CONTACTS:
MIKE EL-HILLOW CATHY KAWAKAMI
EXECUTIVE VICE PRESIDENT, DIRECTOR OF INVESTOR RELATIONS
CHIEF FINANCIAL OFFICER ADVANCED ENERGY INDUSTRIES, INC.
ADVANCED ENERGY INDUSTRIES, INC. 970-407-6732
970-407-6570 cathy.kawakami@aei.com
mike.el-hillow@aei.com
FOR IMMEDIATE RELEASE
ADVANCED ENERGY REPORTS SECOND QUARTER 2003 RESULTS
FORT COLLINS, COLORADO (JULY 24, 2003)--Advanced Energy Industries, Inc.
(Nasdaq: AEIS) today reported financial results for the second quarter ended
June 30, 2003. Advanced Energy is a leading global provider of critical
solutions used in the production of semiconductors, flat panel displays, data
storage products and other advanced thin film applications.
Revenue for the second quarter of 2003 was $62.9 million, a decrease of 7
percent compared to second quarter 2002 revenue of $67.9 million. Revenue for
the second quarter of 2003 increased 12 percent compared to first quarter 2003
revenue of $56.2 million. Net loss for the second quarter of 2003 was $5.8
million, or $0.18 per share compared to the second quarter 2002 net loss of $5.1
million, or $0.16 per share. This compares to the first quarter 2003 net loss of
$8.6 million, or $0.27 per share.
Revenue for the six months ended June 30, 2003 was $119.1 million versus $110.8
million for the first six months of 2002. Net loss for the 2003 six-month period
was $14.4 million, or $0.45 per share, compared with a net loss of $13.9
million, or $0.43 per share, for the 2002 six-month period.
Doug Schatz, chairman and chief executive officer, said, "Our second quarter
results were in line with our expectations. Revenue came in slightly above our
prior guidance range as we experienced some pick-up in demand in our power and
mass flow control product groups. We believe our demand momentum will continue
to increase moderately in the near term as we continue to penetrate new and
existing markets.
"Advanced Energy is well-positioned to extend our market and technology
positions by leveraging our product portfolio in power, flow, plasma and ion
sources, and thermal products to solve critical manufacturing issues," said Mr.
Schatz. "Our commitment to investment in research and development focused on our
four key technology areas strengthens our product offerings and opportunities,
providing greater competitive advantage to our customers."
Based on information currently available, the Company expects third quarter
revenue to increase 3 to 8 percent, in the $65 million to $68 million range, and
expects a loss per share range of $0.11 to $0.13.
SECOND QUARTER 2003 CONFERENCE CALL
Management will host a conference call today, Thursday, July 24, 2003 at 5:00 pm
Eastern time to discuss the financial results. You may access this conference
call by dialing 888-713-4717. International callers may access the call by
dialing 706-679-7720. For a replay of this teleconference, please call
706-645-9291, code 8359784. The replay will be available through Thursday, July
31, 2003. There will also be a webcast available at www.advanced-energy.com.
ABOUT ADVANCED ENERGY
Advanced Energy is a global leader in the development and support of
technologies critical to high-technology manufacturing processes used in the
production of semiconductors, flat panel displays, data storage products,
compact discs, digital video discs, architectural glass, and other advanced
product applications.
Leveraging a diverse product portfolio and technology leadership, AE creates
solutions that maximize process impact, improve productivity and lower cost of
ownership for its customers. This portfolio includes a comprehensive line of
technology solutions in power, flow, thermal management, plasma and ion beam
sources, and integrated process monitoring and control for original equipment
manufacturers (OEMs) and end-users around the world.
AE operates in regional centers in North America, Asia and Europe and offers
global sales and support through direct offices, representatives and
distributors. Founded in 1981, AE is a publicly held company traded on the
Nasdaq National Market under the symbol AEIS. For more information, please visit
our corporate website: www.advanced-energy.com
SAFE HARBOR STATEMENT
This press release contains certain forward-looking statements subject to known
and unknown risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements. Such risks and
uncertainties include, but are not limited to, the volatility and cyclicality of
the semiconductor and semiconductor capital equipment industries, the timing of
orders received from our customers, our ability to execute on the cost reduction
initiatives currently underway, and other risks described in Advanced Energy's
Form 10-K, Forms 10-Q as well as other reports and statements, as filed with the
Securities and Exchange Commission. These reports and statements are available
on the SEC's website at www.sec.gov. Copies may also be obtained by
contacting Advanced Energy's investor relations at 970-407-6732. The company
assumes no obligation to update the information in this press release.
###
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<Table>
<Caption>
Three Months Ended June 30, Six Months Ended June 30,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Sales $ 62,946 $ 67,893 $ 119,104 $ 110,780
Cost of sales 42,673 43,581 80,881 73,094
------------ ------------ ------------ ------------
Gross profit 20,273 24,312 38,223 37,686
Operating expenses:
Research and development 12,551 12,587 25,918 23,835
Sales and marketing 8,261 8,712 16,591 15,463
General and administrative 5,518 7,030 11,147 13,828
Restructuring charges 768 -- 2,277 --
Litigation damages -- 5,313 -- 5,313
------------ ------------ ------------ ------------
Total operating expenses 27,098 33,642 55,933 58,439
Loss from operations (6,825) (9,330) (17,710) (20,753)
Other (expense) income, net (2,340) 1,424 (5,090) (573)
------------ ------------ ------------ ------------
Loss before income taxes (9,165) (7,906) (22,800) (21,326)
Benefit for income taxes (3,391) (2,767) (8,436) (7,464)
------------ ------------ ------------ ------------
Net loss $ (5,774) $ (5,139) $ (14,364) $ (13,862)
============ ============ ============ ============
Basic and diluted net loss per share $ (0.18) $ (0.16) $ (0.45) $ (0.43)
Basic and diluted weighted-average common shares outstanding 32,206 32,045 32,183 31,959
------------ ------------ ------------ ------------
</Table>
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
<Table>
<Caption>
June 30, December 31,
2003 2002
------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 46,383 $ 70,188
Marketable securities 102,969 102,159
Accounts receivable 44,776 43,885
Income tax receivable 14,078 14,720
Inventories 55,727 57,306
Other current assets 7,265 6,828
Deferred income tax assets, net 26,160 17,510
------------ ------------
Total current assets 297,358 312,596
Property and equipment, net 41,404 41,178
Deposits and other 5,195 5,181
Goodwill and intangibles, net 86,255 86,601
Deferred debt issuance costs 3,541 4,091
Demonstration and customer service equipment, net 5,343 6,086
------------ ------------
Total assets $ 439,096 $ 455,733
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 18,988 $ 16,055
Other current liabilities 26,534 31,064
Current portion of capital leases and senior borrowings 13,006 15,197
Accrued interest payable on convertible subordinated notes 2,460 2,338
------------ ------------
Total current liabilities 60,988 64,654
Long-term Liabilities:
Capital leases and senior borrowings 8,078 10,665
Other long-term liabilities 618 694
Deferred income tax liability, net 9,392 8,663
Convertible subordinated notes payable 187,718 187,718
------------ ------------
Total long-term liabilities 205,806 207,740
Total liabilities 266,794 272,394
Stockholders' equity 172,302 183,339
------------ ------------
Total liabilities and stockholders' equity $ 439,096 $ 455,733
============ ============
</Table>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<Table>
<Caption>
Six Months Ended June 30,
2003 2002
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES $ (10,785) $ (16,310)
NET CASH USED IN INVESTING ACTIVITIES (9,672) (29,026)
NET CASH USED IN FINANCING ACTIVITIES (3,692) (2,176)
EFFECT OF CURRENCY TRANSLATION ON CASH 344 1,700
---------- ----------
DECREASE IN CASH AND CASH EQUIVALENTS (23,805) (45,812)
CASH AND EQUIVALENTS, beginning of period 70,188 81,955
---------- ----------
CASH AND EQUIVALENTS, end of period $ 46,383 $ 36,143
========== ==========
</Table>