U.S. markets closed
  • S&P 500

    4,280.15
    +72.88 (+1.73%)
     
  • Dow 30

    33,761.05
    +424.38 (+1.27%)
     
  • Nasdaq

    13,047.19
    +267.27 (+2.09%)
     
  • Russell 2000

    2,016.62
    +41.36 (+2.09%)
     
  • Crude Oil

    91.88
    -2.46 (-2.61%)
     
  • Gold

    1,818.90
    +11.70 (+0.65%)
     
  • Silver

    20.83
    +0.49 (+2.39%)
     
  • EUR/USD

    1.0257
    -0.0068 (-0.66%)
     
  • 10-Yr Bond

    2.8490
    -0.0390 (-1.35%)
     
  • GBP/USD

    1.2139
    -0.0064 (-0.52%)
     
  • USD/JPY

    133.4800
    +0.4810 (+0.36%)
     
  • BTC-USD

    24,786.88
    +802.28 (+3.34%)
     
  • CMC Crypto 200

    574.64
    +3.36 (+0.59%)
     
  • FTSE 100

    7,500.89
    +34.98 (+0.47%)
     
  • Nikkei 225

    28,546.98
    +727.65 (+2.62%)
     

Advanced Energy Announces Second Quarter 2022 Results and Increased Share Repurchase Authorization

  • Oops!
    Something went wrong.
    Please try again later.
·16 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Total revenue was a record $441 million, above high end of guidance range

  • Semiconductor revenue was also a record and grew 30% from last year

  • GAAP EPS from continuing operations was $1.19

  • Non-GAAP EPS was $1.44, above the high end of guidance range

  • Increased share repurchase authorization to $200 million

DENVER, August 03, 2022--(BUSINESS WIRE)--Advanced Energy Industries, Inc. (Nasdaq: AEIS), a global leader in highly engineered, precision power conversion, measurement, and control solutions, today announced financial results for the second quarter ended June 30, 2022.

"Second quarter financial results surpassed our expectations, largely due to improved availability of key components and good operational execution," said Steve Kelley, president and CEO of Advanced Energy. "Customer demand remains strong, and we are pleased by the level of customer interest in our new technologies and products, the foundation of our long-term profitable growth."

Quarter Results

Sales were $440.9 million in the second quarter of 2022, compared with $397.5 million in the first quarter of 2022 and $361.3 million in the second quarter of 2021.

GAAP net income from continuing operations was $44.8 million or $1.19 per diluted share in the quarter, compared with $36.9 million or $0.98 per diluted share in the prior quarter, and $35.5 million or $0.92 per diluted share a year ago.

Non-GAAP net income was $54.3 million or $1.44 per diluted share in the second quarter of 2022. This compares with $46.7 million or $1.24 per diluted share in the first quarter of 2022, and $48.1 million or $1.25 per diluted share in the second quarter of 2021.

Advanced Energy generated $37.6 million of cash flow from continuing operations during the quarter, repurchased $17.0 million of common stock and paid $3.8 million in a quarterly dividend.

A reconciliation of GAAP to non-GAAP measures is provided in the tables below.

Increased Share Repurchase Authorization

The Board of Directors increased the Company’s existing share repurchase authorization to $200 million.

Third Quarter 2022 Guidance

Based on the Company’s current view, beliefs, and assumptions, guidance for the third quarter of 2022 is within the following ranges:

Q3 2022

Revenues

$435 million +/- $25 million

GAAP EPS from continuing operations

$0.92 +/- $0.30

Non-GAAP EPS

$1.30 +/- $0.30

Conference Call

Management will host a conference call today, August 3, 2022, at 4:30 p.m. Eastern Time to discuss the second quarter financial results. To participate in the live earnings conference call, please dial 877-407-0890 approximately ten minutes prior to the start of the meeting and an operator will connect you. International participants can dial +1-201-389-0918. A webcast will also be available on our investor web page at ir.advancedenergy.com in the Events & Presentations section. The archived webcast will be available approximately two hours following the end of the live event.

About Advanced Energy

Advanced Energy Industries, Inc. (Nasdaq: AEIS) is a global leader in the design and manufacture of highly engineered, precision power conversion, measurement and control solutions for mission-critical applications and processes. Advanced Energy’s power solutions enable customer innovation in complex applications for a wide range of industries including semiconductor equipment, industrial, manufacturing, telecommunications, data center computing and healthcare. With engineering know-how and responsive service and support for customers around the globe, the company builds collaborative partnerships to meet technology advances, propels growth of its customers and innovates the future of power. Advanced Energy has devoted four decades to perfecting power. It is headquartered in Denver, Colorado, USA. For more information, visit www.advancedenergy.com.

Advanced Energy | Precision. Power. Performance.

Non-GAAP Measures

This release includes GAAP and non-GAAP income and per-share earnings data and other GAAP and non-GAAP financial information. Advanced Energy’s non-GAAP measures exclude the impact of non-cash related charges such as stock-based compensation and amortization of intangible assets, as well as discontinued operations, and non-recurring items such as acquisition-related costs and restructuring expenses. The non-GAAP measures included in this release are not in accordance with, or an alternative for, similar measures calculated under generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. We believe that these non-GAAP measures provide useful information to management and investors to evaluate business performance without the impacts of certain non-cash charges, non-economic foreign currency remeasurements, and other cash charges which are not part of our usual operations. We use these non-GAAP measures to assess performance against business objectives, make business decisions, develop budgets, forecast future periods, assess trends, and evaluate financial impacts of various scenarios. In addition, management’s incentive plans include these non-GAAP measures as criteria for achievements. Additionally, we believe that these non-GAAP measures, in combination with its financial results calculated in accordance with GAAP, provide investors with additional perspective. To gain a complete picture of all effects on our financial results from any and all events, management does (and investors should) rely upon the GAAP measures as well, as the items excluded from non-GAAP measures may contribute to not accurately reflecting the underlying performance of the company’s continuing operations for the period in which they are incurred. Furthermore, the use of non-GAAP measures has limitations in that such measures do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP, and these measures should only be used to evaluate our results of operations in conjunction with the corresponding GAAP measures.

Forward-Looking Statements

This release and statements we make on the above announced conference call contain, in addition to historical information, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this report that are not historical information are forward-looking statements. For example, statements relating to our beliefs, expectations and plans are forward-looking statements, as are statements that certain actions, conditions, or circumstances will continue. The inclusion of words such as "anticipate," "expect," "estimate," "can," "may," "might," "continue," "enables," "plan," "intend," "should," "could," "would," "likely," "potential," or "believe," as well as statements that events or circumstances "will" occur or continue, indicate forward-looking statements. Forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to: (a) supply chain disruptions and component shortages that may impact our ability to timely manufacture products and deliver to customers; (b) the effects of global macroeconomic conditions upon demand for our products and services, including supply chain cost increases, other inflationary pressures, economic downturns, and volatility and cyclicality of the industries we serve; (c) the impact of political and geographical risks, including trade and other international disputes, war, terrorism, or geopolitical tensions; (d) managing backlog orders; (e) our ability to develop new products expeditiously and be successful in the design win process; (f) delays in capital spending by end-users in our served markets; (g) the risks and uncertainties related to the integration of acquired companies including SL Power Electronics; (h) the continuing spread of COVID-19 and its potential adverse impact on our operations; (i) our ability to avoid additional costs after the solar inverter wind-down; (j) the accuracy of our assumptions on which our financial statement projections are based; (k) the timing of orders received from customers; (l) our ability to realize benefits from cost improvement efforts including avoided costs, restructuring plans and inorganic growth; (m) unanticipated changes to management’s estimates, reserves or allowances; (n) changes and adjustments to the tax expense and benefits related to the U.S. tax reform that was enacted in late 2017, any of which could negatively impact our customers’ and our presence, operations, and financial results. These and other risks are described in Advanced Energy’s Form 10-K, Forms 10-Q and other reports and statements filed with the Securities and Exchange Commission (the "SEC"). These reports and statements are available on the SEC’s website at www.sec.gov. Copies may also be obtained from Advanced Energy’s investor relations page at ir.advancedenergy.com or by contacting Advanced Energy’s investor relations at 970-407-6555. Forward-looking statements are made and based on information available to us on the date of this press release. Aspirational goals and targets discussed on the conference call or in the presentation materials should not be interpreted in any respect as guidance. We assume no obligation to update the information in this press release.

ADVANCED ENERGY INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2022

2021

2022

2022

2021

Sales, net

$

440,949

$

361,311

$

397,459

$

838,408

$

712,931

Cost of sales

278,791

226,278

253,143

531,934

440,395

Gross profit

162,158

135,033

144,316

306,474

272,536

Gross margin %

36.8

%

37.4

%

36.3

%

36.6

%

38.2

%

Operating expenses:

Research and development

48,009

40,119

43,614

91,623

80,287

Selling, general, and administrative

55,022

48,110

49,318

104,340

94,841

Amortization of intangible assets

6,523

5,513

5,509

12,032

10,897

Restructuring expense (benefit)

(161

)

211

1,218

1,057

1,249

Total operating expenses

109,393

93,953

99,659

209,052

187,274

Operating income

52,765

41,080

44,657

97,422

85,262

Other income (expense), net

3,249

(3,662

)

(842

)

2,407

(4,169

)

Income from continuing operations, before income taxes

56,014

37,418

43,815

99,829

81,093

Provision for income taxes

11,203

1,876

6,953

18,156

7,160

Income from continuing operations

44,811

35,542

36,862

81,673

73,933

Income (loss) from discontinued operations, net of income taxes

180

(102

)

(98

)

82

208

Net income

44,991

35,440

36,764

81,755

74,141

Income from continuing operations attributable to noncontrolling interest

21

31

(14

)

7

64

Net income attributable to Advanced Energy Industries, Inc.

$

44,970

$

35,409

$

36,778

$

81,748

$

74,077

Basic weighted-average common shares outstanding

37,520

38,389

37,549

37,535

38,359

Diluted weighted-average common shares outstanding

37,710

38,586

37,770

37,754

38,589

Earnings per share attributable to Advanced Energy Industries, Inc:

Continuing operations:

Basic earnings per share

$

1.19

$

0.93

$

0.98

$

2.18

$

1.93

Diluted earnings per share

$

1.19

$

0.92

$

0.98

$

2.16

$

1.91

Discontinued operations:

Basic earnings (loss) per share

$

$

$

$

$

0.01

Diluted earnings (loss) per share

$

$

$

$

$

0.01

Net income:

Basic earnings per share

$

1.20

$

0.92

$

0.98

$

2.18

$

1.93

Diluted earnings per share

$

1.19

$

0.92

$

0.97

$

2.17

$

1.92

ADVANCED ENERGY INDUSTRIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)

June 30,

December 31,

2022

2021

ASSETS

Current assets:

Cash and cash equivalents

$

372,685

$

544,372

Accounts and other receivable, net

270,839

237,227

Inventories

395,866

338,410

Other current assets

48,126

42,225

Total current assets

1,087,516

1,162,234

Property and equipment, net

126,793

114,830

Operating lease right-of-use assets

104,191

101,769

Deposits and other assets

29,644

19,669

Goodwill and intangible assets, net

482,663

371,596

Deferred income tax assets

47,267

47,242

Total assets

$

1,878,074

$

1,817,340

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

197,870

$

193,708

Other accrued expenses

154,240

140,645

Current portion of long-term debt

20,000

20,000

Current portion of operating lease liabilities

16,911

15,843

Total current liabilities

389,021

370,196

Long-term debt

363,001

372,733

Other long-term liabilities

201,172

202,915

Long-term liabilities

564,173

575,648

Total liabilities

953,194

945,844

Advanced Energy stockholders' equity

924,228

870,851

Noncontrolling interest

652

645

Total stockholders’ equity

924,880

871,496

Total liabilities and stockholders’ equity

$

1,878,074

$

1,817,340

ADVANCED ENERGY INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

(in thousands)

Six Months Ended June 30,

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

81,755

$

74,141

Less: income from discontinued operations, net of income taxes

82

208

Income from continuing operations, net of income taxes

81,673

73,933

Adjustments to reconcile net income to net cash from operating activities:

Depreciation and amortization

28,877

25,744

Stock-based compensation expense

8,986

9,145

Provision for deferred income taxes

(1,977

)

(1,663

)

Loss on disposal of assets

374

446

Changes in operating assets and liabilities, net of assets acquired

(70,392

)

(19,539

)

Net cash from operating activities from continuing operations

47,541

88,066

Net cash from operating activities from discontinued operations

55

(377

)

Net cash from operating activities

47,596

87,689

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(25,476

)

(14,203

)

Acquisitions, net of cash acquired

(145,779

)

(18,686

)

Net cash from investing activities

(171,255

)

(32,889

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Payments on long-term borrowings

(10,000

)

(8,750

)

Dividend payments

(7,595

)

(7,728

)

Purchase and retirement of common stock

(23,578

)

(6,503

)

Net payments related to stock-based awards

(1,667

)

(3,258

)

Net cash from financing activities

(42,840

)

(26,239

)

EFFECT OF CURRENCY TRANSLATION ON CASH

(5,188

)

(1,753

)

NET CHANGE IN CASH AND CASH EQUIVALENTS

(171,687

)

26,808

CASH AND CASH EQUIVALENTS, beginning of period

544,372

480,368

CASH AND CASH EQUIVALENTS, end of period

$

372,685

$

507,176

ADVANCED ENERGY INDUSTRIES, INC.

SUPPLEMENTAL INFORMATION (UNAUDITED)

(in thousands)

Net Sales by Product Line

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2022

2021

2022

2022

2021

Semiconductor Equipment

$

228,797

$

176,671

$

202,957

$

431,754

$

357,387

Industrial and Medical

104,951

83,197

82,898

187,849

161,612

Data Center Computing

69,161

69,458

76,238

145,399

128,612

Telecom and Networking

38,040

31,985

35,366

73,406

65,320

Total

$

440,949

$

361,311

$

397,459

$

838,408

$

712,931

Net Sales by Geographic Region

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2022

2021

2022

2022

2021

United States

$

174,293

$

139,525

$

158,742

$

333,035

$

271,123

North America (excluding U.S.)

31,824

26,112

23,979

55,803

52,359

Asia

180,181

148,803

162,047

342,228

298,394

Europe

49,851

44,491

46,665

96,516

84,913

Other

4,800

2,380

6,026

10,826

6,142

Total

$

440,949

$

361,311

$

397,459

$

838,408

$

712,931

ADVANCED ENERGY INDUSTRIES, INC.

SELECTED OTHER DATA (UNAUDITED)

(in thousands)

Reconciliation of Non-GAAP measure - operating expenses and operating income, excluding certain items

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2022

2021

2022

2022

2021

Gross profit from continuing operations, as reported

$

162,158

$

135,033

$

144,316

$

306,474

$

272,536

Adjustments to gross profit:

Stock-based compensation

402

215

231

633

565

Facility expansion, relocation costs and other

1,187

1,997

1,284

2,471

3,835

Acquisition-related costs

64

84

(502

)

(438

)

92

Non-GAAP gross profit

163,811

137,329

145,329

309,140

277,028

Non-GAAP gross margin

37.1

%

38.0

%

36.6

%

36.9

%

38.9

%

Operating expenses from continuing operations, as reported

109,393

93,953

99,659

209,052

187,274

Adjustments:

Amortization of intangible assets

(6,523

)

(5,513

)

(5,509

)

(12,032

)

(10,897

)

Stock-based compensation

(4,656

)

(3,229

)

(3,697

)

(8,353

)

(8,580

)

Acquisition-related costs

(4,159

)

(2,328

)

(1,668

)

(5,827

)

(4,356

)

Facility expansion, relocation costs and other

(63

)

(114

)

Restructuring charges

161

(211

)

(1,218

)

(1,057

)

(1,249

)

Non-GAAP operating expenses

94,216

82,609

87,567

181,783

162,078

Non-GAAP operating income

$

69,595

$

54,720

$

57,762

$

127,357

$

114,950

Non-GAAP operating margin

15.8

%

15.1

%

14.5

%

15.2

%

16.1

%

Reconciliation of Non-GAAP measure - income excluding certain items

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2022

2021

2022

2022

2021

Income from continuing operations, less non-controlling interest, net of income taxes

$

44,790

$

35,511

$

36,876

$

81,666

$

73,869

Adjustments:

Amortization of intangible assets

6,523

5,513

5,509

12,032

10,897

Acquisition-related costs

4,223

2,412

1,166

5,389

4,448

Facility expansion, relocation costs, and other

1,187

2,060

1,284

2,471

3,949

Restructuring charges

(161

)

211

1,218

1,057

1,249

Unrealized foreign currency (gain) loss

(5,569

)

885

(1,285

)

(6,854

)

(1,317

)

Acquisition-related costs and other included in other income (expense), net

85

899

85

986

Tax effect of non-GAAP adjustments

(752

)

(2,043

)

(1,069

)

(1,821

)

(3,327

)

Non-GAAP income, net of income taxes, excluding stock-based compensation

50,326

45,448

43,699

94,025

90,754

Stock-based compensation, net of taxes

3,946

2,636

3,025

6,971

6,998

Non-GAAP income, net of income taxes

$

54,272

$

48,084

$

46,724

$

100,996

$

97,752

ADVANCED ENERGY INDUSTRIES, INC.

SELECTED OTHER DATA (UNAUDITED)

Reconciliation of non-GAAP measure - per share earnings excluding certain items

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

2022

2021

2022

2022

2021

Diluted earnings per share from continuing operations, as reported

$

1.19

$

0.92

$

0.98

$

2.16

$

1.91

Add back:

Per share impact of non-GAAP adjustments, net of tax

0.25

0.33

0.26

0.52

0.62

Non-GAAP per share earnings

$

1.44

$

1.25

$

1.24

$

2.68

$

2.53

Reconciliation of Q3 2022 Guidance

Low End

High End

Revenue

$410 million

$460 million

Reconciliation of non-GAAP earnings per share

GAAP earnings per share

$

0.62

$

1.22

Stock-based compensation

0.15

0.15

Amortization of intangible assets

0.19

0.19

Restructuring and other

0.11

0.11

Tax effects of excluded items

(0.07

)

(0.07

)

Non-GAAP earnings per share

$

1.00

$

1.60

View source version on businesswire.com: https://www.businesswire.com/news/home/20220803005783/en/

Contacts

Edwin Mok
Advanced Energy Industries, Inc.
970-407-6555
ir@aei.com