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8-K - 8-K - ADVANCED ENERGY INDUSTRIES INCq42012earningsrelease8-k.htm



Financial News Release

CONTACTS:
 
 
 
Danny Herron
 
Annie Leschin/Vanessa Lehr
 
Advanced Energy Industries, Inc.
 
Advanced Energy Industries, Inc.
 
970.407.6570
 
970.407.6555
 
danny.herron@aei.com
 
ir@aei.com
 

ADVANCED ENERGY ANNOUNCES FOURTH QUARTER RESULTS

Revenue of $113 million
Non-GAAP EPS of $0.16 per diluted share
Generated $19 million in cash during the fourth quarter
Generated $111 million in cash during fiscal 2012
Fort Collins, Colo., February 4, 2013 - Advanced Energy Industries, Inc. (Nasdaq: AEIS) today announced financial results for the fourth quarter ended December 31, 2012. The company posted fourth quarter sales of $113.0 million compared to $117.5 million in the third quarter of 2012 and $112.5 million in the fourth quarter of 2011. Income from continuing operations was $4.9 million or $0.13 per diluted share. On a non-GAAP basis, income from continuing operations was $6.2 million or $0.16 per diluted share. The non-GAAP measures exclude a $2.0 million restructuring charge taken in the fourth quarter. A reconciliation of non-GAAP income from continuing operations and earnings per share is provided in the tables below. The company ended the quarter with $172.2 million in cash and marketable securities, having generated $110.8 million of cash during 2012.
“With the majority of our restructuring efforts successfully implemented and a strong financial and operational platform in place, we begin the year focused on driving revenue growth,” said Garry Rogerson, CEO. “Demand for our large scale inverters in the North American market remains strong, and we continue to look at expansion opportunities. In our Thin Films business, we are beginning to see signs that point to recovery in some of our markets as the year progresses. Together, these market conditions position us well for 2014, as we remain committed to our 2014 aspirational goals and actively pursue both organic and inorganic opportunities.”
Thin Films Business Unit
Thin Films sales decreased 6.1% to $53.3 million in the fourth quarter of 2012 from $56.8 million in the third quarter of 2012, and 2.0% from $54.4 million in the fourth quarter of 2011. Sales to the semiconductor market remained flat in the fourth quarter, while declines in the industrial and service markets offset the increases in flat panel display and solar panel equipment markets.





Solar Energy Business Unit    
Solar Energy sales were $59.6 million in the fourth quarter of 2012, a decrease of 1.8% from $60.7 million in the third quarter of 2012, and an increase of 2.6% from $58.1 million in the fourth quarter of 2011. Demand for our products in the North American market remained solid despite the absence of year-end tax credits and incentives.
Income from Continuing Operations
Income from continuing operations for the fourth quarter was $4.9 million or $0.13 per diluted share, compared to income from continuing operations of $5.7 million or $0.15 per diluted share in the third quarter of 2012, and loss from continuing operations of $2.6 million or $0.06 per diluted share in the same period last year. On a non-GAAP basis, excluding the impact of the $2.0 million restructuring charge, income from continuing operations was $6.2 million or $0.16 per diluted share, down from $7.6 million or $0.20 per diluted share in the third quarter of 2012.
Restructuring Charge
The company incurred a $2.0 million charge this quarter related to the restructuring plan that was announced on September 28, 2011. During the quarter the company consolidated certain facilities and centralized other activities.
Over time, existing cost savings along with other manufacturing cost savings initiatives and cost of goods improvements are currently expected to deliver annual savings of approximately $55 million by the end of 2014.
First Quarter 2013 Guidance    
The company anticipates first quarter 2013 results from continuing operations to be within the following ranges:
Sales of $105 million to $115 million
Non-GAAP per share earnings of $0.14 to $0.18
Fourth Quarter 2012 Conference Call
Management will host a conference call tomorrow, Tuesday, February 5, 2013, at 8:30 a.m. Eastern Time to discuss Advanced Energy's financial results. Domestic callers may access this conference call by dialing 800-591-6930. International callers may access the call by dialing 617-614-4908. Participants will need to provide conference pass code 45866756. For a replay of this teleconference, please call 888-286-8010 or 617-801-6888, and enter the pass code 87376844. The replay will be available for two weeks following the conference call. A webcast will also be available on the Investor Relations web page at http://ir.advanced-energy.com.
About Advanced Energy
Advanced Energy (Nasdaq: AEIS) is a global leader in innovative power and control technologies for high-growth, thin-film manufacturing and 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 www.advanced-energy.com
This release includes GAAP and non-GAAP operating income and per share earnings data. These non-GAAP measures are not in accordance with, or an alternative for, similar measures calculated under generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Advanced Energy believes that these non-GAAP measures provide useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Additionally, the company believes that these non-GAAP measures, in combination with its financial results calculated in accordance with GAAP, provides investors with additional perspective. While some of these excluded items may be incurred and reflected in the company's GAAP financial results in the foreseeable future, the company believes that the items excluded from certain non-GAAP measures do not accurately reflect the underlying performance of its continuing operations for the period in which they are incurred. The use of non-GAAP measures has limitations in that they do not reflect all of the amounts associated with its results of operations as determined in accordance with GAAP and these measures should only be used to evaluate the company's results of operations in conjunction with the corresponding GAAP measures.
For additional information on the items excluded from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.
Forward-Looking Statements
The company's expectations with respect to guidance to financial results for the first quarter ending March 31, 2013, anticipated cost savings, market performance, future charges and other statements that are not historical information 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 continuation of RPS (renewable portfolio standards), the timing and availability of incentives and grant programs in North America and Europe related to the renewable energy market, renewable energy project delays resulting from solar panel price declines and increased competition in the solar inverter equipment market, the timing of orders received from customers, the company's ability to realize benefits from cost improvement efforts including avoided costs, any restructuring plans and any inorganic growth, the ability to obtain materials and manufacture products, 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.

###







ADVANCED ENERGY INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)

 
Three Months Ended
 
Year Ended
 
December 31,
 
September 30,
 
December 31,
 
2012
 
2011
 
2012
 
2012
 
2011
 
 
 
 
 
 
 
 
 
 
SALES
$
112,971

 
$
112,495

 
$
117,515

 
$
451,931

 
$
516,799

COST OF SALES
74,425

 
73,607

 
71,788

 
284,185

 
311,642

GROSS PROFIT
38,546

 
38,888

 
45,727

 
167,746

 
205,157

 
34.1
%
 
34.6
%
 
38.9
%
 
37.1
%
 
39.7
%
OPERATING EXPENSES:
 
 
 
 
 
 
 
 
 
Research and Development
13,895

 
14,393

 
14,564

 
58,076

 
64,984

Selling, general, and administrative
15,556

 
22,343

 
16,806

 
69,127

 
79,722

Restructuring charges
2,039

 
4,229

 
3,003

 
7,473

 
7,348

Amortization of intangible assets
1,557

 
1,021

 
1,416

 
5,696

 
3,852

Total operating expenses
33,047

 
41,986

 
35,789

 
140,372

 
155,906

 
 
 
 
 
 
 
 
 
 
Operating income (loss)
5,499

 
(3,098
)
 
9,938

 
27,374

 
49,251

 
 
 
 
 
 
 
 
 
 
Other income, net
181

 
721

 
65

 
2,432

 
1,217

Income (loss) from continuing operations before income taxes
5,680

 
(2,377
)
 
10,003

 
29,806

 
50,468

Provision for income taxes
806

 
218

 
4,268

 
9,630

 
13,614

INCOME (LOSS) FROM CONTINUING OPERATIONS, NET OF INCOME TAXES
4,874

 
(2,595
)
 
5,735

 
20,176

 
36,854

 
 
 
 
 
 
 
 
 
 
Income (loss) from discontinued operations, net of income taxes
(25
)
 
(175
)
 

 
405

 
(540
)
 
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS)
$
4,849

 
$
(2,770
)
 
$
5,735

 
$
20,581

 
$
36,314

 
 
 
 
 
 
 
 
 
 
Basic weighted-average common shares outstanding
37,955

 
43,465

 
37,807

 
38,879

 
43,465

Diluted weighted-average common shares outstanding
38,484

 
43,954

 
38,330

 
39,447

 
43,954

 
 
 
 
 
 
 
 
 
 
EARNINGS PER SHARE:
 
 
 
 
 
 
 
 
 
CONTINUING OPERATIONS:
 
 
 
 
 
 
 
 
 
BASIC EARNINGS (LOSS) PER SHARE
$
0.13

 
$
(0.06
)
 
$
0.15

 
$
0.52

 
$
0.85

DILUTED EARNINGS (LOSS) PER SHARE
$
0.13

 
$
(0.06
)
 
$
0.15

 
$
0.51

 
$
0.84

 
 
 
 
 
 
 
 
 
 
DISCONTINUED OPERATIONS:
 
 
 
 
 
 
 
 
 
BASIC EARNINGS (LOSS) PER SHARE
$
0.00

 
$
0.00

 
$
0.00

 
$
0.01

 
$
(0.01
)
DILUTED EARNINGS (LOSS) PER SHARE
$
0.00

 
$
0.00

 
$
0.00

 
$
0.01

 
$
(0.01
)
 
 
 
 
 
 
 
 
 
 
NET INCOME:
 
 
 
 
 
 
 
 
 
BASIC EARNINGS (LOSS) PER SHARE
$
0.13

 
$
(0.06
)
 
$
0.15

 
$
0.53

 
$
0.84

DILUTED EARNINGS (LOSS) PER SHARE
$
0.13

 
$
(0.06
)
 
$
0.15

 
$
0.52

 
$
0.83










ADVANCED ENERGY INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

 
 December 31,
 
 December 31,
 
2012
 
2011 *
ASSETS
UNAUDITED
 
 
 
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
146,564

 
$
117,639

Marketable securities
25,683

 
25,567

Accounts receivable, net
83,914

 
132,485

Inventories, net
81,482

 
80,283

Deferred income taxes
19,477

 
9,014

Income taxes receivable
4,315

 
13,826

Other current assets
9,075

 
11,672

Total current assets
370,510

 
390,486

 
 
 
 
Property and equipment, net
39,523

 
42,338

 
 
 
 
Deposits and other
7,529

 
8,959

Goodwill and intangibles, net
106,600

 
89,953

Deferred income tax assets
13,998

 
1,642

Total assets
$
538,160

 
$
533,378

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
41,044

 
$
44,828

Other accrued expenses
47,602

 
46,416

Total current liabilities
88,646

 
91,244

 
 
 
 
Long-term liabilities
61,883

 
34,795

 
 
 
 
Total liabilities
150,529

 
126,039

 
 
 
 
Stockholders' equity
387,631

 
407,339

Total liabilities and stockholders' equity
$
538,160

 
$
533,378

 
 
 
 
* December 31, 2011 amounts are derived from the December 31, 2011 audited Consolidated Financial Statements.


















ADVANCED ENERGY INDUSTRIES, INC.
SEGMENT INFORMATION (UNAUDITED)
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Year Ended
 
December 31,
 
September 30,
 
December 31,
 
2012
 
2011
 
2012
 
2012
 
2011
SALES:
 
 
 
 
 
 
 
 
 
Thin Films
$
53,322

 
$
54,420

 
$
56,780

 
$
235,335

 
$
328,614

Solar Energy
59,649

 
58,075

 
60,735

 
216,596

 
188,185

Total Sales
$
112,971

 
$
112,495

 
$
117,515

 
$
451,931

 
$
516,799

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OPERATING INCOME:
 
 
 
 
 
 
 
 
 
Thin Films
$
4,691

 
$
7,360

 
$
6,065

 
$
22,804

 
$
68,241

Solar Energy
3,360

 
231

 
7,410

 
14,003

 
4,323

Total segment operating income
8,051

 
7,591

 
13,475

 
36,807

 
72,564

Corporate expenses
(513
)
 
(6,460
)
 
(534
)
 
(1,960
)
 
(15,965
)
Restructuring charges
(2,039
)
 
(4,229
)
 
(3,003
)
 
(7,473
)
 
(7,348
)
Other income, net
181

 
721

 
65

 
2,432

 
1,217

Income (loss) from continuing operations before income taxes
$
5,680

 
$
(2,377
)
 
$
10,003

 
$
29,806

 
$
50,468


ADVANCED ENERGY INDUSTRIES, INC.
SELECTED OTHER DATA (UNAUDITED)
(in thousands)
Reconciliation of Non-GAAP measure - income from continuing operations
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2012
 
2012
 
 
 
 
Income from continuing operations, net of tax, as reported
$
4,874

 
$
20,176

Adjustments:
 
 
 
Restructuring charges, net of tax
1,367

 
4,778

Gain on sale of gas flow manufacturing assets, net of tax
$

 
$
(1,452
)
Income from continuing operations, net of tax
$
6,241

 
$
23,502


Reconciliation of Non-GAAP measure - per share earnings from
continuing operations
Three Months Ended
 
Twelve Months Ended
 
December 31,
 
December 31,
 
2012
 
2012
 
 
 
 
Diluted earnings per share from continuing operations, as reported
$
0.13

 
$
0.51

Adjustments:
 
 
 
per share impact of restructuring charges, net of tax
0.03
 
0.13
per share impact of gain on sale of gas flow manufacturing assets, net of tax
$

 
$
(0.04
)
Per share earnings from continuing operations
$
0.16

 
$
0.60