Advanced Energy
Advanced Energy
A global leader in innovative power and control technologies that drive high-growth, plasma thin-film and nontech manufacturing processes.
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For more information, contact:

Richard Beck
Advanced Energy Industries, Inc.
9704076204
dick.beck@aei.com
Cathy Kawakami
Advanced Energy Industries, Inc.
9704076732
cathy.kawakami@aei.com


Advanced Energy Reports First Quarter Results

Implements Reduction in Workforce Due to Continued End Market Deterioration

 

Fort Collins, Colorado (April 12, 2001)—Advanced Energy Industries, Inc. (Nasdaq: AEIS) today reported financial results for the first quarter and period ended March 31, 2001. Advanced Energy is an industry-leading provider of critical technology solutions for the manufacture of semiconductors, data storage products, and flat panel displays.


(Photo: http://www.newscom.com/cgi-bin/prnh/20000609/AEISLOGO )

For the first quarter, revenues were $74.7 million, compared to $75.0 million in the first quarter of 2000, and $102.7 million for the fourth quarter of 2000. The company's 2000 results have been restated to reflect the April 6, 2000 acquisition of Noah Holdings and the August 18, 2000 acquisition of Sekidenko, Inc., using the pooling of interests method of accounting.

"Our financial performance in the first quarter was in line with our revised expectations, reflecting the continuing softness in industry demand patterns," said Doug Schatz, Chairman and Chief Executive Officer. "In order to continue to meet our operating goals in light of this difficult environment, we have taken several cost containment initiatives including ten percent salary reductions for senior management, substantial reductions in travel, cutbacks in other discretionary spending and two shutdown weeks during the second quarter. The continuing deterioration in all of the industries we serve has caused us to implement a ten percent reduction in force or 75 full time continuous and 89 temporary employees. We are providing severance packages and job placement services to the employees affected by this industry related action."

Net income for the 2001 first quarter was $5.1 million, or $0.16 per diluted share. Gross margin was 42 percent in the first quarter, down from 49 percent in the comparable quarter in 2000 and in line with our expectations. This compares to net income of $11.2 million or $0.35 per diluted share for the first quarter of 2000, and net income of $19.8 million, excluding the extraordinary item, or $0.61 per diluted share, for the fourth quarter of 2000.

"We continue to have limited visibility for the year 2001. Based on current demand forecasts for the second quarter, we anticipate revenue in the $60 million to $65 million range and earnings per share in the $0.05 to $0.07 range. We expect gross margin to be in the range of 38 percent to 41 percent. The reduced revenue level will continue to create pressure on our operating margins. We expect the cost containment actions implemented late in the first quarter to have a greater impact during the second quarter, in addition to the additional cost reduction measures taken in this current quarter.

"We remain committed to our ongoing product development efforts through continued investments in engineering, strengthening our alliances with customers and furthering the integration of our new subsidiaries. We have gained market share in prior industry downturns, and we are well-positioned to continue to extend our technology lead throughout this cycle," said Mr. Schatz.

First Quarter Conference Call

Management will host a conference call on Thursday, April 12, 2001 at 9:30 am Eastern time to discuss the first quarter financial results. You may access this conference call by dialing 800-982-3654. For a replay of this teleconference, please call 703-925-2533, passcode 5063866. The replay will be available through Thursday, April 19, 2001. There will also be a webcast available at www.advanced-energy.com in the "Investor Relations" section.

About Advanced Energy

Advanced Energy is a global leader in the development, marketing, and support of technology solutions that are central in the manufacture of semiconductors, data storage products, and flat panel displays. Original equipment manufacturers (OEMs) and end-users around the world depend on AE products when plasma-based technology plays a vital role in their manufacturing process. AE offers a comprehensive suite of products for vacuum process systems, including power management, temperature sensing, dynamic temperature control, gas delivery management, process monitoring and machine control tools, ion-beam sources, and plasma abatement technologies. AE technology solutions are sold and supported globally by direct offices, representatives, and distributors. Founded in 1981, AE is a publicly held company traded on Nasdaq under the symbol AEIS. AE's URL is www.advanced-energy.com

Safe Harbor Statement

This press release contains certain forward-looking statements 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: fluctuations in quarterly and annual revenues and operating results, Advanced Energy's ongoing ability to develop new products in a highly competitive industry characterized by increasingly rapid technological changes, the volatility and cyclicality of the semiconductor and semiconductor capital equipment industries and other risks described in Advanced Energy's 10-K, Forms 10-Q and other reports and statements, as filed with the Securities and Exchange Commission. The company assumes no obligation to update the information in this press release.

    CONSOLIDATED INCOME STATEMENT
(in thousands except per share data)

Quarter Ended March 31,
2001 2000
(unaudited) (unaudited)
Sales $74,714 $75,028
Cost of sales 43,491 38,361
Gross profit 31,223 36,667

Operating expenses:
Research and development 12,389 8,113
Sales and marketing 6,629 5,867
General and administrative 6,174 5,639
Litigation recovery (1,500) --
Income from operations 7,531 17,048

Other income (expense) 187 120

Net income before income taxes and
minority interest 7,718 17,168

Provision for income taxes 2,689 5,947
Minority interest in net loss (65) (17)

Net income $5,094 $11,238

Net earnings per share:
Basic $0.16 $0.36
Diluted $0.16 $0.35

Basic weighted-average common shares
outstanding 31,547 31,161

Diluted weighted-average common
shares outstanding 32,187 32,512


ADDITIONAL INFORMATION - EBITDA:
Earnings before interest, taxes,
depreciation and amortization $11,219 $19,163

Pretax cash diluted EPS $0.35 $0.59
After tax cash diluted EPS 0.23 0.39


CONSOLIDATED BALANCE SHEET
(in thousands)

March 31, December 31,
2001 2000
ASSETS (unaudited) (audited)

Current Assets:
Cash and cash equivalents $26,773 $31,716
Marketable securities - trading 130,050 157,811
Accounts receivable 62,206 76,545
Notes receivable 2,472 2,472
Income tax receivable 88 74
Inventories 53,018 45,266
Other current assets 3,465 2,508
Deferred income tax assets, net 8,050 7,483
Total current assets 286,122 323,875

Property and equipment, net 32,813 24,101
Goodwill and intangibles, net 31,770 9,890
Investments 2,209 1,824
Deferred debt issuance costs 2,138 2,261
Other assets 4,368 3,884
Total assets $359,420 $365,835


LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable, trade $16,078 $18,250
Other current liabilities 13,670 16,210
Accrued income taxes payable 1,248 7,923
Current portion of long-term
debt 1,104 1,337
Accrued interest payable on
convertible subordinated notes 1,600 529
Total current liabilities 33,700 44,249

Long-term Liabilities:
Capital leases and notes payable 892 1,043
Deferred income tax liability,
net 912 --
Convertible subordinated notes
payable 81,600 81,600
Total long-term liabilities 83,404 82,643

Total liabilities 117,104 126,892

Minority interest 80 145

Stockholders' equity 242,236 238,798
Total liabilities and stockholders'
equity $359,420 $365,835


CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)


Three Months Ended March 31,
2001 2000
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $5,094 $11,238
Depreciation and amortization 4,105 2,490
Earnings from marketable
securities, net (1,565) (2,278)
Accounts receivable and notes
receivable 15,506 (6,810)
Inventories (6,074) (3,058)
Accounts payable, trade (2,527) (2,526)
Income taxes (6,770) 5,389
Other (3,753) 2,737
Net cash provided by operating
activities 4,016 7,182

CASH FLOWS FROM INVESTING ACTIVITIES:
Marketable securities 30,000 (10,000)
Proceeds from sale of equipment -- 150
Purchase of property and equipment,
net (6,471) (2,016)
Purchase of investments (592) --
Acquisition of EMCO, net of cash
acquired (29,932) --
Net cash used in investing
activities (6,995) (11,866)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net change from notes payable and
capital lease obligations (384) 627
Proceeds from common stock
transactions 199 2,996
Net cash (used in) provided by
financing activities (185) 3,623
EFFECT OF CURRENCY TRANSLATION ON
CASH FLOW (1,779) (145)
DECREASE IN CASH AND CASH EQUIVALENTS (4,943) (1,206)
CASH AND EQUIVALENTS, beginning of
period 31,716 21,043
CASH AND EQUIVALENTS, end of period $26,773 $19,837