Advanced Energy Announces Second Quarter Results
August 01 2016 - 4:18PM
Advanced Energy Industries, Inc. (Nasdaq:AEIS) today announced
financial results for the second quarter ended June 30, 2016. The
company reported second quarter sales of $118.8 million. Second
quarter GAAP income from continuing operations was $27.3 million,
or $0.68 per diluted share. Non-GAAP income from continuing
operations was $29.2 million, or $0.73 per diluted share.
“The second quarter exceeded our expectations on
the top and bottom line with record contributions from our
Semiconductor and Service businesses and a rebound in our
Industrial markets,” said Yuval Wasserman, president and CEO of
Advanced Energy. “Our current performance is a direct result of the
adoption of our recent design wins in next-generation 3D enabling
technologies to volume production. With our advantageous financial
model, we are progressing towards our aspirational goals.”
Second Quarter
Results
Sales were $118.8 million compared with $103.0
million in the first quarter of 2016 and $108.7 million in the
second quarter of 2015.
GAAP income from continuing operations, net of
income taxes was $27.3 million or $0.68 per diluted share in the
second quarter of 2016 compared to $20.2 million or $0.50 per
diluted share in the first quarter, and $23.0 million or $0.56 per
diluted share in the second quarter of 2015.
Non-GAAP income from continuing operations, net of
income taxes was $29.2 million or $0.73 per diluted share in the
second quarter of 2016 compared to $22.1 million or $0.55 per
diluted share in the first quarter, and $24.4 million or $0.59 per
diluted share in the same period last year. A reconciliation of
non-GAAP measures is provided in the tables below.
The company ended the quarter with $215.1 million
in cash and marketable securities.
Discontinued Operations
The company’s financial statements for all periods
presented reflect results for the continuing precision power
business, with the discontinued inverter business included in
discontinued operations for both the balance sheet and income
statement. Further financial detail regarding the amounts related
to the discontinued inverter business are available in the
company’s 2015 Annual Report on Form 10-K.
Third Quarter 2016
Guidance
Based on the company's current view, beliefs and
assumptions, guidance for the third quarter of 2016 is within the
following ranges:
|
|
|
|
Q3 2016 |
Revenues |
|
|
|
$116M
- $126M |
GAAP
operating margins from continuing operations |
|
|
|
25% -
28% |
GAAP EPS
from continuing operations |
|
|
|
$0.65
- $0.76 |
Non-GAAP
operating margins from continuing operations |
|
|
|
27% -
30% |
Non-GAAP
EPS from continuing operations |
|
|
|
$0.70
- $0.80 |
|
|
|
|
|
|
|
Second Quarter 2016 Conference
Call
Management will host a conference call tomorrow
morning, Tuesday, August 2, 2016, 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 the operator with the Conference ID Number
49515744, which has been reserved for this call. For a replay of
this teleconference, please call 855-859-2056 or 404-537-3406 and
enter Conference ID Number 49515744. The replay will be available
for one week following the conference call. A webcast will also be
available on the company’s Investor Relations web page at
http://ir.advanced-energy.com.
About Advanced Energy
Advanced Energy (Nasdaq:AEIS) is a global leader in
innovative power and control technologies for high-growth,
precision power solutions for thin films processes and industrial
applications. 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.
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,
amortization of intangible assets and restructuring costs, as well
as acquisition related costs and other non-recurring items.
For the third quarter ending September 30, 2016 guidance, the
company expects stock based compensation of $1.2 million and
amortization of intangibles of $1.1 million. 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. Advanced Energy believes that these non-GAAP
measures provide useful information to management to evaluate
business performance without the impacts of certain non-cash
charges and other charges which are not part of the company’s usual
operations. The company uses 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, 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 third quarter ending September 30, 2016,
expectations regarding future market trends and the company’s
future performance within specific markets 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 and
services; (b) the volatility and cyclicality of the industries the
company serves, particularly the semiconductor industry; (c) delays
in capital spending by end-users in our served markets; (d) the
accuracy of the company’s estimates related to fulfilling solar
inverter product warranty and post-warranty obligations; (e) the
company’s ability to realize its plan to avoid additional costs
after the solar inverter wind-down; (f) the accuracy of the
company's assumptions on which its financial statement projections
are based; (g) the impact of price changes, which may
result from a variety of factors; (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 in a timely manner the materials necessary to manufacture
its 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 |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
2016 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
Sales: |
|
|
|
|
|
|
|
|
|
Product |
$ |
100,752 |
|
|
$ |
91,424 |
|
|
$ |
86,293 |
|
|
$ |
187,045 |
|
|
$ |
185,032 |
|
Service |
18,013 |
|
|
17,230 |
|
|
16,751 |
|
|
34,764 |
|
|
33,132 |
|
Total sales |
118,765 |
|
|
108,654 |
|
|
103,044 |
|
|
|
221,809 |
|
|
|
218,164 |
|
Cost of sales: |
|
|
|
|
|
|
|
|
|
Product |
47,334 |
|
|
43,778 |
|
|
40,815 |
|
|
88,149 |
|
|
86,070 |
|
Service |
9,385 |
|
|
8,327 |
|
|
8,769 |
|
|
18,154 |
|
|
16,446 |
|
Total cost of sales |
56,719 |
|
|
52,105 |
|
|
49,584 |
|
|
106,303 |
|
|
102,516 |
|
Gross profit |
62,046 |
|
|
56,549 |
|
|
53,460 |
|
|
115,506 |
|
|
115,648 |
|
|
52.2 |
% |
|
52.0 |
% |
|
51.9 |
% |
|
52.1 |
% |
|
53.0 |
% |
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
11,266 |
|
|
9,984 |
|
|
10,765 |
|
|
22,031 |
|
|
19,744 |
|
Selling, general and
administrative |
19,377 |
|
|
16,684 |
|
|
18,016 |
|
|
37,393 |
|
|
33,391 |
|
Amortization of intangible
assets |
1,074 |
|
|
1,102 |
|
|
1,058 |
|
|
2,132 |
|
|
2,200 |
|
Restructuring benefit |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(2 |
) |
Total operating expenses |
31,717 |
|
|
27,770 |
|
|
29,839 |
|
|
61,556 |
|
|
55,333 |
|
Operating Income |
30,329 |
|
|
28,779 |
|
|
23,621 |
|
|
53,950 |
|
|
60,315 |
|
Other income, net |
836 |
|
|
301 |
|
|
357 |
|
|
1,193 |
|
|
1,169 |
|
Income from continuing
operations before income taxes |
31,165 |
|
|
29,080 |
|
|
23,978 |
|
|
55,143 |
|
|
61,484 |
|
Provision for income
taxes |
3,911 |
|
|
6,056 |
|
|
3,758 |
|
|
7,669 |
|
|
12,805 |
|
Income from continuing
operations, net of income taxes |
27,254 |
|
|
23,024 |
|
|
20,220 |
|
|
47,474 |
|
|
48,679 |
|
Income (loss) from
discontinued operations, net of income taxes |
3,277 |
|
|
(255,483 |
) |
|
2,061 |
|
|
5,338 |
|
|
(259,862 |
) |
Net income
(loss) |
$ |
30,531 |
|
|
$ |
(232,459 |
) |
|
$ |
22,281 |
|
|
$ |
52,812 |
|
|
$ |
(211,183 |
) |
|
|
|
|
|
|
|
|
|
|
Basic weighted-average
common shares outstanding |
39,672 |
|
|
40,946 |
|
|
39,814 |
|
|
39,750 |
|
|
40,843 |
|
Diluted
weighted-average common shares outstanding |
39,969 |
|
|
41,253 |
|
|
40,100 |
|
|
40,046 |
|
|
41,192 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations: |
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.69 |
|
|
$ |
0.56 |
|
|
$ |
0.51 |
|
|
$ |
1.19 |
|
|
$ |
1.19 |
|
Diluted earnings per share |
$ |
0.68 |
|
|
$ |
0.56 |
|
|
$ |
0.50 |
|
|
$ |
1.19 |
|
|
$ |
1.18 |
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations: |
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per
share |
$ |
0.08 |
|
|
$ |
(6.24 |
) |
|
$ |
0.05 |
|
|
$ |
0.13 |
|
|
$ |
(6.36 |
) |
Diluted earnings (loss) per
share |
$ |
0.08 |
|
|
$ |
(6.24 |
) |
|
$ |
0.05 |
|
|
$ |
0.13 |
|
|
$ |
(6.36 |
) |
|
|
|
|
|
|
|
|
|
|
Net income: |
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per
share |
$ |
0.77 |
|
|
$ |
(5.68 |
) |
|
$ |
0.56 |
|
|
$ |
1.33 |
|
|
$ |
(5.17 |
) |
Diluted earnings (loss) per
share |
$ |
0.76 |
|
|
$ |
(5.68 |
) |
|
$ |
0.56 |
|
|
$ |
1.32 |
|
|
$ |
(5.17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADVANCED ENERGY INDUSTRIES, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in
thousands) |
|
|
June 30, |
|
December 31, |
|
2016 |
|
2015 |
ASSETS |
Unaudited |
|
|
|
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
209,273 |
|
|
$ |
158,443 |
|
Marketable securities |
5,784 |
|
|
11,986 |
|
Accounts receivable, net |
66,162 |
|
|
54,959 |
|
Inventories, net |
57,227 |
|
|
52,573 |
|
Deferred income tax assets |
6,027 |
|
|
6,004 |
|
Income taxes receivable |
1,875 |
|
|
9,040 |
|
Other current assets |
8,978 |
|
|
7,868 |
|
Current assets of discontinued
operations |
31,517 |
|
|
41,902 |
|
Total current
assets |
386,843 |
|
|
342,775 |
|
|
|
|
|
Property and equipment,
net |
11,167 |
|
|
9,645 |
|
|
|
|
|
Deposits and other |
1,678 |
|
|
1,729 |
|
Goodwill and
intangibles, net |
74,750 |
|
|
76,870 |
|
Deferred income tax
assets |
30,231 |
|
|
30,398 |
|
Non-current assets of
discontinued operations |
285 |
|
|
1,271 |
|
Total assets |
$ |
504,954 |
|
|
$ |
462,688 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
36,951 |
|
|
$ |
27,246 |
|
Other accrued expenses |
36,807 |
|
|
40,357 |
|
Current liabilities of discontinued
operations |
24,910 |
|
|
36,481 |
|
Total current
liabilities |
98,668 |
|
|
104,084 |
|
|
|
|
|
Non-current liabilities of
continuing operations |
64,370 |
|
|
67,722 |
|
Non-current liabilities of
discontinued operations |
20,104 |
|
|
27,302 |
|
Long-term
liabilities |
84,474 |
|
|
95,024 |
|
|
|
|
|
Total liabilities |
183,142 |
|
|
199,108 |
|
|
|
|
|
Stockholders'
equity |
321,812 |
|
|
263,580 |
|
Total liabilities and
stockholders' equity |
$ |
504,954 |
|
|
$ |
462,688 |
|
|
|
|
|
December 31, 2015 amounts are derived from the December 31, 2015
audited Consolidated Financial Statements.
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, |
|
2016 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
Gross Profit from
continuing operations, as reported |
$ |
62,046 |
|
|
$ |
56,549 |
|
|
$ |
53,460 |
|
|
$ |
115,506 |
|
|
$ |
115,648 |
|
Operating expenses from
continuing operations, as reported |
31,717 |
|
|
27,770 |
|
|
29,839 |
|
|
61,556 |
|
|
55,333 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Restructuring charges |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2 |
|
Stock-based compensation |
(1,569 |
) |
|
(693 |
) |
|
(1,429 |
) |
|
(2,998 |
) |
|
(1,180 |
) |
Amortization of intangible
assets |
(1,074 |
) |
|
(1,102 |
) |
|
(1,058 |
) |
|
(2,132 |
) |
|
(2,200 |
) |
Non-GAAP operating
expenses from continuing operations |
29,074 |
|
|
25,975 |
|
|
27,352 |
|
|
56,426 |
|
|
51,955 |
|
Non-GAAP operating
income from continuing operations |
$ |
32,972 |
|
|
$ |
30,574 |
|
|
$ |
26,108 |
|
|
$ |
59,080 |
|
|
$ |
63,693 |
|
|
|
Reconciliation
of Non-GAAP measure - income excluding certain items |
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
2016 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations, net of income taxes, as reported |
$ |
27,254 |
|
|
$ |
23,024 |
|
|
$ |
20,220 |
|
|
$ |
47,474 |
|
|
$ |
48,679 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Restructuring charges |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(2 |
) |
Stock-based compensation |
1,569 |
|
|
693 |
|
|
1,429 |
|
|
2,998 |
|
|
1,180 |
|
Amortization of intangible
assets |
1,074 |
|
|
1,102 |
|
|
1,058 |
|
|
2,132 |
|
|
2,200 |
|
Tax
effect of non-GAAP adjustments |
(711 |
) |
|
(375 |
) |
|
(655 |
) |
|
(1,366 |
) |
|
(673 |
) |
Non-GAAP income from
continuing operations, net of income taxes |
$ |
29,186 |
|
|
$ |
24,444 |
|
|
$ |
22,052 |
|
|
$ |
51,238 |
|
|
$ |
51,384 |
|
|
|
Reconciliation
of Non-GAAP measure - per share earnings excluding certain
items |
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
2016 |
|
2015 |
|
2016 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share from continuing operations, as reported |
$ |
0.68 |
|
|
$ |
0.56 |
|
|
$ |
0.50 |
|
|
$ |
1.19 |
|
|
$ |
1.18 |
|
Add back: |
|
|
|
|
|
|
|
|
|
per share impact of Non-GAAP
adjustments, net of tax |
0.05 |
|
|
0.03 |
|
|
0.05 |
|
|
0.09 |
|
|
0.07 |
|
Non-GAAP per share
earnings from continuing operations |
$ |
0.73 |
|
|
$ |
0.59 |
|
|
$ |
0.55 |
|
|
$ |
1.28 |
|
|
$ |
1.25 |
|
|
Reconciliation
of Q3 2016 Guidance |
|
|
|
|
|
|
Low End |
|
High End |
|
|
|
|
|
Revenue |
|
$116 million |
|
$126 million |
|
|
|
|
|
Reconciliation
of Non-GAAP operating margin |
|
|
|
|
GAAP operating
margin |
|
25 |
% |
|
28 |
% |
Stock-based compensation |
|
1 |
% |
|
1 |
% |
Amortization of intangible
assets |
|
1 |
% |
|
1 |
% |
Non-GAAP
operating margin |
|
27 |
% |
|
30 |
% |
|
|
|
|
|
Reconciliation
of Non-GAAP earnings per share |
|
|
|
|
GAAP earnings per
share |
|
$ |
0.65 |
|
|
$ |
0.76 |
|
Stock-based compensation |
|
0.03 |
|
|
0.03 |
|
Amortization of intangible
assets |
|
0.03 |
|
|
0.03 |
|
Tax effects of excluded items |
|
(0.01 |
) |
|
(0.02 |
) |
Non-GAAP
earnings per share |
|
$ |
0.70 |
|
|
$ |
0.80 |
|
CONTACTS:
Tom Liguori
Advanced Energy Industries, Inc.
970.407.6570
Tom.liguori@aei.com
Annie Leschin
Advanced Energy Industries, Inc.
970.407.6555
ir@aei.com
Advanced Energy Industries (NASDAQ:AEIS)
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Advanced Energy Industries (NASDAQ:AEIS)
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