need to provide a conference passcode 94779571. For a replay of this teleconference, please call (800) 642-1687 or (706) 645-9291, and enter the passcode 94779571. The replay will be available through 12:00 a.m. Eastern Daylight Time, April 25, 2009. A webcast will also be available on the Investor Relations webpage at http://ir.advanced-energy.com.

About Advanced Energy

Advanced Energy is a global leader in innovative power and control technologies for high-growth, thin-film manufacturing and solar power generation. Specifically, AE targets solar grid-tie inverters, solar cells, semiconductors, flat panel displays, data storage products, architectural glass and other advanced applications.

Forward-Looking Statements

The Company's expectations with respect to financial results for the second quarter ended June 30, 2009 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 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
                       (in thousands, except per share data)


                                                    Three Months Ended
                                                   --------------------
                                                   March 31,    December 31,
                                                  -----------   ------------
                                                 2009     2008       2008
                                                 ----     ----       ----

    Sales                                     $32,627  $88,887    $67,525
    Cost of sales                              26,239   53,039     49,128
                                               ------   ------     ------
    Gross profit                                6,388   35,848     18,397

    Operating expenses:
         Research and development              11,098   13,085     13,424
         Selling, general and administrative    9,395   14,468      9,513
         Amortization of intangible assets        222      240        257
         Impairment of goodwill                63,260        -          -
         Restructuring charges                  3,396      674      1,898
                                                -----    -----      -----
              Total operating expenses         87,371   28,467     25,092

    Income (loss) from operations             (80,983)   7,381     (6,695)

    Other income, net                             282      905        553
                                                 ----     ----       ----
    Income (loss) from continuing operations
     before income taxes                      (80,701)   8,286     (6,142)
    Provision (benefit) for income taxes         (938)   2,320     12,835
                                                 ----    -----     ------

    Net income (loss)                        $(79,763)  $5,966   $(18,977)
                                             ========   ======   ========

    Basic earnings (loss) per share            $(1.90)   $0.13     $(0.45)

    Diluted earnings (loss) per share          $(1.90)   $0.13     $(0.45)

    Basic weighted-average common shares
     outstanding                               41,881   44,662     41,832

    Diluted weighted-average common shares
     outstanding                               41,881   45,065     41,832



                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                (in thousands)

                                                   March 31,    December 31,
                                                     2009           2008
                                                     ----           ----

    ASSETS

    Current assets:
         Cash and cash equivalents                $115,409       $116,448
         Marketable securities                      29,588         33,266
         Accounts receivable, net                   35,578         56,549
         Inventories, net                           46,024         46,659
         Deferred income taxes                      12,781         13,253
         Other current assets                        4,649          5,324
                                                     -----          -----
    Total current assets                           244,029        271,499

    Property and equipment, net                     29,960         31,322

    Long-term investments                           28,418         30,401
    Deposits and other                               7,557          7,505
    Goodwill and intangibles, net                    6,009         72,918
    Customer service equipment, net                      -             23
    Deferred income tax assets, net                  7,955          6,969
                                                     -----          -----
    Total assets                                  $323,928       $420,637
                                                  ========       ========


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
         Accounts payable                           $6,087         $8,005
         Other accrued expenses                     21,843         23,928
                                                    ------         ------
    Total current liabilities                       27,930         31,933

    Long-term liabilities                           10,653         12,155
                                                    ------         ------

    Total liabilities                               38,583         44,088

    Stockholders' equity                           285,345        376,549
                                                   -------        -------
    Total liabilities and stockholders' equity    $323,928       $420,637
                                                  ========       ========