News

Advanced Energy Announces Record Bookings and Revenues for the Second Quarter 2010

July 22, 2010 by Jeff Shepard

Advanced Energy Industries, Inc. announced financial results for the second quarter ended June 30, 2010. Total sales for the second quarter were $115.2 million, representing an all-time high for the company in a single quarter and producing earnings of $0.31 per diluted share. The results highlighted in this release include the company’s Aera® mass flow controller business that is currently being divested, as well as the inclusion of two months of operating results from PV Powered.

"We had an outstanding second quarter, with $154 million in bookings and $115 million in revenue, including PV Powered and the flow business. As our semiconductor revenues continued to grow, the semiconductor industry demonstrated its momentum again this quarter," said Dr. Hans Betz, Chief Executive Officer.

"Our recent acquisition of PV Powered contributed significantly to our higher inverter revenues and backlog, which we anticipate will provide momentum for the second half of 2010. PV Powered also contributed to our bottom line, delivering a profitable second quarter ahead of expectations and making the acquisition immediately accretive. The addition of this excellent team and product line to our Solaron inverter business positions us to forge ahead and take the leading position in the US market for inverters and expand worldwide. Additionally, today we announced that we are divesting our flow business. We see this move as a crucial part of our corporate strategy to focus the company on becoming the market leader in power conversion and capitalize on future growth opportunities."

Semiconductor sales rose 9.9% sequentially to $53.5 million, representing 46.4% of total sales for the quarter. Sales to the non-semiconductor thin film markets increased 87.2% sequentially to $35.9 million, representing 31.2% of total sales for the quarter. Inverter sales grew substantially with the addition of PV Powered to $14.4 million to 12.5% of total sales compared to $2.3 million in the first quarter. Service revenue was flat sequentially at $11.4 million, representing 9.9% of total sales for the quarter.

Bookings for the second quarter, including $15.3 million for the mass flow controller business, hit a record of $154.3 million, or a 60.0% increase, compared to $96.7 million in the first quarter of 2010, resulting in a book-to-bill ratio of 1.34:1 for the second quarter. Ending backlog for the second quarter increased 52.0% sequentially to $123.6 million, including $14.4 million for the flow business, compared to $81.3 million at the end of the first quarter of 2010.

Advanced Energy also announced that it has entered into an agreement to sell its flow business, related product lines and all related assets including the real property in Japan to Hitachi Metals, Ltd. for $44 million in cash, subject to an adjustment based on inventory balance at closing. The company anticipates this transaction will close in the third quarter of 2010 subject to satisfaction of customary closing conditions.

As a result of this transaction, the financial results for the flow business will be recorded in discontinued operations on a net basis beginning with the second quarter 2010. These amounts are revenue of $15.1 million, gross profit of $5.3 million, operating expenses of $1.7 million and net income of $2.2 million, or $0.05 per diluted share in the quarter ended June 30, 2010. Comparable results for the flow business for the second quarter of 2009 were revenues of $3.7 million, gross profit of $0.6 million, operating expenses of $1.3 million and a net loss of $0.4 million, or $0.01 per diluted share.

Excluding the flow business, sales for the second quarter of 2010 increased 43.6% to $100.1 million from $69.7 million in the first quarter of 2010, and up substantially from $31.9 million in the second quarter of 2009. Gross margin for the second quarter was 44.5%, compared with 41.9% in the first quarter of 2010, as a result of higher revenues and leverage from overhead absorption. This compares to gross margin of 22.8% in the same period last year.

Second quarter net income from continuing operations was $11.5 million or $0.26 per diluted share, compared to net income from continuing operations of $4.9 million or $0.11 per diluted share in the first quarter of 2010. In the same period a year ago, net loss from continuing operations was $16.0 million or a loss of $0.38 per share. Cash, cash equivalents and investments were $128.9 million at the end of the second quarter, versus $163.4 million in the first quarter reflecting the $35 million payment for the PV Powered acquisition.