Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 31, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2023 | |
Entity File Number | 000-26966 | |
Entity Registrant Name | ADVANCED ENERGY INDUSTRIES INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-0846841 | |
Entity Address, Address Line One | 1595 Wynkoop Street, Suite 800 | |
Entity Address, City or Town | Denver | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80202 | |
City Area Code | 970 | |
Local Phone Number | 407-6626 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | AEIS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 37,651,044 | |
Entity Central Index Key | 0000927003 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 455,252 | $ 458,818 |
Accounts and other receivables, net | 258,752 | 300,683 |
Inventories | 392,349 | 376,012 |
Other current assets | 46,850 | 53,001 |
Total current assets | 1,153,203 | 1,188,514 |
Property and equipment, net | 159,025 | 148,462 |
Operating lease right-of-use assets | 93,994 | 100,177 |
Other assets | 85,500 | 84,056 |
Intangible assets, net | 175,493 | 189,526 |
Goodwill | 282,692 | 281,433 |
TOTAL ASSETS | 1,949,907 | 1,992,168 |
Current liabilities: | ||
Accounts payable | 149,259 | 170,467 |
Accrued payroll and employee benefits | 59,927 | 82,733 |
Other accrued expenses | 44,190 | 76,750 |
Customer deposits and other | 14,633 | 26,322 |
Current portion of long-term debt | 20,000 | 20,000 |
Current portion of operating lease liabilities | 15,421 | 16,771 |
Total current liabilities | 303,430 | 393,043 |
Long-term debt, net | 343,516 | 353,262 |
Operating lease liabilities | 87,780 | 94,460 |
Pension benefits | 45,518 | 44,031 |
Other long-term liabilities | 44,384 | 41,105 |
Total liabilities | 824,628 | 925,901 |
Commitments and contingencies (Note 17) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 1,000 shares authorized, none issued and outstanding | ||
Common stock, $0.001 par value, 70,000 shares authorized; 37,650 and 37,429 issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 38 | 37 |
Additional paid-in capital | 147,221 | 134,640 |
Accumulated other comprehensive income | 12,281 | 16,320 |
Retained earnings | 965,739 | 915,270 |
Total stockholders' equity | 1,125,279 | 1,066,267 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,949,907 | $ 1,992,168 |
Unaudited Consolidated Balanc_2
Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Unaudited Consolidated Balance Sheets | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 1,000 | 1,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 70,000 | 70,000 |
Common stock, shares issued (in shares) | 37,650 | 37,429 |
Common stock, shares outstanding (in shares) | 37,650 | 37,429 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Unaudited Consolidated Statements of Operations | ||||
Sales, net | $ 415,508 | $ 440,949 | $ 840,548 | $ 838,408 |
Cost of sales | 268,428 | 278,791 | 538,357 | 531,934 |
Gross profit | 147,080 | 162,158 | 302,191 | 306,474 |
Operating expenses: | ||||
Research and development | 51,413 | 48,009 | 103,023 | 91,623 |
Selling, general, and administrative | 55,613 | 55,022 | 110,971 | 104,340 |
Amortization of intangible assets | 7,075 | 6,523 | 14,137 | 12,032 |
Restructuring | 3,154 | (161) | 4,197 | 1,057 |
Total operating expenses | 117,255 | 109,393 | 232,328 | 209,052 |
Operating income | 29,825 | 52,765 | 69,863 | 97,422 |
Other income (expense), net | 2,425 | 3,249 | 1,875 | 2,407 |
Income from continuing operations, before income taxes | 32,250 | 56,014 | 71,738 | 99,829 |
Provision for income taxes | 4,795 | 11,203 | 12,531 | 18,156 |
Income from continuing operations | 27,455 | 44,811 | 59,207 | 81,673 |
Income (loss) from discontinued operations, net of income taxes | (315) | 180 | (1,146) | 82 |
Net income | 27,140 | 44,991 | 58,061 | 81,755 |
Income from continuing operations attributable to noncontrolling interest | 21 | 7 | ||
Net income attributable to Advanced Energy Industries, Inc. | $ 27,140 | $ 44,970 | $ 58,061 | $ 81,748 |
Basic weighted-average common shares outstanding | 37,573 | 37,520 | 37,524 | 37,535 |
Diluted weighted-average common shares outstanding | 37,803 | 37,710 | 37,804 | 37,754 |
Earnings per share: | ||||
Continuing operations: Basic earnings per share | $ 0.73 | $ 1.19 | $ 1.58 | $ 2.18 |
Continuing operations: Diluted earnings per share | 0.73 | 1.19 | 1.57 | 2.16 |
Discontinued operations: Basic loss per share | (0.01) | (0.03) | ||
Discontinued operations: Diluted loss per share | (0.01) | (0.03) | ||
Net income: | ||||
Basic earnings per share | 0.72 | 1.20 | 1.55 | 2.18 |
Diluted earnings per share | $ 0.72 | $ 1.19 | $ 1.54 | $ 2.17 |
Unaudited Consolidated Statem_2
Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Unaudited Consolidated Statements of Comprehensive Income | ||||
Net income | $ 27,140 | $ 44,991 | $ 58,061 | $ 81,755 |
Other comprehensive income (loss), net of income taxes | ||||
Foreign currency translation | (1,533) | (8,679) | (1,729) | (12,771) |
Change in fair value of cash flow hedges | (201) | 2,026 | (2,018) | 7,939 |
Minimum pension benefit retirement liability | (292) | 269 | (292) | 414 |
Comprehensive income | 25,114 | 38,607 | 54,022 | 77,337 |
Comprehensive income attributable to noncontrolling interest | 21 | 7 | ||
Comprehensive income attributable to Advanced Energy Industries, Inc. | $ 25,114 | $ 38,586 | $ 54,022 | $ 77,330 |
Unaudited Consolidated Statem_3
Unaudited Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Non-controlling Interest | Total |
Beginning Balance at Dec. 31, 2021 | $ 38 | $ 115,706 | $ (1,216) | $ 756,323 | $ 645 | $ 871,496 |
Beginning Balance (in shares) at Dec. 31, 2021 | 37,589 | |||||
Stock issued from equity plans | (2,430) | (2,430) | ||||
Stock issued from equity plans (in shares) | 52 | |||||
Stock-based compensation | 3,906 | 3,906 | ||||
Share repurchases | (254) | (6,340) | (6,594) | |||
Share repurchases (in shares) | (82) | |||||
Dividends declared ($0.10 per share) | (3,789) | (3,789) | ||||
Other comprehensive income (loss) | 1,966 | 1,966 | ||||
Net income (loss) | 36,778 | (14) | 36,764 | |||
Ending Balance at Mar. 31, 2022 | $ 38 | 116,928 | 750 | 782,972 | 631 | 901,319 |
Ending Balance (in shares) at Mar. 31, 2022 | 37,559 | |||||
Beginning Balance at Dec. 31, 2021 | $ 38 | 115,706 | (1,216) | 756,323 | 645 | 871,496 |
Beginning Balance (in shares) at Dec. 31, 2021 | 37,589 | |||||
Share repurchases | (23,613) | |||||
Net income (loss) | 81,755 | |||||
Ending Balance at Jun. 30, 2022 | $ 37 | 121,982 | (5,634) | 807,843 | 652 | 924,880 |
Ending Balance (in shares) at Jun. 30, 2022 | 37,392 | |||||
Beginning Balance at Mar. 31, 2022 | $ 38 | 116,928 | 750 | 782,972 | 631 | 901,319 |
Beginning Balance (in shares) at Mar. 31, 2022 | 37,559 | |||||
Stock issued from equity plans | 763 | 763 | ||||
Stock issued from equity plans (in shares) | 63 | |||||
Stock-based compensation | 5,016 | 5,016 | ||||
Share repurchases | $ (1) | (725) | (16,293) | (17,019) | ||
Share repurchases (in shares) | (230) | |||||
Dividends declared ($0.10 per share) | (3,806) | (3,806) | ||||
Other comprehensive income (loss) | (6,384) | (6,384) | ||||
Net income (loss) | 44,970 | 21 | 44,991 | |||
Ending Balance at Jun. 30, 2022 | $ 37 | 121,982 | (5,634) | 807,843 | $ 652 | 924,880 |
Ending Balance (in shares) at Jun. 30, 2022 | 37,392 | |||||
Beginning Balance at Dec. 31, 2022 | $ 37 | 134,640 | 16,320 | 915,270 | $ 1,066,267 | |
Beginning Balance (in shares) at Dec. 31, 2022 | 37,429 | 37,429 | ||||
Stock issued from equity plans | (1,991) | $ (1,991) | ||||
Stock issued from equity plans (in shares) | 100 | |||||
Stock-based compensation | 6,543 | 6,543 | ||||
Dividends declared ($0.10 per share) | (3,814) | (3,814) | ||||
Other comprehensive income (loss) | (2,013) | (2,013) | ||||
Net income (loss) | 30,921 | 30,921 | ||||
Ending Balance at Mar. 31, 2023 | $ 37 | 139,192 | 14,307 | 942,377 | 1,095,913 | |
Ending Balance (in shares) at Mar. 31, 2023 | 37,529 | |||||
Beginning Balance at Dec. 31, 2022 | $ 37 | 134,640 | 16,320 | 915,270 | $ 1,066,267 | |
Beginning Balance (in shares) at Dec. 31, 2022 | 37,429 | 37,429 | ||||
Net income (loss) | $ 58,061 | |||||
Ending Balance at Jun. 30, 2023 | $ 38 | 147,221 | 12,281 | 965,739 | $ 1,125,279 | |
Ending Balance (in shares) at Jun. 30, 2023 | 37,650 | 37,650 | ||||
Beginning Balance at Mar. 31, 2023 | $ 37 | 139,192 | 14,307 | 942,377 | $ 1,095,913 | |
Beginning Balance (in shares) at Mar. 31, 2023 | 37,529 | |||||
Stock issued from equity plans | $ 1 | 606 | 607 | |||
Stock issued from equity plans (in shares) | 121 | |||||
Stock-based compensation | 7,423 | 7,423 | ||||
Dividends declared ($0.10 per share) | (3,778) | (3,778) | ||||
Other comprehensive income (loss) | (2,026) | (2,026) | ||||
Net income (loss) | 27,140 | 27,140 | ||||
Ending Balance at Jun. 30, 2023 | $ 38 | $ 147,221 | $ 12,281 | $ 965,739 | $ 1,125,279 | |
Ending Balance (in shares) at Jun. 30, 2023 | 37,650 | 37,650 |
Unaudited Consolidated Statem_4
Unaudited Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | |
Unaudited Consolidated Statements of Stockholders' Equity | ||||
Dividends declared (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 |
Unaudited Consolidated Statem_5
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 58,061 | $ 81,755 |
Less: income (loss) from discontinued operations, net of income taxes | (1,146) | 82 |
Income from continuing operations, net of income taxes | 59,207 | 81,673 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 32,966 | 28,877 |
Stock-based compensation | 14,738 | 8,986 |
Benefit for deferred income taxes | (786) | (1,977) |
Loss on disposal and sale of assets | 192 | 374 |
Changes in operating assets and liabilities, net of assets acquired | ||
Accounts and other receivable, net | 46,044 | (27,790) |
Inventories | (17,688) | (52,109) |
Other assets | 2,859 | (5,402) |
Accounts payable | (17,448) | 2,491 |
Other liabilities and accrued expenses | (64,580) | 12,418 |
Net cash from operating activities from continuing operations | 55,504 | 47,541 |
Net cash from operating activities from discontinued operations | (3,090) | 55 |
Net cash from operating activities | 52,414 | 47,596 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of investments | (3,128) | |
Purchases of property and equipment | (33,623) | (25,476) |
Acquisitions, net of cash acquired | (145,779) | |
Net cash from investing activities | (36,751) | (171,255) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payments on long-term borrowings | (10,000) | (10,000) |
Dividend payments | (7,592) | (7,595) |
Purchase and retirement of common stock | (23,578) | |
Net payments related to stock-based awards | (1,384) | (1,667) |
Net cash from financing activities | (18,976) | (42,840) |
EFFECT OF CURRENCY TRANSLATION ON CASH AND CASH EQUIVALENTS | (253) | (5,188) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (3,566) | (171,687) |
CASH AND CASH EQUIVALENTS, beginning of period | 458,818 | 544,372 |
CASH AND CASH EQUIVALENTS, end of period | 455,252 | 372,685 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 5,291 | 2,461 |
Cash paid for income taxes | $ 38,008 | $ 9,982 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2023 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Advanced Energy Industries, Inc., a Delaware corporation, and its consolidated subsidiaries (“we,” “us,” “our,” “Advanced Energy,” or the “Company”) design, manufacture, sell, and support precision power products that transform, refine, and modify the raw electrical power coming from either the utility or the building facility and convert it into various types of highly controllable, usable power that is predictable, repeatable, and customizable to meet the necessary requirements for powering a wide range of complex equipment. Our plasma power solutions enable innovation in complex semiconductor and thin film plasma processes such as dry etch and deposition. Our broad portfolio of high and low voltage power products is used in a wide range of applications, such as semiconductor equipment, industrial production, medical and life science equipment, data centers computing, networking, and telecommunications. We also supply related sensing, controls, and instrumentation products primarily for advanced measurement and calibration of power and temperature for multiple industrial markets. Our network of global service support centers provides repair services, calibration, conversions, upgrades, refurbishments, and used equipment to companies using our products. In management's opinion, the accompanying unaudited consolidated financial statements contain all adjustments, consisting of normal, recurring adjustments, necessary to present fairly Advanced Energy’s financial position as of June 30, 2023, and the results of our operations and cash flows for the three and six months ended June 30, 2023 and 2022. The unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been omitted pursuant to such rules and regulations. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2022 and other financial information filed with the SEC. Use of Estimates in the Preparation of the Consolidated Financial Statements The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The significant estimates, assumptions, and judgments include, but are not limited to: ● excess and obsolete inventory; ● pension obligations; ● acquisitions and asset valuations; and ● income taxes and other provisions. Significant Accounting Policies Our accounting policies are described in Note 1 to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022. New Accounting Standards From time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, will not have a material impact on the consolidated financial statements upon adoption. New Acco unting Standards Adopted The FASB issued the following ASUs that we adopted in the current year: Issuance Date ASU Title March 2020 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting January 2021 2021-01 Reference Rate Reform (Topic 848): Scope December 2022 2022-06 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 This collective guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria that reference LIBOR or another reference rate that is expected to be discontinued. Our Credit Facility (refer to Note 18. Credit Facility Note 7. Derivative Financial Instruments |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2023 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 2. ACQUISITIONS SL Power Electronics Corporation On April 25, 2022, we acquired 100% of the issued and outstanding shares of capital stock of SL Power Electronics Corporation (“SL Power”), which is based in Calabasas, California. We accounted for this transaction as a business combination. This acquisition added complementary products to Advanced Energy’s medical power offerings and extends our presence in several advanced industrial markets . The components of the fair value of the total consideration transferred were as follows: Cash paid for acquisition $ 145,693 Less cash acquired (3,484) Total fair value of purchase consideration $ 142,209 We allocated the purchase price consideration to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess allocated to goodwill. Fair Value Current assets and liabilities, net $ 12,329 Property and equipment 3,567 Operating lease right-of-use assets 4,640 Deferred taxes and other liabilities (2,326) Intangible assets 57,600 Goodwill 71,039 Operating lease liability (4,640) Total fair value of net assets acquired $ 142,209 The following table summarizes the intangible assets acquired: Amortization Useful Life Fair Value Method (in years) Customer relationships $ 50,500 Straight-line 10 Technology 7,100 Straight-line 5 Total $ 57,600 To estimate the fair value of intangible assets, we used a multi-period excess earnings approach for the customer relationships and a relief from royalty approach for developed technology. Goodwill represents SL Power’s assembled workforce and the expected operating synergies from combining operations. We expect virtually all of the goodwill to be deductible for tax purposes. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2023 | |
REVENUE | |
REVENUE | NOTE 3. REVENUE Disaggregation of revenue The following tables present additional information regarding our revenue: Revenue by Market Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Semiconductor Equipment $ 173,177 $ 228,797 $ 367,386 $ 431,754 Industrial and Medical 127,603 104,951 250,623 187,849 Data Center Computing 59,076 69,161 118,735 145,399 Telecom and Networking 55,652 38,040 103,804 73,406 Total $ 415,508 $ 440,949 $ 840,548 $ 838,408 Revenue by Region Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 North America $ 171,516 $ 206,117 $ 352,458 $ 388,838 Asia 186,498 180,181 365,681 342,228 Europe 56,213 49,851 118,779 96,516 Other 1,281 4,800 3,630 10,826 Total $ 415,508 $ 440,949 $ 840,548 $ 838,408 Revenue by Significant Countries Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 United States $ 147,109 $ 174,293 $ 300,615 $ 333,035 China 53,192 41,438 90,648 86,130 All others 215,207 225,218 449,285 419,243 Total $ 415,508 $ 440,949 $ 840,548 $ 838,408 We attribute sales to individual countries and regions based on the customer’s ship to location. Apart from the United States and China, no revenue attributable to any individual country exceeded 10% of our total consolidated revenues in the three and six months ended June 30, 2023 and 2022. Revenue by Category Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Product $ 369,881 $ 403,977 $ 749,155 $ 766,853 Services 45,627 36,972 91,393 71,555 Total $ 415,508 $ 440,949 $ 840,548 $ 838,408 Remaining Performance Obligations Our remaining performance obligations primarily relate to customer purchase orders for products we have not yet shipped. We expect to fulfill the majority of these performance obligations within one year. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 4. INCOME TAXES The following table summarizes tax expense and the effective tax rate for our income from continuing operations: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income from continuing operations, before income taxes $ 32,250 $ 56,014 $ 71,738 $ 99,829 Provision for income taxes $ 4,795 $ 11,203 $ 12,531 $ 18,156 Effective tax rate 14.9 % 20.0 % 17.5 % 18.2 % Our effective tax rates differ from the U.S. federal statutory rate of 21% for the three and six months ended June 30, 2023 and 2022, respectively, primarily due to the benefit of earnings in foreign jurisdictions which are subject to lower tax rates, as well as tax credits, partially offset by net U.S. tax on foreign operations. The effective tax rate for the three and six months ended June 30, 2023 was lower than the same periods in 2022 primarily due to the impact of beneficial discrete items in the three months ended June 30, 2023 relative to unfavorable discrete items recorded in the three months ended June 30, 2022. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 5. EARNINGS PER SHARE We compute basic earnings per share (“EPS”) by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. The diluted EPS computation is similar to basic EPS except we increase the denominator to include the number of additional common shares that would have been outstanding (using the treasury stock method) if our outstanding stock options and restricted stock units had been converted to common shares (when such conversion is dilutive). The following table summarizes our earnings per share: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income from continuing operations $ 27,455 $ 44,811 $ 59,207 $ 81,673 Less: income from continuing operations attributable to noncontrolling interest — 21 — 7 Income from continuing operations attributable to Advanced Energy Industries, Inc. $ 27,455 $ 44,790 $ 59,207 $ 81,666 Basic weighted-average common shares outstanding 37,573 37,520 37,524 37,535 Assumed exercise of dilutive stock options and restricted stock units 230 190 280 219 Diluted weighted-average common shares outstanding 37,803 37,710 37,804 37,754 Continuing operations: Basic earnings per share $ 0.73 $ 1.19 $ 1.58 $ 2.18 Diluted earnings per share $ 0.73 $ 1.19 $ 1.57 $ 2.16 Share Repurchase To execute the repurchase of shares of our common stock, we periodically enter into stock repurchase agreements. The following table summarizes these repurchases: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share amounts) 2023 2022 2023 2022 Amount paid or accrued to repurchase shares $ — $ 17,019 $ — $ 23,613 Number of shares repurchased — 230 — 312 Average repurchase price per share $ — $ 74.12 $ — $ 75.68 There were no shares repurchased from related parties. Repurchased shares were retired and assumed the status of authorized and unissued shares. At , 2023, the remaining amount authorized by the Board of Directors for future share repurchases was $199.3 million with no time limitation. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2023 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 6. FAIR VALUE MEASUREMENTS The following tables present information about our assets and liabilities measured at fair value on a recurring basis. June 30, 2023 Description Balance Sheet Classification Level 1 Level 2 Level 3 Total Fair Value Certificates of deposit Other current assets $ — $ 175 $ — $ 175 Foreign currency forward contracts Other current liabilities — (68) — (68) Interest rate swaps Other assets — 12,630 — 12,630 Net assets measured at fair value on a recurring basis $ — $ 12,737 $ — $ 12,737 December 31, 2022 Description Balance Sheet Classification Level 1 Level 2 Level 3 Total Fair Value Certificates of deposit Other current assets $ — $ 2,128 $ — $ 2,128 Interest rate swaps Other assets — 15,310 — 15,310 Net assets measured at fair value on a recurring basis $ — $ 17,438 $ — $ 17,438 For all periods presented, there were no transfers into or out of Level 3. |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2023 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTS Changes in foreign currency exchange rates impact us. We may manage these risks through the use of derivative financial instruments, primarily forward contracts with banks. These forward contracts manage the exchange rate risk associated with assets and liabilities denominated in nonfunctional currencies. Typically, we execute these derivative instruments for one-month periods and do not designate them as hedges; however, they do partially offset the economic fluctuations of certain of our assets and liabilities due to foreign exchange rate changes. The following table summarizes the notional amount of outstanding foreign currency forward contracts: June 30, December 31, 2023 2022 Foreign currency forward contracts $ 81,403 $ — Gains and losses related to foreign currency exchange contracts were offset by corresponding gains and losses on the revaluation of the underlying assets and liabilities. Both are included as a component of other income (expense), net in our Consolidated Statements of Operations. In April 2020, we executed interest rate swap contracts with independent financial institutions to partially reduce the variability of cash flows in LIBOR indexed debt interest payments on our Term Loan Facility (under our existing Credit Agreement dated September 10, 2019, as amended, refer to Note 18. Credit Facility The interest rate swap contracts fix a portion of the outstanding principal balance on our Term Loan Facility to a total interest rate of 1.172%. This is comprised of a 0.322% average fixed rate per annum in exchange for a variable interest rate based on SOFR plus the credit spread in our existing Credit Agreement (see Note 18. Credit Facility The following table summarizes the notional amount of our qualified hedging instruments: June 30, December 31, 2023 2022 Interest rate swap contracts $ 229,469 $ 238,219 The following table summarizes the amounts recorded in accumulated other comprehensive income on the Consolidated Balance Sheets for qualifying hedges. June 30, December 31, 2023 2022 Interest rate swap contract gains $ 9,707 $ 11,779 See Note 6. Fair Value Measurements As a result of using derivative financial instruments, we are exposed to the risk that counterparties to contracts could fail to meet their contractual obligations. We manage this credit risk by reviewing counterparty creditworthiness on a regular basis and limiting exposure to any single counterparty. |
ACCOUNTS AND OTHER RECEIVABLES,
ACCOUNTS AND OTHER RECEIVABLES, NET | 6 Months Ended |
Jun. 30, 2023 | |
ACCOUNTS AND OTHER RECEIVABLES, NET | |
ACCOUNTS AND OTHER RECEIVABLES, NET | NOTE 8. ACCOUNTS AND OTHER RECEIVABLES, NET We record accounts and other receivables at net realizable value. The following table summarizes the changes in expected credit losses related to receivables: December 31, 2022 $ 1,814 Additions 123 Deductions - write-offs, net of recoveries (251) Foreign currency translation 8 June 30, 2023 $ 1,694 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2023 | |
INVENTORIES | |
INVENTORIES | NOTE 9. INVENTORIES We value inventories at the lower of cost or net realizable value and computed on a first-in, first-out basis. Components of inventories were as follows: June 30, December 31, 2023 2022 Parts and raw materials $ 292,430 $ 286,955 Work in process 18,080 23,002 Finished goods 81,839 66,055 Total $ 392,349 $ 376,012 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 6 Months Ended |
Jun. 30, 2023 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | NOTE 10. PROPERTY AND EQUIPMENT, NET Property and equipment, net is comprised of the following: Estimated Useful June 30, December 31, Life (in years) 2023 2022 Buildings, machinery, and equipment 5 to 25 $ 180,331 $ 165,673 Computer equipment, furniture, fixtures, and vehicles 3 to 5 39,926 36,281 Leasehold improvements 2 to 10 70,937 63,103 Construction in process 19,396 18,226 310,590 283,283 Less: Accumulated depreciation (151,565) (134,821) Property and equipment, net $ 159,025 $ 148,462 The following table summarizes depreciation expense. All depreciation expense is recorded in income from continuing operations: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Depreciation expense $ 9,368 $ 8,466 $ 18,829 $ 16,845 |
GOODWILL
GOODWILL | 6 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
GOODWILL | NOTE 11. GOODWILL The following table summarizes the changes in goodwill: December 31, 2022 $ 281,433 Measurement period adjustments 353 Foreign currency translation 906 June 30, 2023 $ 282,692 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 12. INTANGIBLE ASSETS Intangible assets consisted of the following: June 30, 2023 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Technology $ 97,659 $ (53,838) $ 43,821 Customer relationships 168,116 (51,809) 116,307 Trademarks and other 27,122 (11,757) 15,365 Total $ 292,897 $ (117,404) $ 175,493 December 31, 2022 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Technology $ 97,237 $ (47,196) $ 50,041 Customer relationships 167,631 (44,774) 122,857 Trademarks and other 27,036 (10,408) 16,628 Total $ 291,904 $ (102,378) $ 189,526 At June 30, 2023, the weighted average remaining useful life of intangibles subject to amortization was approximately 8.8 years. Amortization expense related to intangible assets is as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Amortization expense $ 7,075 $ 6,523 $ 14,137 $ 12,032 Estimated amortization expense related to intangibles is as follows: Year Ending December 31, 2023 (remaining) $ 14,153 2024 25,212 2025 20,997 2026 19,282 2027 17,372 Thereafter 78,477 Total $ 175,493 |
RESTRUCTURING COSTS
RESTRUCTURING COSTS | 6 Months Ended |
Jun. 30, 2023 | |
RESTRUCTURING COSTS | |
RESTRUCTURING COSTS | NOTE 13. RESTRUCTURING COSTS In the fourth quarter of 2022, we approved a restructuring plan (the “2022 Plan”), which is expected to further improve our operating efficiencies and drive the realization of synergies from business combinations by consolidating our operations, optimizing our factory footprint, including moving certain production into our higher volume factories, and reducing redundancies. We anticipate the 2022 Plan will be substantially completed, and associated expenses will be incurred, by early 2024. In 2018, we committed to a restructuring plan (the “2018 Plan”) to optimize our manufacturing footprint and improve operating efficiencies and synergies related to business combinations. We incurred severance costs primarily related to the transition and exit of our facility in Shenzhen, China and actions associated with synergies related to the acquisition of Artesyn Embedded Technologies, Inc.’s embedded power business. The Shenzhen facility closed in the first quarter of 2023, and the 2018 Plan is substantially complete. The tables below summarize the charges related to our restructuring plans: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Severance and related charges $ 3,154 $ (161) $ 4,197 $ 712 Facility relocation and closure charges — — — 345 Total restructuring charges $ 3,154 $ (161) $ 4,197 $ 1,057 Cumulative Cost Through June 30, 2023 2022 Plan 2018 Plan Total Severance and related charges $ 9,921 $ 21,125 $ 31,046 Facility relocation and closure charges — 7,160 7,160 Total restructuring charges $ 9,921 $ 28,285 $ 38,206 Our restructuring liabilities are included in other accrued expenses in our Consolidated Balance Sheets. Changes in restructuring liabilities were as follows: 2022 Plan 2018 Plan Total December 31, 2022 $ 5,788 $ 1,422 $ 7,210 Costs incurred and charged to expense 4,133 64 4,197 Costs paid or otherwise settled (4,343) (887) (5,230) June 30, 2023 $ 5,578 $ 599 $ 6,177 |
WARRANTIES
WARRANTIES | 6 Months Ended |
Jun. 30, 2023 | |
WARRANTIES | |
WARRANTIES | NOTE 14. WARRANTIES Our sales agreements include customary product warranty provisions, which generally range from 12 to 24 months after shipment. We record the estimated warranty obligations cost when we recognize revenue. This estimate is based on historical experience by product and configuration. Our estimated warranty obligation is included in other accrued expenses in our Consolidated Balance Sheets. Changes in our product warranty obligation were as follows: December 31, 2022 $ 5,702 Net increases to accruals 1,375 Warranty expenditures (2,229) Effect of changes in exchange rates (16) June 30, 2023 $ 4,832 |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2023 | |
LEASES | |
LEASES | NOTE 15. LEASES Components of operating lease cost were as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Operating lease cost $ 5,656 $ 5,729 $ 11,336 $ 11,448 Short-term and variable lease cost 987 1,249 2,070 2,339 Total operating lease cost $ 6,643 $ 6,978 $ 13,406 $ 13,787 Maturities of our operating lease liabilities are as follows: Year Ending December 31, 2023 (remaining) $ 10,010 2024 19,006 2025 15,544 2026 13,813 2027 12,110 Thereafter 58,431 Total lease payments 128,914 Less: Interest (25,713) Present value of lease liabilities $ 103,201 The following tables present additional information about our lease agreements: June 30, December 31, 2023 2022 Weighted average remaining lease term (in years) 8.8 8.9 Weighted average discount rate 4.7 % 4.6 % Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cash paid for operating leases $ 5,824 $ 5,471 $ 11,668 $ 11,097 Right-of-use assets obtained in exchange for operating lease liabilities $ 2,420 $ 7,681 $ 2,628 $ 12,222 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2023 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 16. STOCK-BASED COMPENSATION The Compensation Committee of our Board of Directors administers our stock plans. As of June 30, 2023, we have two active stock-based incentive compensation plans: the 2023 Omnibus Incentive Plan (“the 2023 Plan”) and the Employee Stock Purchase Plan (“ESPP”). The 2023 Plan was approved on April 27, 2023. We issue all new equity compensation grants under these two plans; however, outstanding awards previously issued under inactive plans will continue to vest and remain exercisable in accordance with the terms of the respective plans. The 2023 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, stock units, unrestricted stock, and dividend equivalent rights. Any of the awards issued may be issued as performance-based awards to align stock compensation awards to the attainment of annual or long-term performance goals . The following table summarizes information related to our stock-based incentive compensation plans: June 30, 2023 Shares available for future issuance under the 2023 Omnibus Incentive Plan 2,383 Shares available for future issuance under the Employee Stock Purchase Plan 598 Generally, we grant restricted stock units (“RSUs”) with a three-year time-based vesting schedule. Certain RSUs contain performance-based or market-based vesting conditions in addition to the time-based vesting requirements. RSUs are generally granted with a grant date fair value based on the market price of our stock on the date of grant. Generally, we grant stock option awards with an exercise price equal to the market price of our stock at the date of grant and with either a three four-year We recognize stock-based compensation expense based on the fair value of the awards issued and the functional area of the employee receiving the award. Stock-based compensation was as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Stock-based compensation expense $ 7,937 $ 5,058 $ 14,738 $ 8,986 Changes in our RSUs were as follows: Six Months Ended June 30, 2023 Weighted- Average Number of Grant Date RSUs Fair Value RSUs outstanding at beginning of period 803 $ 78.46 RSUs granted 320 $ 96.03 RSUs vested (193) $ 84.97 RSUs forfeited (38) $ 75.83 RSUs outstanding at end of period 892 $ 83.33 Changes in our stock options were as follows: Six Months Ended June 30, 2023 Weighted- Average Number of Exercise Price Options per Share Options outstanding at beginning of period 151 $ 55.48 Options exercised (62) $ 24.67 Options outstanding at end of period 89 $ 76.69 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 17. COMMITMENTS AND CONTINGENCIES We are involved in disputes and legal actions arising in the normal course of our business. While we currently believe that the amount of any ultimate loss would not be material to our financial position, the outcome of these actions is inherently difficult to predict. In the event of an adverse outcome, the ultimate loss could have a material adverse effect on our financial position or reported results of operations. An unfavorable decision in intellectual property litigation also could require material changes in production processes and products or result in our inability to ship products or components found to have violated third-party intellectual property rights. We accrue loss contingencies in connection with our commitments and contingencies, including litigation, when it is probable that a loss has occurred, and the amount of the loss can be reasonably estimated. We are not currently a party to any legal action that we believe would reasonably have a material adverse impact on our business, financial condition, results of operations or cash flows. |
CREDIT FACILITY
CREDIT FACILITY | 6 Months Ended |
Jun. 30, 2023 | |
CREDIT FACILITY | |
CREDIT FACILITY | NOTE 18. CREDIT FACILITY Our credit agreement (“Credit Agreement”) consists of a senior unsecured term loan facility (“Term Loan Facility”) and a senior unsecured revolving facility (“Revolving Facility”). Both mature on September 9, 2026. On March 31, 2023, we executed agreements pursuant to the Credit Agreement to transition the benchmark interest rate from LIBOR to SOFR. The impact of this transition was not material to our consolidated financial statements. The following table summarizes borrowings under our Credit Agreement and the associated interest rate . June 30, 2023 Balance Interest Rate Unused Line Fee Term Loan Facility subject to a fixed interest rate due to interest rate swap $ 229,469 1.172% — Term Loan Facility subject to a variable interest rate 135,531 5.952% — Revolving Facility subject to a variable interest rate — 5.952% 0.10% Total borrowings under the Credit Agreement $ 365,000 For more information on the interest rate swap that fixes the interest rate for a portion of our Term Loan Facility, see Note 7. Derivative Financial Instruments For all periods presented, we were in compliance with the Credit Agreement covenants. The following table summarizes our availability to withdraw on the Revolving Facility. June 30, December 31, 2023 2022 Available capacity on Revolving Facility $ 200,000 $ 200,000 In addition to the available capacity on the Revolving Facility, prior to the maturity date of our Credit Agreement, we may also request an increase to the financing commitments in either the Term Loan Facility or Revolving Facility by an aggregate amount not to exceed $115.0 million. The fair value of the Term Loan Facility approximates the outstanding balance of $365.0 million as of June 30, 2023. The debt obligation on our Consolidated Balance Sheets consists of the following: June 30, December 31, 2023 2022 Term Loan Facility $ 365,000 $ 375,000 Less: debt discount (1,484) (1,738) Total debt 363,516 373,262 Less current portion of long-term debt (20,000) (20,000) Total long-term debt $ 343,516 $ 353,262 Contractual maturities of our debt obligations, excluding amortization of debt issuance costs, are as follows: Year Ending December 31, 2023 (remaining) $ 10,000 2024 20,000 2025 20,000 2026 315,000 Total $ 365,000 Interest expense and unused line of credit fees were recorded in other income (expense), net in our Consolidated Statements of Operations as follows: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Interest expense $ 2,701 $ 1,338 $ 5,290 $ 2,460 Amortization of debt issuance costs 131 142 263 277 Unused line of credit fees and other 51 47 101 101 Total interest expense $ 2,883 $ 1,527 $ 5,654 $ 2,838 |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | |
Use of Estimates in the Preparation of the Consolidated Financial Statements | Use of Estimates in the Preparation of the Consolidated Financial Statements The preparation of our consolidated financial statements in conformity with U.S. GAAP requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The significant estimates, assumptions, and judgments include, but are not limited to: ● excess and obsolete inventory; ● pension obligations; ● acquisitions and asset valuations; and ● income taxes and other provisions. |
Significant Accounting Policies | Significant Accounting Policies Our accounting policies are described in Note 1 to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022. |
New Accounting Standards | New Accounting Standards From time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, will not have a material impact on the consolidated financial statements upon adoption. New Acco unting Standards Adopted The FASB issued the following ASUs that we adopted in the current year: Issuance Date ASU Title March 2020 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting January 2021 2021-01 Reference Rate Reform (Topic 848): Scope December 2022 2022-06 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 This collective guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria that reference LIBOR or another reference rate that is expected to be discontinued. Our Credit Facility (refer to Note 18. Credit Facility Note 7. Derivative Financial Instruments |
DESCRIPTION OF BUSINESS AND B_3
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | |
Schedule of new accounting standards adopted | Issuance Date ASU Title March 2020 2020-04 Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting January 2021 2021-01 Reference Rate Reform (Topic 848): Scope December 2022 2022-06 Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) - SL Power Electronics Corporation | 6 Months Ended |
Jun. 30, 2023 | |
Business Acquisition [Line Items] | |
Schedule of components of fair value of total consideration transferred | Cash paid for acquisition $ 145,693 Less cash acquired (3,484) Total fair value of purchase consideration $ 142,209 |
Schedule of fair value of assets acquired and liabilities assumed | Fair Value Current assets and liabilities, net $ 12,329 Property and equipment 3,567 Operating lease right-of-use assets 4,640 Deferred taxes and other liabilities (2,326) Intangible assets 57,600 Goodwill 71,039 Operating lease liability (4,640) Total fair value of net assets acquired $ 142,209 |
Summary of intangible assets acquired | Amortization Useful Life Fair Value Method (in years) Customer relationships $ 50,500 Straight-line 10 Technology 7,100 Straight-line 5 Total $ 57,600 |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
REVENUE | |
Schedule of disaggregation of revenue | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Semiconductor Equipment $ 173,177 $ 228,797 $ 367,386 $ 431,754 Industrial and Medical 127,603 104,951 250,623 187,849 Data Center Computing 59,076 69,161 118,735 145,399 Telecom and Networking 55,652 38,040 103,804 73,406 Total $ 415,508 $ 440,949 $ 840,548 $ 838,408 Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 North America $ 171,516 $ 206,117 $ 352,458 $ 388,838 Asia 186,498 180,181 365,681 342,228 Europe 56,213 49,851 118,779 96,516 Other 1,281 4,800 3,630 10,826 Total $ 415,508 $ 440,949 $ 840,548 $ 838,408 Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 United States $ 147,109 $ 174,293 $ 300,615 $ 333,035 China 53,192 41,438 90,648 86,130 All others 215,207 225,218 449,285 419,243 Total $ 415,508 $ 440,949 $ 840,548 $ 838,408 Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Product $ 369,881 $ 403,977 $ 749,155 $ 766,853 Services 45,627 36,972 91,393 71,555 Total $ 415,508 $ 440,949 $ 840,548 $ 838,408 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
INCOME TAXES | |
Schedule of tax expense and the effective tax rate for income from continuing operations | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income from continuing operations, before income taxes $ 32,250 $ 56,014 $ 71,738 $ 99,829 Provision for income taxes $ 4,795 $ 11,203 $ 12,531 $ 18,156 Effective tax rate 14.9 % 20.0 % 17.5 % 18.2 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER SHARE | |
Reconciliation of weighted-average shares outstanding used in calculation of basic and diluted EPS | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income from continuing operations $ 27,455 $ 44,811 $ 59,207 $ 81,673 Less: income from continuing operations attributable to noncontrolling interest — 21 — 7 Income from continuing operations attributable to Advanced Energy Industries, Inc. $ 27,455 $ 44,790 $ 59,207 $ 81,666 Basic weighted-average common shares outstanding 37,573 37,520 37,524 37,535 Assumed exercise of dilutive stock options and restricted stock units 230 190 280 219 Diluted weighted-average common shares outstanding 37,803 37,710 37,804 37,754 Continuing operations: Basic earnings per share $ 0.73 $ 1.19 $ 1.58 $ 2.18 Diluted earnings per share $ 0.73 $ 1.19 $ 1.57 $ 2.16 |
Schedule of repurchase of shares of common stock | Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share amounts) 2023 2022 2023 2022 Amount paid or accrued to repurchase shares $ — $ 17,019 $ — $ 23,613 Number of shares repurchased — 230 — 312 Average repurchase price per share $ — $ 74.12 $ — $ 75.68 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
FAIR VALUE MEASUREMENTS | |
Schedule of assets and liabilities measured at fair value on a recurring basis | June 30, 2023 Description Balance Sheet Classification Level 1 Level 2 Level 3 Total Fair Value Certificates of deposit Other current assets $ — $ 175 $ — $ 175 Foreign currency forward contracts Other current liabilities — (68) — (68) Interest rate swaps Other assets — 12,630 — 12,630 Net assets measured at fair value on a recurring basis $ — $ 12,737 $ — $ 12,737 December 31, 2022 Description Balance Sheet Classification Level 1 Level 2 Level 3 Total Fair Value Certificates of deposit Other current assets $ — $ 2,128 $ — $ 2,128 Interest rate swaps Other assets — 15,310 — 15,310 Net assets measured at fair value on a recurring basis $ — $ 17,438 $ — $ 17,438 |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of notional amount of outstanding foreign currency forward contracts | June 30, December 31, 2023 2022 Foreign currency forward contracts $ 81,403 $ — |
Schedule of notional amount of qualified hedging instruments | June 30, December 31, 2023 2022 Interest rate swap contracts $ 229,469 $ 238,219 |
Schedule of balances recorded in Accumulated other comprehensive income | June 30, December 31, 2023 2022 Interest rate swap contract gains $ 9,707 $ 11,779 |
ACCOUNTS AND OTHER RECEIVABLE_2
ACCOUNTS AND OTHER RECEIVABLES, NET (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
ACCOUNTS AND OTHER RECEIVABLES, NET | |
Schedule of expected credit losses | December 31, 2022 $ 1,814 Additions 123 Deductions - write-offs, net of recoveries (251) Foreign currency translation 8 June 30, 2023 $ 1,694 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
INVENTORIES | |
Schedule of components of inventories | June 30, December 31, 2023 2022 Parts and raw materials $ 292,430 $ 286,955 Work in process 18,080 23,002 Finished goods 81,839 66,055 Total $ 392,349 $ 376,012 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment, net | Estimated Useful June 30, December 31, Life (in years) 2023 2022 Buildings, machinery, and equipment 5 to 25 $ 180,331 $ 165,673 Computer equipment, furniture, fixtures, and vehicles 3 to 5 39,926 36,281 Leasehold improvements 2 to 10 70,937 63,103 Construction in process 19,396 18,226 310,590 283,283 Less: Accumulated depreciation (151,565) (134,821) Property and equipment, net $ 159,025 $ 148,462 |
Schedule of depreciation expense recorded in continuing operations | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Depreciation expense $ 9,368 $ 8,466 $ 18,829 $ 16,845 |
GOODWILL (Tables)
GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of changes in goodwill | December 31, 2022 $ 281,433 Measurement period adjustments 353 Foreign currency translation 906 June 30, 2023 $ 282,692 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of intangible assets | June 30, 2023 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Technology $ 97,659 $ (53,838) $ 43,821 Customer relationships 168,116 (51,809) 116,307 Trademarks and other 27,122 (11,757) 15,365 Total $ 292,897 $ (117,404) $ 175,493 December 31, 2022 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Technology $ 97,237 $ (47,196) $ 50,041 Customer relationships 167,631 (44,774) 122,857 Trademarks and other 27,036 (10,408) 16,628 Total $ 291,904 $ (102,378) $ 189,526 |
Schedule of amortization expense related to intangible assets | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Amortization expense $ 7,075 $ 6,523 $ 14,137 $ 12,032 |
Schedule of estimated amortization expense related to intangible assets | Year Ending December 31, 2023 (remaining) $ 14,153 2024 25,212 2025 20,997 2026 19,282 2027 17,372 Thereafter 78,477 Total $ 175,493 |
RESTRUCTURING COSTS (Tables)
RESTRUCTURING COSTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
RESTRUCTURING COSTS | |
Schedule of restructuring charges | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Severance and related charges $ 3,154 $ (161) $ 4,197 $ 712 Facility relocation and closure charges — — — 345 Total restructuring charges $ 3,154 $ (161) $ 4,197 $ 1,057 Cumulative Cost Through June 30, 2023 2022 Plan 2018 Plan Total Severance and related charges $ 9,921 $ 21,125 $ 31,046 Facility relocation and closure charges — 7,160 7,160 Total restructuring charges $ 9,921 $ 28,285 $ 38,206 |
Schedule of restructuring liabilities | 2022 Plan 2018 Plan Total December 31, 2022 $ 5,788 $ 1,422 $ 7,210 Costs incurred and charged to expense 4,133 64 4,197 Costs paid or otherwise settled (4,343) (887) (5,230) June 30, 2023 $ 5,578 $ 599 $ 6,177 |
WARRANTIES (Tables)
WARRANTIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
WARRANTIES | |
Schedule of changes in accrued product warranties | December 31, 2022 $ 5,702 Net increases to accruals 1,375 Warranty expenditures (2,229) Effect of changes in exchange rates (16) June 30, 2023 $ 4,832 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
LEASES | |
Components of operating lease cost | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Operating lease cost $ 5,656 $ 5,729 $ 11,336 $ 11,448 Short-term and variable lease cost 987 1,249 2,070 2,339 Total operating lease cost $ 6,643 $ 6,978 $ 13,406 $ 13,787 |
Schedule of maturities of operating lease liabilities | Year Ending December 31, 2023 (remaining) $ 10,010 2024 19,006 2025 15,544 2026 13,813 2027 12,110 Thereafter 58,431 Total lease payments 128,914 Less: Interest (25,713) Present value of lease liabilities $ 103,201 |
Schedule of other information related to leases | June 30, December 31, 2023 2022 Weighted average remaining lease term (in years) 8.8 8.9 Weighted average discount rate 4.7 % 4.6 % Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cash paid for operating leases $ 5,824 $ 5,471 $ 11,668 $ 11,097 Right-of-use assets obtained in exchange for operating lease liabilities $ 2,420 $ 7,681 $ 2,628 $ 12,222 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
STOCK-BASED COMPENSATION | |
Summary of information related to stock-based incentive compensation plans | June 30, 2023 Shares available for future issuance under the 2023 Omnibus Incentive Plan 2,383 Shares available for future issuance under the Employee Stock Purchase Plan 598 |
Schedule of stock-based compensation | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Stock-based compensation expense $ 7,937 $ 5,058 $ 14,738 $ 8,986 |
Summary of changes in RSUs | Six Months Ended June 30, 2023 Weighted- Average Number of Grant Date RSUs Fair Value RSUs outstanding at beginning of period 803 $ 78.46 RSUs granted 320 $ 96.03 RSUs vested (193) $ 84.97 RSUs forfeited (38) $ 75.83 RSUs outstanding at end of period 892 $ 83.33 |
Summary of changes in stock options | Six Months Ended June 30, 2023 Weighted- Average Number of Exercise Price Options per Share Options outstanding at beginning of period 151 $ 55.48 Options exercised (62) $ 24.67 Options outstanding at end of period 89 $ 76.69 |
CREDIT FACILITY (Tables)
CREDIT FACILITY (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
CREDIT FACILITY | |
Schedule of borrowings under credit facility | June 30, 2023 Balance Interest Rate Unused Line Fee Term Loan Facility subject to a fixed interest rate due to interest rate swap $ 229,469 1.172% — Term Loan Facility subject to a variable interest rate 135,531 5.952% — Revolving Facility subject to a variable interest rate — 5.952% 0.10% Total borrowings under the Credit Agreement $ 365,000 |
Schedule of availability to withdraw on Revolving Facility | June 30, December 31, 2023 2022 Available capacity on Revolving Facility $ 200,000 $ 200,000 |
Schedule of debt obligation | June 30, December 31, 2023 2022 Term Loan Facility $ 365,000 $ 375,000 Less: debt discount (1,484) (1,738) Total debt 363,516 373,262 Less current portion of long-term debt (20,000) (20,000) Total long-term debt $ 343,516 $ 353,262 |
Schedule of contractual maturities of debt obligations | Year Ending December 31, 2023 (remaining) $ 10,000 2024 20,000 2025 20,000 2026 315,000 Total $ 365,000 |
Schedule of interest expense and unused line of credit fees | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Interest expense $ 2,701 $ 1,338 $ 5,290 $ 2,460 Amortization of debt issuance costs 131 142 263 277 Unused line of credit fees and other 51 47 101 101 Total interest expense $ 2,883 $ 1,527 $ 5,654 $ 2,838 |
ACQUISITIONS - Consideration Tr
ACQUISITIONS - Consideration Transferred (Details) - SL Power Electronics Corporation $ in Thousands | Apr. 25, 2022 USD ($) |
Business Acquisition [Line Items] | |
Acquired percentage | 100% |
Cash paid for acquisition | $ 145,693 |
Less cash acquired | (3,484) |
Total fair value of purchase consideration | $ 142,209 |
ACQUISITIONS - Assets Acquired
ACQUISITIONS - Assets Acquired and Liabilities Assumed (Details) - SL Power Electronics Corporation - USD ($) $ in Thousands | Jun. 30, 2023 | Apr. 25, 2022 |
Business Acquisition [Line Items] | ||
Current assets and liabilities, net | $ 12,329 | |
Property and equipment | 3,567 | |
Operating lease right-of-use assets | 4,640 | |
Deferred taxes and other liabilities | (2,326) | |
Intangible assets | $ 57,600 | 57,600 |
Goodwill | 71,039 | |
Operating lease liability | (4,640) | |
Total fair value of net assets acquired | $ 142,209 |
ACQUISITIONS - Schedule of Inta
ACQUISITIONS - Schedule of Intangible Assets Acquired, Amortization Method, and Estimated Useful Lives (Details) - SL Power Electronics Corporation - USD ($) $ in Thousands | Jun. 30, 2023 | Apr. 25, 2022 |
Business Acquisition [Line Items] | ||
Intangible assets | $ 57,600 | $ 57,600 |
Customer Relationships | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 50,500 | |
Intangible assets useful life | 10 years | |
Technology | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 7,100 | |
Intangible assets useful life | 5 years |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 415,508 | $ 440,949 | $ 840,548 | $ 838,408 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 171,516 | 206,117 | 352,458 | 388,838 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 186,498 | 180,181 | 365,681 | 342,228 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 56,213 | 49,851 | 118,779 | 96,516 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,281 | 4,800 | 3,630 | 10,826 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 147,109 | 174,293 | 300,615 | 333,035 |
China | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 53,192 | 41,438 | 90,648 | 86,130 |
All others | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 215,207 | $ 225,218 | $ 449,285 | $ 419,243 |
Countries apart from United States | Revenue benchmark | Geographic concentration | Maximum | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue (as a percent) | 10% | 10% | 10% | 10% |
Semiconductor Equipment | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 173,177 | $ 228,797 | $ 367,386 | $ 431,754 |
Industrial and Medical | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 127,603 | 104,951 | 250,623 | 187,849 |
Data Center Computing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 59,076 | 69,161 | 118,735 | 145,399 |
Telecom and Networking | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 55,652 | 38,040 | 103,804 | 73,406 |
Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 369,881 | 403,977 | 749,155 | 766,853 |
Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 45,627 | $ 36,972 | $ 91,393 | $ 71,555 |
INCOME TAXES - Schedule of Tax
INCOME TAXES - Schedule of Tax Expense and Effective Tax Rate for Income from Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
INCOME TAXES | ||||
Income from continuing operations, before income taxes | $ 32,250 | $ 56,014 | $ 71,738 | $ 99,829 |
Provision for income taxes | $ 4,795 | $ 11,203 | $ 12,531 | $ 18,156 |
Effective tax rate | 14.90% | 20% | 17.50% | 18.20% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
INCOME TAXES | ||||
Federal statutory tax rate | 21% | 21% | 21% | 21% |
EARNINGS PER SHARE - Reconcilia
EARNINGS PER SHARE - Reconciliation of Weighted-Average Shares Outstanding Used in Calculation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
EARNINGS PER SHARE | ||||
Income from continuing operations | $ 27,455 | $ 44,811 | $ 59,207 | $ 81,673 |
Less: income from continuing operations attributable to noncontrolling interest | 21 | 7 | ||
Income from continuing operations attributable to Advanced Energy Industries, Inc. | $ 27,455 | $ 44,790 | $ 59,207 | $ 81,666 |
Basic weighted-average common shares outstanding | 37,573 | 37,520 | 37,524 | 37,535 |
Assumed exercise of dilutive stock options and restricted stock units | 230 | 190 | 280 | 219 |
Diluted weighted-average common shares outstanding | 37,803 | 37,710 | 37,804 | 37,754 |
Continuing operations: | ||||
Basic earnings per share (in dollars per share) | $ 0.73 | $ 1.19 | $ 1.58 | $ 2.18 |
Diluted earnings per share (in dollars per share) | $ 0.73 | $ 1.19 | $ 1.57 | $ 2.16 |
EARNINGS PER SHARE - Share Repu
EARNINGS PER SHARE - Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
EARNINGS PER SHARE | ||||
Amount paid or accrued to repurchase shares | $ 17,019 | $ 6,594 | $ 23,613 | |
Number of shares repurchased | 230,000 | 312,000 | ||
Average repurchase price per share | $ 74.12 | $ 75.68 | ||
Shares repurchased from related parties | 0 | |||
Remaining amount authorized by Board of Directors for future share repurchases | $ 199,300 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net assets measured at fair value on a recurring basis | $ 12,737 | $ 17,438 |
Foreign Currency Forward Contracts | Other Current Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, Fair Value Disclosure | (68) | |
Certificates of Deposit | Other Current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net assets measured at fair value on a recurring basis | 175 | 2,128 |
Interest Rate Swaps | Other Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net assets measured at fair value on a recurring basis | 12,630 | 15,310 |
Fair Value, Inputs, Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net assets measured at fair value on a recurring basis | 12,737 | 17,438 |
Fair Value, Inputs, Level 2 | Foreign Currency Forward Contracts | Other Current Liabilities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, Fair Value Disclosure | (68) | |
Fair Value, Inputs, Level 2 | Certificates of Deposit | Other Current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net assets measured at fair value on a recurring basis | 175 | 2,128 |
Fair Value, Inputs, Level 2 | Interest Rate Swaps | Other Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net assets measured at fair value on a recurring basis | $ 12,630 | $ 15,310 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | ||
Transfer into Level 3, Liabilities | $ 0 | $ 0 |
Transfer from Level 3, Liabilities | 0 | 0 |
Transfer into Level 3, Assets | 0 | 0 |
Transfer from Level 3, Assets | $ 0 | $ 0 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Annual interest (as a percent) | 1.172% |
Average fixed rate | 0.322% |
LIBOR to SOFR transitional rate adjustment (as a percent) | 0.10% |
Cash Flow Hedge | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Basis points at current leverage ratios | 75 |
Foreign currency forward | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative, notional amount | $ 81,403 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Qualified Hedging Instruments (Details) - Interest Rate Swaps - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Derivative [Line Items] | ||
Derivative, notional amount | $ 229,469 | $ 238,219 |
Balances recorded in accumulated other comprehensive income | $ 9,707 | $ 11,779 |
ACCOUNTS AND OTHER RECEIVABLE_3
ACCOUNTS AND OTHER RECEIVABLES, NET - Expected Credit Losses - (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
ACCOUNTS AND OTHER RECEIVABLES, NET | |
Balance as of beginning of period | $ 1,814 |
Additions | 123 |
Deductions - write-offs, net of recoveries | (251) |
Foreign currency translation | 8 |
Balance as of end of period | $ 1,694 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
INVENTORIES | ||
Parts and raw materials | $ 292,430 | $ 286,955 |
Work in process | 18,080 | 23,002 |
Finished goods | 81,839 | 66,055 |
Total | $ 392,349 | $ 376,012 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 310,590 | $ 283,283 |
Less: Accumulated depreciation | (151,565) | (134,821) |
Property and equipment, net | 159,025 | 148,462 |
Buildings, machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 180,331 | $ 165,673 |
Buildings, machinery and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 5 years | 5 years |
Buildings, machinery and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 25 years | 25 years |
Computer equipment, furniture, fixtures, and vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 39,926 | $ 36,281 |
Computer equipment, furniture, fixtures, and vehicles | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 3 years | 3 years |
Computer equipment, furniture, fixtures, and vehicles | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 5 years | 5 years |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 70,937 | $ 63,103 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 2 years | 2 years |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life (in years) | 10 years | 10 years |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 19,396 | $ 18,226 |
PROPERTY AND EQUIPMENT, NET - D
PROPERTY AND EQUIPMENT, NET - Depreciation Expense Recorded in Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
PROPERTY AND EQUIPMENT, NET | ||||
Depreciation expense | $ 9,368 | $ 8,466 | $ 18,829 | $ 16,845 |
GOODWILL - Changes in Goodwill
GOODWILL - Changes in Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
GOODWILL AND INTANGIBLE ASSETS | |
Balance at beginning of period | $ 281,433 |
Measurement period adjustments | 353 |
Foreign currency translation | 906 |
Balance at end of period | $ 282,692 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 292,897 | $ 291,904 |
Finite-Lived Intangible Assets, Accumulated Amortization | (117,404) | (102,378) |
Finite-lived intangible assets, net | $ 175,493 | 189,526 |
Amortization of weighted average remaining useful life | 8 years 9 months 18 days | |
Technology. | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 97,659 | 97,237 |
Finite-Lived Intangible Assets, Accumulated Amortization | (53,838) | (47,196) |
Finite-lived intangible assets, net | 43,821 | 50,041 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 168,116 | 167,631 |
Finite-Lived Intangible Assets, Accumulated Amortization | (51,809) | (44,774) |
Finite-lived intangible assets, net | 116,307 | 122,857 |
Trademarks and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 27,122 | 27,036 |
Finite-Lived Intangible Assets, Accumulated Amortization | (11,757) | (10,408) |
Finite-lived intangible assets, net | $ 15,365 | $ 16,628 |
INTANGIBLE ASSETS - Amortizatio
INTANGIBLE ASSETS - Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | ||||
Amortization expense | $ 7,075 | $ 6,523 | $ 14,137 | $ 12,032 |
INTANGIBLE ASSETS - Estimated A
INTANGIBLE ASSETS - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
GOODWILL AND INTANGIBLE ASSETS | ||
2023 (remaining) | $ 14,153 | |
2024 | 25,212 | |
2025 | 20,997 | |
2026 | 19,282 | |
2027 | 17,372 | |
Thereafter | 78,477 | |
Finite-lived intangible assets, net | $ 175,493 | $ 189,526 |
RESTRUCTURING COSTS - Restructu
RESTRUCTURING COSTS - Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 18 Months Ended | 66 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | $ 3,154 | $ (161) | $ 4,197 | $ 1,057 | $ 38,206 | |
2022 Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | 4,133 | $ 9,921 | ||||
2018 Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | 64 | 28,285 | ||||
Severance and related charges | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | $ 3,154 | $ (161) | $ 4,197 | 712 | 31,046 | |
Severance and related charges | 2022 Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | $ 9,921 | |||||
Severance and related charges | 2018 Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | 21,125 | |||||
Facility relocation and closure charges | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | $ 345 | 7,160 | ||||
Facility relocation and closure charges | 2018 Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | $ 7,160 |
RESTRUCTURING COSTS - Changes i
RESTRUCTURING COSTS - Changes in Restructuring Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 18 Months Ended | 66 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2023 | |
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | $ 7,210 | |||||
Cost incurred and charged to expense | $ 3,154 | $ (161) | 4,197 | $ 1,057 | $ 38,206 | |
Cost paid or otherwise settled | (5,230) | |||||
Ending balance | 6,177 | 6,177 | $ 6,177 | 6,177 | ||
2022 Plan | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 5,788 | |||||
Cost incurred and charged to expense | 4,133 | 9,921 | ||||
Cost paid or otherwise settled | (4,343) | |||||
Ending balance | 5,578 | 5,578 | 5,578 | 5,578 | ||
2018 Plan | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 1,422 | |||||
Cost incurred and charged to expense | 64 | 28,285 | ||||
Cost paid or otherwise settled | (887) | |||||
Ending balance | $ 599 | $ 599 | $ 599 | $ 599 |
WARRANTIES - Narrative (Details
WARRANTIES - Narrative (Details) | 6 Months Ended |
Jun. 30, 2023 | |
Minimum | |
Product Liability Contingency [Line Items] | |
Standard Product Warranty Term | 12 months |
Maximum | |
Product Liability Contingency [Line Items] | |
Standard Product Warranty Term | 24 months |
WARRANTIES - Changes in Product
WARRANTIES - Changes in Product Warranty Obligation (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Balance at beginning of period | $ 5,702 |
Net increases to accruals | 1,375 |
Warranty expenditures | (2,229) |
Effect of changes in exchange rates | (16) |
Balance at end of period | $ 4,832 |
LEASES - Components of Operatin
LEASES - Components of Operating Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
LEASES | ||||
Operating lease cost | $ 5,656 | $ 5,729 | $ 11,336 | $ 11,448 |
Short-term and variable lease cost | 987 | 1,249 | 2,070 | 2,339 |
Total operating lease cost | $ 6,643 | $ 6,978 | $ 13,406 | $ 13,787 |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
LEASES | |
2023 (remaining) | $ 10,010 |
2024 | 19,006 |
2025 | 15,544 |
2026 | 13,813 |
2027 | 12,110 |
Thereafter | 58,431 |
Total lease payments | 128,914 |
Less: Interest | (25,713) |
Present value of lease liabilities | $ 103,201 |
LEASES - Other Lease Cost Infor
LEASES - Other Lease Cost Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
LEASES | |||||
Weighted average remaining lease term (in years) | 8 years 9 months 18 days | 8 years 9 months 18 days | 8 years 10 months 24 days | ||
Weighted average discount rate | 4.70% | 4.70% | 4.60% | ||
Cash paid for operating leases | $ 5,824 | $ 5,471 | $ 11,668 | $ 11,097 | |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 2,420 | $ 7,681 | $ 2,628 | $ 12,222 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | 6 Months Ended |
Jun. 30, 2023 plan shares | |
Stock-based incentive compensation plans | plan | 2 |
Awards term | 10 years |
2023 OMNIBUS Incentive Plan | |
Shares available for future issuance | 2,383 |
Restricted Stock Units (RSUs) | Minimum | |
Vesting period | 3 years |
Employee Stock | |
Shares available for future issuance | 598 |
Employee Stock | Minimum | |
Vesting period | 3 years |
Employee Stock | Maximum | |
Vesting period | 4 years |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of share-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Regular Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 7,937 | $ 5,058 | $ 14,738 | $ 8,986 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Restricted Stock Units activity (Details) - Restricted Stock Units (RSUs) shares in Thousands | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at the beginning of period | shares | 803 |
Granted | shares | 320 |
Vested | shares | (193) |
Forfeited | shares | (38) |
Outstanding at the end of period | shares | 892 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 78.46 |
Weighted Average Grant Date Fair Value, granted | $ / shares | 96.03 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 84.97 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 75.83 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 83.33 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
STOCK-BASED COMPENSATION | |
Options outstanding at beginning of period | shares | 151 |
Options exercised | shares | (62) |
Options outstanding at ending of period | shares | 89 |
Weighted-Average Exercise Price per Share, Options outstanding at beginning of period | $ / shares | $ 55.48 |
Weighted-Average Exercise Price per Share, Options exercised | $ / shares | 24.67 |
Weighted-Average Exercise Price per Share, Options outstanding at end of period | $ / shares | $ 76.69 |
CREDIT FACILITY (Details)
CREDIT FACILITY (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | ||
Balance | $ 365,000 | $ 375,000 |
Fair value of long-term debt | 365,000 | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Increase in borrowing capacity | 115,000 | |
Available capacity | 200,000 | $ 200,000 |
Term Loan, Fixed Interest Rate | ||
Line of Credit Facility [Line Items] | ||
Balance | $ 229,469 | |
Interest Rate | 1.172% | |
Term Loan, Variable Interest Rate | ||
Line of Credit Facility [Line Items] | ||
Balance | $ 135,531 | |
Interest Rate | 5.952% | |
Revolving Facility, Variable Interest Rate | ||
Line of Credit Facility [Line Items] | ||
Interest Rate | 5.952% | |
Unused Line Fee | 0.10% |
CREDIT FACILITY - Debt Obligati
CREDIT FACILITY - Debt Obligation (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt: | ||
Term Loan Facility | $ 365,000 | $ 375,000 |
Less: debt discount | (1,484) | (1,738) |
Total debt | 363,516 | 373,262 |
Less current portion of long-term debt | (20,000) | (20,000) |
Total long-term debt | $ 343,516 | $ 353,262 |
CREDIT FACILITY - Contractual M
CREDIT FACILITY - Contractual Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
CREDIT FACILITY | ||
2023 (remaining) | $ 10,000 | |
2024 | 20,000 | |
2025 | 20,000 | |
2026 | 315,000 | |
Total | $ 365,000 | $ 375,000 |
CREDIT FACILITY - Interest Expe
CREDIT FACILITY - Interest Expense and Unused Line of Credit Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CREDIT FACILITY | ||||
Interest expense | $ 2,701 | $ 1,338 | $ 5,290 | $ 2,460 |
Amortization of debt issuance costs | 131 | 142 | 263 | 277 |
Unused line of credit fees and other | 51 | 47 | 101 | 101 |
Total interest expense | $ 2,883 | $ 1,527 | $ 5,654 | $ 2,838 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 27,140 | $ 44,970 | $ 58,061 | $ 81,748 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | ITEM 5. OTHER INFORMATION On June 13, 2023 , Anne DelSanto , a member of our Board of Directors , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 1,776 shares of our common stock during the period from October 1, 2023 through September 5, 2024 . During the three months ended June 30, 2023, no other director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K. At its regularly scheduled meeting on July 27, 2023, the Compensation Committee of our Board reviewed and approved non-material changes to the Company’s Amended and Restated Deferred Compensation Plan that curtail eligibility of special bonuses (as defined in the Plan) for deferral under the Plan. For additional information, refer to Exhibit 10.1 in Part II, Item 6 “Exhibits” below. |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Anne DelSanto | |
Trading Arrangements, by Individual | |
Name | Anne DelSanto |
Title | a member of our Board of Directors |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | June 13, 2023 |
Aggregate Available | 1,776 |
Expiration Date | September 5, 2024 |