AEIS - Earnings call transcript Q1 2022 | Advanced Energy Industries, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and thank you for joining us for this Advanced Energy First Quarter 2022 Earnings Conference Call.

As a reminder, all phone participants are in a listen-only mode. [Operator Instructions] Also, please be aware that today's meeting is being recorded. To get us started with opening remarks and introductions, I am pleased to turn the floor over to Vice President of Strategic Marketing and Investor Relations, Mr. Edwin Mok.

Edwin Mok

operator. you, Thank everyone. Good afternoon, Advanced Energy's earnings to quarter first call. conference Welcome XXXX our are Vice CEO; today me President President Steve CFO. Executive With our Kelley, and Oldham, and and Paul

can seen There, ir.advancedenergy.com. also find presentation. press have website slide you our earnings you on our not release, If you find our it at earnings

conferences to months. coming I'd Before we be the I like begin, participating in will that mention at several investor

or be cause and our Medium-term presented concerning actual financial as A Steve Excluded today All financial amortization, interpreted presented our and that, forward-looking be exchange gains of me stock are future With restructuring targets are press forward-looking on goals remind and to can obligation found statements acquisition-related guidance. call that the uncertainties call you and that statements in unless estimates can call, CEO, losses. today's unrealized compensation, X, to costs, basis, expenses as subject On should non-GAAP results not SEC performance. May me a and otherwise no could Let management's non-GAAP results materially and long-term contains today's risks release. results XXXX, aspirational on in from GAAP detailed reconciliation of the found let pass President today, non-GAAP company differ foreign our are these and that measures them. to are between be Kelley. specified. update are guarantees today's not filings. risks assume based to Information

Stephen Kelley

and Edwin. the afternoon, call. everyone you, joining for Good Thank thanks

execution and largely guidance, share additional manufacturing and our key good revenue secure quarter First per to exceeded earnings ability to components. due

impact can quickly target full all is particularly market semiconductor components strong. that To we we maintain of factories, across become is of available. mitigate of all-time when high. order at staffing react book a the dynamic the levels environment, our to our will all and supply so Demand into continue shipments markets, robust scarce an were Our our at

when We higher some shipments supply find we will components the This component normal on our are to months. procurement premium, sourcing our through issues we can't purchase sense staffing, is the mitigation efforts. intractable at off a associated to thank to incremental qualification of we in our finally, customers paying alternative Energy costs. approach the us form through customers. and for our to also to with would redesigns. I incremental those and address And for continue aggressive components think over last and And will absorb continue open those of like market partnering There six our with to significant for approach But costs makes Advanced customers channels.

talking are our won financial proprietary opportunity future to differentiated and In products of multiple the our continues launched technologies primary Although products designs the first funnel products of technologies and critical applications. we performance. quarter, time be grew and parts and that These shortages, new we spend to about a you to focus our assure provide which value me many let customers. lot into in markets, revenue development our growth

acquisition and medical of in base industrial expanding markets. we our broadening recently SL the and In customer Electronics, addition, portfolio product the completed our Power

demand goal suppliers and including The are despite the first response in are appreciated. operations Now overcame COVID we that are of to these also an color the much with quarterly to of their our partnering environment. circuit efforts challenges, challenging production most like is despite necessary, to supply alternative note quick mitigate performance entire issues, we on in more I'll To shutdown and the environment environment with and provide would support. us team's operating to number the their continue wave Shenzhen. exceed COVID-related qualify regional Omicron the redesign more ICs headwinds. changing to In manufacturing our a supply the Customers grateful quarter, and our I Malaysia keeping allowed us up we in boards.

further $XXX I'll target markets. revenue for from provide our first color company. new each the for a semiconductor customers million, In quarter, the of Now milestone exceeded

We market into year. in second of semiconductor to second the half quarter the continue in sequentially to expect and sales grow the the growing

that Given semiconductor that overall grow than market outlook, we fab can AE XXXX. wafer equipment the faster are sales in confident

dielectric revenue quarter first quarter order science, quarter. our of We slots industrial in book will products with represent and wins in for help Demand industrial first the year-on-year. test We efforts and remote and number are packaging. good company. Advanced a share market, progress and first and Energy opportunity medical increased grew long-term revenue growth in developing the making and secured the drive design as is electro source for market charging plasma etch, applications and the These medical technologies and such important life upside applications. strong vehicle panel-level for surgery, In notable measurement

the and lighting customers indoor large high-density resulted will commercial first well-suited enable in already to both operating reduce applications. launched installation a costs. efficiency, the in LCMXXXX has farming large-scale system, for we highly interest During This the LCMXXXX, particularly orders. our several Key delivery customer quarter, costs high solution and power differentiated

summary, leading power XX% Medical built sticky proprietary features. and well-known solutions their device solutions medical secular of highly medical sole we with With of to lines a products almost up designs. opportunity SL steady demand And tier sourced life believe makes cross-selling. Advanced commentary, all customer product Power, year-on-year. with on see top offers We products. SL as for portfolio we cycles market and Concluding are of We revenue our solutions. for makers. is over of from because market. of Advanced a reliable medical Energy growth, product market power certified Power like a strong Roughly the months, derived company. nicely in markets data low long player Energy's is lot overlap, acquisition demand momentum like it Now gaining which demonstrated six medical see power our on in networking the I'd no the customers last touch recent high-power equipment supplier we its dovetails In the were customized in these the center and as a revenues markets. computing, continued telecom of

Our is good. operating tempo

Our coming are and on now sustained positioned new in products deliver satisfaction, team gaining strong review new well and development focus our innovation, our Paul customer is traction With financial energized. growth to guidance. provide will a profitable the years. and detailed product results Advanced Energy is

Paul Oldham

continues ranges. of afternoon, output secure $X quarter be our Thank cost first grew results We billion. recovery you, and everyone. the our EPS good and to to execution, to over The key reflect and partial components, delivered guidance revenue premiums. another our increased strong a X% and additional above ability good material high Steve, backlog end little of Demand factory

chain our performance. earnings revenue However, to the pace and supply continues

we per annualized result, are exit to earnings but will over as share the a target that optimistic of As continue fiscal we we to deliver $X remain year. prudently, plan we our on track

Now let me go over our financial results.

of XX% target. impacts and to growing to Revenue fourth our ability revenue our $XXX quarter. grew our XX% Malaysia deliver upside a semiconductor initial COVID was sequentially. $XXX slightly was after the recover up allowed year from from million, us it quarter First and from last significant to XX% demand in record market Strong and year-over-year and million Shenzhen

we anticipate the the quarter forward, semiconductor sequentially second half in and second the in grow Looking to year. of revenue

extended enable capacity semiconductor we Shenzhen and us the improves. as increase increase end to of addition, quarters, plant the to the should quarter, few customers' in Overall, we year. In calendar our capacity capacity which should over our every long-term and to investing our flexibility. production are demand expect Malaysia next meet supply have chain significantly we and further the allow in This to throughput our closure to continue

For increased. was our the quarter, first backlog overall and other strong in demand also markets

telecom components and market QX. However, last as supply a were revenue down Sales up up year record the year, sequentially; $XX networking Data $XX down paced to quarter. from our revenue but expected. revenue by XX% but the XX% declined into was was X% from million, year-over-year from center X% but industrial million, grew from medical critical X% X% computing million, $XX and fourth ago, of and

margin. XXX the environment. recoveries, declined customers on better but last point Compared to and inefficiency margin current basis costs been points which slightly gross able mix higher output. was alone First Premium up impact XXX to in basis quarter XXX costs material we've onto basis margins gross and primarily to pass points, gross quarter reflect accounted margin for from that at factory year, our to X last factory higher XX.X%, due

our We negatively costs expect results the higher to continue premium related in recoveries will and impact the second quarter. material

million, offset actions up other mitigating was million, $X.X expense million was quarter last exchange down SG&A believe of chain. in including increase the were from the on Operating costs approximately was interest due half quarter. sequential that margin partially $XX $XXX,XXX and was our for and $XX investments foreign of $X.X and Operating by The based these However, come losses. R&D, million, expense the of lower the quarter X% the up some was expense. from Depreciation gradually expenses adjusted XX.X%. our $XX.X to for we supply million year EBITDA in last Non-GAAP million $X.X second of normalization will quarter.

million range to the We other $X to non-GAAP expect expense continue be in forward. going

to above our a XX%. offset credit. The in target a U.S. effective rate the tax tax favorable was tax slightly Our by at change the non-GAAP beginning increase due was rules, of year, partially of XX%,

our by GAAP of share. compares approximately per which to Looking forward, large the XX%. quarter we This $X.XX Compared were to for quarterly share. this a target, fourth $X.XX discrete now benefit. our included EPS year-end expect non-GAAP quarter to rate impact be will tax per earnings tax and $X.XX, Earnings our approximately prior

quarter Excluding have last earnings been share. this $X.XX per benefit, would

marketable sheet. cash was flow basis now including to of were days. X% was $XX of cash, cash balance ended turns flow The operating $XXX a lower Cash due capital, with on which net to $XXX million. sequentially fourth continuing operations working dollar and to Turning XXX million. net the and securities the Inventory increased X.Xx. increased total higher from We quarter the million

expect continue meeting critical upward pressure near-term on We as to we while prioritize the in some parts. demand shortages pursuing inventory of customer

to DSO should increase. slightly XX shipments days, largely turns payable chain to supply as due improves the and normalize inventory timing. and to Days However, XX days increased declined

first the CapEx, quarter, paid and $X invested in $X.X million dividends. million into During million debt principal payments made $XX.X to we

we as share of of part opportunistic at share stock common $XX repurchased our In per million repurchase program. addition, $X.X

want Before about I details financial I guidance, some acquisition. Power on talk the SL to provide

free, operating balance our sheet. announced, Power basis, $XX completed Electronics cash SL $XXX the have using we on adds a for last on week with we of million free business Power once As the forma on in we operations. debt approximately cash acquisition and SL million revenue the million realize margins integrate $X fully It basis. synergies pro is profitable approximately annualized to cost of of expect the an mid-teens a we we

With highly the there portfolio customers, accelerate we meaningful believe are medical product cross-selling complementary in synergies markets. and industrial growth and which our the will

let turn Now guidance. me to

including availability ongoing quarter by results paced continue in of lockdowns be will critical second China. Our from COVID risk to the parts, additional

a plus expect $XXX or to million. minus $XX we million, approximately As result, QX revenue be

and Our sequentially includes SL grow QX guidance assumes contribution Power. from revenue partial semiconductor revenue a quarter will to continue it

approximately guided with we gross QX expect cost we similar premiums. margin material mix flat As and to be to QX previously,

adds $XX million which to the $X annual continued rate million approximately per in R&D be We to tax be to on and earnings higher OpEx plus Including minus salary or $X.XX. share million $X expenses addition we quarter. expect the to for XX%, investment $X.XX, non-GAAP the range operating million of to SL of $XX increases, Power, the our QX expect

let it make comments questions, I up me some beyond current open Before the for quarter. additional

challenging, revenue the paced mentioned, I As components. remain results environments supply and are by of chain supply operating financial and critical and being our

progress executing the mitigation are making increase and our supply are supply we investing However, capacity improves. output and in efforts. further Demand position are our in chain as well we backlog are strong and and to flexibility

higher that, per share your continue to With annualized believe let's of we QX greater are we potential with than take to result, Operator? XXXX. in earnings by a $X EPS track on questions. that As deliver

Operator

[Operator Instructions]. Needham at hear We'll from & Company. first Bolton Quinn

Quinn Bolton

you to on where ability out kind the go up loosen been to when efforts guys, on source Hey open if above or market things could I'm just second were on us of some get get guidance about the your upside on you nice the do have thoughts or to starts supply March nicely updated availability your your wondering secure predictable? of and give quarter congratulations the results. think in component availability thinking more of starting was you near-term, really the component components to just component guys

Stephen Kelley

question. is Yes. Steve. Good Quinn, this

think get We've we from every for a get more battle a our IC upsides, fighting I literally than daily battle downsides essentially. this We suppliers. day been it's critical year.

think we're better getting at So I it. bit a

results seen of part we think you've of do of it. and channels some various So that's our the as I brokers, efforts

half. quickly, last see solutions forward The intractable bigger that on and we're with second two well why other customers been success that's play hard working supply pretty alternative in qualify part our more is, qualifications to us we've around have also these redesigns our XXXX. very played so will That's been to part the as in alternative quarters solutions optimistic working we board a role the and the some and closely a of in get issues those about as moving

Quinn Bolton

for a would million to by supply natural certainly component for in run nicely quarters? seems I several to like think component of sounds to get was you're $XXX could Paul. if I happen, run of rate $X little million right annualized really am to $XXX like when level. $X be quarters, It revenue guidance be a $XXX backlogs now want of issues, the your when well that of above I that that bit for up might question second on my of I past sort north question basis revenue paced rate but no over revenue It say can ask the you're of EPS billion. million. you something longer ahead your and on that is quarterly reiterating My our think that you guess

Paul Oldham

how down exactly also materials are, think the to we Yes, to have I them. that's right, for and and comes Quinn really it pay available what

these essentially little We it's more pass premium is where but have higher costs. at we of now, revenues a revenue, that through have a recoveries part but

as in doing product be availability inside we're many as the and quickly where be, you're So company I'd revenue right, of margin of become put as to parts will as over by parts we position the and get would as expect increase will as prepared available the time, in gross that would some be a to everything parts lift can, that's to the to get improved ourselves sales deliver That decrease, actual as you exactly paced those customers. well our well. it

Quinn Bolton

you. thank it, Got

Operator

for you sir. Thank questions your

hear Next, from Mehdi Hosseini SIG. we'll at

Mehdi Hosseini

I impact able my taking Yes, questions. look were thanks versus SL revenue I to your have $XX I'm Power, factors, include reported still about of how March open and driven can at forward to follow-up. upside procure discuss the that When for north moving or you of factors? to help in to I just million us should our by of exclude components you the think other market revenue a other curious And have ability if

Paul Oldham

Yes, me Mehdi, let there. a make just comment

QX. I two helped main are that factors think in us there

source to, to around act the some the But work in we components ability second play. COVID Shenzhen. into in to was ability indeed shutdown and slowdown was the and Malaysia our first our where COVID put quickly The to

the And tempo. actually quickly so the very very and high quarter at operating factories recovered a exited

So and of number hit allowed improved parts of good the combination factories QX. us execution in to procurement really the

Stephen Kelley

you if there operational a availability Yes. interesting going open like market. And seems were especially what I the is premium, execution, the you're is is it that the pay to execution, components but appreciate in willing if

Paul Oldham

get. Yes, of There that don't that's that a go components true we at I think level. is we some after actually lot

trying limiting what's it And factor. you adept And course both really parts think gotten as we've shortages of hard at there, something, available because to come what's find the are down some in you're but to get I We So or predict that's out pretty and does the there said, commit also to think dynamic. that's recovered be very quickly. cases. then should to having Steve

it So environment. be continues a dynamic to

better headwinds. this quickly able were to factories COVID product we and to able and into again parts despite turn then those getting that were think do I our quarter the

Mehdi Hosseini

Sure.

$XXX and why the hit than revenue per of with the that Okay, of annualized on year share, cash and earnings now at of you're return? not capital become aggressive $XX more and of as quarterly follow-up, north $X with million to track my exiting your

Paul Oldham

a did stock Last buy we back. quite year, of lot

and see a to factors You'll variety share tools should this aggressive buy quarter we opportunistic plan have be did on back every repurchase we how last determine to program. continues the assess as of quarter, our some we'll stock repurchase that with that we be of one and

Mehdi Hosseini

thank it, Got you.

Operator

KeyBanc today at comes Barger next Steve question Our Capital Markets. from

Steve Barger

you midpoint sure would at understand are those guide, lower $X.XX echo, per tax just Hi, at about that to back could an levels you're XQ? rate the guidance, and you the higher make the be averaged the on margin XXX record EPS non-GAAP will thanks. that factors quarters, sequentially I I hear I like And quarter, to the XQ revenue midpoint. guiding put what of you operating revenue? drive in want on but other

Paul Oldham

there Yes, I couple Steve. factors. a is think of

that The partial higher slightly or that does first in quarter include roughly SL Power. of revenue flat is

So with in that that's cost it know, structure. comes revenue helps as but QX, you full us

if not it's leveraged revenue, will. So you

our revenue, than QX projecting QX. little that we lower got if actually a bit you in So it's in it we're exclude product

that's thing. think I biggest the

headline benefit you're getting of So bit just a the little of acquisition.

course Now, factor. fall more the is that increase as parts through expect our over that's organic to time, of and biggest revenues but there we'd because occur,

Steve Barger

specialty industrial from the in all just have were that and suggested remain Got equipment trends through strong commentary XQ, demand. no it, companies reported April strong okay. rates cracks and And the order for speaking, in really broadly

you just or SL segment that thinking if in layer for about you organic could? Power the into how to going and we're in are XQ that medical, understanding growth year, So industrial

Paul Oldham

impressive. is organic seen thing are right think we've the holding only The of in I&M than quite The shortages semiconductor. now I&M parts. Steve. what growth And I in have are more acute critical we us in back some Yes,

So trying pent-up business focus to there we're industrial, for the to medical parts and a markets. has backlog been current on there's profit lot it, of very sensitized industrial, for revenue medical and real a procure the and but our

Steve Barger

on I year-over-year what side, rates the talk I&M? guess in can supply you explain could order were if the you about

Paul Oldham

that say can first up I in the quarter. backlog our went

receive ship. to continue we what So in of could excess we orders

Steve Barger

thanks. Okay,

Operator

Paretosh the Misra hope correctly. go Our next question your today ahead. I do of Please comes Berenberg. line with I name from said

open. is line Your

Paretosh Misra

you about bit? mix mix backlog the you. the your was on Yes, Can your business? perfect. to talk that it's mix semiconductor in similar heavier Thank your a Is or revenue

Paul Oldham

Yes, in industrial, than Broadly healthy mix. or say speaking, over Broadly it's say, very general, medical I'd our mix. more is I'd say average either revenue products. a it's semiconductor healthy I'd XX%

Paretosh Misra

it. Shenzhen at facility And about then end think and output between should how given now year Got the the your current the plan? your of we

Stephen Kelley

as reminder, year. to -- this we the decided open of plant we Yes, the through so end a keep Shenzhen

And did we so, reason the Shenzhen today the output. that can the plant because an say capacity is we and with job excellent need that doing I is

quarters. we've many the output it's highest fact, seen In in

So of time, that going we're they're over same production Malaysia. our up we course expect solid at to the the be in a And XXXX. bringing contributor

we're setting facility increasing getting semiconductor at output on So good regular side. our on shape records production month think the efficient we're in more we're and a we output and so new basis, every Penang

Paretosh Misra

guys. thanks Got it,

Operator

of next Cowen hear [Operator from at Sankar Krish Instructions] line We'll Company. the and

Krish Sankar

a of you Paul, million, of how actually had Power Hi, of couple taking much them, contributing? question. mention my did your thanks guide in SL for $XXX I

Paul Oldham

million the if in results million last specifically, close week about mention but at transaction April. annualized we did of it last look year's $XX you and We $XX to it's the

the kind get of of roughly to the math can contribution. an estimate you do So

Krish Sankar

that your guidance, Got -- is sequentially in then that growth on then you grow down all it. in June the data Got I&M fact if June? help will And it while right. and food clearly semi said I and and fair layer SL centers and semi that telecom and to should it, assume then sequentially

Stephen Kelley

let Yes, Krish. here, me comment

what's what couple than is going but QX what better than actually key we it's is, uncertainties quarter. less every in guide deal are that guide delivered QX, we there Our in substantially on with and we really

the One IC upside. critical of decommits an

So it's predict. very difficult to

the impact parts our in hard this not we our The of are that impacting know dealing second China. the We precisely quantify impacting with have lockdowns these of are supply we're but And impacting They're to quarter factories, COVID lockdowns. chain. they it's various really our they one suppliers. are

QX guidance. so we a a cautious did our And bit of take approach to

Krish Sankar

it, of look premium months or Got it flat it's month three the that a or going it actually you curious to paying And Steve. you I'm good then brokers, you almost question, third-party or think broker, over the final the ago? has kind a those with rolling of or helpful, over paid last you would been within Super so it's been from Steve, I what six months, the in two about when say past paid been or mentioned premium has got the months massive up months the amount part I last think just like it. or just a a few you do dealing

Paul Oldham

good It's question. a

As Steve day-to-day it's said, of battle. the sort

of rate better, coming we're maybe see in I'd the find So I to getting that is trends. not what in the we generally, incoming out us we conclude But should a is what's those year, door, say that's there part see that down. there cautious of trending think track about trying indications of to the but little things what part that we to earlier maybe latter and said on what leads is the coming these we're better towards

supply the don't I because ahead environment. the too Steve the of chain. to lockdowns just and COVID on dynamic So impact a it's much want China, already commented myself get on

that cautiously to we're starting are optimistic improve. but those So, perhaps

Krish Sankar

think a Should QX second-half. in is or gross in can but for your QX than over comments the story maybe past end exit you one margin annualized, our rather inflect QX? you assume based more lastly, that mean said should I we it, I Paul, the what EPS rate if run you that inflection on still do $X squeeze Well, just should gross be margins

Paul Oldham

it's question. Yes, good a

I the the exactly that's issue QX. think, QX, our second but of of think in But then premiums modestly and thought question degree And benefit the of as in these later help gross as up on can about the subside, it that improving. maybe be that to is, a key half, some more modest going we sooner will we in QX, really should that QX, margins a total look, in to you're that but it improvement view QX than you more that best in some us. closer the is is signs be and that to or get most is when we are seeing hitting could

Krish Sankar

Paul. Thank Thanks, very you it. Got Steve. much,

Operator

Hans Balyasny. Chung with

Hans Chung

from D.A. Hi, Chung this is Hans Davidson.

my year. to think just semiconductor business WFE go your question commentary like the very regarding the to encouraging I So it's is on this outlook outpace first

critical you we can so. available kind component it's underlying to or once the like the parts of elaborate driver the So just have be like like gain is story more more share

to that to to and fill just maybe else something that So part our and we're ship new of the be able backlog, ship anything just to would rents is there, going helpful? we're ship it's or so

Paul Oldham

Yes.

Let two question just Hans. your me parts, in answer

two this simply And through quarters question our the driving go what's optimism that's our of to year tied your story as in XXXX. growth is So for we things. immediate remaining

good remainder quite year. parts the expect to first we're The factories for and tempo on based the is that and of sustain our our the activities, we expecting second is, availability operating is improved

equip in of drive our as through it that's XXXX. we growth to really I to business market we new comes going years think measure the But to because business semiconductor, then to our we So for are it that share, share, in slot, when tends slots And accelerate be over hit from course in equipment win the design major afterwards. win if that trying years the we we market makers. many

share much shift or that over doesn't a course monthly on It quarterly the the really is So shift of years. basis.

been strongest quite we're what so current in seeds is in planting doing we're which has area defending conductor new some our for there And But position is time. markets. etch, our also we're

etch launched So market, into market, we market. products panel we've source new into remote have the plasma dielectric flat that the the into

market that think we and So served and early in growth XXXX we by our increase essentially doing drive can 'XX. our this,

Hans Chung

Got That's helpful. it.

the basically, in you colors or seems these like mean to guidance I like all account question, combine going me just can will and imply going center have next to that's, now same provide you sequentially decline, market around they end they industrial, So just or…? to can decline show some medical these in quarter it be

Stephen Kelley

Hans, I function the think only that all it's thinking a to supply. of about way this, is

pent-up industrial, data have all you just mentioned, markets We telecom you demand huge the and it's in medical, it. whether center networking, name

We in markets. very all solid have of those order a book

so, will has about but And demand. maximize as we output, this able we parts, to do nothing get be to with our now. It's all supply right

Paul Oldham

next the question. Hans? ready for Operator, we're

Operator

complete to Raymond to delay. We'll And again, forward your Graham Price question. Chung, Mr. with re-signal move gentlemen, James. apologies Once for please the

Graham Price

my afternoon SL I taking and for the guess, good Hey, Power just question. acquisition. thanks quickly on

highlighted cross-selling integration You've the there. and synergies

broadly, see out for business? of those playing and kind quickly more wondering compare the how acquired business the how you Just the just legacy margins to then

Stephen Kelley

Yes.

a just sale make and the me comment we intend to how synergies. So exploit the integration let about

the the there just we've SL unconstrained power well immediately Power to the products, Advanced and medical demand AE this is are products over force reporting to So SL our the into sales Chief to strong for not And Energy has approach then but year Sales support the first, reporting is remaining President, factories marketing, now taken $XXX makes, products. of SL that think of all former a Russell, reporting Officer directly integration, the engineering, responsibility at who Chief Officer. And directly the million. also people the and together, people very we our Power Operating their Power,

I business my right source our us So player. makes that's essentially. medical market it space high top in script, good Like a in us the said is low think mostly business good for volume. us, for it's sole a to and wheelhouse we It's and it's size it's tier mix,

think training on at basically our we could and to strong we're accounts SL going was So Power we force on is SL Power AE were accounts accounts. weren't we're we to force. force products. Power wasn't. the sell at to sales And what sales very focus products select we particular And good medical sell the and accounts sales together, SL Power Because industrial The secondary focus a do forward job SL we're AE have where and do cross-selling. a strong moving

down Advanced think So Friday actually there. team SL energy very Power went there team energy, from a positive And visited the Energy match. of to it's of week, and the lot good down there's a we last color lot I and welcomed a buses

think it's between Energy a SL going to very Power. and Advanced I good be match

Paul Oldham

Yes. coming comment of or say today. we the already and profile top-line. the differentiated actions, of organizations, It's Energy. there's grow markets AE said, I'd generally Gross mentioned the pretty And opportunity pretty lot there's the to that business. pretty on Advanced mid-teens. They to similar financial similar in Maybe just the look similar there to products operating gate business feel margins out is model. in probably are we the XX%, very to still the the or other say, to with Steve grow, bottom-line the combine I'll as and a even again opportunity in margins faster are around similar. earnings, as And integration you so

market very go forward. the of opportunity it's I to medical us think for lot a and grow we a in So as natural fit

Graham Price

one kind just housekeeping And of then a my Got for it. one. second Thanks.

will in not mentioned XX%, which going tax forward like highest, the the looks and a then be income been just it's few years. You rate

little So I'm clarity get causing that? what's to just trying on a

Paul Oldham

in change beginning benefits. back something capitalize XXXX That Jobs that put that the was the than companies in quarter to in as Cut their because effective some impact. became This part Yes. as expense year in the tax it the requires forward, the Tax first to of us and about law There that much basis was at rather impact But Act. essentially R&D was expenses a them. had it's was we looking effective. XXX point a of U.S. didn't Obviously, place other

hope some think back at companies, technology I I expectation point, overtime get it, probably reflected law, can affecting is this will tax appeal, forward. that's reading You so may what that some that but going do or current that even that companies about rolled all it's and the that's particularly there

Graham Price

much. very Thank you Understood.

Operator

[Operator once sir. line open Instructions]. go for Mr. your the apologies issue audio ahead, is Please again, Chung earlier.

Hans Chung

Yes, just quick one. Okay.

us give is bit impact margin I for about premium know going that second some million but gross how the the give the high quarter? little well pitch quarter, first about you from a can $XXX for So sense second the quarter? you

Paul Oldham

related recoveries level be that that premiums. about prepared the as we specifically, QX, didn't We of in premiums we said to Yes. those in but was expected to and remarks, guide the it same those The my things.

Hans Chung

it. Okay, got you. Thank

Paul Oldham

Yes.

Stephen Kelley

You're welcome.

Operator

remarks. we And additional to turn pleased closing or any audience am from floor have over for further the to Steve back I the at no time. this signals Mr. Kelley

Stephen Kelley

Thank And recap just our you, to operator. I'd like key messages.

for demand strong. products very First, our is

an squarely the innovative we quarter better Second, are for even track And our in we call the on operating technologies today. joining to focused thanks developing And results in second solid on half. customers. deliver are for products and and finally, second results the

Operator

earnings We conclude first Ladies gentlemen, call. XXXX this all participation. you Advanced thank quarter your and for today's does Energy

may You now your lines. disconnect

Advanced Energy Industries (AEIS) 5 May 222022 Q1 Earnings call transcript