|
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: October 29, 2018
|
|
Paul Oldham
|
|
|
|
Chief Financial Officer & Executive Vice President
|
|
|
Q4 2018
|
Revenues
|
|
$150M - $160M
|
GAAP operating margins from continuing operations
|
|
12.8% - 17.5%
|
GAAP EPS from continuing operations
|
|
$0.48 - $0.66
|
Non-GAAP operating margins from continuing operations
|
|
20.0% - 22.0%
|
Non-GAAP EPS from continuing operations
|
|
$0.70 - $0.80
|
|
September 30,
|
|
December 31,
|
||||
|
2018
|
|
2017
|
||||
ASSETS
|
Unaudited
|
|
|
||||
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
338,673
|
|
|
$
|
407,283
|
|
Marketable securities
|
3,058
|
|
|
3,104
|
|
||
Accounts and other receivable, net
|
110,440
|
|
|
87,429
|
|
||
Inventories, net
|
110,327
|
|
|
78,450
|
|
||
Income taxes receivable
|
4,229
|
|
|
1,295
|
|
||
Other current assets
|
9,777
|
|
|
8,129
|
|
||
Current assets of discontinued operations
|
8,273
|
|
|
9,535
|
|
||
Total current assets
|
584,777
|
|
|
595,225
|
|
||
|
|
|
|
||||
Property and equipment, net
|
30,174
|
|
|
17,795
|
|
||
|
|
|
|
||||
Deposits and other assets
|
5,608
|
|
|
3,051
|
|
||
Goodwill and intangibles, net
|
157,884
|
|
|
87,311
|
|
||
Deferred income tax assets
|
44,112
|
|
|
18,841
|
|
||
Non-current assets of discontinued operations
|
11,077
|
|
|
11,085
|
|
||
Total assets
|
$
|
833,632
|
|
|
$
|
733,308
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
45,620
|
|
|
$
|
48,177
|
|
Other accrued expenses
|
73,081
|
|
|
50,092
|
|
||
Current liabilities of discontinued operations
|
5,895
|
|
|
7,850
|
|
||
Total current liabilities
|
124,596
|
|
|
106,119
|
|
||
|
|
|
|
||||
Non-current liabilities of continuing operations
|
97,894
|
|
|
91,271
|
|
||
Non-current liabilities of discontinued operations
|
11,567
|
|
|
15,277
|
|
||
Long-term liabilities
|
109,461
|
|
|
106,548
|
|
||
|
|
|
|
||||
Total liabilities
|
234,057
|
|
|
212,667
|
|
||
|
|
|
|
||||
Advanced Energy stockholders’ equity
|
599,062
|
|
|
520,641
|
|
||
Noncontrolling interest
|
513
|
|
|
—
|
|
||
Stockholders' equity
|
599,575
|
|
|
520,641
|
|
||
Total liabilities and stockholders' equity
|
$
|
833,632
|
|
|
$
|
733,308
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
2018
|
|
2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net income
|
$
|
127,701
|
|
|
$
|
167,451
|
|
Income from discontinued operations, net of income taxes
|
(226
|
)
|
|
2,343
|
|
||
Income from continuing operations, net of income taxes
|
127,927
|
|
|
165,108
|
|
||
|
|
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
9,488
|
|
|
6,792
|
|
||
Stock-based compensation expense
|
7,461
|
|
|
10,707
|
|
||
Provision for deferred income taxes
|
—
|
|
|
(26,185
|
)
|
||
Loss on foreign exchange hedge
|
—
|
|
|
3,489
|
|
||
Net loss on disposal of assets
|
167
|
|
|
106
|
|
||
Changes in operating assets and liabilities, net of assets acquired
|
(26,560
|
)
|
|
(19,710
|
)
|
||
Net cash provided by operating activities from continuing operations
|
118,483
|
|
|
140,307
|
|
||
Net cash used in operating activities from discontinued operations
|
(4,550
|
)
|
|
(7,293
|
)
|
||
Net cash provided by operating activities
|
113,933
|
|
|
133,014
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|||
Purchases of marketable securities
|
(93
|
)
|
|
(86
|
)
|
||
Proceeds from sale of marketable securities
|
6
|
|
|
1,883
|
|
||
Acquisitions, net of cash acquired
|
(93,801
|
)
|
|
(17,347
|
)
|
||
Purchase of foreign exchange hedge
|
—
|
|
|
(3,489
|
)
|
||
Purchases of property and equipment
|
(16,586
|
)
|
|
(5,646
|
)
|
||
Net cash used in investing activities from continuing operations
|
(110,474
|
)
|
|
(24,685
|
)
|
||
Net cash used in investing activities from discontinued operations
|
—
|
|
|
—
|
|
||
Net cash used in investing activities
|
(110,474
|
)
|
|
(24,685
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Purchase and retirement of common stock
|
(69,021
|
)
|
|
(24,998
|
)
|
||
Net payments related to stock-based award activities
|
(2,636
|
)
|
|
(1,902
|
)
|
||
Net cash used in financing activities from continuing operations
|
(71,657
|
)
|
|
(26,900
|
)
|
||
Net cash used in financing activities from discontinued operations
|
—
|
|
|
—
|
|
||
Net cash used in financing activities
|
(71,657
|
)
|
|
(26,900
|
)
|
||
EFFECT OF CURRENCY TRANSLATION ON CASH
|
(722
|
)
|
|
1,138
|
|
||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(68,920
|
)
|
|
82,567
|
|
||
CASH AND CASH EQUIVALENTS, beginning of period
|
415,037
|
|
|
289,517
|
|
||
CASH AND CASH EQUIVALENTS, end of period
|
346,117
|
|
|
372,084
|
|
||
Less cash and cash equivalents from discontinued operations
|
7,444
|
|
|
5,512
|
|
||
CASH AND CASH EQUIVALENTS FROM CONTINUING OPERATIONS, end of period
|
$
|
338,673
|
|
|
$
|
366,572
|
|
Reconciliation of Non-GAAP measure - operating expenses and operating income, excluding certain items
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
September 30,
|
|
June 30,
|
|
September 30,
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
2017
|
||||||||||
Gross profit from continuing operations, as reported
|
$
|
85,539
|
|
|
$
|
92,234
|
|
|
$
|
101,235
|
|
|
$
|
290,419
|
|
|
$
|
258,206
|
|
Adjustments to gross profit:
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock-based compensation
|
76
|
|
|
334
|
|
|
149
|
|
|
576
|
|
|
1,048
|
|
|||||
Facility transition and relocation costs
|
725
|
|
|
—
|
|
|
249
|
|
|
974
|
|
|
—
|
|
|||||
Acquisition-related costs
|
158
|
|
|
—
|
|
|
—
|
|
|
158
|
|
|
—
|
|
|||||
Non-GAAP gross profit from continuing operations
|
86,498
|
|
|
92,568
|
|
|
101,633
|
|
|
292,127
|
|
|
259,254
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating expenses from continuing operations, as reported
|
45,677
|
|
|
40,561
|
|
|
45,217
|
|
|
138,436
|
|
|
115,498
|
|
|||||
Adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortization of intangible assets
|
(1,437
|
)
|
|
(1,240
|
)
|
|
(1,264
|
)
|
|
(3,958
|
)
|
|
(3,176
|
)
|
|||||
Stock-based compensation
|
(948
|
)
|
|
(3,119
|
)
|
|
(1,794
|
)
|
|
(6,885
|
)
|
|
(9,659
|
)
|
|||||
Acquisition-related costs
|
(705
|
)
|
|
—
|
|
|
(255
|
)
|
|
(1,310
|
)
|
|
(150
|
)
|
|||||
Facility expansion and relocation costs
|
(29
|
)
|
|
—
|
|
|
(13
|
)
|
|
(518
|
)
|
|
—
|
|
|||||
Restructuring charges
|
(403
|
)
|
|
—
|
|
|
—
|
|
|
(403
|
)
|
|
—
|
|
|||||
Non-GAAP operating expenses from continuing operations
|
42,155
|
|
|
36,202
|
|
|
41,891
|
|
|
125,362
|
|
|
102,513
|
|
|||||
Non-GAAP operating income from continuing operations
|
$
|
44,343
|
|
|
$
|
56,366
|
|
|
$
|
59,742
|
|
|
$
|
166,765
|
|
|
$
|
156,741
|
|
Reconciliation of Non-GAAP measure - operating expenses and operating income, excluding certain items
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||
|
September 30,
|
|
June 30,
|
|
September 30,
|
|||||||||
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
2017
|
|||||
Gross profit from continuing operations, as reported
|
49.4
|
%
|
|
52.2
|
%
|
|
51.6
|
%
|
|
51.4
|
%
|
|
52.5
|
%
|
Adjustments to gross profit:
|
|
|
|
|
|
|
|
|
|
|||||
Stock-based compensation
|
—
|
|
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
Facility transition and relocation costs
|
0.5
|
|
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|
—
|
|
Acquisition-related costs
|
0.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Non-GAAP gross profit from continuing operations
|
50.0
|
|
|
52.4
|
|
|
51.8
|
|
|
51.7
|
|
|
52.7
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating expenses from continuing operations, as reported
|
26.4
|
|
|
23.0
|
|
|
23.1
|
|
|
24.5
|
|
|
23.5
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|||||
Amortization of intangible assets
|
(0.8
|
)
|
|
(0.7
|
)
|
|
(0.6
|
)
|
|
(0.7
|
)
|
|
(0.6
|
)
|
Stock-based compensation
|
(0.6
|
)
|
|
(1.8
|
)
|
|
(1.1
|
)
|
|
(1.2
|
)
|
|
(2.1
|
)
|
Acquisition-related costs
|
(0.4
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
—
|
|
Facility expansion and relocation costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
Restructuring charges
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
Non-GAAP operating expenses from continuing operations
|
24.4
|
|
|
20.5
|
|
|
21.3
|
|
|
22.2
|
|
|
20.8
|
|
Non-GAAP operating income from continuing operations
|
25.6
|
%
|
|
31.9
|
%
|
|
30.5
|
%
|
|
29.5
|
%
|
|
31.9
|
%
|
Reconciliation of Non-GAAP measure - income excluding certain items
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
September 30,
|
|
June 30,
|
|
September 30,
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
2017
|
||||||||||
Income from continuing operations, less noncontrolling interest, net of income taxes
|
$
|
35,150
|
|
|
$
|
83,794
|
|
|
$
|
46,356
|
|
|
$
|
127,845
|
|
|
$
|
165,108
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Amortization of intangible assets
|
1,437
|
|
|
1,240
|
|
|
1,264
|
|
|
3,958
|
|
|
3,176
|
|
|||||
Stock-based compensation
|
1,024
|
|
|
3,453
|
|
|
1,943
|
|
|
7,461
|
|
|
10,707
|
|
|||||
Acquisition-related costs
|
863
|
|
|
—
|
|
|
255
|
|
|
1,468
|
|
|
150
|
|
|||||
Facility expansion and relocation costs
|
754
|
|
|
—
|
|
|
262
|
|
|
1,492
|
|
|
—
|
|
|||||
Restructuring charges
|
403
|
|
|
—
|
|
|
—
|
|
|
403
|
|
|
—
|
|
|||||
Nonrecurring tax (benefit) expense associated with inverter business
|
—
|
|
|
(40,194
|
)
|
|
—
|
|
|
—
|
|
|
(40,194
|
)
|
|||||
Loss on foreign exchange hedge
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,489
|
|
|||||
Incremental expense associated with start-up of the Asia regional headquarters
|
—
|
|
|
1,133
|
|
|
—
|
|
|
—
|
|
|
1,133
|
|
|||||
Tax Cuts and Jobs Act Impact
|
2,398
|
|
|
—
|
|
|
—
|
|
|
4,251
|
|
|
—
|
|
|||||
Tax effect of Non-GAAP adjustments
|
(843
|
)
|
|
(1,426
|
)
|
|
(704
|
)
|
|
(2,890
|
)
|
|
(4,451
|
)
|
|||||
Non-GAAP income from continuing operations, net of income taxes
|
$
|
41,186
|
|
|
$
|
48,000
|
|
|
$
|
49,376
|
|
|
$
|
143,988
|
|
|
$
|
139,118
|
|
Reconciliation of Non-GAAP measure - per share earnings excluding certain items
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
September 30,
|
|
June 30,
|
|
September 30,
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2018
|
|
2017
|
||||||||||
Diluted earnings per share from continuing operations, as reported
|
$
|
0.90
|
|
|
$
|
2.09
|
|
|
$
|
1.17
|
|
|
$
|
3.23
|
|
|
$
|
4.11
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
||||||||||
per share impact of Non-GAAP adjustments, net of tax
|
0.15
|
|
|
(0.90
|
)
|
|
0.08
|
|
|
0.41
|
|
|
(0.65
|
)
|
|||||
Non-GAAP per share earnings from continuing operations
|
$
|
1.05
|
|
|
$
|
1.19
|
|
|
$
|
1.25
|
|
|
$
|
3.64
|
|
|
$
|
3.46
|
|
Reconciliation of Q4 2018 Guidance
|
|
|
|
||||
|
Low End
|
|
High End
|
||||
|
|
|
|
||||
Revenue
|
$150 million
|
|
$160 million
|
||||
|
|
|
|
||||
Reconciliation of Non-GAAP operating margin
|
|
|
|
||||
GAAP operating margin
|
12.8
|
%
|
|
17.5
|
%
|
||
Stock-based compensation
|
1.5
|
%
|
|
1.3
|
%
|
||
Amortization of intangible assets
|
1.3
|
%
|
|
1.1
|
%
|
||
Restructuring and other
|
4.4
|
%
|
|
2.1
|
%
|
||
Non-GAAP operating margin
|
20.0
|
%
|
|
22.0
|
%
|
||
|
|
|
|
||||
Reconciliation of Non-GAAP earnings per share
|
|
|
|
||||
GAAP earnings per share
|
$
|
0.48
|
|
|
$
|
0.66
|
|
Stock-based compensation
|
0.06
|
|
|
0.05
|
|
||
Amortization of intangible assets
|
0.05
|
|
|
0.05
|
|
||
Restructuring and other
|
0.17
|
|
|
0.08
|
|
||
Tax effects of excluded items
|
(0.06
|
)
|
|
(0.04
|
)
|
||
Non-GAAP earnings per share
|
$
|
0.70
|
|
|
$
|
0.80
|
|