- Revenue was $416 million, above the mid-point of
guidance
- Industrial & Medical revenue was a quarterly record and
grew 22% from last year
- GAAP EPS from continuing operations was $0.73
- Non-GAAP EPS was $1.11, above the mid-point of
guidance
Advanced Energy Industries, Inc. (Nasdaq: AEIS), a global leader
in highly engineered, precision power conversion, measurement, and
control solutions, today announced financial results for the second
quarter ended June 30, 2023.
“Second quarter results were led by record revenue in the
Industrial and Medical market, highlighting the benefits of our
broad-based growth and diversification strategy,” said Steve
Kelley, president and CEO of Advanced Energy. “We are experiencing
strong design win activity across the portfolio, with particularly
high interest in our two new plasma power platforms for
semiconductor applications.”
Second Quarter Results
Sales were $415.5 million in the second quarter of 2023,
compared with $425.0 million in the first quarter of 2023 and
$440.9 million in the second quarter of 2022.
GAAP net income from continuing operations was $27.5 million or
$0.73 per diluted share in the quarter, compared with $31.8 million
or $0.84 per diluted share in the prior quarter, and $44.8 million
or $1.19 per diluted share a year ago.
Non-GAAP net income was $41.9 million or $1.11 per diluted share
in the second quarter of 2023. This compares with $47.0 million or
$1.24 per diluted share in the first quarter of 2023, and $54.3
million or $1.44 per diluted share in the second quarter of
2022.
Advanced Energy generated $23.6 million of cash flow from
continuing operations during the quarter and paid $3.8 million in a
quarterly dividend.
Third Quarter 2023 Guidance
Based on the Company’s current view, beliefs, and assumptions,
guidance is within the following ranges:
Q3 2023
Revenue
$415 million +/- $15 million
GAAP EPS from continuing operations
$0.70 +/- $0.20
Non-GAAP EPS
$1.13 +/- $0.20
Conference Call
Management will host a conference call today, August 3, 2023, at
4:30 p.m. Eastern Time to discuss the second quarter financial
results. To participate in the live earnings conference call,
please dial 877-407-0890 approximately ten minutes prior to the
start of the meeting and an operator will connect you.
International participants can dial +1-201-389-0918. A webcast will
also be available on our investor web page at ir.advancedenergy.com
in the Events & Presentations section. The archived webcast
will be available approximately two hours following the end of the
live event.
About Advanced Energy
Advanced Energy Industries, Inc. (Nasdaq: AEIS) is a global
leader in the design and manufacture of highly engineered,
precision power conversion, measurement and control solutions for
mission-critical applications and processes. Advanced Energy’s
power solutions enable customer innovation in complex applications
for a wide range of industries including semiconductor equipment,
industrial production, medical and life sciences, data center
computing, networking, and telecommunications. With engineering
know-how and responsive service and support for customers around
the globe, the company builds collaborative partnerships to meet
technology advances, propels growth of its customers and innovates
the future of power. Advanced Energy has devoted four decades to
perfecting power. It is headquartered in Denver, Colorado, USA. For
more information, visit www.advancedenergy.com.
Advanced Energy | Precision. Power. Performance. Trust.
Non-GAAP Measures
This release includes GAAP and non-GAAP income and per-share
earnings data and other GAAP and non-GAAP financial information.
Advanced Energy’s non-GAAP measures exclude the impact of non-cash
related charges such as stock-based compensation and amortization
of intangible assets, as well as discontinued operations, and
non-recurring items such as acquisition-related costs and
restructuring expenses. The non-GAAP measures included in this
release 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. We believe
that these non-GAAP measures provide useful information to
management and investors to evaluate business performance without
the impacts of certain non-cash charges, non-economic foreign
currency remeasurements, and other cash charges which are not part
of our usual operations. We use these non-GAAP measures to assess
performance against business objectives, make business decisions,
develop budgets, forecast future periods, assess trends, and
evaluate financial impacts of various scenarios. In addition,
management’s incentive plans include these non-GAAP measures as
criteria for achievements. Additionally, we believe that these
non-GAAP measures, in combination with its financial results
calculated in accordance with GAAP, provide investors with
additional perspective. To gain a complete picture of all effects
on our financial results from any and all events, management does
(and investors should) rely upon the GAAP measures as well, as the
items excluded from non-GAAP measures may contribute to not
accurately reflecting the underlying performance of the company’s
continuing operations for the period in which they are incurred.
Furthermore, the use of non-GAAP measures has limitations in that
such measures do not reflect all of the amounts associated with our
results of operations as determined in accordance with GAAP, and
these measures should only be used to evaluate our results of
operations in conjunction with the corresponding GAAP measures.
Forward-Looking Statements
This release and statements we make on the above announced
conference call contain, in addition to historical information,
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Statements in this
report that are not historical information are forward-looking
statements. For example, statements relating to our beliefs,
expectations and plans are forward-looking statements, as are
statements that certain actions, conditions, or circumstances will
continue. The inclusion of words such as "anticipate," "expect,"
"estimate," "can," "may," "might," "continue," "enables," "plan,"
"intend," "should," "could," "would," "likely," "potential," or
"believe," as well as statements that events or circumstances
"will" occur or continue, indicate forward-looking statements.
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) supply
chain disruptions and component shortages that may impact our
ability to timely manufacture products and deliver to customers;
(b) the effects of global macroeconomic conditions upon demand for
our products and services, including supply chain cost increases,
inflationary pressures, economic downturns, and volatility and
cyclicality of the industries we serve; (c) the impact of political
and geographical risks, including trade and export regulations,
other effects of international disputes, war, terrorism, or
geopolitical tensions; (d) managing backlog orders; (e) our ability
to develop new products expeditiously and be successful in the
design win process; (f) delays in capital spending by end-users in
our served markets; (g) the risks and uncertainties related to the
integration of acquired companies including SL Power Electronics;
(h) the continuing spread of COVID-19 and its potential adverse
impact on our operations; (i) our ability to avoid additional costs
and lawsuits after the solar inverter wind-down; (j) the accuracy
of our assumptions on which our financial statement projections are
based; (k) the timing of orders received from customers; (l) our
ability to realize benefits from cost improvement efforts including
avoided costs, restructuring plans and inorganic growth; (m)
unanticipated changes to management’s estimates, reserves or
allowances; and (n) changes and adjustments to the tax expense and
benefits related to the U.S. tax law changes, any of which could
negatively impact our customers’ and our presence, operations, and
financial results. 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 ir.advancedenergy.com or by contacting
Advanced Energy’s investor relations at 970-407-6555.
Forward-looking statements are made and based on information
available to us 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. We assume 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
Six Months Ended
June 30,
March 31,
June 30,
2023
2022
2023
2023
2022
Sales, net
$
415,508
$
440,949
$
425,040
$
840,548
$
838,408
Cost of sales
268,428
278,791
269,929
538,357
531,934
Gross profit
147,080
162,158
155,111
302,191
306,474
Gross margin %
35.4
%
36.8
%
36.5
%
36.0
%
36.6
%
Operating expenses:
Research and development
51,413
48,009
51,610
103,023
91,623
Selling, general, and administrative
55,613
55,022
55,358
110,971
104,340
Amortization of intangible assets
7,075
6,523
7,062
14,137
12,032
Restructuring
3,154
(161
)
1,043
4,197
1,057
Total operating expenses
117,255
109,393
115,073
232,328
209,052
Operating income
29,825
52,765
40,038
69,863
97,422
Other income (expense), net
2,425
3,249
(550
)
1,875
2,407
Income from continuing operations, before
income taxes
32,250
56,014
39,488
71,738
99,829
Provision for income taxes
4,795
11,203
7,736
12,531
18,156
Income from continuing operations
27,455
44,811
31,752
59,207
81,673
Income (loss) from discontinued
operations, net of income taxes
(315
)
180
(831
)
(1,146
)
82
Net income
27,140
44,991
30,921
58,061
81,755
Income from continuing operations
attributable to noncontrolling interest
—
21
—
—
7
Net income attributable to Advanced
Energy Industries, Inc.
$
27,140
$
44,970
$
30,921
$
58,061
$
81,748
Basic weighted-average common shares
outstanding
37,573
37,520
37,475
37,524
37,535
Diluted weighted-average common shares
outstanding
37,803
37,710
37,757
37,804
37,754
Earnings per share attributable to
Advanced Energy Industries, Inc:
Continuing operations:
Basic earnings per share
$
0.73
$
1.19
$
0.85
$
1.58
$
2.18
Diluted earnings per share
$
0.73
$
1.19
$
0.84
$
1.57
$
2.16
Discontinued operations:
Basic loss per share
$
(0.01
)
$
—
$
(0.02
)
$
(0.03
)
$
—
Diluted loss per share
$
(0.01
)
$
—
$
(0.02
)
$
(0.03
)
$
—
Net income:
Basic earnings per share
$
0.72
$
1.20
$
0.83
$
1.55
$
2.18
Diluted earnings per share
$
0.72
$
1.19
$
0.82
$
1.54
$
2.17
ADVANCED ENERGY INDUSTRIES,
INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
June 30,
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
455,252
$
458,818
Accounts and other receivables, net
258,752
300,683
Inventories
392,349
376,012
Other current assets
46,850
53,001
Total current assets
1,153,203
1,188,514
Property and equipment, net
159,025
148,462
Operating lease right-of-use assets
93,994
100,177
Other assets
85,500
84,056
Goodwill and intangible assets, net
458,185
470,959
Total assets
$
1,949,907
$
1,992,168
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
149,259
$
170,467
Other accrued expenses
118,750
185,805
Current portion of long-term debt
20,000
20,000
Current portion of operating lease
liabilities
15,421
16,771
Total current liabilities
303,430
393,043
Long-term debt
343,516
353,262
Other long-term liabilities
177,682
179,596
Long-term liabilities
521,198
532,858
Total liabilities
824,628
925,901
Total stockholders' equity
1,125,279
1,066,267
Total liabilities and stockholders’
equity
$
1,949,907
$
1,992,168
ADVANCED ENERGY INDUSTRIES,
INC.
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS (UNAUDITED)
(in thousands)
Six Months Ended June
30,
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income
$
58,061
$
81,755
Less: income (loss) from discontinued
operations, net of income taxes
(1,146
)
82
Income from continuing operations, net of
income taxes
59,207
81,673
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization
32,966
28,877
Stock-based compensation
14,738
8,986
Benefit for deferred income taxes
(786
)
(1,977
)
Loss on disposal and sale of assets
192
374
Changes in operating assets and
liabilities, net of assets acquired
(50,813
)
(70,392
)
Net cash from operating activities from
continuing operations
55,504
47,541
Net cash from operating activities from
discontinued operations
(3,090
)
55
Net cash from operating activities
52,414
47,596
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of investments
(3,128
)
—
Purchases of property and equipment
(33,623
)
(25,476
)
Acquisitions, net of cash acquired
—
(145,779
)
Net cash from investing activities
(36,751
)
(171,255
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Payments on long-term borrowings
(10,000
)
(10,000
)
Dividend payments
(7,592
)
(7,595
)
Purchase and retirement of common
stock
—
(23,578
)
Net payments related to stock-based
awards
(1,384
)
(1,667
)
Net cash from financing activities
(18,976
)
(42,840
)
EFFECT OF CURRENCY TRANSLATION ON
CASH
(253
)
(5,188
)
NET CHANGE IN CASH AND CASH
EQUIVALENTS
(3,566
)
(171,687
)
CASH AND CASH EQUIVALENTS, beginning of
period
458,818
544,372
CASH AND CASH EQUIVALENTS, end of
period
$
455,252
$
372,685
ADVANCED ENERGY INDUSTRIES,
INC.
SUPPLEMENTAL INFORMATION
(UNAUDITED)
(in thousands)
Net Sales by Market
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
2023
2022
2023
2023
2022
Semiconductor Equipment
$
173,177
$
228,797
$
194,209
$
367,386
$
431,754
Industrial and Medical
127,603
104,951
123,020
250,623
187,849
Data Center Computing
59,076
69,161
59,659
118,735
145,399
Telecom and Networking
55,652
38,040
48,152
103,804
73,406
Total
$
415,508
$
440,949
$
425,040
$
840,548
$
838,408
Net Sales by Geographic Region
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
2023
2022
2023
2023
2022
North America
$
171,516
$
206,117
$
180,942
$
352,458
$
388,838
Asia
186,498
180,181
179,183
365,681
342,228
Europe
56,213
49,851
62,566
118,779
96,516
Other
1,281
4,800
2,349
3,630
10,826
Total
$
415,508
$
440,949
$
425,040
$
840,548
$
838,408
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
Six Months Ended
June 30,
March 31,
June 30,
2023
2022
2023
2023
2022
Gross profit from continuing operations,
as reported
$
147,080
$
162,158
$
155,111
$
302,191
$
306,474
Adjustments to gross profit:
Stock-based compensation
589
402
383
972
633
Facility expansion, relocation costs and
other
60
1,187
957
1,017
2,471
Acquisition-related costs
97
64
53
150
(438
)
Non-GAAP gross profit
147,826
163,811
156,504
304,330
309,140
Non-GAAP gross margin
35.6
%
37.1
%
36.8
%
36.2
%
36.9
%
Operating expenses from continuing
operations, as reported
117,255
109,393
115,073
232,328
209,052
Adjustments:
Amortization of intangible assets
(7,075
)
(6,523
)
(7,062
)
(14,137
)
(12,032
)
Stock-based compensation
(7,348
)
(4,656
)
(6,418
)
(13,766
)
(8,353
)
Acquisition-related costs
(1,165
)
(4,159
)
(878
)
(2,043
)
(5,827
)
Restructuring
(3,154
)
161
(1,043
)
(4,197
)
(1,057
)
Non-GAAP operating expenses
98,513
94,216
99,672
198,185
181,783
Non-GAAP operating income
$
49,313
$
69,595
$
56,832
$
106,145
$
127,357
Non-GAAP operating margin
11.9
%
15.8
%
13.4
%
12.6
%
15.2
%
Reconciliation of Non-GAAP measure -
income excluding certain items
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
2023
2022
2023
2023
2022
Income from continuing operations, less
non-controlling interest, net of income taxes
$
27,455
$
44,790
$
31,752
$
59,207
$
81,666
Adjustments:
Amortization of intangible assets
7,075
6,523
7,062
14,137
12,032
Acquisition-related costs
1,262
4,223
931
2,193
5,389
Facility expansion, relocation costs, and
other
60
1,187
957
1,017
2,471
Restructuring
3,154
(161
)
1,043
4,197
1,057
Unrealized foreign currency gain
(2,266
)
(5,569
)
1,053
(1,213
)
(6,854
)
Acquisition-related costs and other
included in other income (expense), net
—
85
—
—
85
Tax effect of non-GAAP adjustments
(1,051
)
(752
)
(1,121
)
(2,172
)
(1,821
)
Non-GAAP income, net of income taxes,
excluding stock-based compensation
35,689
50,326
41,677
77,366
94,025
Stock-based compensation, net of taxes
6,191
3,946
5,304
11,495
6,971
Non-GAAP income, net of income taxes
$
41,880
$
54,272
$
46,981
$
88,861
$
100,996
ADVANCED ENERGY INDUSTRIES,
INC.
SELECTED OTHER DATA (UNAUDITED)
Reconciliation of non-GAAP measure -
per share earnings excluding certain items
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
2023
2022
2023
2023
2022
Diluted earnings per share from continuing
operations, as reported
$
0.73
$
1.19
$
0.84
$
1.57
$
2.16
Add back:
Per share impact of non-GAAP adjustments,
net of tax
0.38
0.25
0.40
0.78
0.52
Non-GAAP earnings per share
$
1.11
$
1.44
$
1.24
$
2.35
$
2.68
Reconciliation of Q3 2023
Guidance
Low End
High End
Revenue
$400 million
$430 million
Reconciliation of non-GAAP earnings per
share
GAAP earnings per share
$
0.50
$
0.90
Stock-based compensation
0.20
0.20
Amortization of intangible assets
0.19
0.19
Restructuring and other
0.12
0.12
Tax effects of excluded items
(0.08
)
(0.08
)
Non-GAAP earnings per share
$
0.93
$
1.33
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803309277/en/
Andrew Huang Advanced Energy Industries, Inc. 970-407-6555
ir@aei.com
Advanced Energy Industries (NASDAQ:AEIS)
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