EXHIBIT 99.1
FOR IMMEDIATE RELEASE
ADVANCED ENERGY REPORTS THIRD QUARTER REVENUES
UP 95 PERCENT FROM THIRD QUARTER OF 1998
FORT COLLINS, CO (OCTOBER 11, 1999) -- Advanced Energy Industries, Inc. (Nasdaq
NM: AEIS) today reported financial results for the third quarter and nine-month
period ended September 30, 1999. Advanced Energy is an industry-leading
manufacturer of critical power delivery systems to original equipment
manufacturers to make semiconductors, compact disks, data storage, flat panel
displays, and industrial products.
For the third quarter of 1999, revenues were $51.1 million, up 95 percent from
$26.3 million for the third quarter of 1998 and up 23 percent from $41.5 million
for the second quarter of 1999. "Revenue growth was driven primarily by
increasing demand from our core customers in the semiconductor equipment
industry," said Douglas S. Schatz, chairman and CEO. "Shipments to semiconductor
equipment manufacturing clients are more than three times what they were a year
ago as this global market continues to strengthen. We have seen greater demand
for blank CDs, driven by the adoption of the MP3 format. DRAM overcapacity
issues are fading, and computer prices are firming slightly. Additionally, we
are seeing a proliferation of DVD drives in both TV and PC platforms. These
factors have contributed to rapid growth in our data storage and flat panel
display applications business, which now accounts for approximately 17 percent
of revenue."
Net income for third quarter of 1999 was $5.5 million, or $0.20 per diluted
share, compared to a net loss of $3.5 million, or $0.13 per share in the third
quarter of 1998. 1999 third quarter income almost doubled from 1999 second
quarter income of $2.8 million, or $0.10 per diluted share.
"The level of products shipped from our Voorhees facility exceeded our
expectations and suppressed our gross margin at 44 percent which is below our
goal. We believe that we have continued upside potential in the gross margin at
that facility as we continue our materials management program implementation.
R&D expenditures for the quarter were $6.9 million, or 13.6 percent of revenue,
reflecting our continued investment in developing new products that enable our
customers to maximize the value of their process equipment, and the expansion of
our Silicon Valley design facility to meet the needs of customers in that
region. We are committed to making the necessary R&D investments to maintain our
leadership position in the power conversion and control marketplace. At the same
time, we believe we have the operations discipline, infrastructure, and
expanding product portfolio to continue to meet our profitability and growth
plans," concluded Mr. Schatz.
For the nine months ended September 30, 1999, revenues were $125.4 million
compared with $102.1 million for the same period of 1998. Gross profit for the
1999 nine-month period improved measurably to $53.9 million, or 43 percent,
compared with $30.1 million, or 29.5 percent, for the 1998 period. Net income
for the 1999 nine-month period was $8.8 million, or $0.31 per diluted share,
compared to a net loss of $5.7 million, or $0.22 per diluted share, for the
nine-month period ended September 30, 1998.
1998 third quarter and nine-month financial results have been restated to
reflect the 1998 fourth quarter acquisition of RF Power Products, Inc. (RFPP),
using the pooling of interests method of accounting.
SAFE HARBOR STATEMENT
Except for any historical information contained herein, the matters discussed in
this news release are forward-looking statements that reflect our current
beliefs and expectations including the achievement of goals established by the
Company to improve gross margin and maintain operating expenses in line with
revenue and continued sales growth in non-semiconductor areas. Actual results
may differ materially from the forward-looking statements which by their nature
are subject to risks and uncertainties including fluctuations in quarterly and
annual revenues and operating results, the volatility of the semiconductor and
semiconductor capital equipment industries and other risks detailed from time to
time in the Company's Form 10-K, Forms 10-Q and other reports and statements
filed with the Securities and Exchange Commission. The Company continues to be
susceptible to fluctuations in quarterly and annual revenues and operating
results and the volatility of the semiconductor and semiconductor capital
equipment industries. The Company assumes no obligation to update the
information in this release.
ABOUT THE COMPANY
Founded in 1981, Advanced Energy Industries, Inc. is a leading manufacturer of
power delivery systems that are critical in the manufacturing of semiconductors,
data storage media, flat panel displays, and other products using thin-film
technology. The Company also manufactures ion beam sources and plasma abatement
systems for applications in data storage and semiconductor manufacturing. Within
its comprehensive product portfolio of direct current (DC), low/mid-frequency
and radio frequency (RF) solutions, the Company sells hundreds of different
products critical in applications ranging from compact disks, digital video
disks, flat panel displays, the most popular logic semiconductor devices, among
many other applications. The Company's stock is traded on the Nasdaq National
Market under the symbol AEIS.
ADVANCED ENERGY INDUSTRIES, INC.
CONSOLIDATED INCOME STATEMENT
(in thousands except per share data)
Quarter Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
(unaudited) (unaudited) (unaudited) (unaudited)
Sales $51,142 $26,292 $125,385 $102,142
Cost of sales 28,598 18,317 71,450 72,046
Gross profit 22,544 7,975 53,935 30,096
Operating expenses:
Research and
development 6,935 5,722 19,545 17,951
Sales and marketing 4,187 3,255 11,471 10,331
General and
administrative 3,715 2,353 9,673 7,980
Restructuring charge -- 1,000 -- 1,000
Income (loss) from
operations 7,707 (4,355) 13,246 (7,166)
Other income (loss) 1,131 (214) 1,148 13
Net income (loss) before
income taxes 8,838 (4,569) 14,394 (7,153)
Provision (benefit) for
income taxes 3,303 (1,089) 5,555 (1,422)
Net income (loss) $ 5,535 $(3,480) $ 8,839 $ (5,731)
Basic earnings (loss)
per share $ 0.20 $ (0.13) $ 0.33 $ (0.22)
Diluted earnings (loss)
per share $ 0.20 $ (0.13) $ 0.31 $ (0.22)
Basic weighted-average
common shares
outstanding 27,048 26,585 26,940 26,536
Diluted weighted-average
common shares
outstanding 28,318 26,585 28,172 26,536
ADDITIONAL INFORMATION:
Earnings (loss) before
interest, taxes,
depreciation and
amortization $10,561 $(2,982) $ 19,275 $ (2,838)
ADVANCED ENERGY INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(in thousands)
September 30, December 31,
1999 1998
(unaudited) (unaudited)
ASSETS
Current Assets:
Cash and equivalents $ 11,261 $ 12,295
Marketable securities - trading 17,329 15,839
Accounts receivable 37,176 15,604
Income tax receivable 539 3,576
Inventories 23,465 21,412
Other current assets 1,377 797
Deferred income tax assets, net 4,768 4,112
Total current assets 95,915 73,635
Property and equipment, net 15,565 15,320
Other assets 3,597 3,494
Goodwill and intangibles, net 7,550 8,586
Total assets $122,627 $101,035
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 11,414 $ 5,675
Other current liabilities 8,280 5,123
Accrued income taxes payable 1,508 567
Current portion of long-term debt 613 211
Total current liabilities 21,815 11,576
Long-term debt 203 326
Stockholders' equity 100,609 89,133
Total liabilities and
stockholders' equity $122,627 $101,035
ADVANCED ENERGY INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
Nine Months Ended September 30,
1999 1998
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 8,839 $(5,731)
Depreciation and amortization 5,511 4,886
Accounts receivable (21,572) 16,903
Inventories (2,053) 8,226
Accounts payable, trade 5,739 (9,269)
Other 4,873 (5,613)
Net cash provided by operating activities 1,337 9,402
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (3,000) (1,000)
Sale of marketable securities 1,928 2,500
Purchase of stock investment -- (1,000)
Purchase of property and equipment, net (4,215) (4,565)
Acquisition of assets of FST, Inc. -- (2,500)
Net cash used in investing activities (5,287) (6,565)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change from notes payable and
capital lease obligations 279 (4,415)
Proceeds from sale of common stock 2,960 393
Other -- 67
Net cash provided by (used in)
financing activities 3,239 (3,955)
EFFECT OF CURRENCY TRANSLATION ON CASH FLOW (323) (115)
DECREASE IN CASH AND CASH EQUIVALENTS (1,034) (1,233)
CASH AND EQUIVALENTS, beginning of period 12,295 12,041
CASH AND EQUIVALENTS, end of period $ 11,261 $10,808