Fort Collins, Colo., April 22, 2010
– Advanced Energy Industries, Inc. (Nasdaq GM: AEIS) today announced financial results for the first quarter ended March 31, 2010.
Sales for the first quarter of 2010 increased 22.7% to $81.6 million from $66.4 million in the fourth quarter of 2009, and increased 150.0% from $32.6 million in the first quarter of 2009.
Sales were robust in the first quarter driven by strong growth in the semiconductor market. Semiconductor sales rose 47.7% sequentially to $48.6 million, representing 59.6% of total sales for the quarter. Sales to the non-semiconductor markets increased 3.9% sequentially to $21.5 million, representing 26.3% of total sales for the quarter. Service revenue was flat sequentially at $11.5 million, representing 14.1% of total sales for the quarter.
Bookings for the first quarter were $96.7 million compared to $98.0 million in the fourth quarter of 2009, resulting in a book to bill ratio of 1.19:1 for the first quarter. Ending backlog increased 22.8% sequentially to $81.3 million at the end of the first quarter compared to $66.2 million at the end of the fourth quarter of 2009.
Gross margin improved significantly to 40.6% in the first quarter, up from 36.8% in the fourth quarter of 2009, as a result of greater efficiencies and improved operating leverage due to higher revenues. This compares to 19.6% in the same period last year.
Operating expenses rose 11.0% sequentially to $25.0 million as we eliminated our temporary cost reductions related to pay cuts and shutdowns. In addition, expenses associated with the pending acquisition of PV Powered were $325,000 ($0.01 per share).
First quarter net income was $6.2 million or $0.15 per diluted share, compared to net income of $1.5 million or $0.04 per diluted share in the fourth quarter of 2009. In the same period a year ago, net loss was $79.8 million or a loss of $1.90 per share due primarily to a non-cash goodwill impairment charge of $63.3 million or $1.51 per share. Cash, cash equivalents and investments were $163.4 million at the end of the first quarter, a decrease of $14.1 million from the fourth quarter due to increases in accounts receivable and inventory to support the growth in revenues.
“Marked by the third consecutive quarter of greater than 20% total revenue growth, we were extremely pleased with our first quarter results. Momentum in the semiconductor capital equipment market drove the majority of the growth this quarter continuing the three-quarter trend of over 40% expansion in that market,” said Dr. Hans Betz, chief executive officer. “Advanced Energy once again distinguished itself as one of the premier suppliers as we successfully managed through supply chain constraints in order to meet aggressive customer demand.”
“In keeping with our strategy to increase Advanced Energy’s presence in the renewable energy market, we announced a definitive agreement to acquire PV Powered, a leading manufacturer of grid-tied PV inverters serving the commercial and residential markets. The combined company will offer a complete suite of products, propelling Advanced Energy forward as a leader in the North American solar inverter market.”
On March 24, 2010, Advanced Energy announced a definitive agreement to acquire 100% of the outstanding shares of PV Powered. Pending review under the Hart-Scott Rodino Act, we expect the acquisition to close in early May. We will provide updated guidance once the acquisition is complete.
Second Quarter 2010 Guidance
The Company anticipates second quarter 2010 results to be within the following ranges:
Sales of $92 million to $102 million
Earnings per share of $0.21 to $0.31
First Quarter 2010 Conference Call
Management will host a conference call today, Thursday April 22, 2010, 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 67518997. For a replay of this teleconference, please call (800) 642-1687 or (706) 645-9291, and enter the passcode 67518997. The replay will be available through 12:00 a.m. Eastern Daylight Time, April 24, 2010. A webcast will also be available on the Investor Relations web page at http://ir.advanced-energy.com.
About Advanced Energy
Advanced Energy is a global leader in innovative power and control technologies for high-growth markets, including advanced thin-film manufacturing and commercial grid-tied inverters for solar-power generation. Advanced Energy is headquartered in Fort Collins, Colorado, with dedicated support and service locations around the world. For more information, go to http://www.advanced-energy.com.
The Company’s expectations with respect to guidance to financial results for the second quarter ending June 30, 2010 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, 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.advancedenergy.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
Sales $81,552 $32,627
Cost of sales 48,444 26,239
Gross profit 33,108 6,388
Research and development 11,590 11,098
Selling, general and administrative 13,283 9,395
Impairment of goodwill - 63,260
Amortization of intangible assets 122 222
Restructuring charges - 3,396
Total operating expenses 24,995 87,371
Income (loss) from operations 8,113 (80,983)
Other income, net 386 282
Income (loss) from operations
before income taxes 8,499 (80,701)
Provision (benefit) for income
taxes 2,282 (938)
Net income (loss) $6,217 $(79,763)
Basic earnings (loss) per share $0.15 $(1.90)
Diluted earnings (loss) per share $0.15 $(1.90)
Three Months Ended
Cost of sales 41,972
Gross profit 24,467
Research and development 11,227
Selling, general and administrative 11,135
Impairment of goodwill -
Amortization of intangible assets 148
Restructuring charges 6
Total operating expenses 22,516
Income (loss) from operations 1,951
Other income, net 495
Income (loss) from operations
before income taxes 2,446
Provision (benefit) for income
Net income (loss) $1,523
Basic earnings (loss) per share $0.04
Diluted earnings (loss) per share $0.04
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
Cash and cash equivalents $114,643 $133,106
Marketable securities 48,804 44,401
Accounts receivable, net 61,901 50,267
Inventories, net 47,715 37,118
Deferred income taxes 9,998 9,215
Income taxes receivable 2,125 -
Other current assets 6,687 5,648
Total current assets 291,873 279,755
Property and equipment, net 29,577 30,615
Deposits and other 9,272 9,294
Goodwill and intangibles, net 5,793 5,982
Deferred income tax assets, net 16,639 19,479
Total assets $353,154 $345,125
LIABILITIES AND STOCKHOLDERS'
Accounts payable $28,432 $23,802
Other accrued expenses 22,465 24,176
Total current liabilities 50,897 47,978
Long-term liabilities 18,686 18,813
Total liabilities 69,583 66,791
Stockholders' equity 283,571 278,334
Total liabilities and
stockholders' equity $353,154 $345,125
SOURCE Advanced Energy Industries, Inc.