Advanced Energy Industries, Inc. announced financial results for the third quarter ended September 30, 2013, including sales of $142.9 million compared with $139.7 million in the second quarter of 2013 and $117.5 million in the third quarter of 2012. Income from continuing operations was $687,000 or $0.02 per diluted share. On a non-GAAP basis, income from continuing operations was $21.7 million or $0.53 per diluted share. The non-GAAP measures exclude, on an after tax basis, $22.4 million in restructuring charges, $3.6 million of stock-based compensation, $549,000 of intangible amortization and a $5.6 million benefit from a non-recurring tax release item. A reconciliation of non-GAAP income from continuing operations and earnings per share is provided in the tables below. It is important to note that based on our current mix of profits our effective tax rate has declined to approximately 12.5%. The company ended the quarter with $104.7 million in cash and marketable securities, a sequential increase of $5.6 million.
"As we approach the end of 2013, we had yet another sound quarter reflecting the significant progress we are making towards our strategic objectives," said Garry Rogerson, CEO. "Once again, we returned value to our shareholders by continuing to grow operating profit and earnings per share on a non-GAAP basis. Since the beginning of 2013, we have increased our operating income excluding restructuring by nearly 140%, from $7.7 million in the first quarter, to $12.6 million in the second quarter, to $18.3 million in the third quarter. Clearly, we are demonstrating the effectiveness of our low-cost, distributed R&D, centralized manufacturing model. With increasing backlog, a growing number of new products and entrance into new applications and geographies, we believe we are poised for continued profitable growth opportunities as we head into 2014."
Thin Films sales were $75.4 million in the third quarter of 2013, a 5.2% increase from $71.7 million in the second quarter of 2013 and a 32.8% increase from $56.8 million in the third quarter of 2012. The increase was driven by improved conditions across all of our served markets with the exception of flat panel display applications, where OEMs digested recent capital investments. In addition, we are increasing our penetration of existing applications and expanding into new ones such as environmental and hard coating applications.
Solar Energy sales were $67.5 million in the third quarter of 2013, roughly flat with $68.0 million in the second quarter of 2013 and an increase of 11.1% from $60.7 million in the third quarter of 2012. Backlog continued to build due to the growing demand for the one megawatt product slated to begin shipping at the end of the fourth quarter and the three-phase string product line.
Income from continuing operations for the third quarter was $687,000 or $0.02 per diluted share, compared with a loss from continuing operations of $9.8 million or $0.24 per diluted share in the second quarter of 2013, and income from continuing operations of $5.7 million or $0.15 per diluted share in the same period last year. On a non-GAAP basis, excluding the impact of the items mentioned above, income from continuing operations grew to $21.7 million or $0.53 per diluted share, from $13.9 million or $0.35 per diluted share in the second quarter of 2013.
After the acquisition of the three-phase string product line in April 2013, the company undertook a major restructuring to take advantage of additional future cost saving opportunities. These activities include the consolidation of certain facilities, product rationalization and further centralization of manufacturing. During the third quarter, the company recorded a pre-tax restructuring charge of $19.9 million, $18.5 million of which was non-cash. The company has now completed virtually all of these restructuring actions. The total charges related to these activities were $44 million, of which $36.2 million was non-cash. We expect this restructuring to provide additional cost savings in the range of $20 to $22 million annually, including approximately $14 million of cash savings. These cost savings activities, along with those previously announced are expected to deliver annual savings of approximately $72 to $77 million by 2014.
