- Revenue was $327.5 million, below guidance
- GAAP EPS from continuing operations was $0.15, within the
guidance range
- Non-GAAP EPS was $0.58, within the guidance range
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 first
quarter ended March 31, 2024.
“Early signs of improving demand give us confidence that the
first quarter was a trough for the year and that through the
remainder of 2024, revenue will improve with meaningfully higher
profitability driven by our actions to expand gross margins and
control spending,” said Steve Kelley, president and CEO of Advanced
Energy. “Looking forward, I believe that broad customer acceptance
of our new products and technologies will drive share gains as our
markets recover.”
Quarter Results
Revenue was $327.5 million in the first quarter of 2024,
compared with $405.3 million in the fourth quarter of 2023 and
$425.0 million in the first quarter of 2023.
GAAP net income from continuing operations was $5.8 million or
$0.15 per diluted share in the quarter, compared with $37.9 million
or $1.01 per diluted share in the prior quarter, and $31.8 million
or $0.84 per diluted share a year ago.
Non-GAAP net income was $21.9 million or $0.58 per diluted share
in the first quarter of 2024. This compares with $46.7 million or
$1.24 per diluted share in the fourth quarter of 2023, and $47.0
million or $1.24 per diluted share in the first quarter of
2023.
Advanced Energy generated $8.0 million in cash flow from
continuing operations during the quarter and paid $3.8 million in
quarterly dividends.
A reconciliation of GAAP and non-GAAP measures is provided in
the tables below.
Second Quarter 2024 Guidance
Based on the Company’s current view, beliefs, and assumptions,
guidance is within the following ranges:
Q2 2024
Revenue
$ 350 million +/- $20 million
GAAP EPS from continuing operations
$0.25 +/- $0.25
Non-GAAP EPS
$0.73 +/- $0.25
Conference Call
Management will host a conference call today, May 1, 2024, at
2:30 p.m. Eastern Time to discuss the third 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.
The non-GAAP results presented below exclude the impact of non-cash
related charges, such as stock-based compensation, amortization of
intangible assets, and long-term unrealized foreign exchange gains
and losses. In addition, we exclude discontinued operations and
other non-recurring items such as acquisition-related costs,
facility expansion and related costs, restructuring, asset
impairments, and other charges, as they are not indicative of
future performance. The tax effect of our non-GAAP adjustments
represents the anticipated annual tax rate applied to each non-GAAP
adjustment after consideration of their respective book and tax
treatments. In addition, the tax effect also includes a discrete
tax benefit associated with the release of a portion of our
deferred tax asset valuation allowance.
The non-GAAP measures included in this release are not prepared
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
March 31,
December 31,
2024
2023
2023
Revenue, net
$
327,475
$
425,040
$
405,271
Cost of revenue
214,646
269,929
262,405
Gross profit
112,829
155,111
142,866
Gross margin %
34.5
%
36.5
%
35.3
%
Operating expenses:
Research and development
49,836
51,610
49,025
Selling, general, and administrative
55,124
55,358
54,932
Amortization of intangible assets
6,947
7,062
7,068
Restructuring, asset impairments, and
other charges
245
1,043
18,071
Total operating expenses
112,152
115,073
129,096
Operating income
677
40,038
13,770
Interest income
12,645
3,585
12,810
Interest expense
(7,127
)
(2,730
)
(7,198
)
Other income (expense), net
1,379
(1,405
)
(3,184
)
Income from continuing operations, before
income tax
7,574
39,488
16,198
Income tax provision (benefit)
1,787
7,736
(21,693
)
Income from continuing operations
5,787
31,752
37,891
Loss from discontinued operations, net of
income tax
(571
)
(831
)
(389
)
Net income
$
5,216
$
30,921
$
37,502
Basic weighted-average common shares
outstanding
37,359
37,475
37,297
Diluted weighted-average common shares
outstanding
37,687
37,757
37,585
Earnings per share attributable to
Advanced Energy Industries, Inc:
Continuing operations:
Basic earnings per share
$
0.15
$
0.85
$
1.02
Diluted earnings per share
$
0.15
$
0.84
$
1.01
Discontinued operations:
Basic loss per share
$
(0.02
)
$
(0.02
)
$
(0.01
)
Diluted loss per share
$
(0.02
)
$
(0.02
)
$
(0.01
)
Net income:
Basic earnings per share
$
0.14
$
0.83
$
1.01
Diluted earnings per share
$
0.14
$
0.82
$
1.00
ADVANCED ENERGY INDUSTRIES,
INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands)
March 31,
December 31,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
1,017,780
$
1,044,556
Accounts receivables, net
247,510
282,430
Inventories
361,337
336,137
Other current assets
44,990
48,771
Total current assets
1,671,617
1,711,894
Property and equipment, net
175,453
167,665
Operating lease right-of-use assets
106,167
95,432
Other assets
135,627
136,448
Goodwill and intangible assets, net
435,224
445,318
Total assets
$
2,524,088
$
2,556,757
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
137,934
$
141,850
Other accrued expenses
123,009
156,254
Current portion of long-term debt
20,000
20,000
Current portion of operating lease
liabilities
17,049
17,744
Total current liabilities
297,992
335,848
Long-term debt
891,495
895,679
Other long-term liabilities
191,718
181,048
Long-term liabilities
1,083,213
1,076,727
Total liabilities
1,381,205
1,412,575
Total stockholders' equity
1,142,883
1,144,182
Total liabilities and stockholders’
equity
$
2,524,088
$
2,556,757
ADVANCED ENERGY INDUSTRIES,
INC.
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)
Three Months Ended March
31,
2024
2023
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income
$
5,216
$
30,921
Less: loss from discontinued operations,
net of income tax
(571
)
(831
)
Income from continuing operations, net of
income tax
5,787
31,752
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization
16,952
16,523
Stock-based compensation
11,005
6,801
Amortization of debt issuance costs and
debt discount
816
128
Deferred income tax benefit
(9
)
(617
)
Loss (gain) on disposal and sale of
assets
(7
)
115
Unrealized gain on investment
(441
)
—
Changes in operating assets and
liabilities, net of assets acquired
(26,110
)
(22,822
)
Net cash from operating activities from
continuing operations
7,993
31,880
Net cash from operating activities from
discontinued operations
(710
)
(2,069
)
Net cash from operating activities
7,283
29,811
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchases of long-term investments
(2,092
)
—
Purchases of property and equipment
(16,629
)
(16,210
)
Net cash from investing activities
(18,721
)
(16,210
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Payments on long-term borrowings
(5,000
)
(5,000
)
Dividend payments
(3,810
)
(3,814
)
Net payments related to stock-based
awards
(5,327
)
(1,991
)
Net cash from financing activities
(14,137
)
(10,805
)
EFFECT OF CURRENCY TRANSLATION ON
CASH
(1,201
)
51
NET CHANGE IN CASH AND CASH
EQUIVALENTS
(26,776
)
2,847
CASH AND CASH EQUIVALENTS, beginning of
period
1,044,556
458,818
CASH AND CASH EQUIVALENTS, end of
period
$
1,017,780
$
461,665
ADVANCED ENERGY INDUSTRIES,
INC.
SUPPLEMENTAL INFORMATION
(UNAUDITED)
(in thousands)
Net Revenue by Market
Three Months Ended
March 31,
December 31,
2024
2023
2023
Semiconductor Equipment
$
179,903
$
194,209
$
191,375
Industrial and Medical
83,418
123,020
108,600
Data Center Computing
41,902
59,659
62,853
Telecom and Networking
22,252
48,152
42,443
Total
$
327,475
$
425,040
$
405,271
Net Revenue by Geographic
Region
Three Months Ended
March 31,
December 31,
2024
2023
2023
North America
$
134,079
$
180,942
$
187,240
Asia
151,943
179,183
169,700
Europe
40,553
62,566
47,501
Other
900
2,349
830
Total
$
327,475
$
425,040
$
405,271
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,
2024
2023
2023
Gross profit from continuing operations,
as reported
$
112,829
$
155,111
$
142,866
Adjustments to gross profit:
Stock-based compensation
829
383
472
Facility expansion, relocation costs and
other
1,308
957
1,146
Acquisition-related costs
44
53
44
Non-GAAP gross profit
115,010
156,504
144,528
Non-GAAP gross margin
35.1
%
36.8
%
35.7
%
Operating expenses from continuing
operations, as reported
112,152
115,073
129,096
Adjustments:
Amortization of intangible assets
(6,947
)
(7,062
)
(7,068
)
Stock-based compensation
(10,176
)
(6,418
)
(7,716
)
Acquisition-related costs
(1,266
)
(878
)
(1,372
)
Restructuring, asset impairments, and
other charges
(245
)
(1,043
)
(18,071
)
Non-GAAP operating expenses
93,518
99,672
94,869
Non-GAAP operating income
$
21,492
$
56,832
$
49,659
Non-GAAP operating margin
6.6
%
13.4
%
12.3
%
Reconciliation of Non-GAAP measure -
income excluding certain items
Three Months Ended
March 31,
December 31,
2024
2023
2023
Income from continuing operations, less
non-controlling interest, net of income tax
$
5,787
$
31,752
$
37,891
Adjustments:
Amortization of intangible assets
6,947
7,062
7,068
Acquisition-related costs
1,310
931
1,416
Facility expansion, relocation costs, and
other
1,308
957
1,146
Restructuring, asset impairments, and
other charges
245
1,043
18,071
Unrealized foreign currency loss
(gain)
(1,757
)
1,053
2,728
Tax effect of non-GAAP adjustments,
including certain discrete tax benefits
(622
)
(1,121
)
(28,030
)
Non-GAAP income, net of income tax,
excluding stock-based compensation
13,218
41,677
40,290
Stock-based compensation, net of tax
8,694
5,304
6,387
Non-GAAP income, net of income tax
$
21,912
$
46,981
$
46,677
ADVANCED ENERGY INDUSTRIES,
INC.
SELECTED OTHER DATA (UNAUDITED)
Reconciliation of non-GAAP measure -
per share earnings excluding certain items
Three Months Ended
March 31,
December 31,
2024
2023
2023
Diluted earnings per share from continuing
operations, as reported
$
0.15
$
0.84
$
1.01
Add back:
Per share impact of non-GAAP adjustments,
net of tax
0.43
0.40
0.23
Non-GAAP earnings per share
$
0.58
$
1.24
$
1.24
Reconciliation of Q2 2024
Guidance
Low End
High End
Revenue
$330 million
$370 million
Reconciliation of non-GAAP earnings per
share
GAAP earnings per share
$
0.00
$
0.50
Stock-based compensation
0.29
0.29
Amortization of intangible assets
0.19
0.19
Restructuring, asset impairments, and
other charges
0.10
0.10
Tax effects of excluded items
(0.10
)
(0.10
)
Non-GAAP earnings per share
$
0.48
$
0.98
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501087346/en/
Andrew Huang Advanced Energy Industries, Inc. 970-407-6555
ir@aei.com
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