News

Advanced Energy Announces First Quarter 2009 Results

April 26, 2009 by Jeff Shepard

Advanced Energy Industries, Inc. announced financial results for the first quarter ended March 31, 2009. Sales for the first quarter of 2009 were $32.6 million, representing a 63.3% decline from $88.9 million in the same quarter a year ago and a 51.7% decline from $67.5 million in the fourth quarter of 2008. Sales were lower across all of the company’s markets. The book to bill ratio for the quarter increased sequentially to 0.87:1, from quarter’s 0.70:1, from the fourth quarter of 2008, though on a much lower revenue base.

Gross margins in the first quarter were impacted by the lower revenues, resulting in lower absorption of manufacturing overhead in the first quarter. Margins fell to 19.6%, down from 40.3% in the first quarter of 2008 and 27.2% in the fourth quarter of 2008.

During the quarter we implemented a restructuring plan that resulted in a charge of $3.4 million or $0.08 per share related to a reduction in workforce. Due to the current economic downturn and a significant decline in the company’s market capitalization, it recorded an estimated non-cash impairment charge in the first quarter of $63.3 million or $1.51 per share related to our goodwill. These charges do not affect its cash balance, liquidity, or operating cash flow.

The result was a net loss for the first quarter of 2009 of $79.8 million, or $1.90 loss per diluted share, compared to net income of $6.0 million, or $0.13 earnings per diluted share, in the first quarter of 2008. The quarterly net loss increased from $19.0 million, or $0.45 per diluted share, in the fourth quarter of 2008. The balance sheet remained strong as the company closed the quarter with $173.4 million of cash and investments.

"This was an exceptionally difficult quarter as we experienced revenue levels not seen since the late 1990s. We responded once again by reducing our cost structure, yet maintaining our critical technology development and product initiatives. Our healthy balance sheet remains a key strategic asset, which we plan to leverage during these difficult times," said Hans Betz, President and CEO. "Although we experienced a significant drop in all of our markets during the quarter and visibility remains limited, we have seen some positive signs of investment in some markets, which we hope will provide some near-term stability. We remain committed to our strategy of being the strong and healthy supplier of choice to all of our OEM and end user customers."