For more information, contact:
Advanced Energy Industries, Inc.
|
Cathy Kawakami,
Advanced Energy Industries, Inc.
970.407.6732
cathy.kawakami@aei.com |
Advanced Energy Reports Fourth Quarter and Year-End 2003 Results
FORT COLLINS, Colo., Feb. 12—Advanced Energy (Nasdaq: AEIS) today reported financial results for the fourth quarter and year ended December 31, 2003. Advanced Energy is a leading global provider of critical solutions used in the production of semiconductors, flat panel displays, data storage products and other advanced applications.
Fourth Quarter Review
For the 2003 fourth quarter, revenue was $74.7 million, up 30 percent from $57.4 million for the fourth quarter of 2002, and up 9 percent compared to $68.6 million for the third quarter of 2003. The company generated income from operations of $319,000 for the fourth quarter of 2003, compared to a loss from operations of $5.7 million for the third quarter of 2003.
The net loss for the fourth quarter of 2003 was $2.4 million, or $0.08 per share, compared to the net loss of $22.0 million, or $0.68 per share, for the fourth quarter of 2002 and a net loss of $27.4 million, or $0.85 per share, for the third quarter of 2003. The fourth quarter of 2002 includes pre-tax charges of $13.1 million relating to excess and obsolete inventory and warranty reserves, and other items. The third quarter 2003 net loss included a non-cash charge of $22.4 million related to a reduction in the carrying value of the Company's net deferred tax assets.
Full Year Review
For the full year 2003, revenue was $262.4 million, compared with $238.9 million for the full year 2002, a 10 percent increase. Net loss for the full year 2003 was $44.2 million, or $1.37 per share, compared with a net loss of $41.4 million, or $1.29 per share, for the full year 2002.
Doug Schatz, chairman and chief executive officer, said, "Industry fundamentals are improving, and we are experiencing strong demand in all product groups, primarily driven by our semiconductor and flat panel customers. Our sales to semiconductor original equipment manufacturers (OEMs) in the fourth quarter of 2003 increased 22 percent compared to the 2003 third quarter, and sales to flat panel display OEMs increased 38 percent from the prior quarter. Our ability to secure key designs in high-growth semiconductor segments such as 300mm etch and chemical vapor deposition (CVD) puts us in a strong position to benefit as the industry accelerates its transition to larger wafers, as well as to smaller line widths and advanced materials such as copper and low-k dielectrics.
"In this accelerating order environment, we continue to focus on improving internal efficiencies and cost control. The initial improvements have shown through in our fourth quarter performance, and we posted income from operations for the first time in ten quarters. Looking ahead, we expect to gain greater leverage from the changes we have made, such as our manufacturing operation in China and our transition to a world-class Asian supply base.
"Based on our strong market position and the continued order momentum, we anticipate first quarter revenue in the $95 to $100 million range and earnings per share in the range of $0.12 to $0.17," said Mr. Schatz.
Fourth Quarter and Year-End Conference Call
Management will host a conference call today, Thursday, February 12, 2004 at 5:00 pm Eastern time to discuss the financial results. You may access this conference call by dialing 888-713-4717, or 706-679-7220 for international callers. For a replay of this teleconference, please call 706-645-9291, passcode 4682617. The replay will be available through Thursday, February 19, 2004.
There will also be a webcast available on the Advanced Energy Website, www.advanced-energy.com .
About Advanced Energy
Advanced Energy is a global leader in the development and support of technologies critical to high-technology manufacturing processes used in the production of semiconductors, flat panel displays, data storage products, compact discs, digital video discs, architectural glass, and other advanced product applications.
Leveraging a diverse product portfolio and technology leadership, Advanced Energy creates solutions that maximize process impact, improve productivity and lower cost of ownership for its customers. This portfolio includes a comprehensive line of technology solutions in power, flow, thermal management, plasma and ion beam sources, and integrated process monitoring and control for original equipment manufacturers (OEMs) and end-users around the world.
Advanced Energy operates in regional centers in North America, Asia and Europe and offers global sales and support through direct offices, representatives and distributors. Founded in 1981, Advanced Energy is a publicly held company traded on the Nasdaq National Market under the symbol AEIS. For more information, please visit our corporate website: www.advanced-energy.com .
Safe Harbor Statement
This press release contains certain forward-looking statements 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, our ability to manage the operations of our new manufacturing facility in China, our customers' acceptance of products manufactured at our Chinese manufacturing facility, the volatility and cyclicality of the semiconductor and semiconductor capital equipment industries, the timing of orders received from our customers, our ability to execute on the cost reduction initiatives currently underway, and other risks described in Advanced Energy's Form 10-K, Forms 10-Q as well as other reports and statements filed with the Securities and Exchange Commission. These reports and statements are available on the SEC's website at www.sec.gov . Copies may also be obtained by contacting Advanced Energy's investor relations at 970-407-6732. The company assumes no obligation to update the information in this press release.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
Sales $74,731 $57,444 $262,402 $238,898
Cost of sales (2) 48,100 52,970 174,455 170,138
Gross profit 26,631 4,474 87,947 68,760
Operating expenses:
Research and development 12,750 12,975 51,647 48,995
Sales and marketing 7,095 9,739 31,015 34,940
General and administrative 4,250 7,556 18,324 25,110
Amortization of intangible
assets 1,199 1,904 4,612 5,423
Litigation damages -- -- -- 5,313
Restructuring charges 1,018 5,840 4,306 9,060
Impairment of intangible
assets -- 1,904 1,175 1,904
Total operating expenses 26,312 39,918 111,079 130,745
Income (loss) from operations 319 (35,444) (23,132) (61,985)
Other (expense) income, net (1) (1,957) 1,663 (9,308) (1,707)
Loss before income taxes (1,638) (33,781) (32,440) (63,692)
(Provision) benefit for income
taxes (1) (801) 11,824 (11,801) 22,293
Net loss $(2,439) $(21,957) $(44,241) $(41,399)
Basic and diluted net loss per
share $(0.08) $(0.68) $(1.37) $(1.29)
Basic and diluted weighted-average
common shares outstanding 32,433 32,111 32,271 32,026
(1) In the fourth quarter of 2002, Advanced Energy recorded a gain on the
extinguishment of debt, net of related income taxes, as a result
of the Company's previously announced repurchase of a portion of its
convertible debt. The gain was previously reported as an
extraordinary gain, net of related tax effects. In connection with
the issuance of Statement of Financial Accounting Standards No. 145,
the gain before any tax effect has been reclassified to other
(expense) income. The loss before income taxes and income tax
benefit were adjusted accordingly.
(2) In the fourth quarter of 2002, Advanced Energy recorded charges of
$11.5 million as cost of sales for excess and obsolete inventory and
warranty reserves.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands)
December 31, December 31,
2003 2002
ASSETS
Current Assets:
Cash and cash equivalents $41,522 $70,188
Marketable securities 93,691 102,159
Accounts receivable 61,927 43,885
Income tax receivable 151 14,720
Inventories 65,703 57,306
Other current assets 5,486 6,828
Deferred income tax assets, net -- 17,510
Total current assets 268,480 312,596
Property and equipment, net 44,725 41,178
Deposits and other 5,630 5,181
Goodwill and intangibles, net 88,943 86,601
Deferred debt issuance costs 3,019 4,091
Demonstration and customer service
equipment, net 3,934 6,086
Total assets $414,731 $455,733
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $23,066 $16,055
Other current liabilities 28,216 31,064
Current portion of capital
leases and senior borrowings 8,582 15,197
Accrued interest payable on
convertible subordinated notes 2,460 2,338
Total current liabilities 62,324 64,654
Long-term Liabilities:
Capital leases and senior
borrowings 6,168 10,665
Other long-term liabilities 2,015 694
Deferred income tax liability,
net 4,672 8,663
Convertible subordinated notes
payable 187,718 187,718
Total long-term liabilities 200,573 207,740
Total liabilities 262,897 272,394
Stockholders' equity 151,834 183,339
Total liabilities and stockholders'
equity $414,731 $455,733
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
Twelve Months Ended December 31,
2003 2002
NET CASH USED IN OPERATING ACTIVITIES $(12,986) $(15,305)
NET CASH (USED IN) PROVIDED BY
INVESTING ACTIVITIES (8,590) 24,311
NET CASH USED IN FINANCING ACTIVITIES (8,608) (22,634)
EFFECT OF CURRENCY TRANSLATION ON
CASH 1,518 1,861
DECREASE IN CASH AND CASH EQUIVALENTS (28,666) (11,767)
CASH AND EQUIVALENTS, beginning of
period 70,188 81,955
CASH AND EQUIVALENTS, end of period $41,522 $70,188
|