Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
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, $0.001 par value | |
Trading Symbol | AEIS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 37,280,657 | |
Entity Central Index Key | 0000927003 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Unaudited Consolidated Balance
Unaudited Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 985,931 | $ 458,818 |
Accounts and other receivables, net | 270,348 | 300,683 |
Inventories | 364,003 | 376,012 |
Other current assets | 53,191 | 53,001 |
Total current assets | 1,673,473 | 1,188,514 |
Property and equipment, net | 161,671 | 148,462 |
Operating lease right-of-use assets | 98,591 | 100,177 |
Other assets | 110,027 | 84,056 |
Intangible assets, net | 168,211 | 189,526 |
Goodwill | 281,713 | 281,433 |
TOTAL ASSETS | 2,493,686 | 1,992,168 |
Current liabilities: | ||
Accounts payable | 140,320 | 170,467 |
Accrued payroll and employee benefits | 68,937 | 82,733 |
Other accrued expenses | 50,937 | 76,750 |
Customer deposits and other | 17,141 | 26,322 |
Current portion of long-term debt | 20,000 | 20,000 |
Current portion of operating lease liabilities | 17,477 | 16,771 |
Total current liabilities | 314,812 | 393,043 |
Long-term debt, net | 899,848 | 353,262 |
Operating lease liabilities | 89,789 | 94,460 |
Pension benefits | 44,289 | 44,031 |
Other long-term liabilities | 44,077 | 41,105 |
Total liabilities | 1,392,815 | 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; 37,280 and 37,429 issued and outstanding at September 30, 2023 and December 31, 2022, respectively | 37 | 37 |
Additional paid-in capital | 139,283 | 134,640 |
Accumulated other comprehensive income | 5,390 | 16,320 |
Retained earnings | 956,161 | 915,270 |
Total stockholders' equity | 1,100,871 | 1,066,267 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,493,686 | $ 1,992,168 |
Unaudited Consolidated Balanc_2
Unaudited Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Sep. 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) | 37,280 | 37,429 |
Common stock, shares outstanding (in shares) | 37,280 | 37,429 |
Unaudited Consolidated Statemen
Unaudited Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Unaudited Consolidated Statements of Operations | ||||
Sales, net | $ 409,991 | $ 516,274 | $ 1,250,539 | $ 1,354,682 |
Cost of sales | 262,650 | 325,056 | 801,007 | 856,990 |
Gross profit | 147,341 | 191,218 | 449,532 | 497,692 |
Operating expenses: | ||||
Research and development | 50,391 | 49,760 | 153,414 | 141,383 |
Selling, general, and administrative | 55,131 | 56,716 | 166,102 | 161,056 |
Amortization of intangible assets | 7,049 | 7,049 | 21,186 | 19,081 |
Restructuring | 4,709 | 121 | 8,906 | 1,178 |
Total operating expenses | 117,280 | 113,646 | 349,608 | 322,698 |
Operating income | 30,061 | 77,572 | 99,924 | 174,994 |
Other income (expense), net | 4,464 | 8,940 | 6,339 | 11,347 |
Income from continuing operations, before income tax | 34,525 | 86,512 | 106,263 | 186,341 |
Provision for income tax | 874 | 11,639 | 13,405 | 29,795 |
Income from continuing operations | 33,651 | 74,873 | 92,858 | 156,546 |
Loss from discontinued operations, net of income tax | (930) | (697) | (2,076) | (615) |
Net income | 32,721 | 74,176 | 90,782 | 155,931 |
Income from continuing operations attributable to noncontrolling interest | 9 | 16 | ||
Net income attributable to Advanced Energy Industries, Inc. | $ 32,721 | $ 74,167 | $ 90,782 | $ 155,915 |
Basic weighted-average common shares outstanding (in shares) | 37,575 | 37,379 | 37,541 | 37,482 |
Diluted weighted-average common shares outstanding (in shares) | 37,854 | 37,630 | 37,842 | 37,725 |
Earnings per share: | ||||
Continuing operations: Basic earnings per share (in dollars per share) | $ 0.90 | $ 2 | $ 2.47 | $ 4.18 |
Continuing operations: Diluted earnings per share (in dollars per share) | 0.89 | 1.99 | 2.45 | 4.15 |
Discontinued operations: Basic loss per share (in dollars per share) | (0.02) | (0.02) | (0.06) | (0.02) |
Discontinued operations: Diluted loss per share (in dollars per share) | (0.02) | (0.02) | (0.05) | (0.02) |
Net income: | ||||
Basic earnings per share (in dollars per share) | 0.87 | 1.98 | 2.42 | 4.16 |
Diluted earnings per share (in dollars per share) | $ 0.86 | $ 1.97 | $ 2.40 | $ 4.13 |
Unaudited Consolidated Statem_2
Unaudited Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Unaudited Consolidated Statements of Comprehensive Income | ||||
Net income | $ 32,721 | $ 74,176 | $ 90,782 | $ 155,931 |
Other comprehensive income (loss), net of income tax | ||||
Foreign currency translation | (5,069) | (11,671) | (6,798) | (24,442) |
Change in fair value of cash flow hedges | (1,822) | 2,508 | (3,840) | 10,447 |
Minimum pension benefit retirement liability | (292) | 414 | ||
Comprehensive income | 25,830 | 65,013 | 79,852 | 142,350 |
Comprehensive income attributable to noncontrolling interest | 9 | 16 | ||
Comprehensive income attributable to Advanced Energy Industries, Inc. | $ 25,830 | $ 65,004 | $ 79,852 | $ 142,334 |
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 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 | (25,955) | |||||
Net income (loss) | 155,931 | |||||
Ending Balance at Sep. 30, 2022 | $ 37 | 128,079 | (14,797) | 875,968 | 661 | 989,948 |
Ending Balance (in shares) at Sep. 30, 2022 | 37,393 | |||||
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 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 | |||||
Stock issued from equity plans | 256 | 256 | ||||
Stock issued from equity plans (in shares) | 35 | |||||
Stock-based compensation | 5,953 | 5,953 | ||||
Share repurchases | (112) | (2,230) | (2,342) | |||
Share repurchases (in shares) | (34) | |||||
Dividends declared ($0.10 per share) | (3,812) | (3,812) | ||||
Other comprehensive loss | (9,163) | (9,163) | ||||
Net income (loss) | 74,167 | 9 | 74,176 | |||
Ending Balance at Sep. 30, 2022 | $ 37 | 128,079 | (14,797) | 875,968 | $ 661 | 989,948 |
Ending Balance (in shares) at Sep. 30, 2022 | 37,393 | |||||
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 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 | ||||
Share repurchases | $ (40,000) | |||||
Net income (loss) | 90,782 | |||||
Ending Balance at Sep. 30, 2023 | $ 37 | 139,283 | 5,390 | 956,161 | $ 1,100,871 | |
Ending Balance (in shares) at Sep. 30, 2023 | 37,280 | 37,280 | ||||
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 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 | |||||
Stock issued from equity plans | 130 | 130 | ||||
Stock issued from equity plans (in shares) | 8 | |||||
Stock-based compensation | 7,506 | 7,506 | ||||
Share repurchases | $ (1) | (1,530) | (38,469) | (40,000) | ||
Share repurchases (in shares) | (378) | |||||
Dividends declared ($0.10 per share) | (3,830) | (3,830) | ||||
Other comprehensive loss | (6,891) | (6,891) | ||||
Warrants and note hedges, net | (40,135) | (40,135) | ||||
Tax impact of convertible notes and note hedges | 26,091 | 26,091 | ||||
Net income (loss) | 32,721 | 32,721 | ||||
Ending Balance at Sep. 30, 2023 | $ 37 | $ 139,283 | $ 5,390 | $ 956,161 | $ 1,100,871 | |
Ending Balance (in shares) at Sep. 30, 2023 | 37,280 | 37,280 |
Unaudited Consolidated Statem_4
Unaudited Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | 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 | $ 0.10 | $ 0.10 |
Unaudited Consolidated Statem_5
Unaudited Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 90,782 | $ 155,931 |
Less: loss from discontinued operations, net of income tax | (2,076) | (615) |
Income from continuing operations, net of income tax | 92,858 | 156,546 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 49,764 | 44,433 |
Stock-based compensation | 22,813 | 15,008 |
Benefit for deferred income tax | (996) | (2,496) |
Loss (gain) on disposal and sale of assets | 394 | (4,058) |
Changes in operating assets and liabilities, net of assets acquired | ||
Accounts and other receivable, net | 35,135 | (68,591) |
Inventories | 9,025 | (70,407) |
Other assets | 4,121 | (11,858) |
Accounts payable | (26,203) | 21,630 |
Other liabilities and accrued expenses | (58,671) | 32,775 |
Net cash from operating activities from continuing operations | 128,240 | 112,982 |
Net cash from operating activities from discontinued operations | (3,307) | (81) |
Net cash from operating activities | 124,933 | 112,901 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of investments | (3,447) | |
Purchases of property and equipment | (46,782) | (39,507) |
Acquisitions, net of cash acquired | (145,779) | |
Net cash from investing activities | (50,229) | (185,286) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from long-term borrowings | 575,000 | |
Payment of fees for long-term borrowings | (12,985) | |
Payments on long-term borrowings | (15,000) | (15,000) |
Dividend payments | (11,422) | (11,407) |
Payment for purchase of note hedges | (115,000) | |
Proceeds from sale of warrants | 74,865 | |
Purchase and retirement of common stock | (40,000) | (25,955) |
Net payments related to stock-based awards | (1,254) | (1,411) |
Net cash from financing activities | 454,204 | (53,773) |
EFFECT OF CURRENCY TRANSLATION ON CASH AND CASH EQUIVALENTS | (1,795) | (9,161) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 527,113 | (135,319) |
CASH AND CASH EQUIVALENTS, beginning of period | 458,818 | 544,372 |
CASH AND CASH EQUIVALENTS, end of period | 985,931 | 409,053 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 8,060 | 4,303 |
Cash paid for income taxes | $ 45,040 | $ 5,393 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 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 this raw power 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. Many of our products enable our original equipment manufacturer (“OEM”) customers to optimize their energy consumption through increased power conversion efficiency, power density, power coupling, and process control across a wide range of applications. Our plasma power solutions enable innovation in complex semiconductor and thin film plasma-based manufacturing 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 September 30, 2023, and the results of our operations and cash flows for the three and nine months ended September 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 tax 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 Agreement (see Note 18. Long-Term Debt Note 7. Derivative Financial Instruments |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2023 | |
ACQUISITIONS | |
ACQUISITIONS | NOTE 2. ACQUISITIONS 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 extended 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 tax 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 | 9 Months Ended |
Sep. 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 September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Semiconductor Equipment $ 185,033 $ 266,600 $ 552,419 $ 698,354 Industrial and Medical 115,226 119,587 365,849 307,436 Data Center Computing 68,286 87,542 187,021 232,941 Telecom and Networking 41,446 42,545 145,250 115,951 Total $ 409,991 $ 516,274 $ 1,250,539 $ 1,354,682 Revenue by Region Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 North America $ 184,783 $ 238,115 $ 537,241 $ 626,953 Asia 178,190 215,401 543,871 557,629 Europe 46,088 61,456 164,867 157,972 Other 930 1,302 4,560 12,128 Total $ 409,991 $ 516,274 $ 1,250,539 $ 1,354,682 Revenue by Significant Countries Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 United States $ 156,710 $ 179,205 $ 457,325 $ 530,240 China 41,391 53,522 132,039 139,652 All others 211,890 283,547 661,175 684,790 Total $ 409,991 $ 516,274 $ 1,250,539 $ 1,354,682 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 nine months ended September 30, 2023 and 2022. Revenue by Category Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Product $ 369,129 $ 471,627 $ 1,118,284 $ 1,238,480 Services 40,862 44,647 132,255 116,202 Total $ 409,991 $ 516,274 $ 1,250,539 $ 1,354,682 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 TAX
INCOME TAX | 9 Months Ended |
Sep. 30, 2023 | |
INCOME TAX | |
INCOME TAX | NOTE 4. INCOME TAX The following table summarizes tax expense and the effective tax rate for our income from continuing operations: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Income from continuing operations, before income tax $ 34,525 $ 86,512 $ 106,263 $ 186,341 Provision for income tax $ 874 $ 11,639 $ 13,405 $ 29,795 Effective tax rate 2.5% 13.5% 12.6% 16.0% Our effective tax rates differ from the U.S. federal statutory rate of 21% for the three and nine months ended September 30, 2023 and 2022, 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 nine months ended September 30, 2023 was lower than the same periods in 2022 primarily due to the greater impact of beneficial discrete items primarily related to tax strategies we implemented in the three months ended September 30, 2023 relative to the beneficial discrete items recorded in the three months ended September 30, 2022. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 5. EARNINGS PER SHARE The following table summarizes our earnings per share (“EPS”): Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Income from continuing operations $ 33,651 $ 74,873 $ 92,858 $ 156,546 Less: — 9 — 16 Income from continuing operations $ 33,651 $ 74,864 $ 92,858 $ 156,530 Basic weighted-average common shares outstanding 37,575 37,379 37,541 37,482 Dilutive effect of stock awards 279 251 301 243 Diluted weighted-average common shares outstanding 37,854 37,630 37,842 37,725 EPS from continuing operations Basic EPS $ 0.90 $ 2.00 $ 2.47 $ 4.18 Diluted EPS $ 0.89 $ 1.99 $ 2.45 $ 4.15 Anti-dilutive shares not included above Stock awards 27 121 84 58 Warrants 3,180 — 3,180 — Convertible Notes 1,448 — 1,448 — Total anti-dilutive shares 4,655 121 4,712 58 We compute basic earnings per share of common stock (“Basic EPS”) by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. See Note 18. Long-Term Debt ● Dilutive impact associated with the Convertible Notes using the if-converted method. The Convertible Notes are repayable in cash up to par value and in cash or shares of common stock for the excess over par value. Prior to conversion, we do not consider the Note Hedges for purposes of Diluted EPS as their effect would be anti-dilutive. Upon conversion, we expect the Note Hedges to offset the dilutive effect of the Convertible Notes when the stock price is above $137.46 ; ● Additional common shares that would have been outstanding if our outstanding stock awards had been converted to common shares using the treasury stock method. We exclude any stock awards that have an anti-dilutive effect; and ● Dilutive effect of the Warrants issued concurrently with the Convertible Notes using the treasury stock method. For all periods presented, the Warrants did not increase the weighted-average number of common shares outstanding because the exercise price of the Warrants exceeded the average market price of our common stock. Share Repurchase To repurchase shares of our common stock, we periodically enter into stock repurchase agreements. The following table summarizes these repurchases: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share amounts) 2023 2022 2023 2022 Amount paid or accrued to repurchase shares $ 40,000 $ 2,342 $ 40,000 $ 25,955 Number of shares repurchased 378 34 378 346 Average repurchase price per share $ 105.74 $ 69.39 $ 105.74 $ 75.07 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 (“the Board”) for future share repurchases was $199.3 million with no time limitation. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 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: September 30, 2023 Description Balance Sheet Classification Level 1 Level 2 Level 3 Total Fair Value Certificates of deposit Other current assets $ — $ 155 $ — $ 155 Foreign currency forward contracts Other current assets — 83 — 83 Interest rate swaps Other assets — 10,273 — 10,273 Net assets measured at fair value on a recurring basis $ — $ 10,511 $ — $ 10,511 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 | 9 Months Ended |
Sep. 30, 2023 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 7. DERIVATIVE FINANCIAL INSTRUMENTS Changes in foreign currency exchange rates impact our results of operations and cash flows. 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: September 30, December 31, 2023 2022 Foreign currency forward contracts $ 104,137 $ — 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, see Note 18. Long-Term Debt 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. Long-Term Debt The following table summarizes the notional amount of our qualified hedging instruments: September 30, December 31, 2023 2022 Interest rate swap contracts $ 225,094 $ 238,219 The following table summarizes the amounts recorded in accumulated other comprehensive income on the Consolidated Balance Sheets for qualifying hedges. September 30, December 31, 2023 2022 Interest rate swap contract gains $ 7,885 $ 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 | 9 Months Ended |
Sep. 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 220 Deductions - write-offs, net of recoveries (297) Foreign currency translation (5) September 30, 2023 $ 1,732 |
INVENTORIES
INVENTORIES | 9 Months Ended |
Sep. 30, 2023 | |
INVENTORIES | |
INVENTORIES | NOTE 9. INVENTORIES We value inventories at the lower of cost or net realizable value, computed on a first-in, first-out basis. Components of inventories were as follows: September 30, December 31, 2023 2022 Parts and raw materials $ 273,941 $ 286,955 Work in process 13,750 23,002 Finished goods 76,312 66,055 Total $ 364,003 $ 376,012 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 9 Months Ended |
Sep. 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 September 30, December 31, Life (in years) 2023 2022 Buildings, machinery, and equipment 5 to 25 $ 183,673 $ 165,673 Computer equipment, furniture, fixtures, and vehicles 3 to 5 42,555 36,281 Leasehold improvements 2 to 10 75,308 63,103 Construction in process 19,525 18,226 321,061 283,283 Less: Accumulated depreciation (159,390) (134,821) Property and equipment, net $ 161,671 $ 148,462 The following table summarizes depreciation expense. All depreciation expense is recorded in income from continuing operations: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Depreciation expense $ 9,749 $ 8,507 $ 28,578 $ 25,352 |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 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 (73) September 30, 2023 $ 281,713 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 12. INTANGIBLE ASSETS Intangible assets consisted of the following: September 30, 2023 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Technology $ 97,171 $ (56,574) $ 40,597 Customer relationships 167,480 (54,570) 112,910 Trademarks and other 27,040 (12,336) 14,704 Total $ 291,691 $ (123,480) $ 168,211 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 September 30, 2023, the weighted average remaining useful life of intangibles subject to amortization was approximately 8.7 years. Amortization expense related to intangible assets is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Amortization expense $ 7,049 $ 7,049 $ 21,186 $ 19,081 Estimated amortization expense related to intangibles is as follows: Year Ending December 31, 2023 (remaining) $ 7,054 2024 25,156 2025 20,953 2026 19,238 2027 17,339 Thereafter 78,471 Total $ 168,211 |
RESTRUCTURING COSTS
RESTRUCTURING COSTS | 9 Months Ended |
Sep. 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 our business combinations by consolidating our operations, optimizing our factory footprint, including moving certain production into our higher volume factories, reducing redundancies, and lowering our cost structure. The majority of these actions impact our factory operations and should partially mitigate the impact of lower volumes on gross margins. Although we expect additional charges under this plan as we refine and execute our actions, we anticipate the 2022 Plan will be substantially completed, and associated expenses will be incurred, by the end of 2024. In 2018, we committed to a restructuring plan (the “2018 Plan”) to optimize our manufacturing footprint and to improve our 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. This plan is substantially complete with the closure of our Shenzhen facility in February 2023. The tables below summarize the charges related to our restructuring plans: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Severance and related charges $ 4,709 $ 121 $ 8,906 $ 833 Facility relocation and closure charges — — — 345 Total restructuring charges $ 4,709 $ 121 $ 8,906 $ 1,178 Cumulative Cost Through September 30, 2023 2022 Plan 2018 Plan Total Severance and related charges $ 14,792 $ 20,963 $ 35,755 Facility relocation and closure charges — 7,160 7,160 Total restructuring charges $ 14,792 $ 28,123 $ 42,915 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 9,004 (98) 8,906 Costs paid or otherwise settled (8,314) (960) (9,274) September 30, 2023 $ 6,478 $ 364 $ 6,842 |
WARRANTIES
WARRANTIES | 9 Months Ended |
Sep. 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 2,330 Warranty expenditures (2,823) Effect of changes in exchange rates (35) September 30, 2023 $ 5,174 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2023 | |
LEASES | |
LEASES | NOTE 15. LEASES Components of total operating lease cost were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease cost $ 5,629 $ 5,613 $ 16,965 $ 17,061 Short-term and variable lease cost 1,100 1,177 3,170 3,516 Total operating lease cost $ 6,729 $ 6,790 $ 20,135 $ 20,577 Maturities of our operating lease liabilities are as follows: Year Ending December 31, 2023 (remaining) $ 5,681 2024 21,662 2025 18,451 2026 15,912 2027 12,994 Thereafter 63,639 Total lease payments 138,339 Less: Interest (31,073) Present value of lease liabilities $ 107,266 In addition to the above, we have lease agreements that commence in October 2023 with total payments of $31.8 million through 2036. The following tables present additional information about our lease agreements: September 30, December 31, 2023 2022 Weighted average remaining lease term (in years) 8.3 8.9 Weighted average discount rate 5.0 % 4.6 % Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cash paid for operating leases $ 5,683 $ 5,557 $ 17,290 $ 16,642 Right-of-use assets obtained in exchange for operating lease liabilities $ 9,271 $ 2,222 $ 11,900 $ 14,433 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 16. STOCK-BASED COMPENSATION The Compensation Committee of our Board administers our stock plans. As of September 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: September 30, 2023 Shares available for future issuance under the 2023 Plan 2,318 Shares available for future issuance under the ESPP 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 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 September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Stock-based compensation expense $ 8,075 $ 6,022 $ 22,813 $ 15,008 Changes in our RSUs were as follows: Nine Months Ended September 30, 2023 Weighted- Average Number of Grant Date RSUs Fair Value RSUs outstanding at beginning of period 803 $ 78.46 RSUs granted 397 $ 100.15 RSUs vested (203) $ 85.60 RSUs forfeited (51) $ 78.35 RSUs outstanding at end of period 946 $ 85.91 Changes in our stock options were as follows: Nine Months Ended September 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 | 9 Months Ended |
Sep. 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 such 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. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2023 | |
LONG-TERM DEBT | |
LONG-TERM DEBT | NOTE 18. LONG-TERM DEBT Long-term debt on our Consolidated Balance Sheets consists of the following: September 30, December 31, 2023 2022 Convertible Notes due 2028 $ 575,000 $ — Term Loan Facility due 2026 360,000 375,000 Gross long-term debt, including current maturities 935,000 375,000 Less: debt discount (15,152) (1,738) Net long-term debt, including current maturities 919,848 373,262 Less: current maturities (20,000) (20,000) Net long-term debt $ 899,848 $ 353,262 For all periods presented, we were in compliance with the covenants under all debt agreements. Contractual maturities of our gross long-term debt, including current maturities, are as follows: Year Ending December 31, 2023 (remaining) $ 5,000 2024 20,000 2025 20,000 2026 315,000 2027 — 2028 575,000 Total $ 935,000 The following table summarizes our borrowings: September 30, 2023 Balance Interest Rate Unused Line Fee Convertible Notes $ 575,000 2.50% — Term Loan Facility at fixed interest rate due to interest rate swap 225,094 1.17% — Term Loan Facility at variable interest rate 134,906 6.17% — Revolving Facility at variable interest rate — 6.17% 0.10% Total borrowings $ 935,000 The interest rate swap contracts expire on September 10, 2024. After that date, this portion of our Term Loan Facility will be subject to a variable interest rate. For more information, see Note 7. Derivative Financial Instruments We record interest expense and unused line of credit fees in other income (expense), net in our Consolidated Statements of Operations. Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Interest expense $ 3,528 $ 1,842 $ 8,818 $ 4,303 Amortization of debt issuance costs 245 136 509 413 Unused line of credit fees and other 52 51 152 152 Total interest expense $ 3,825 $ 2,029 $ 9,479 $ 4,868 Convertible Senior Notes due 2028 On September 12, 2023, we completed a private, unregistered offering of $575.0 million aggregate principal amount 2.50% convertible senior notes (“Convertible Notes”) and received net proceeds of approximately $562.1 million after the discount for the initial purchasers’ fees. We used $40.0 million of the net proceeds to repurchase approximately 0.4 million shares of common stock and $40.1 million to fund the net cost of convertible note hedge transactions (“Note Hedges”) (after such costs were offset by the proceeds from the sale of warrants to purchase our common stock (“Warrants”). The Convertible Notes mature on September 15, 2028, unless earlier repurchased, redeemed, or converted. Interest is payable semi-annually in arrears in March and September. We do not maintain a sinking fund. We may redeem for cash all or any portion of the Convertible Notes, at our option, on or after September 20, 2026 if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period (including the last trading day of such period). The redemption price is 100% of the principal amount plus accrued and unpaid interest. Prior to May 15, 2028, holders have the option to convert all or a portion of their Convertible Notes under the following circumstances: ● during any calendar quarter if the last reported sale price of our common stock, for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days is greater than or equal to 130% of the conversion price on each applicable trading day; ● during the five business day period immediately after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day was less than 98% of the product of the last reported sale price of our common stock on each such trading day and the conversion rate on each such trading day; ● if Advanced Energy calls any or all of the Convertible Notes for redemption; or ● upon the occurrence of specified corporate transactions or events described in the indenture. From May 15, 2028 through the maturity date, holders have the option to convert at any time regardless of circumstances. The initial conversion rate is 7.2747 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $137.46 per share of common stock. The conversion rate is subject to adjustment upon the occurrence of certain specified events as set forth in the indenture. Upon conversion, Advanced Energy will do the following: ● pay cash up to the aggregate principal amount to be converted; and ● pay or deliver cash, shares of our common stock, or a combination (at our election) with respect to the remainder, if any, of the conversion obligation in excess of the aggregate principal amount being converted. Concurrent with the Convertible Notes issuance, we entered into the Note Hedges with respect to our common stock. We will exercise the Note Hedges simultaneously when the Convertible Notes are settled. The Note Hedges have a $137.46 per share initial exercise price and cover, subject to customary anti-dilution adjustments, the number of shares of common stock that initially underlie the Convertible Notes and are expected to reduce the potential dilution to the common stock and/or offset potential cash payments in excess of the principal amount upon conversion of the Convertible Notes. We paid approximately $ million in cash for the Note Hedges, which we recorded to additional paid-in capital in our Statements of Stockholders’ Equity . Also concurrent with the issuance of our Convertible Notes, we sold Warrants, which provide the counterparties the option to acquire approximately million aggregate shares of our common stock (subject to customary anti-dilution adjustments), which is the same number of shares of our common stock covered by the Note Hedges at a $179.76 per share initial exercise price, which represents a premium over the $ closing price of our common stock on September 7, 2023. The Warrants expire on July 7, 2029. We received aggregate proceeds of $ million for the sale of Warrants, which we recorded to additional paid-in capital in our Statements of Stockholders’ Equity. If the market value per share of our common stock exceeds the exercise price of the Warrants during the measurement period at the maturity of such Warrants, the Warrants will have a dilutive effect on our earnings per share as we will owe the counterparties a number of shares of common stock in an amount based on the excess of such market price per share of the common stock over the Warrants’ exercise price. The Note Hedge and Warrants are separate from the Convertible Notes. The Convertible Notes holders have no rights with respect to the Note Hedges and Warrants. Counterparties in the Note Hedge and Warrants transactions have no rights with respect to the Convertible Notes. However, in combination, the Note Hedges and Warrants synthetically increase the initial conversion price on the Convertible Notes from $137.46 to $179.76, reducing the potential dilutive effect of the Convertible Notes. Credit Agreement Our credit agreement dated as of September 10, 2019, as amended (the “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. On September 7, 2023, we entered into an additional amendment to the Credit Agreement to amend certain definitions, covenants, and events of default to enable the issuance of the Convertible Notes and the entry into the Note Hedges and Warrants. The following table summarizes our availability to withdraw on the Revolving Facility: September 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. We use level 2 measurements to estimate the fair value of our debt. As of September 30, 2023, the outstanding principal balance on our Term Loan Facility approximates fair value, and we estimate the fair value of our Convertible Notes to be $575.0 million. |
DESCRIPTION OF BUSINESS AND B_2
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 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 tax 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 Agreement (see Note 18. Long-Term Debt Note 7. Derivative Financial Instruments |
DESCRIPTION OF BUSINESS AND B_3
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 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 | 9 Months Ended |
Sep. 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 tax 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) | 9 Months Ended |
Sep. 30, 2023 | |
REVENUE | |
Schedule of disaggregation of revenue | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Semiconductor Equipment $ 185,033 $ 266,600 $ 552,419 $ 698,354 Industrial and Medical 115,226 119,587 365,849 307,436 Data Center Computing 68,286 87,542 187,021 232,941 Telecom and Networking 41,446 42,545 145,250 115,951 Total $ 409,991 $ 516,274 $ 1,250,539 $ 1,354,682 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 North America $ 184,783 $ 238,115 $ 537,241 $ 626,953 Asia 178,190 215,401 543,871 557,629 Europe 46,088 61,456 164,867 157,972 Other 930 1,302 4,560 12,128 Total $ 409,991 $ 516,274 $ 1,250,539 $ 1,354,682 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 United States $ 156,710 $ 179,205 $ 457,325 $ 530,240 China 41,391 53,522 132,039 139,652 All others 211,890 283,547 661,175 684,790 Total $ 409,991 $ 516,274 $ 1,250,539 $ 1,354,682 Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Product $ 369,129 $ 471,627 $ 1,118,284 $ 1,238,480 Services 40,862 44,647 132,255 116,202 Total $ 409,991 $ 516,274 $ 1,250,539 $ 1,354,682 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
INCOME TAX | |
Schedule of tax expense and the effective tax rate for income from continuing operations | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Income from continuing operations, before income tax $ 34,525 $ 86,512 $ 106,263 $ 186,341 Provision for income tax $ 874 $ 11,639 $ 13,405 $ 29,795 Effective tax rate 2.5% 13.5% 12.6% 16.0% |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
EARNINGS PER SHARE | |
Reconciliation of weighted-average shares outstanding used in calculation of basic and diluted EPS | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Income from continuing operations $ 33,651 $ 74,873 $ 92,858 $ 156,546 Less: — 9 — 16 Income from continuing operations $ 33,651 $ 74,864 $ 92,858 $ 156,530 Basic weighted-average common shares outstanding 37,575 37,379 37,541 37,482 Dilutive effect of stock awards 279 251 301 243 Diluted weighted-average common shares outstanding 37,854 37,630 37,842 37,725 EPS from continuing operations Basic EPS $ 0.90 $ 2.00 $ 2.47 $ 4.18 Diluted EPS $ 0.89 $ 1.99 $ 2.45 $ 4.15 Anti-dilutive shares not included above Stock awards 27 121 84 58 Warrants 3,180 — 3,180 — Convertible Notes 1,448 — 1,448 — Total anti-dilutive shares 4,655 121 4,712 58 |
Schedule of repurchase of shares of common stock | Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share amounts) 2023 2022 2023 2022 Amount paid or accrued to repurchase shares $ 40,000 $ 2,342 $ 40,000 $ 25,955 Number of shares repurchased 378 34 378 346 Average repurchase price per share $ 105.74 $ 69.39 $ 105.74 $ 75.07 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
FAIR VALUE MEASUREMENTS | |
Schedule of assets and liabilities measured at fair value on a recurring basis | September 30, 2023 Description Balance Sheet Classification Level 1 Level 2 Level 3 Total Fair Value Certificates of deposit Other current assets $ — $ 155 $ — $ 155 Foreign currency forward contracts Other current assets — 83 — 83 Interest rate swaps Other assets — 10,273 — 10,273 Net assets measured at fair value on a recurring basis $ — $ 10,511 $ — $ 10,511 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) | 9 Months Ended |
Sep. 30, 2023 | |
DERIVATIVE FINANCIAL INSTRUMENTS | |
Schedule of notional amount of outstanding foreign currency forward contracts | September 30, December 31, 2023 2022 Foreign currency forward contracts $ 104,137 $ — |
Schedule of notional amount of qualified hedging instruments | September 30, December 31, 2023 2022 Interest rate swap contracts $ 225,094 $ 238,219 |
Schedule of balances recorded in Accumulated other comprehensive income | September 30, December 31, 2023 2022 Interest rate swap contract gains $ 7,885 $ 11,779 |
ACCOUNTS AND OTHER RECEIVABLE_2
ACCOUNTS AND OTHER RECEIVABLES, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
ACCOUNTS AND OTHER RECEIVABLES, NET | |
Schedule of accounts and other receivable | December 31, 2022 $ 1,814 Additions 220 Deductions - write-offs, net of recoveries (297) Foreign currency translation (5) September 30, 2023 $ 1,732 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
INVENTORIES | |
Schedule of components of inventories | September 30, December 31, 2023 2022 Parts and raw materials $ 273,941 $ 286,955 Work in process 13,750 23,002 Finished goods 76,312 66,055 Total $ 364,003 $ 376,012 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment, net | Estimated Useful September 30, December 31, Life (in years) 2023 2022 Buildings, machinery, and equipment 5 to 25 $ 183,673 $ 165,673 Computer equipment, furniture, fixtures, and vehicles 3 to 5 42,555 36,281 Leasehold improvements 2 to 10 75,308 63,103 Construction in process 19,525 18,226 321,061 283,283 Less: Accumulated depreciation (159,390) (134,821) Property and equipment, net $ 161,671 $ 148,462 |
Schedule of depreciation expense recorded in continuing operations | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Depreciation expense $ 9,749 $ 8,507 $ 28,578 $ 25,352 |
GOODWILL (Tables)
GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of changes in goodwill | December 31, 2022 $ 281,433 Measurement period adjustments 353 Foreign currency translation (73) September 30, 2023 $ 281,713 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
GOODWILL AND INTANGIBLE ASSETS | |
Schedule of intangible assets | September 30, 2023 Gross Carrying Accumulated Net Carrying Amount Amortization Amount Technology $ 97,171 $ (56,574) $ 40,597 Customer relationships 167,480 (54,570) 112,910 Trademarks and other 27,040 (12,336) 14,704 Total $ 291,691 $ (123,480) $ 168,211 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 September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Amortization expense $ 7,049 $ 7,049 $ 21,186 $ 19,081 |
Schedule of estimated amortization expense related to intangible assets | Year Ending December 31, 2023 (remaining) $ 7,054 2024 25,156 2025 20,953 2026 19,238 2027 17,339 Thereafter 78,471 Total $ 168,211 |
RESTRUCTURING COSTS (Tables)
RESTRUCTURING COSTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
RESTRUCTURING COSTS | |
Schedule of restructuring charges | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Severance and related charges $ 4,709 $ 121 $ 8,906 $ 833 Facility relocation and closure charges — — — 345 Total restructuring charges $ 4,709 $ 121 $ 8,906 $ 1,178 Cumulative Cost Through September 30, 2023 2022 Plan 2018 Plan Total Severance and related charges $ 14,792 $ 20,963 $ 35,755 Facility relocation and closure charges — 7,160 7,160 Total restructuring charges $ 14,792 $ 28,123 $ 42,915 |
Schedule of restructuring liabilities | 2022 Plan 2018 Plan Total December 31, 2022 $ 5,788 $ 1,422 $ 7,210 Costs incurred and charged to expense 9,004 (98) 8,906 Costs paid or otherwise settled (8,314) (960) (9,274) September 30, 2023 $ 6,478 $ 364 $ 6,842 |
WARRANTIES (Tables)
WARRANTIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
WARRANTIES | |
Schedule of changes in accrued product warranties | December 31, 2022 $ 5,702 Net increases to accruals 2,330 Warranty expenditures (2,823) Effect of changes in exchange rates (35) September 30, 2023 $ 5,174 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
LEASES | |
Components of operating lease cost | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Operating lease cost $ 5,629 $ 5,613 $ 16,965 $ 17,061 Short-term and variable lease cost 1,100 1,177 3,170 3,516 Total operating lease cost $ 6,729 $ 6,790 $ 20,135 $ 20,577 |
Schedule of maturities of operating lease liabilities | Year Ending December 31, 2023 (remaining) $ 5,681 2024 21,662 2025 18,451 2026 15,912 2027 12,994 Thereafter 63,639 Total lease payments 138,339 Less: Interest (31,073) Present value of lease liabilities $ 107,266 |
Schedule of other information related to leases | September 30, December 31, 2023 2022 Weighted average remaining lease term (in years) 8.3 8.9 Weighted average discount rate 5.0 % 4.6 % Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Cash paid for operating leases $ 5,683 $ 5,557 $ 17,290 $ 16,642 Right-of-use assets obtained in exchange for operating lease liabilities $ 9,271 $ 2,222 $ 11,900 $ 14,433 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
STOCK-BASED COMPENSATION | |
Summary of information related to stock-based incentive compensation plans | September 30, 2023 Shares available for future issuance under the 2023 Plan 2,318 Shares available for future issuance under the ESPP 598 |
Schedule of stock-based compensation | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Stock-based compensation expense $ 8,075 $ 6,022 $ 22,813 $ 15,008 |
Summary of changes in RSUs | Nine Months Ended September 30, 2023 Weighted- Average Number of Grant Date RSUs Fair Value RSUs outstanding at beginning of period 803 $ 78.46 RSUs granted 397 $ 100.15 RSUs vested (203) $ 85.60 RSUs forfeited (51) $ 78.35 RSUs outstanding at end of period 946 $ 85.91 |
Summary of changes in stock options | Nine Months Ended September 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 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
LONG-TERM DEBT | |
Schedule of long-term debt | September 30, December 31, 2023 2022 Convertible Notes due 2028 $ 575,000 $ — Term Loan Facility due 2026 360,000 375,000 Gross long-term debt, including current maturities 935,000 375,000 Less: debt discount (15,152) (1,738) Net long-term debt, including current maturities 919,848 373,262 Less: current maturities (20,000) (20,000) Net long-term debt $ 899,848 $ 353,262 |
Schedule of contractual maturities of gross long-term debt | Year Ending December 31, 2023 (remaining) $ 5,000 2024 20,000 2025 20,000 2026 315,000 2027 — 2028 575,000 Total $ 935,000 |
Schedule of borrowings under credit facility | September 30, 2023 Balance Interest Rate Unused Line Fee Convertible Notes $ 575,000 2.50% — Term Loan Facility at fixed interest rate due to interest rate swap 225,094 1.17% — Term Loan Facility at variable interest rate 134,906 6.17% — Revolving Facility at variable interest rate — 6.17% 0.10% Total borrowings $ 935,000 |
Schedule of interest expense and unused line of credit fees | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Interest expense $ 3,528 $ 1,842 $ 8,818 $ 4,303 Amortization of debt issuance costs 245 136 509 413 Unused line of credit fees and other 52 51 152 152 Total interest expense $ 3,825 $ 2,029 $ 9,479 $ 4,868 |
Schedule of availability to withdraw on Revolving Facility | September 30, December 31, 2023 2022 Available capacity on Revolving Facility $ 200,000 $ 200,000 |
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 | Sep. 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 tax 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 | Sep. 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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 409,991 | $ 516,274 | $ 1,250,539 | $ 1,354,682 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 184,783 | 238,115 | 537,241 | 626,953 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 178,190 | 215,401 | 543,871 | 557,629 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 46,088 | 61,456 | 164,867 | 157,972 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 930 | 1,302 | 4,560 | 12,128 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 156,710 | 179,205 | 457,325 | 530,240 |
China | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 41,391 | 53,522 | 132,039 | 139,652 |
All others | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 211,890 | $ 283,547 | $ 661,175 | $ 684,790 |
Countries apart from United States and China | 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 | $ 185,033 | $ 266,600 | $ 552,419 | $ 698,354 |
Industrial and Medical | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 115,226 | 119,587 | 365,849 | 307,436 |
Data Center Computing | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 68,286 | 87,542 | 187,021 | 232,941 |
Telecom and Networking | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 41,446 | 42,545 | 145,250 | 115,951 |
Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 369,129 | 471,627 | 1,118,284 | 1,238,480 |
Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 40,862 | $ 44,647 | $ 132,255 | $ 116,202 |
INCOME TAX - Schedule of Tax Ex
INCOME TAX - Schedule of Tax Expense and Effective Tax Rate for Income from Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
INCOME TAX | ||||
Income from continuing operations, before income tax | $ 34,525 | $ 86,512 | $ 106,263 | $ 186,341 |
Provision for income tax | $ 874 | $ 11,639 | $ 13,405 | $ 29,795 |
Effective tax rate | 2.50% | 13.50% | 12.60% | 16% |
INCOME TAX - Narrative (Details
INCOME TAX - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
INCOME TAX | ||||
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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Income from continuing operations | $ 33,651 | $ 74,873 | $ 92,858 | $ 156,546 |
Less: income from continuing operations attributable to noncontrolling interest | 9 | 16 | ||
Income from continuing operations attributable to Advanced Energy Industries, Inc. | $ 33,651 | $ 74,864 | $ 92,858 | $ 156,530 |
Basic weighted-average common shares outstanding | 37,575 | 37,379 | 37,541 | 37,482 |
Dilutive effect of stock awards | 279 | 251 | 301 | 243 |
Diluted weighted-average common shares outstanding | 37,854 | 37,630 | 37,842 | 37,725 |
Continuing operations: | ||||
Basic EPS (in dollars per share) | $ 0.90 | $ 2 | $ 2.47 | $ 4.18 |
Diluted EPS (in dollars per share) | $ 0.89 | $ 1.99 | $ 2.45 | $ 4.15 |
Anti-dilutive shares | 4,655 | 121 | 4,712 | 58 |
Stock awards | ||||
Continuing operations: | ||||
Anti-dilutive shares | 27 | 121 | 84 | 58 |
Warrant | ||||
Continuing operations: | ||||
Anti-dilutive shares | 3,180 | 3,180 | ||
2.50% Convertible Notes | ||||
Continuing operations: | ||||
Anti-dilutive shares | 1,448 | 1,448 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - 2.50% Convertible Notes - $ / shares | Sep. 13, 2023 | Sep. 12, 2023 |
Debt Instrument [Line Items] | ||
Interest rate | 2.50% | |
Conversion price | $ 179.76 | $ 137.46 |
EARNINGS PER SHARE - Share Repu
EARNINGS PER SHARE - Share Repurchases (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
EARNINGS PER SHARE | ||||||
Amount paid or accrued to repurchase shares | $ 40,000 | $ 2,342 | $ 17,019 | $ 6,594 | $ 40,000 | $ 25,955 |
Number of shares repurchased | 378,000 | 34,000 | 378,000 | 346,000 | ||
Average repurchase price per share | $ 105.74 | $ 69.39 | $ 105.74 | $ 75.07 | ||
Shares repurchased from related parties | 0 | |||||
Remaining amount authorized by Board of Directors for future share repurchases | $ 199,300 | $ 199,300 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities Measured at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Sep. 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 | $ 10,511 | $ 17,438 |
Foreign Currency Forward Contracts | Other Current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, Fair Value Disclosure | 83 | |
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 | 155 | 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 | 10,273 | 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 | 10,511 | 17,438 |
Fair Value, Inputs, Level 2 | Foreign Currency Forward Contracts | Other Current Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, Fair Value Disclosure | 83 | |
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 | 155 | 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 | $ 10,273 | $ 15,310 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 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 | 9 Months Ended |
Sep. 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 contracts | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative, notional amount | $ 104,137 |
DERIVATIVE FINANCIAL INSTRUME_4
DERIVATIVE FINANCIAL INSTRUMENTS - Qualified Hedging Instruments (Details) - Interest Rate Swaps - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Derivative [Line Items] | ||
Derivative, notional amount | $ 225,094 | $ 238,219 |
Balances recorded in accumulated other comprehensive income | $ 7,885 | $ 11,779 |
ACCOUNTS AND OTHER RECEIVABLE_3
ACCOUNTS AND OTHER RECEIVABLES, NET - Expected Credit Losses - (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
ACCOUNTS AND OTHER RECEIVABLES, NET | |
Balance as of beginning of period | $ 1,814 |
Additions | 220 |
Deductions - write-offs, net of recoveries | (297) |
Foreign currency translation | (5) |
Balance as of end of period | $ 1,732 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
INVENTORIES | ||
Parts and raw materials | $ 273,941 | $ 286,955 |
Work in process | 13,750 | 23,002 |
Finished goods | 76,312 | 66,055 |
Total | $ 364,003 | $ 376,012 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 321,061 | $ 283,283 |
Less: Accumulated depreciation | (159,390) | (134,821) |
Property and equipment, net | 161,671 | 148,462 |
Buildings, machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 183,673 | $ 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 | $ 42,555 | $ 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 | $ 75,308 | $ 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 | $ 19,525 | $ 18,226 |
PROPERTY AND EQUIPMENT, NET - D
PROPERTY AND EQUIPMENT, NET - Depreciation Expense Recorded in Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
PROPERTY AND EQUIPMENT, NET | ||||
Depreciation expense | $ 9,749 | $ 8,507 | $ 28,578 | $ 25,352 |
GOODWILL - Changes in Goodwill
GOODWILL - Changes in Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
GOODWILL AND INTANGIBLE ASSETS | |
Balance at beginning of period | $ 281,433 |
Measurement period adjustments | 353 |
Foreign currency translation | (73) |
Balance at end of period | $ 281,713 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 291,691 | $ 291,904 |
Finite-Lived Intangible Assets, Accumulated Amortization | (123,480) | (102,378) |
Finite-lived intangible assets, net | $ 168,211 | 189,526 |
Amortization of weighted average remaining useful life | 8 years 8 months 12 days | |
Technology. | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 97,171 | 97,237 |
Finite-Lived Intangible Assets, Accumulated Amortization | (56,574) | (47,196) |
Finite-lived intangible assets, net | 40,597 | 50,041 |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 167,480 | 167,631 |
Finite-Lived Intangible Assets, Accumulated Amortization | (54,570) | (44,774) |
Finite-lived intangible assets, net | 112,910 | 122,857 |
Trademarks and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 27,040 | 27,036 |
Finite-Lived Intangible Assets, Accumulated Amortization | (12,336) | (10,408) |
Finite-lived intangible assets, net | $ 14,704 | $ 16,628 |
INTANGIBLE ASSETS - Amortizatio
INTANGIBLE ASSETS - Amortization Expense Related to Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | ||||
Amortization expense | $ 7,049 | $ 7,049 | $ 21,186 | $ 19,081 |
INTANGIBLE ASSETS - Estimated A
INTANGIBLE ASSETS - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
GOODWILL AND INTANGIBLE ASSETS | ||
2023 (remaining) | $ 7,054 | |
2024 | 25,156 | |
2025 | 20,953 | |
2026 | 19,238 | |
2027 | 17,339 | |
Thereafter | 78,471 | |
Finite-lived intangible assets, net | $ 168,211 | $ 189,526 |
RESTRUCTURING COSTS - Restructu
RESTRUCTURING COSTS - Restructuring Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 21 Months Ended | 69 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | $ 4,709 | $ 121 | $ 8,906 | $ 1,178 | $ 42,915 | |
2022 Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | 9,004 | $ 14,792 | ||||
2018 Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | (98) | 28,123 | ||||
Severance and related charges | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | $ 4,709 | $ 121 | $ 8,906 | 833 | 35,755 | |
Severance and related charges | 2022 Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | $ 14,792 | |||||
Severance and related charges | 2018 Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Total restructuring charges | 20,963 | |||||
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 | 9 Months Ended | 21 Months Ended | 69 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2023 | |
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | $ 7,210 | |||||
Cost incurred and charged to expense | $ 4,709 | $ 121 | 8,906 | $ 1,178 | $ 42,915 | |
Cost paid or otherwise settled | (9,274) | |||||
Ending balance | 6,842 | 6,842 | $ 6,842 | 6,842 | ||
2022 Plan | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 5,788 | |||||
Cost incurred and charged to expense | 9,004 | 14,792 | ||||
Cost paid or otherwise settled | (8,314) | |||||
Ending balance | 6,478 | 6,478 | 6,478 | 6,478 | ||
2018 Plan | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Beginning balance | 1,422 | |||||
Cost incurred and charged to expense | (98) | 28,123 | ||||
Cost paid or otherwise settled | (960) | |||||
Ending balance | $ 364 | $ 364 | $ 364 | $ 364 |
WARRANTIES - Narrative (Details
WARRANTIES - Narrative (Details) | 9 Months Ended |
Sep. 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 | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Balance at beginning of period | $ 5,702 |
Net increases to accruals | 2,330 |
Warranty expenditures | (2,823) |
Effect of changes in exchange rates | (35) |
Balance at end of period | $ 5,174 |
LEASES - Components of Operatin
LEASES - Components of Operating Lease Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
LEASES | ||||
Operating lease cost | $ 5,629 | $ 5,613 | $ 16,965 | $ 17,061 |
Short-term and variable lease cost | 1,100 | 1,177 | 3,170 | 3,516 |
Total operating lease cost | $ 6,729 | $ 6,790 | $ 20,135 | $ 20,577 |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
LEASES | |
2023 (remaining) | $ 5,681 |
2024 | 21,662 |
2025 | 18,451 |
2026 | 15,912 |
2027 | 12,994 |
Thereafter | 63,639 |
Total lease payments | 138,339 |
Less: Interest | (31,073) |
Present value of lease liabilities | 107,266 |
Payments for lease agreements that commence in the future | $ 31,800 |
LEASES - Other Lease Cost Infor
LEASES - Other Lease Cost Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
LEASES | |||||
Weighted average remaining lease term (in years) | 8 years 3 months 18 days | 8 years 3 months 18 days | 8 years 10 months 24 days | ||
Weighted average discount rate | 5% | 5% | 4.60% | ||
Cash paid for operating leases | $ 5,683 | $ 5,557 | $ 17,290 | $ 16,642 | |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 9,271 | $ 2,222 | $ 11,900 | $ 14,433 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | 9 Months Ended |
Sep. 30, 2023 plan shares | |
Stock-based incentive compensation plans | plan | 2 |
Awards term | 10 years |
The 2023 Plan | |
Shares available for future issuance | 2,318 |
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 | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Regular Awards [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 8,075 | $ 6,022 | $ 22,813 | $ 15,008 |
STOCK-BASED COMPENSATION - Summ
STOCK-BASED COMPENSATION - Summary of Restricted Stock Units activity (Details) - Restricted Stock Units (RSUs) shares in Thousands | 9 Months Ended |
Sep. 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 | 397 |
Vested | shares | (203) |
Forfeited | shares | (51) |
Outstanding at the end of period | shares | 946 |
Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 78.46 |
Weighted Average Grant Date Fair Value, granted | $ / shares | 100.15 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 85.60 |
Weighted Average Grant Date Fair Value, Forfeited | $ / shares | 78.35 |
Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 85.91 |
STOCK-BASED COMPENSATION - Su_2
STOCK-BASED COMPENSATION - Summary of Stock Option Activity (Details) shares in Thousands | 9 Months Ended |
Sep. 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 |
LONG-TERM DEBT (Details)
LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Sep. 12, 2023 | Dec. 31, 2022 |
Debt: | |||
Gross long-term debt, including current maturities | $ 935,000 | $ 375,000 | |
Less: debt discount | (15,152) | (1,738) | |
Net long-term debt, including current maturities | 919,848 | 373,262 | |
Less: current maturities | (20,000) | (20,000) | |
Net long-term debt | 899,848 | 353,262 | |
Term Loan Facility | |||
Debt: | |||
Gross long-term debt, including current maturities | 360,000 | $ 375,000 | |
2.50% Convertible Notes | |||
Debt: | |||
Gross long-term debt, including current maturities | $ 575,000 | ||
Interest rate | 2.50% |
LONG-TERM DEBT - Contractual Ma
LONG-TERM DEBT - Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
LONG-TERM DEBT | ||
2023 (remaining) | $ 5,000 | |
2024 | 20,000 | |
2025 | 20,000 | |
2026 | 315,000 | |
2028 | 575,000 | |
Total | $ 935,000 | $ 375,000 |
LONG-TERM DEBT - Borrowings (De
LONG-TERM DEBT - Borrowings (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Line of Credit Facility [Line Items] | ||
Balance | $ 935,000 | $ 375,000 |
Term Loan, Fixed Interest Rate | ||
Line of Credit Facility [Line Items] | ||
Balance | $ 225,094 | |
Interest Rate | 1.17% | |
Term Loan, Variable Interest Rate | ||
Line of Credit Facility [Line Items] | ||
Balance | $ 134,906 | |
Interest Rate | 6.17% | |
Revolving Facility, Variable Interest Rate | ||
Line of Credit Facility [Line Items] | ||
Interest Rate | 6.17% | |
Unused Line Fee | 0.10% | |
2.50% Convertible Notes | ||
Line of Credit Facility [Line Items] | ||
Balance | $ 575,000 | |
Interest Rate | 2.50% |
LONG-TERM DEBT - Interest Expen
LONG-TERM DEBT - Interest Expense and Unused Line of Credit Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
LONG-TERM DEBT | ||||
Interest expense | $ 3,528 | $ 1,842 | $ 8,818 | $ 4,303 |
Amortization of debt issuance costs | 245 | 136 | 509 | 413 |
Unused line of credit fees and other | 52 | 51 | 152 | 152 |
Total interest expense | $ 3,825 | $ 2,029 | $ 9,479 | $ 4,868 |
LONG-TERM DEBT - Convertible Se
LONG-TERM DEBT - Convertible Senior Notes (Details) $ / shares in Units, shares in Millions | 9 Months Ended | ||||
Sep. 12, 2023 USD ($) D $ / shares shares | Sep. 07, 2023 $ / shares | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 13, 2023 $ / shares | |
Debt Instrument [Line Items] | |||||
Net proceeds | $ 575,000,000 | ||||
Repurchase of common stock | 40,000,000 | $ 25,955,000 | |||
Payments to convertible note hedges | 115,000,000 | ||||
Proceeds from sale of warrants | $ 74,865,000 | ||||
Redemption Prior to May 15, 2028 | |||||
Debt Instrument [Line Items] | |||||
Principal amount of debt used in conversion | $ 1,000 | ||||
Number of business days | D | 5 | ||||
Number of consecutive trading days | D | 5 | ||||
Threshold percentage of product of last reported sale price | 98% | ||||
2.50% Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 575,000,000 | ||||
Interest rate | 2.50% | ||||
Net proceeds | $ 562,100,000 | ||||
Proceeds to fund net cost of convertible note hedges | 40,100,000 | ||||
Repurchase of common stock | $ 40,000,000 | ||||
Repurchase of common stock (in shares) | shares | 0.4 | ||||
Payments to convertible note hedges | $ 115,000,000 | ||||
Initial conversion rate | 7.2747 | ||||
Principal amount of debt used in conversion | $ 1,000 | ||||
Conversion price | $ / shares | $ 137.46 | $ 179.76 | |||
Maximum number shares to be purchased in option of warrants | shares | 4.2 | ||||
Initial exercise price | $ / shares | $ 179.76 | ||||
Initial exercise price of convertible note hedge | $ / shares | $ 137.46 | ||||
Percentage of premium on closing price | 70% | ||||
Closing price | $ / shares | $ 105.74 | ||||
Proceeds from sale of warrants | $ 74,900,000 | ||||
Deferred tax assets | $ 26,100,000 | ||||
2.50% Convertible Notes | Redemption On or After September 20, 2026 | |||||
Debt Instrument [Line Items] | |||||
Threshold percentage of conversion price | 130% | ||||
Trading days | D | 20 | ||||
Consecutive trading days | D | 30 | ||||
Redemption price of the principal amount to be redeemed | 100% | ||||
2.50% Convertible Notes | Redemption Prior to May 15, 2028 | |||||
Debt Instrument [Line Items] | |||||
Threshold percentage of conversion price | 130% | ||||
Trading days | D | 20 | ||||
Consecutive trading days | D | 30 |
LONG-TERM DEBT - Credit Facilit
LONG-TERM DEBT - Credit Facility (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Line of Credit Facility [Line Items] | ||
Fair value of debt | $ 575,000 | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Available capacity | 200,000 | $ 200,000 |
Increase in borrowing capacity | $ 115,000 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 32,721 | $ 74,167 | $ 90,782 | $ 155,915 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |