For more information, contact:

Richard Beck Advanced Energy Industries, Inc. 970.407.6204 dick.beck@aei.com

Janet Nelson The Financial Relations Board 415.986.1591

Advanced Energy 1999 Fourth Quarter Revenue Up 160 Percent Report Record Results for Fourth Quarter and Year

FORT COLLINS, CO (February 10, 2000) -- Advanced Energy Industries, Inc. (Nasdaq NM: AEIS) today reported record financial results for the fourth quarter and year ended December 31, 1999. Advanced Energy is an industry-leading manufacturer of critical power delivery systems to original equipment manufacturers to make semiconductors, compact disks, data storage, flat panel displays, and emerging growth products. For the fourth quarter, revenues increased 160 percent to $58.6 million from $22.6 million for the fourth quarter of 1998. Fourth quarter revenues were up 15 percent from the $51.1 million reported for the third quarter of 1999.

 

"We experienced revenue growth in the fourth quarter across all segments of our business, with higher than average growth in the data storage and flat panel display segments," stated Chairman and Chief Executive Officer Douglas S. Schatz.

"With the momentum attained in the fourth quarter, and through all of 1999, Advanced Energy resumes the Company's historical annual growth rates. The record results validate the Company's restructuring in 1998. Our market share remains strong and is increasing in all of our target markets. Advanced Energy is positioned for accelerated growth going forward."

Net income in the fourth quarter increased 45% to $8 million from $5.5 million in the third quarter, and represented a significant increase over the net loss of $3.8 million in the year ago quarter. Diluted EPS in the fourth quarter were $0.28 compared to $0.20 in the prior quarter, an increase of 40% even with 3% more shares in the fourth quarter than in the third quarter. The fourth quarter EPS of $0.28 also shows significant improvement over the net loss of $0.14 in the year ago quarter.

"Our solid improvement in net income results from our continuing and successful simultaneous efforts to increase revenues by increasing market share, and to reduce costs. For the twelve months ended June 1999, on average we had a 56% market share across our market segments, with market share in the semiconductor equipment market of 46%, and over 90% market share in compact disk and DVD production equipment. Our on-going efforts to reduce costs and design-in operating efficiencies include improvements in both cost of goods sold and operating expenses," concluded Mr. Schatz.

New markets and new technologies continue to open significant growth opportunities for Advanced Energy. Consumer electronics markets are exploding with new devices, contributing significantly to the overall demand driving growth in the semiconductor industry.

In addition, as announced in December 1999, Advanced Energy is working closely with Hewlett-Packard to implement Advanced Energy's New Power Supply Architecture (NPSA) for applications in very high performance microprocessors and in workstations.

Also in the December quarter, to further stimulate growth in Asia, we opened a new subsidiary in Taiwan, and separately, announced the appointment of Kim Seon Woo as President of AE in South Korea.

For the year 1999, revenues reached a record $184 million, a 48% increase over revenues of $124.7 million in 1998. Gross profit in 1999 improved 123% to $81.9 million, and gross margin increased notably to 44% from 29% in 1998. Net income for the year was $16.8 million compared to a loss of $9.5 million in 1998. Diluted EPS for the year were $0.59 as compared to the year ago EPS loss of $0.36.

Safe Harbor Statement
Except for any historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, including the achievement of goals established by the Company to improve gross margin and maintain operating expenses in line with revenue, continued sales growth in non-semiconductor areas, and other risks detailed from time to time in the Company's Securities and Exchange Commission reports, including the Company's Form 10-K and Forms 10-Q. The Company continues to be susceptible to fluctuations in quarterly and annual revenues and operating results and the volatility of the semiconductor and semiconductor capital equipment industries. The Company assumes no obligation to update the information in this release.

About the Company
Founded in 1981, Advanced Energy Industries, Inc. is the leading manufacturer of power delivery systems that are critical in the manufacturing of semiconductors, data storage media, flat panel displays, and other products using thin-film technology. Within its comprehensive product portfolio of direct current (DC), low/mid-frequency and radio frequency (RF) power solutions, the Company sells products critical in applications ranging from compact disks, digital video disks, flat panel displays, the most popular logic semiconductor devices, among many other applications. The Company's stock is traded on the Nasdaq National Market under the symbol AEIS.

For more information, access Advanced Energy's web site at www.advanced-energy.com or for information via fax, at no cost, dial 1-800-PRO-INFO, code AEIS.