Advanced Energy Announces Fourth Quarter & Full Year 2008 Financial Results
Advanced Energy Industries, Inc. announced financial results for the fourth quarter and year ended December 31, 2008. Sales for the fourth quarter of 2008 were $67.5 million, representing a 19.5% decline from $83.8 million in the same quarter a year ago and a 20.1% decline from $84.5 million in the third quarter of 2008. The weak economy affected all of its markets, led by semiconductor equipment, which experienced a revenue decrease of 20.2% sequentially. The book to bill ratio for the quarter was 0.7:1.
Sales to company’s non-semiconductor markets represented 48.3% of total sales for the quarter, driven by continued strength from the solar market, which represented 23.6% of total sales. Service revenues were 18.4% of total sales, down 20.5% sequentially, primarily due to softness in the semiconductor market, where the majority of its installed base resides.
Gross margin for the fourth quarter was 27.2%, down from 39.1% in the fourth quarter of 2007, and 41.7% in the third quarter of 2008. Margins were lower due to a $5.1 million charge to cost of goods sold for excess and obsolete inventory, which impacted gross margin by 7.6%, as well as lower revenues and the resulting lower absorption of manufacturing overhead.
The company reduced operating expenses 15.7% sequentially in the quarter, as we implemented additional cost reduction measures including discretionary spending controls, global shutdown weeks during the holiday season and workforce reductions.
During the fourth quarter of 2008, the company also recorded a non-cash charge of $18.0 million, or $0.43 per share, for income taxes related to a valuation allowance against our deferred tax assets. This resulted in a net loss for the fourth quarter of 2008 of $19.0 million, or $0.45 per diluted share, compared to net income of $4.2 million, or $0.09 per diluted share, in the fourth quarter of 2007. Net income also decreased sequentially from $5.4 million, or $0.13 per diluted share, in the third quarter of 2008.
For the full year 2008, sales were $328.9 million, a 14.5% decrease from $384.7 million in 2007. The primary driver of the reduction in sales was a 39.0% drop in revenues to the semiconductor equipment market, partially offset by a 118.7% increase in revenues to the solar market. Net loss from continuing operations for 2008 was $1.8 million, or $0.04 per diluted share, compared to net income of $34.4 million, or $0.75 per diluted share, in 2007. During 2008, the company generated $24.7 million in cash from operations to end the year with $180.1 million in cash, cash equivalents and investments, including auction rate securities of $30.4 million.