Advanced Energy Industries (AEIS) 8-K Advanced Energy Reports Fourth Quarter and Year-end 2003 Results

EXHIBIT 99.1

CONTACTS:
Mike El-Hillow	Cathy Kawakami
Executive Vice President, Chief Financial Officer	Director of Investor Relations
Advanced Energy Industries, Inc.	Advanced Energy Industries, Inc.
970-407-6570	970-407-6732
mike.el-hillow@aei.com	cathy.kawakami@aei.com

FOR IMMEDIATE RELEASE

ADVANCED ENERGY REPORTS FOURTH QUARTER AND YEAR-END 2003 RESULTS

Fort Collins, Colorado (February 12, 2004)-Advanced Energy (Nasdaq: AEIS) today reported financial results for the fourth quarter and year ended December 31, 2003. Advanced Energy is a leading global provider of critical solutions used in the production of semiconductors, flat panel displays, data storage products and other advanced applications.

Fourth Quarter Review
For the 2003 fourth quarter, revenue was $74.7 million, up 30 percent from $57.4 million for the fourth quarter of 2002, and up 9 percent compared to $68.6 million for the third quarter of 2003. The company generated income from operations of $319,000 for the fourth quarter of 2003, compared to a loss from operations of $5.7 million for the third quarter of 2003.

The net loss for the fourth quarter of 2003 was $2.4 million, or $0.08 per share, compared to the net loss of $22.0 million, or $0.68 per share, for the fourth quarter of 2002 and a net loss of $27.4 million, or $0.85 per share, for the third quarter of 2003. The fourth quarter of 2002 includes pre-tax charges of $13.1 million relating to excess and obsolete inventory and warranty reserves, and other items. The third quarter 2003 net loss included a non-cash charge of $22.4 million related to a reduction in the carrying value of the Company’s net deferred tax assets.

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ADVANCED ENERGY REPORTS FOURTH QUARTER AND YEAR END RESULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 2

Full Year Review

For the full year 2003, revenue was $262.4 million, compared with $238.9 million for the full year 2002, a 10 percent increase. Net loss for the full year 2003 was $44.2 million, or $1.37 per share, compared with a net loss of $41.4 million, or $1.29 per share, for the full year 2002.

Doug Schatz, chairman and chief executive officer, said, “Industry fundamentals are improving, and we are experiencing strong demand in all product groups, primarily driven by our semiconductor and flat panel customers. Our sales to semiconductor original equipment manufacturers (OEMs) in the fourth quarter of 2003 increased 22 percent compared to the 2003 third quarter, and sales to flat panel display OEMs increased 38 percent from the prior quarter. Our ability to secure key designs in high-growth semiconductor segments such as 300mm etch and chemical vapor deposition (CVD) puts us in a strong position to benefit as the industry accelerates its transition to larger wafers, as well as to smaller line widths and advanced materials such as copper and low-k dielectrics.

“In this accelerating order environment, we continue to focus on improving internal efficiencies and cost control. The initial improvements have shown through in our fourth quarter performance, and we posted income from operations for the first time in ten quarters. Looking ahead, we expect to gain greater leverage from the changes we have made, such as our manufacturing operation in China and our transition to a world-class Asian supply base.

“Based on our strong market position and the continued order momentum, we anticipate first quarter revenue in the $95 to $100 million range and earnings per share in the range of $0.12 to $0.17,” said Mr. Schatz.

Fourth Quarter and Year-End Conference Call

Management will host a conference call today, Thursday, February 12, 2004 at 5:00 pm Eastern time to discuss the financial results. You may access this conference call by dialing 888-713-4717, or 706-679-7220 for international callers. For a replay of this teleconference, please call 706-645-9291, passcode 4682617. The replay will be available through Thursday, February 19, 2004.

There will also be a webcast available on the Advanced Energy Website, www.advanced-energy.com.

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ADVANCED ENERGY REPORTS FOURTH QUARTER AND YEAR END RESULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 3

About Advanced Energy

Advanced Energy is a global leader in the development and support of technologies critical to high-technology manufacturing processes used in the production of semiconductors, flat panel displays, data storage products, compact discs, digital video discs, architectural glass, and other advanced product applications.

Leveraging a diverse product portfolio and technology leadership, Advanced Energy creates solutions that maximize process impact, improve productivity and lower cost of ownership for its customers. This portfolio includes a comprehensive line of technology solutions in power, flow, thermal management, plasma and ion beam sources, and integrated process monitoring and control for original equipment manufacturers (OEMs) and end-users around the world.

Advanced Energy operates in regional centers in North America, Asia and Europe and offers global sales and support through direct offices, representatives and distributors. Founded in 1981, Advanced Energy is a publicly held company traded on the Nasdaq National Market under the symbol AEIS. For more information, please visit our corporate website: 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, our ability to manage the operations of our new manufacturing facility in China, our customers’ acceptance of products manufactured at our Chinese manufacturing facility, the volatility and cyclicality of the semiconductor and semiconductor capital equipment industries, the timing of orders received from our customers, our ability to execute on the cost reduction initiatives currently underway, and other risks described in Advanced Energy’s Form 10-K, Forms 10-Q as well as 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 by contacting Advanced Energy’s investor relations at 970-407-6732. The company assumes no obligation to update the information in this press release.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)

			Three Months Ended December 31,						Twelve Months Ended December 31,
			2003			2002			2003			2002
Sales			$	74,731		$	57,444		$	262,402		$	238,898
Cost of sales (2)				48,100			52,970			174,455			170,138
Gross profit				26,631			4,474			87,947			68,760
Operating expenses:
	Research and development			12,750			12,975			51,647			48,995
	Sales and marketing			7,095			9,739			31,015			34,940
	General and administrative			4,250			7,556			18,324			25,110
	Amortization of intangible assets			1,199			1,904			4,612			5,423
	Litigation damages			—			—			—			5,313
	Restructuring charges			1,018			5,840			4,306			9,060
	Impairment of intangible assets			—			1,904			1,175			1,904
		Total operating expenses		26,312			39,918			111,079			130,745
Income (loss) from operations				319			(35,444	)		(23,132	)		(61,985	)
Other (expense) income, net (1)				(1,957	)		1,663			(9,308	)		(1,707	)
Loss before income taxes				(1,638	)		(33,781	)		(32,440	)		(63,692	)
(Provision) benefit for income taxes (1)				(801	)		11,824			(11,801	)		22,293
Net loss			$	(2,439	)	$	(21,957	)	$	(44,241	)	$	(41,399	)
Basic and diluted net loss per share			$	(0.08	)	$	(0.68	)	$	(1.37	)	$	(1.29	)
Basic and diluted weighted-average common shares outstanding				32,433			32,111			32,271			32,026

(1) In the fourth quarter of 2002, Advanced Energy recorded again on the extinguishment of debt, net of related income taxes, as a result of the Company's previously announced repurchase of a portion of its convertible debt. The gain was previously reported as an extraordinary gain, net of related tax effects. In connection with the issuance of Statement of Financial Accounting Standards No. 145, the gain before any tax effect has been reclassified to other (expense) income. The loss before income taxes and income tax benefit were adjusted accordingly.

(2) In the fourth quarter of 2002, Advanced Energy recorded charges of $11.5 million as cost of sales for excess and obsolete inventory and warranty reserves.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)

			December 31,		December 31,
			2003		2002
ASSETS
Current Assets:
		Cash and cash equivalents	$	41,522	$	70,188
		Marketable securities		93,691		102,159
		Accounts receivable		61,927		43,885
		Income tax receivable		151		14,720
		Inventories		65,703		57,306
		Other current assets		5,486		6,828
		Deferred income tax assets, net		--		17,510
Total current assets				268,480		312,596
Property and equipment, net				44,725		41,178
Deposits and other				5,630		5,181
Goodwill and intangibles, net				88,943		86,601
Deferred debt issuance costs				3,019		4,091
Demonstration and customer service equipment, net				3,934		6,086
Total assets			$	414,731	$	455,733
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
		Trade accounts payable	$	23,066	$	16,055
		Other current liabilities		28,216		31,064
		Current portion of capital leases and senior borrowings		8,582		15,197
		Accrued interest payable on convertible subordinated notes		2,460		2,338
Total current liabilities				62,324		64,654
Long-term Liabilities:
	Capital leases and senior borrowings			6,168		10,665
	Other long-term liabilities			2,015		694
	Deferred income tax liability, net			4,672		8,663
	Convertible subordinated notes payable			187,718		187,718
Total long-term liabilities				200,573		207,740
Total liabilities				262,897		272,394
Stockholders’ equity				151,834		183,339
Total liabilities and stockholders’ equity			$	414,731	$	455,733

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)

	Twelve Months Ended December 31,
	2003			2002
NET CASH USED IN OPERATING ACTIVITIES		$(12,986	)		$(15,305	)
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		(8,590	)		24,311
NET CASH USED IN FINANCING ACTIVITIES		(8,608	)		(22,634	)
EFFECT OF CURRENCY TRANSLATION ON CASH		1,518			1,861
DECREASE IN CASH AND CASH EQUIVALENTS		(28,666	)		(11,767	)
CASH AND EQUIVALENTS, beginning of period		70,188			81,955
CASH AND EQUIVALENTS, end of period	$	41,522		$	70,188