Advanced Energy Industries (AEIS) 8-K Advanced Energy Announces 2006 Fourth Quarter and Record Year-end Financial Results

Exhibit 99.1

CONTACTS:

Larry Firestone	Cathy Kawakami
Advanced Energy Industries, Inc.	Advanced Energy Industries, Inc.
Executive Vice President, CFO	Director, Investor Relations
lawrence.firestone@aei.com	cathy.kawakami@aei.com
970-407-6570	970-407-6732

FOR IMMEDIATE RELEASE

ADVANCED ENERGY ANNOUNCES 2006 FOURTH QUARTER AND
RECORD YEAR-END FINANCIAL RESULTS

Fort Collins, Colo., February 7, 2007— Advanced Energy Industries, Inc. (Nasdaq GM: AEIS) today announced financial results for the fourth quarter and year ended December 31, 2006. Sales were $104.5 million for the fourth quarter of 2006, down 3% compared to $107.7 million in the third quarter of 2006, and up 30% compared to $80.4 million in the fourth quarter of 2005. Operating profit for the fourth quarter of 2006 was $16.6 million, or 16% of sales, compared to $18.3 million, or 17% of sales in the third quarter of 2006, and $6.2 million, or 8% of sales in the fourth quarter of 2005.

Fourth quarter 2006 income from continuing operations was $39.4 million, or $0.87 per diluted share compared to $17.0 million, or $0.38 per diluted share in the third quarter of 2006, and $5.0 million, or $0.11 per diluted share in the fourth quarter of 2005. In the fourth quarter of 2006, the Company reversed its valuation allowance on its deferred tax assets and accrued taxes for the year at the full tax rate which resulted in a net tax benefit of $23.5 million, or $0.52 per share. Excluding the net tax benefit of $23.5 million related to income taxes, and using the same effective tax rate as the third quarter of 2006, income from continuing operations in the fourth quarter of 2006 would have been $15.9 million, or $0.35 per diluted share.

Sales for 2006 were a record $410.7 million, a 26% increase over $325.5 million in 2005. Net income was $88.3 million, or $1.95 per diluted share, for 2006 including the income tax benefit mentioned above. Net income for 2005 was $12.8 million, or $0.34 per diluted share.

Dr. Hans Betz, president and chief executive officer of Advanced Energy, said, “2006 was an outstanding year as the results of our initiatives improved our financial performance significantly. Our operating model complements the capability of our global infrastructure, and positions the company for future profitable growth. Our strategy, which focused on power conversion and flow control technologies, has enabled our growth throughout the year, particularly to sales to non-semiconductor markets. Sales to the solar industry tripled in 2006 over 2005, and sales to the architectural glass industry set a company record, more than doubling over 2005. We believe that we have built a global team and a platform that is scalable and capable of capturing future growth opportunities.”

Advanced Energy Reports Fourth Quarter and Record Year-End 2006 Results — Page 2
February 7, 2007

First Quarter 2007 Guidance

The Company anticipates first quarter 2007 guidance to be:

• Sales of $102 million to $106 million

• Earnings per share of $0.26 to $0.29. Without the effect of reversing the valuation allowance related to the deferred tax assets, our guidance would be $0.35 to $0.40 per share based on a 12% tax rate

• Effective tax rate of 35%.

The financial measures set forth above that present the financial results excluding certain charges and benefits, are not in accordance with GAAP. The Company believes that these non-GAAP financial measures provide further insight into the results of operations and enhance the consistency and comparability of those results to results in prior periods because they assist shareholder understanding of the effects of certain charges and benefits on the quarter’s results.

Fourth Quarter and Year-End 2006 Conference Call

Management will host a conference call today, Wednesday, February 7, 2007 at 5:00 pm Eastern Time to discuss Advanced Energy’s financial results. You may access this conference call by dialing 888-713-4717. International callers may access the call by dialing 706-679-7720. For a replay of this teleconference, please call 706-645-9291, and enter the pass code 8117391. The replay will be available through February 14, 2007. There will also be a webcast available on the Investor Relations webpage at http://ir.advanced-energy.com.

About Advanced Energy

Advanced Energy is a global leader in the development and support of technologies critical to high-technology, high-growth manufacturing processes used in the production of semiconductors, flat panel displays, data storage products, solar cells, 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 the cost of ownership for its customers. This portfolio includes a comprehensive line of technology solutions in power, flow, thermal management, and plasma and ion beam sources 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

Advanced Energy Reports Fourth Quarter and Record Year-End 2006 Results — Page 3
February 7, 2007

held company traded on the Nasdaq Global Market under the symbol AEIS. For more information, please visit our corporate website: www.advanced-energy.com.

This press release contains certain forward-looking statements, including the company’s expectations with respect to Advanced Energy’s financial results for the first quarter of 2007 as well as other matters discussed in this press release that are not purely historical data. 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 volatility and cyclicality of the industries we serve, the timing of orders received from our customers, our ability to realize cost improvement benefits from the additional global operations initiatives underway, and unanticipated changes to our 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 970-407-6732. Forward-looking statements are made and based on information available to us on the date of this press release. 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								Years Ended
	December 31,					September 30,			December 31,
	2006		2005			2006			2006		2005
Sales	$	104,533	$	80,387		$	107,688		$	410,742	$	325,482
Cost of sales		59,639		50,196			60,674			235,524		208,401
Gross profit		44,894		30,191			47,014			175,218		117,081
Operating expenses:
Research and development		12,240		9,635			11,345			44,848		39,720
Selling, general and administrative		15,535		13,671			16,856			61,037		53,631
Amortization of intangible assets		450		481			453			1,833		2,050
Restructuring charges		20		166			31			111		2,706
Litigation settlement		—		—			—			—		3,000
Total operating expenses		28,245		23,953			28,685			107,829		101,107
Income from operations		16,649		6,238			18,329			67,389		15,974
Other income (expense), net		1,060		123			1,044			4,677		(7,479	)
Income from continuing operations before income taxes		17,709		6,361			19,373			72,066		8,495
Benefit (provision) for income taxes		21,697		(1,330	)		(2,381	)		15,118		(4,873	)
Income from continuing operations		39,406		5,031			16,992			87,184		3,622
Gain on sale of discontinued assets		1,000		5,210			—			1,138		7,855
Results of discontinued operations		—		(216	)		—			—		1,340
Income from discontinued operations		1,000		4,994			—			1,138		9,195
Net income	$	40,406	$	10,025		$	16,992		$	88,322	$	12,817
Net income per basic share
Income from continuing operations	$	0.88	$	0.11		$	0.38		$	1.95	$	0.10
Income from discontinued operations	$	0.02	$	0.11		$	—		$	0.03	$	0.25
Basic earnings per share	$	0.90	$	0.23		$	0.38		$	1.98	$	0.35
Net income per diluted share
Income from continuing operations	$	0.87	$	0.11		$	0.38		$	1.93	$	0.10
Income from discontinued operations	$	0.02	$	0.11		$	—		$	0.03	$	0.25
Diluted earnings per share	$	0.89	$	0.22		$	0.38		$	1.95	$	0.34
Basic weighted-average common shares outstanding		44,826		44,416			44,762			44,721		37,084
Diluted weighted-average common shares outstanding		45,345		44,902			45,166			45,265		37,434

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)

	December 31,		December 31,
	2006		2005
ASSETS
Current assets:
Cash and cash equivalents	$	58,240	$	52,874
Marketable securities		85,978		6,811
Accounts receivable, net		71,956		64,900
Inventories, net		52,778		56,199
Deferred income taxes		24,434		—
Other current assets		7,341		10,865
Total current assets		300,727		191,649
Property and equipment, net		33,571		39,294
Deposits and other		2,640		3,808
Goodwill and intangibles, net		65,584		69,843
Customer service equipment, net		832		2,407
Deferred income tax assets, net		8,549		3,116
Total assets	$	411,903	$	310,117
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Trade accounts payable	$	16,310	$	22,028
Other accrued expenses		36,488		23,977
Current portion of capital leases and senior borrowings		131		2,011
Total current liabilities		52,929		48,016
Long-term liabilities:
Capital leases and senior borrowings		198		2,179
Other long-term liabilities		2,986		2,492
Total long-term liabilities		3,184		4,671
Total liabilities		56,113		52,687
Stockholders’ equity		355,790		257,430
Total liabilities and stockholders’ equity	$	411,903	$	310,117

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
RECONCILIATION OF GAAP EARNINGS TO “ADJUSTED” EARNINGS
(in thousands, except per share data)

	Three Months Ended								Twelve Months Ended
	December 31, 2006								December 31, 2006
	GAAP		Adjustment			"Adjusted"			GAAP		Adjustment			"Adjusted"
Sales	$	104,533	$	—		$	104,533		$	410,742	$	—		$	410,742
Cost of sales		59,639		—			59,639			235,524		—			235,524
Gross profit		44,894		—			44,894			175,218		—			175,218
Operating expenses		28,245		—			28,245			107,829		—			107,829
Income from operations		16,649		—			16,649			67,389		—			67,389
Other income (expense), net		1,060		—			1,060			4,677		—			4,677
Income from continuing operations before income taxes		17,709		—			17,709			72,066		—			72,066
Benefit (provision) for income taxes		21,697		(23,492	)(1)		(1,795	)		15,118		(23,492	)(1)		(8,374	)
Income from continuing operations		39,406		(23,492	)		15,914			87,184		(23,492	)		63,692
Gain on sale of discontinued assets		1,000		—			1,000			1,138		—			1,138
Income from discontinued operations		1,000		—			1,000			1,138		—			1,138
Net income	$	40,406	$	(23,492	)	$	16,914		$	88,322	$	(23,492	)	$	64,830
Net income per basic share
Income from continuing operations	$	0.88	$	(0.52	)	$	0.36		$	1.95	$	(0.53	)	$	1.43
Income from discontinued operations	$	0.02	$	—		$	0.02		$	0.03	$	—		$	0.03
Basic earnings per share	$	0.90	$	(0.52	)	$	0.38		$	1.98	$	(0.53	)	$	1.45
Net income per diluted share
Income from continuing operations	$	0.87	$	(0.52	)	$	0.35		$	1.93	$	(0.52	)	$	1.41
Income from discontinued operations	$	0.02	$	—		$	0.02		$	0.03	$	—		$	0.03
Diluted earnings per share	$	0.89	$	(0.52	)	$	0.37		$	1.95	$	(0.52	)	$	1.43
Basic weighted-average common shares outstanding		44,826								44,721
Diluted weighted-average common shares outstanding		45,345								45,265

(1) To eliminate the effect of the reversal of the valuation allowance on net deferred tax assets at December 31, 2006. We assess the recoverability of our net deferred tax assets on a quarterly basis, in accordance with SFAS No. 109, to determine if it is more likely than not that our net deferred tax assets will be realized. Based on our 2006 operating results, our management concluded that it was more likely than not that the majority of net deferred tax assets would be realized and recorded a reduction in the valuation allowance of approximately $23.5 million in the fourth quarter of 2006.