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 Second Quarter 2009 Results
Fort Collins, Colo., July 23, 2009—Advanced Energy Industries, Inc. (Nasdaq GM: AEIS) today announced financial results for the second quarter ended June 30, 2009.

Sales for the second quarter of 2009 were $35.6 million, a 9.2% increase from $32.6 million in the first quarter of 2009. Sales decreased 59.6% from $88.0 million in the second quarter of 2008.

Sales to the semiconductor market drove overall sales growth, increasing 27.3% sequentially to $12.2 million. Semiconductor equipment OEMs worked through their inventories and fabs increased utilization, reflecting what we believe is the beginning of the market recovery. With equipment sitting idle for the last few quarters, manufacturers’ need for repairs and upgrades also grew, leading to a sequential increase of 14.2% in service and support revenues to $8.8 million, taking them to 24.8% of total sales. Sales to our non-semiconductor markets fell 5.0% to $14.6 million and represented 41.0% of total sales for the quarter. Strong orders during the quarter drove a sequential increase in our book to bill ratio to 1.06:1 from 0.87:1 in the first quarter of 2009 on a higher revenue base.
Higher revenues and the cost reduction efforts that have been implemented over the last several quarters resulted in improved gross margins of 22.3% in the second quarter, up from 19.6% in the first quarter of 2009. Gross margins decreased from 40.1% in the second quarter of 2008.

The second quarter net loss was $16.0 million or $0.38 loss per share, up from a net loss of $79.8 million or $1.90 loss per share in the first quarter of 2009, which included a non-cash goodwill impairment charge of $63.3 million or $1.51 loss per share. Net income was $5.9 million or $0.14 earnings per diluted share in the second quarter of 2008.

“We were pleased with the improvement in our second quarter results, which we believe points to signs of modest recovery in certain markets. For the first time in more than a year, sales to our semiconductor OEMs increased. Sales to our semi-related service business also grew, typically reflecting near-term modest growth in the semiconductor market,” said Hans Betz, president and CEO.

“Our strong commitment to technology investment is fueling our diversification strategy. As such, we are very encouraged by the order momentum for our 500KW Solaron inverter. The successful launch of the 500KW Solaron demonstrates AE’s commitment to technology development as we look to expand our product portfolio and our market presence.”

Third Quarter 2009 Guidance

The Company anticipates third quarter 2009 results to be within the following ranges:
  • Sales of $40 million to $45 million
  • Loss per share of $0.35 to $0.29

Second Quarter 2009 Conference Call

Management will host a conference call today, Thursday, July 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 19233458. For a replay of this teleconference, please call (800) 642-1687 or (706) 645-9291, and enter the passcode 19233458. The replay will be available through 12:00 a.m. Eastern Daylight Time, July 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.

The Company’s expectations with respect to guidance to financial results for the third quarter ending September 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 (UNAUDITED)
    (in thousands, except per share data)


                                  Three Months Ended      Six Months Ended
                                  ------------------      ----------------
                                  June 30,     March 31,      June 30,
                                  --------     ---------      --------
                              2009     2008      2009      2009      2008
                              ----     ----      ----      ----      ----

    Sales                   $35,567  $87,996   $32,627   $68,194  $176,883
    Cost of sales            27,636   52,720    26,239    53,875   105,759
                             ------   ------    ------    ------   -------
    Gross profit              7,931   35,276     6,388    14,319    71,124
                               22.3%    40.1%     19.6%     21.0%     40.2%
    Operating expenses:
        Research and
         development         10,742   13,762    11,098    21,840    26,847
        Selling,
         general and
         administrative      10,166   13,955     9,395    19,561    28,423
        Amortization
         of intangible
         assets                 120      226       222       342       466
        Impairment of
         goodwill                 -        -    63,260    63,260         -
        Restructuring
         charges                739      393     3,396     4,135     1,067
                              -----    -----     -----     -----     -----
          Total
           operating
           expenses          21,767   28,336    87,371   109,138    56,803

    Income (loss) from
     operations             (13,836)   6,940   (80,983)  (94,819)   14,321

    Other income, net           627      996       282       909     1,901
                                ---      ---       ---       ---     -----
    Income (loss) from
     operations before
     income taxes           (13,209)   7,936   (80,701)  (93,910)   16,222
    Provision
     (benefit) for
     income taxes             2,825    2,073      (938)    1,887     4,393
                              -----    -----      ----     -----     -----

    Net income (loss)      $(16,034)  $5,863  $(79,763) $(95,797)  $11,829
                           ========   ======  ========  ========   =======

    Basic earnings
     (loss) per share        $(0.38)   $0.14    $(1.90)   $(2.28)    $0.27

    Diluted earnings
     (loss) per share        $(0.38)   $0.14    $(1.90)   $(2.28)    $0.27

    Basic weighted-
     average common
     shares
     outstanding             41,948   41,869    41,881    41,915    43,265

    Diluted weighted-
     average common
     shares
     outstanding             41,948   42,290    41,881    41,915    43,686



    CONDENSED CONSOLIDATED BALANCE SHEETS
    (in thousands)

                                               June 30,      December 31,
                                                 2009             2008
                                                 ----             ----
                                              (unaudited)
    ASSETS

    Current assets:
        Cash and cash equivalents             $137,416         $116,448
        Marketable securities                   37,897           33,266
        Accounts receivable, net                32,298           56,549
        Inventories, net                        39,809           46,659
        Deferred income taxes                   11,754           13,253
        Other current assets                     3,593            5,324
                                                 -----            -----
    Total current assets                       262,767          271,499

    Property and equipment, net                 29,385           31,322

    Long-term investments                            -           30,401
    Deposits and other                           7,539            7,528
    Goodwill and intangibles, net                6,055           72,918
    Deferred income tax assets, net              8,993            6,969
                                                 -----            -----
    Total assets                              $314,739         $420,637
                                              ========         ========


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities:
        Accounts payable                        $7,736           $8,005
        Other accrued expenses                  20,346           23,928
                                                ------           ------
    Total current liabilities                   28,082           31,933

    Long-term liabilities                       11,538           12,155
                                                ------           ------

    Total liabilities                           39,620           44,088

    Stockholders' equity                       275,119          376,549
                                               -------          -------
    Total liabilities and stockholders'
     equity                                   $314,739         $420,637
                                              ========         ========