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Advanced Energy Announces 2007 Fourth Quarter & Year-End Financial Results

February 12, 2008 by Jeff Shepard

Advanced Energy Industries, Inc. announced financial results for the fourth quarter and year ended December 31, 2007.

Sales were $83.8 million for the fourth quarter of 2007, in line with the company’s revised guidance announced on January 22, 2008. This represented a decrease of 19.8% from $104.5 million in the fourth quarter of 2006, and a sequential decline of 7.4% from $90.5 million in the third quarter of 2007, driven primarily by further declines in the semiconductor equipment industry and order delays by key OEMs. Gross margin for the fourth quarter of 2007 was 39.1%, down from 42.9% in the fourth quarter of 2006, and down from 40.6% in the third quarter of 2007, due to lower sales.

Net income from continuing operations for the fourth quarter of 2007 was $4.2 million, or $0.09 per diluted share, compared to $39.4 million, or $0.87 per diluted share, in the fourth quarter of 2006, which includes a tax benefit of $23.5 million related to the reversal of a valuation allowance for deferred taxes. Net income from continuing operations for the fourth quarter of 2006, adjusted to exclude such tax benefit, was $15.9 million or $0.35 per diluted share. Net income from continuing operations also decreased sequentially from $5.9 million, or $0.13 per diluted share, in the third quarter of 2007.

Sales were $384.7 million for 2007, a 6.3% decrease from $410.7 million in 2006. Net income from continuing operations for 2007 was $34.4 million, or $0.75 per diluted share, compared to $87.2 million, or $1.93 per diluted share, in 2006. Net income from continuing operations for 2006, adjusted to exclude the tax benefit mentioned above, was $63.7 million, or $1.41 per diluted share.

"While 2007 was a challenging year for Advanced Energy, we have seen growth in our solar business including the successful launch of our Solaron™ inverter product. However, declines in the semiconductor equipment market pressured our sales once again in the fourth quarter," said Dr. Hans Betz, President and Chief Executive Officer of Advanced Energy. "As we move into 2008, we continue to focus on the diversification of our business and are working to drive down our costs, thereby positioning Advanced Energy for growth and profitability."