Advanced Energy Announces First Quarter Results
May 04 2015 - 3:05PM
- Revenue of $141 million
- GAAP earnings of $0.52 per diluted share
- Non-GAAP earnings of $0.57 per diluted
share
- Ended quarter with $156 million in cash
Advanced Energy Industries, Inc. (Nasdaq:AEIS) today announced
financial results for the first quarter ended March 31, 2015. The
company reported first quarter sales of $141.1 million compared
with $152.7 million in the fourth quarter of 2014 and $140.9
million in the first quarter of 2014. Net income was $21.3 million
or $0.52 per diluted share. On a non-GAAP basis, adjusted net
income was $23.6 million or $0.57 per diluted share. A
reconciliation of non-GAAP net income and earnings per share is
provided in the tables below. The company ended the quarter with
$155.9 million in cash and marketable securities, a sequential
increase of $27.5 million.
"With another record quarter in our semiconductor applications
and a mix shift to higher margin products we drove significantly
higher profitability this quarter," said Yuval Wasserman, President
and CEO of Advanced Energy. "Our agile business model and diversity
of applications allow us to effectively respond to changing market
dynamics. With an enhanced management team, a growing number of
opportunities in current and target applications and ongoing global
expansion, we are building upon our leadership position in
precision power products."
Precision Power Products
Precision Power Products sales were $105.8 million in the first
quarter of 2015, essentially in-line with $105.9 million in the
fourth quarter of 2014 and a 27.7% increase from $82.9 million in
the first quarter of 2014. These results were due to record
semiconductor sales and were partially offset by cyclicality in our
industrial and flat panel display applications.
Inverters
Inverter sales were $35.3 million in the first quarter of 2015,
down 24.7% from $46.8 million in the fourth quarter of 2014, and
down 39.3% from $58.1 million in the first quarter of 2014. Solar
inverters were impacted by seasonality, pricing pressure and the
effect on sales of our pursuit of strategic alternatives for this
business.
Net Income
Net income for the first quarter of 2015 was $21.3 million or
$0.52 per diluted share, compared with net income of $9.3 million
or $0.23 per diluted share in the fourth quarter of 2014, and $14.7
million or $0.35 per diluted share in the first quarter last year.
On a non-GAAP basis adjusted net income this quarter increased to
$23.6 million or $0.57 per diluted share from $20.6 million or
$0.50 per diluted share in the fourth quarter of 2014, and $18.1
million or $0.43 per diluted share in the same period last
year.
Second Quarter 2015 Guidance
Based on the company's current view, guidance for the second
quarter of 2015 is within the following ranges:
- Sales of $126 million to $136 million
- GAAP earnings per share of $0.32 to $0.36
- Non-GAAP earnings per share of $0.38 to $0.41
First Quarter 2015 Conference Call
Management will host a conference call tomorrow morning,
Tuesday, May 5, 2015, at 8:30 a.m. Eastern Time to discuss Advanced
Energy's financial results. Domestic callers may access this
conference call by dialing 855-232-8958. International callers may
access the call by dialing 315-625-6980. Participants will need to
provide conference pass code 29371496. For a replay of this
teleconference, please call 855-859-2056 or 404-537-3406 and enter
pass code 29371496. The replay will be available for one week
following the conference call. A webcast will also be available on
the Investor Relations web page at
http://ir.advanced-energy.com.
About Advanced Energy
Advanced Energy is a global leader in innovative power and
control technologies for high-growth, precision power conversion
solutions. Advanced Energy is headquartered in Fort
Collins, Colorado, with dedicated support and service locations
around the world. For more information, go
to www.advanced-energy.com.
This release includes GAAP and non-GAAP income and per-share
earnings data. Please note that beginning in 2013, Advanced Energy
redefined its non-GAAP measures to exclude restructuring charges,
acquisition-related costs, stock based compensation and
amortization of intangibles and tax release items. For our second
quarter 2015 guidance, we expect stock based compensation of $0.6
million, amortization of intangibles of $1.9 million and
restructuring charges ranging between $0.2 million and $1.0 million
in our inverter business as we continue to reduce costs in that
business. These non-GAAP measures are not in accordance with, or an
alternative for, similar measures calculated under generally
accepted accounting principles and may be different from non-GAAP
measures used by other companies. In addition, these non-GAAP
measures are not based on any comprehensive set of accounting rules
or principles. Advanced Energy believes that these non-GAAP
measures provide useful information to management and investors
regarding financial and business trends relating to its financial
condition and results of operations. Additionally, the company
believes that these non-GAAP measures, in combination with its
financial results calculated in accordance with GAAP, provide
investors with additional perspective. While some of the excluded
items may be incurred and reflected in the company's GAAP financial
results in the foreseeable future, the company believes that the
items excluded from certain non-GAAP measures do not accurately
reflect the underlying performance of its continuing operations for
the period in which they are incurred. The use of non-GAAP measures
has limitations in that such measures do not reflect all of the
amounts associated with the company's results of operations as
determined in accordance with GAAP, and these measures should only
be used to evaluate the company's results of operations in
conjunction with the corresponding GAAP measures.
Please refer to the Form 8-K regarding this release furnished
today to the Securities and Exchange Commission.
Forward-Looking Statements
The company's guidance with respect to anticipated financial
results for the second quarter ending June 30, 2015, and other
statements that are not historical information are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are 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: (a) the
effects of global macroeconomic conditions upon demand for our
products; (b) the volatility and cyclicality of the industries the
company serves, particularly the semiconductor industry; (c) the
volatility, seasonality and delays of renewable energy projects and
inverter sales; (d) our ability to integrate successfully the
operations of companies we acquire, including the retention of key
employees of such companies, realization of the benefits of such
companies' products, the total available market and expected sales
of such products, and product cost expectations surrounding the
fabless manufacturing models for REFUsol and the power control
modules product line we acquired from AEG Power Solutions GmbH; (e)
opportunities that might present themselves, or actions we might
take, as a result of our exploration of strategic alternatives for
our solar inverter business, (f) with regard to the renewable
energy market, tariffs on Chinese & Taiwanese solar panels, the
continuation of feed-in-tariffs and other incentives
in Europe and elsewhere for inverters, including the RPS
(renewable portfolio standards), the timing and availability of
grant programs in North America and Europe and the reduction of the
investment tax credit for solar facilities in the United States
after 2016; (g) the impact of price changes resulting from a
variety of factors including increased competition in the solar
inverter equipment market; (h) the timing of orders received from
customers; (i) the company's ability to realize benefits from cost
improvement efforts including avoided costs, restructuring plans
and inorganic growth; (j) the company's ability to obtain materials
and manufacture products; and (k) unanticipated changes to
management's estimates, reserves or allowances. These and other
risks are described in Advanced Energy's Form 10-K, Forms 10-Q and
other reports and statements filed with the Securities and Exchange
Commission (the "SEC"). These reports and statements are available
on the SEC's website at www.sec.gov. Copies may also be obtained
from Advanced Energy's investor relations page at
http://ir.advanced-energy.com or by contacting Advanced Energy's
investor relations at 970-407-6555. Forward-looking statements are
made and based on information available to the company on the date
of this press release. Aspirational goals and targets discussed on
the conference call or in the presentation materials should not be
interpreted in any respect as guidance. The company assumes no
obligation to update the information in this press release.
ADVANCED ENERGY
INDUSTRIES, INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED) |
(in thousands, except per
share data) |
|
Three Months
Ended |
|
March
31, |
December 31, |
|
2015 |
2014 |
2014 |
|
|
|
|
SALES |
$ 141,118 |
$ 140,948 |
$ 152,718 |
COST OF SALES |
81,374 |
88,287 |
111,839 |
GROSS PROFIT |
59,744 |
52,661 |
40,879 |
|
42.3% |
37.4% |
26.8% |
OPERATING EXPENSES: |
|
|
|
Research and development |
14,242 |
14,142 |
14,080 |
Selling, general and administrative |
21,754 |
19,731 |
21,070 |
Restructuring charges |
— |
— |
929 |
Amortization of intangible assets |
1,891 |
1,875 |
2,027 |
Total operating expenses |
37,887 |
35,748 |
38,106 |
OPERATING INCOME |
21,857 |
16,913 |
2,773 |
OTHER INCOME (EXPENSE), NET |
1,066 |
(96) |
(56) |
Income before income taxes |
22,923 |
16,817 |
2,717 |
Provision (benefit) for income taxes |
1,647 |
2,102 |
(6,602) |
NET INCOME |
$ 21,276 |
$ 14,715 |
$ 9,319 |
|
|
|
|
Basic weighted-average common shares
outstanding |
40,740 |
40,814 |
40,329 |
Diluted weighted-average common shares
outstanding |
41,129 |
41,870 |
40,757 |
|
|
|
|
EARNINGS PER SHARE: |
|
|
|
|
|
|
|
BASIC EARNINGS PER
SHARE |
$ 0.52 |
$ 0.36 |
$ 0.23 |
DILUTED EARNINGS PER
SHARE |
$ 0.52 |
$ 0.35 |
$ 0.23 |
|
|
ADVANCED ENERGY
INDUSTRIES, INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(in
thousands) |
|
|
|
|
March 31, 2015 |
December 31,
2014 |
ASSETS |
UNAUDITED |
|
|
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 152,827 |
$ 125,285 |
Marketable securities |
3,085 |
3,083 |
Accounts receivable, net |
121,746 |
124,150 |
Inventories, net |
98,052 |
95,082 |
Deferred income tax assets |
13,986 |
14,011 |
Income taxes receivable |
10,047 |
5,555 |
Other current assets |
10,458 |
9,588 |
Total current assets |
410,201 |
376,754 |
|
|
|
Property and equipment, net |
25,964 |
28,976 |
|
|
|
Deposits and other |
1,667 |
2,052 |
Goodwill and intangibles, net |
231,723 |
250,403 |
Deferred income tax assets |
25,668 |
26,384 |
Total assets |
$ 695,223 |
$ 684,569 |
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
Accounts payable |
$ 60,568 |
$ 53,040 |
Other accrued expenses |
54,763 |
59,530 |
Total current liabilities |
115,331 |
112,570 |
|
|
|
Long-term liabilities |
95,624 |
97,034 |
|
|
|
Total liabilities |
210,955 |
209,604 |
|
|
|
Stockholders' equity |
484,268 |
474,965 |
Total liabilities and stockholders'
equity |
$ 695,223 |
$ 684,569 |
|
|
|
* December 31, 2014 amounts
are derived from the December 31, 2014 audited Consolidated
Financial Statements. |
|
|
ADVANCED ENERGY
INDUSTRIES, INC. |
SEGMENT INFORMATION
(UNAUDITED) |
(in
thousands) |
|
|
|
|
|
Three Months
Ended |
|
March
31, |
December 31, |
|
2015 |
2014 |
2014 |
SALES: |
|
|
|
Precision Power Products |
$ 105,840 |
$ 82,872 |
$ 105,873 |
Inverters |
35,278 |
58,076 |
46,845 |
Total Sales |
$ 141,118 |
$ 140,948 |
$ 152,718 |
|
|
|
|
|
|
|
|
OPERATING INCOME
(LOSS): |
|
|
|
Precision Power Products |
$ 31,103 |
$ 23,211 |
$ 30,759 |
Inverters |
(9,246) |
(6,298) |
(27,057) |
Total segment operating income |
21,857 |
16,913 |
3,702 |
Restructuring charges |
— |
— |
(929) |
Other income (expense), net |
1,066 |
(96) |
(56) |
Income (loss) before income taxes |
$ 22,923 |
$ 16,817 |
$ 2,717 |
|
|
ADVANCED ENERGY
INDUSTRIES, INC. |
SELECTED OTHER DATA
(UNAUDITED) |
(in
thousands) |
|
|
|
|
Reconciliation of Non-GAAP measure -
operating expenses and operating income, excluding certain
items |
Three Months
Ended |
|
March
31, |
December 31, |
|
2015 |
2014 |
2014 |
|
|
|
|
Gross Profit, as reported |
$ 59,744 |
$ 52,661 |
$ 40,879 |
Operating expenses, as reported |
37,887 |
35,748 |
38,106 |
Adjustments: |
|
|
|
Restructuring charges |
— |
— |
(929) |
Acquisition-related costs |
— |
(260) |
— |
Stock-based compensation |
(589) |
(1,764) |
(245) |
Amortization of intangible assets |
(1,891) |
(1,875) |
(2,027) |
Nonrecurring inventory impairment |
— |
— |
(13,320) |
Non-GAAP operating expenses |
35,407 |
31,849 |
21,585 |
Non-GAAP operating income |
$ 24,337 |
$ 20,812 |
$ 19,294 |
|
|
|
|
Reconciliation of Non-GAAP measure -
income excluding certain items |
Three Months
Ended |
|
March
31, |
December 31, |
|
2015 |
2014 |
2014 |
|
|
|
|
Income, net of tax, as reported |
$ 21,276 |
$ 14,715 |
$ 9,319 |
Adjustments, net of tax |
|
|
|
Restructuring charges |
— |
— |
604 |
Acquisition-related costs |
— |
228 |
— |
Stock-based compensation |
547 |
1,544 |
159 |
Amortization of intangible assets |
1,755 |
1,642 |
1,427 |
Nonrecurring inventory impairment |
— |
— |
9,058 |
Non-GAAP income, net of
tax |
$ 23,578 |
$ 18,129 |
$ 20,567 |
|
|
|
|
Reconciliation of Non-GAAP measure -
per share earnings excluding certain items |
Three Months
Ended |
|
March
31, |
December 31, |
|
2015 |
2014 |
2014 |
|
|
|
|
Diluted earnings per share, as reported |
$ 0.52 |
$ 0.35 |
$ 0.23 |
Add back: |
|
|
|
per share impact of Non-GAAP adjustments, net
of tax |
0.05 |
0.08 |
0.27 |
Non-GAAP per share earnings |
$ 0.57 |
$ 0.43 |
$ 0.50 |
CONTACT: Bill Trupkiewicz
Advanced Energy Industries, Inc.
970.407.6770
bill.trupkiewicz@aei.com
Annie Leschin
Advanced Energy Industries, Inc.
970.407.6555
ir@aei.com
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