|
Delaware
|
|
000-26966
|
|
84-0846841
|
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(IRS Employer Identification No.)
|
1625 Sharp Point Drive, Fort Collins, Colorado
|
|
80525
|
|
||
(Address of principal executive offices)
|
|
(Zip Code)
|
|
(970) 221-4670
|
|||
(Registrant's telephone number, including area code)
|
|||
|
|
|
|
Not applicable
|
|||
(Former name or former address, if changed since last report)
|
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
|
|
|
|
|
|
/s/ Paul Oldham
|
|
Date: July 30, 2018
|
|
Paul Oldham
|
|
|
|
Chief Financial Officer & Executive Vice President
|
•
|
Q2 Revenue increased 18.2% y/y to $196.0 million
|
•
|
Q2 GAAP EPS from continuing operations was $1.17
|
•
|
Q2 Non-GAAP EPS from continuing operations was $1.25
|
|
|
Q3 2018
|
Revenues
|
|
$160M - $170M
|
GAAP operating margins from continuing operations
|
|
25.2% - 27.2%
|
GAAP EPS from continuing operations
|
|
$0.86 - $1.00
|
Non-GAAP operating margins from continuing operations
|
|
27.5% - 29.5%
|
Non-GAAP EPS from continuing operations
|
|
$0.93 - $1.07
|
Paul Oldham
Advanced Energy Industries, Inc.
(970) 407-6615
paul.oldham@aei.com
|
Annie Leschin/Rhonda Bennetto
Advanced Energy Industries, Inc.
(970) 407-6555
ir@aei.com
|
|
June 30,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
ASSETS
|
Unaudited
|
|
|
||||
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
432,999
|
|
|
$
|
407,283
|
|
Marketable securities
|
3,146
|
|
|
3,104
|
|
||
Accounts and other receivable, net
|
106,302
|
|
|
87,429
|
|
||
Inventories, net
|
109,834
|
|
|
78,450
|
|
||
Income taxes receivable
|
3,290
|
|
|
1,295
|
|
||
Other current assets
|
7,263
|
|
|
8,129
|
|
||
Current assets of discontinued operations
|
7,979
|
|
|
9,535
|
|
||
Total current assets
|
670,813
|
|
|
595,225
|
|
||
|
|
|
|
||||
Property and equipment, net
|
24,148
|
|
|
17,795
|
|
||
|
|
|
|
||||
Deposits and other assets
|
3,670
|
|
|
3,051
|
|
||
Goodwill and intangibles, net
|
86,928
|
|
|
87,311
|
|
||
Deferred income tax assets
|
38,419
|
|
|
18,841
|
|
||
Non-current assets of discontinued operations
|
11,080
|
|
|
11,085
|
|
||
Total assets
|
$
|
835,058
|
|
|
$
|
733,308
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
58,028
|
|
|
$
|
48,177
|
|
Other accrued expenses
|
67,823
|
|
|
50,092
|
|
||
Current liabilities of discontinued operations
|
6,478
|
|
|
7,850
|
|
||
Total current liabilities
|
132,329
|
|
|
106,119
|
|
||
|
|
|
|
||||
Non-current liabilities of continuing operations
|
94,475
|
|
|
91,271
|
|
||
Non-current liabilities of discontinued operations
|
12,738
|
|
|
15,277
|
|
||
Long-term liabilities
|
107,213
|
|
|
106,548
|
|
||
|
|
|
|
||||
Total liabilities
|
239,542
|
|
|
212,667
|
|
||
|
|
|
|
||||
Advanced Energy stockholders’ equity
|
595,010
|
|
|
520,641
|
|
||
Noncontrolling interest
|
506
|
|
|
—
|
|
||
Stockholders' equity
|
595,516
|
|
|
520,641
|
|
||
Total liabilities and stockholders' equity
|
$
|
835,058
|
|
|
$
|
733,308
|
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net income
|
$
|
92,915
|
|
|
$
|
83,587
|
|
Income from discontinued operations, net of income taxes
|
145
|
|
|
2,273
|
|
||
Income from continuing operations, net of income taxes
|
92,770
|
|
|
81,314
|
|
||
|
|
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
5,917
|
|
|
4,219
|
|
||
Stock-based compensation expense
|
6,437
|
|
|
7,254
|
|
||
Provision for deferred income taxes
|
(96
|
)
|
|
—
|
|
||
Loss on foreign exchange hedge
|
—
|
|
|
3,489
|
|
||
Net loss on disposal of assets
|
158
|
|
|
65
|
|
||
Changes in operating assets and liabilities, net of assets acquired
|
(17,282
|
)
|
|
10,272
|
|
||
Net cash provided by operating activities from continuing operations
|
87,904
|
|
|
106,613
|
|
||
Net cash used in operating activities from discontinued operations
|
(2,450
|
)
|
|
(6,396
|
)
|
||
Net cash provided by operating activities
|
85,454
|
|
|
100,217
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|||
Purchases of marketable securities
|
(91
|
)
|
|
(19
|
)
|
||
Proceeds from sale of marketable securities
|
4
|
|
|
723
|
|
||
Restricted Cash
|
—
|
|
|
(17,732
|
)
|
||
Acquisitions, net of cash acquired
|
(9,072
|
)
|
|
—
|
|
||
Purchase of foreign exchange hedge
|
—
|
|
|
(3,489
|
)
|
||
Purchases of property and equipment
|
(9,426
|
)
|
|
(3,408
|
)
|
||
Net cash used in investing activities from continuing operations
|
(18,585
|
)
|
|
(23,925
|
)
|
||
Net cash used in investing activities from discontinued operations
|
—
|
|
|
—
|
|
||
Net cash used in investing activities
|
(18,585
|
)
|
|
(23,925
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Purchase and retirement of common stock
|
(38,059
|
)
|
|
—
|
|
||
Net payments related to stock-based award activities
|
(2,576
|
)
|
|
(1,874
|
)
|
||
Net cash used in financing activities from continuing operations
|
(40,635
|
)
|
|
(1,874
|
)
|
||
Net cash used in financing activities from discontinued operations
|
—
|
|
|
—
|
|
||
Net cash used in financing activities
|
(40,635
|
)
|
|
(1,874
|
)
|
||
EFFECT OF CURRENCY TRANSLATION ON CASH
|
(1,160
|
)
|
|
1,216
|
|
||
INCREASE IN CASH AND CASH EQUIVALENTS
|
25,074
|
|
|
75,634
|
|
||
CASH AND CASH EQUIVALENTS, beginning of period
|
415,037
|
|
|
289,517
|
|
||
CASH AND CASH EQUIVALENTS, end of period
|
440,111
|
|
|
365,151
|
|
||
Less cash and cash equivalents from discontinued operations
|
7,112
|
|
|
6,214
|
|
||
CASH AND CASH EQUIVALENTS FROM CONTINUING OPERATIONS, end of period
|
$
|
432,999
|
|
|
$
|
358,937
|
|
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,
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
2017
|
||||||||||
Gross profit from continuing operations, as reported
|
$
|
101,235
|
|
|
$
|
87,141
|
|
|
$
|
103,645
|
|
|
$
|
204,880
|
|
|
$
|
165,972
|
|
Adjustments to gross profit:
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock-based compensation
|
149
|
|
|
379
|
|
|
351
|
|
|
500
|
|
|
714
|
|
|||||
Facility expansion and relocation costs
|
249
|
|
|
—
|
|
|
—
|
|
|
249
|
|
|
—
|
|
|||||
Non-GAAP gross profit from continuing operations
|
101,633
|
|
|
87,520
|
|
|
103,996
|
|
|
205,629
|
|
|
166,686
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses from continuing operations, as reported
|
45,217
|
|
|
39,374
|
|
|
47,542
|
|
|
92,759
|
|
|
74,937
|
|
|||||
Adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock-based compensation
|
(1,794
|
)
|
|
(3,477
|
)
|
|
(4,143
|
)
|
|
(5,937
|
)
|
|
(6,540
|
)
|
|||||
Amortization of intangible assets
|
(1,264
|
)
|
|
(974
|
)
|
|
(1,257
|
)
|
|
(2,521
|
)
|
|
(1,936
|
)
|
|||||
Acquisition-related costs
|
(255
|
)
|
|
(150
|
)
|
|
(350
|
)
|
|
(605
|
)
|
|
(150
|
)
|
|||||
Facility expansion and relocation costs
|
(13
|
)
|
|
—
|
|
|
(476
|
)
|
|
(489
|
)
|
|
—
|
|
|||||
Non-GAAP operating expenses from continuing operations
|
41,891
|
|
|
34,773
|
|
|
41,316
|
|
|
83,207
|
|
|
66,311
|
|
|||||
Non-GAAP operating income from continuing operations
|
$
|
59,742
|
|
|
$
|
52,747
|
|
|
$
|
62,680
|
|
|
$
|
122,422
|
|
|
$
|
100,375
|
|
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,
|
|||||||||
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
2017
|
|||||
Gross profit from continuing operations, as reported
|
51.6
|
%
|
|
52.5
|
%
|
|
53.0
|
%
|
|
52.3
|
%
|
|
52.7
|
%
|
Adjustments to gross profit:
|
|
|
|
|
|
|
|
|
|
|||||
Stock-based compensation
|
0.1
|
|
|
0.3
|
|
|
0.2
|
|
|
0.1
|
|
|
0.2
|
|
Facility expansion and relocation costs
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
Non-GAAP gross profit from continuing operations
|
51.8
|
|
|
52.8
|
|
|
53.2
|
|
|
52.5
|
|
|
52.9
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating expenses from continuing operations, as reported
|
23.1
|
|
|
23.7
|
|
|
24.3
|
|
|
23.7
|
|
|
23.8
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|||||
Stock-based compensation
|
(1.1
|
)
|
|
(2.0
|
)
|
|
(2.1
|
)
|
|
(1.6
|
)
|
|
(2.1
|
)
|
Amortization of intangible assets
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(0.6
|
)
|
Acquisition-related costs
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
Facility expansion and relocation costs
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
Non-GAAP operating expenses from continuing operations
|
21.3
|
|
|
21.0
|
|
|
21.2
|
|
|
21.2
|
|
|
21.1
|
|
Non-GAAP operating income from continuing operations
|
30.5
|
%
|
|
31.8
|
%
|
|
32.0
|
%
|
|
31.3
|
%
|
|
31.8
|
%
|
Reconciliation of Non-GAAP measure - income excluding certain items
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
|
June 30,
|
|
March 31,
|
|
June 30,
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
2017
|
||||||||||
Income from continuing operations, less noncontrolling interest, net of income taxes
|
$
|
46,356
|
|
|
$
|
45,873
|
|
|
$
|
46,339
|
|
|
$
|
92,695
|
|
|
$
|
81,314
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock-based compensation
|
1,943
|
|
|
3,856
|
|
|
4,494
|
|
|
6,437
|
|
|
7,254
|
|
|||||
Amortization of intangible assets
|
1,264
|
|
|
974
|
|
|
1,257
|
|
|
2,521
|
|
|
1,936
|
|
|||||
Loss on foreign exchange hedge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,489
|
|
|||||
Acquisition-related costs
|
255
|
|
|
150
|
|
|
350
|
|
|
605
|
|
|
150
|
|
|||||
Facility expansion and relocation costs
|
262
|
|
|
—
|
|
|
476
|
|
|
738
|
|
|
—
|
|
|||||
Tax Cuts and Jobs Act Impact
|
—
|
|
|
—
|
|
|
1,853
|
|
|
1,853
|
|
|
—
|
|
|||||
Tax effect of Non-GAAP adjustments
|
(704
|
)
|
|
(1,629
|
)
|
|
(1,343
|
)
|
|
(2,047
|
)
|
|
(3,025
|
)
|
|||||
Non-GAAP income from continuing operations, net of income taxes
|
$
|
49,376
|
|
|
$
|
49,224
|
|
|
$
|
53,426
|
|
|
$
|
102,802
|
|
|
$
|
91,118
|
|
Reconciliation of Non-GAAP measure - per share earnings excluding certain items
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
|
June 30,
|
|
March 31,
|
|
June 30,
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
2017
|
||||||||||
Diluted earnings per share from continuing operations, as reported
|
$
|
1.17
|
|
|
$
|
1.14
|
|
|
$
|
1.16
|
|
|
$
|
2.33
|
|
|
$
|
2.02
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
||||||||||
per share impact of Non-GAAP adjustments, net of tax
|
0.08
|
|
|
0.08
|
|
|
0.18
|
|
|
0.25
|
|
|
0.25
|
|
|||||
Non-GAAP per share earnings from continuing operations
|
$
|
1.25
|
|
|
$
|
1.22
|
|
|
$
|
1.34
|
|
|
$
|
2.58
|
|
|
$
|
2.27
|
|
Reconciliation of Q3 2018 Guidance
|
|
|
|
||||
|
Low End
|
|
High End
|
||||
|
|
|
|
||||
Revenue
|
$160 million
|
|
$170 million
|
||||
|
|
|
|
||||
Reconciliation of Non-GAAP operating margin
|
|
|
|
||||
GAAP operating margin
|
25.2
|
%
|
|
27.2
|
%
|
||
Stock-based compensation
|
1.5
|
%
|
|
1.6
|
%
|
||
Amortization of intangible assets
|
0.8
|
%
|
|
0.7
|
%
|
||
Non-GAAP operating margin
|
27.5
|
%
|
|
29.5
|
%
|
||
|
|
|
|
||||
Reconciliation of Non-GAAP earnings per share
|
|
|
|
||||
GAAP earnings per share
|
$
|
0.86
|
|
|
$
|
1.00
|
|
Stock-based compensation
|
0.06
|
|
|
0.06
|
|
||
Amortization of intangible assets
|
0.03
|
|
|
0.03
|
|
||
Tax effects of excluded items
|
(0.02
|
)
|
|
(0.02
|
)
|
||
Non-GAAP earnings per share
|
$
|
0.93
|
|
|
$
|
1.07
|
|