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Wednesday February 11, 4:00 pm Eastern Time
Company Press Release
SOURCE: Advanced Energy Industries, Inc.
Advanced Energy Industries Has Record Year; Strong
Results Posted for Fourth Quarter and Fiscal 1997
FORT COLLINS, Colo., Feb. 11 /PRNewswire/ -- Advanced Energy Industries, Inc. (Nasdaq:
AEIS - news) reported record revenues for the fourth quarter and fiscal year 1997.
Net sales for the fourth quarter increased 128% from the prior year to $46.0 million. Gross margin
for the fourth quarter of 1997 increased to 37.6% versus 36.9% in the fourth quarter of 1996.
Net income for the fourth quarter was $5.8 million, or 25 cents per share on a diluted basis,
compared with net income of $686,000, or three cents per share, a year ago -- an increase of
745%. Included in net income for the fourth quarter was $300,000 in insurance money collected
from the storm damage incurred at the Company's main facility in July 1997. Diluted average shares
outstanding for the fourth quarters of 1997 and 1996 were 23,112,000 and 21,728,000,
respectively.
For the year ended December 31, 1997, Advanced Energy reported net sales of $141.9 million,
which is a 43.5% increase from 1996 net sales of $98.9 million. Gross margin for the year 1997 was
38.3% versus 37.2% in 1996.
Net income for 1997, excluding one-time charges, was $15.1 million, or 68 cents per share.
Including the charges, net income was $10.4 million, or 47 cents per share, compared with net
income of $5.1 million, or 24 cents per share, in 1996. Operating expenses from one-time charges
totaling $5.8 million were taken in fiscal 1997. These charges included a $2.7 million charge taken
for storm damage during heavy rains in the Fort Collins area on July 29, 1997 and a $3.1 million
charge for purchased in-process research and development efforts of Tower Electronics expensed
immediately upon the acquisition of Tower Electronics. Operating income for 1997, excluding the
one-time charges, would have been $22.8 million compared with $8.2 million in 1996, an increase
of 178%.
Advanced Energy ended the year with $31.6 million of cash and marketable securities, $66.7 million
of working capital, $112.2 million of total assets, and $87.3 million of stockholders' equity.
Douglas S. Schatz, president and chief executive officer, said that the acquisition of Tower
Electronics, which occurred in the third quarter of 1997, would bring an estimated $17 million of
additional revenue to the Company in 1998. ''In 1997, we made substantial progress in positioning
Advanced Energy to enter new, emerging markets which will further diversify our revenue stream.
The acquisition of Tower Electronics enables us to make further inroads in the industrial market, as
well as telecommunications and computer systems. One of our primary goals for 1998 is to further
leverage our technological and market leadership position to capitalize on opportunities in new and
existing markets.''
Commenting on the impact of Asia on its business, Schatz said, ''The company did not experience
any shortfall in revenues during the year related to the Asia crisis. This is due to the fact that only
10% of the Company's revenues were directly derived from Asia, in 1997, particularly Japan.
However, a substantial portion of our customers' business is affected by Asia, and indirectly impacts
us as well. Therefore, we join popular sentiment throughout the industry by viewing Asia with limited
visibility. On a more positive note, the Company has historically experienced market share gains
even through market downturns.''
Safe Harbor Statement
Except for any historical information contained herein, the matters discussed in this news release are
forward-looking statements that involve risks and uncertainties, including the achievement of goals
established by the Company to improve gross margin and maintain operating expenses in line with
revenue, continued sales growth in non-semiconductor areas, and other risks detailed from time to
time in reports to the Securities and Exchange Commission, including the Company's Form 10-K
and Forms 10-Q. The Company continues to be susceptible to fluctuations in quarterly and annual
revenues and operating results. The Company assumes no obligation to update the information in this
release.
About the Company
Advanced Energy Industries, Inc. was founded in 1981 and is a leading manufacturer of power
delivery systems that are critical in the manufacturing of semiconductors, data storage media, flat
panel displays, and other products using thin-film technology. Within its comprehensive product
portfolio of direct current (DC), low/mid-frequency and radio frequency (RF) solutions, the
Company sells hundreds of different products critical in applications ranging from compact disks,
digital video disks, flat panel displays, the most popular logic semiconductor devices, among many
other applications. The Company's stock is traded on Nasdaq under the symbol AEIS.
CONSOLIDATED INCOME STATEMENTS
(in thousands except per share data)
Quarter Ended Year Ended
December 31, December 31,
1997 1996 1997 1996
(unaudited) (audited)
Net sales $45,995 $20,216 $141,923 $98,852
Cost of sales 28,703 12,752 87,538 62,038
Gross profit 17,292 7,464 54,385 36,814
Operating expenses:
Research and development 4,345 3,268 14,751 13,760
Sales and marketing 3,101 2,058 9,565 8,590
General and administrative 2,391 1,265 7,284 6,253
Storm damage, net (300) 0 2,700 0
Purchased in-process
research and development 0 0 3,080 0
Operating income 7,755 873 17,005 8,211
Other income (expense), net 73 232 26 93
Income before income taxes 7,828 1,105 17,031 8,304
Income taxes 2,038 419 6,669 3,160
Net income $5,790 $686 $10,362 $5,144
Basic earnings per share $0.26 $0.03 $0.48 $0.24
Diluted earnings per share $0.25 $0.03 $0.47 $0.24
Weighted average common
shares outstanding 22,244 21,260 21,544 21,242
Weighted average common and common
equivalent shares outstanding 23,112 21,728 22,274 21,666
CONSOLIDATED BALANCE SHEETS
(in thousands except per share data)
December 31, December 31,
1997 1996
(audited) (audited)
ASSETS
Current Assets:
Cash and cash equivalents $11,470 $11,231
Marketable securities - trading 20,174 0
Accounts receivable, net 28,386 16,116
Inventories 26,243 13,976
Prepaid expenses and other current assets 2,472 1,013
Deferred income taxes 2,836 1,223
Total current assets 91,581 43,559
Equipment and leasehold improvements, net 11,331 9,500
Other assets 2,219 2,972
Goodwill, net 7,112 0
Total assets $112,243 $56,031
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $12,045 $2,253
Other current liabilities 6,796 3,718
Accrued income taxes payable 2,734 1,485
Current portion of long-term debt 3,298 924
Total current liabilities 24,873 8,380
Long-term debt 22 1,127
Deferred income tax liability 0 28
Stockholders' equity 87,348 46,496
Total liabilities and stockholders' equity $112,243 $56,031 |
