SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DELAWARE 000-26966 84-0846841
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
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ITEM 5. OTHER EVENTS.
On July 11, 2001, Advanced Energy Industries, Inc. reported its financial results for the second quarter of 2001 and the six-month period ended June 30, 2001. The text of the press release is filed with this Form 8-K as Exhibit 99.1 and is incorporated herein by this reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exh. No. Description -------- ----------- 99.1 Press Release dated July 11, 2001 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: July 11, 2001 Advanced Energy Industries, Inc.
By: /s/ Richard P. Beck
---------------------------------
Name: Richard P. Beck
Title: Senior Vice President and Chief
Financial Officer
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INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION ------- ----------- 99.1 Press Release dated July 11, 2001 |
EXHIBIT 99.1
CONTACTS: RICHARD BECK CATHY KAWAKAMI ADVANCED ENERGY INDUSTRIES, INC. ADVANCED ENERGY INDUSTRIES, INC. SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER DIRECTOR OF INVESTOR RELATIONS 970-407-6204 970-407-6732 dick.beck@aei.com cathy.kawakami@aei.com |
FOR IMMEDIATE RELEASE
ADVANCED ENERGY REPORTS 2001 SECOND QUARTER RESULTS
FORT COLLINS, COLO., JULY 11, 2001-Advanced Energy Industries, Inc. (Nasdaq:
AEIS) today reported financial results for the 2001 second quarter and six-month
period ended June 30, 2001. Advanced Energy is an industry-leading provider of
technology solutions for the manufacture of semiconductors, data storage
products, and flat panel displays.
For the second quarter of 2001, revenues were $46.2 million, down 46 percent compared to $85.7 million in the second quarter of 2000 and down 38 percent from revenue of $74.7 million in the first quarter of 2001.
The results for the second quarter of 2001 include charges related to a writedown of goodwill, a restructuring charge and a writedown related to the disposal of excess, obsolete and warranty inventory. Pro forma net loss for the second quarter of 2001, excluding the effect of these charges, was $4.9 million, or $0.15 per diluted share. The company's gross margin, excluding the effect of these charges, declined to 32 percent for the second quarter of 2001, as a result of the lower revenue base.
"Our financial results continue to be adversely affected by the global slowdown in demand for capital equipment," said Doug Schatz, chairman and chief executive officer. "At this point, we do not have evidence from our customer base that there will be any significant change in order demand over the remainder of 2001. Although we have limited visibility regarding revenue levels, we do expect to see improvements in our operating margins during the third quarter once the full effect of our cost containment actions is realized."
"Longer term, the fundamentals of our core markets remain strong. We continue to leverage our market leadership in power conversion into other critical technology areas such as temperature management, temperature sensing and gas delivery and management. We believe these initiatives are gaining traction and will more than double our total available market opportunity, based on a June 2001 VLSI Research study. We are working closely with our OEM and end user customers to develop solutions with added capabilities that will improve their manufacturing results for current technology requirements and beyond," said Mr. Schatz.
During the second quarter of 2001, Advanced Energy terminated operations of two non-strategic product lines as part of the recent restructuring. The company took a charge of $3.6 million in goodwill related to the dissolution of the Tower Electronics subsidiary and a charge of $1.8 million in goodwill related to the dissolution of the Fourth State Technology division. The company does intend to fulfill outstanding orders for existing customers. The company also announced two reductions in force during the second quarter of 2001, which resulted in a charge of $614,000 in restructuring and severance costs.
Actual net loss for the 2001 second quarter was $14.5 million or $0.46 per diluted share and includes the effects of the charges described above, in addition to a $7.1 million writedown of excess, obsolete and warranty inventory charges that was included in cost of goods sold. This compares to net income of $13.1 million or $0.40 per diluted share in the second quarter of 2000 and net income of $5.1 million or $0.16 per diluted share in the first quarter of 2001.
For the first six months of 2001, revenues were $120.9 million compared to $160.7 million for the first six months of 2000. Actual gross profit for the 2001 six-month period was $39.0 million, or 32 percent, compared to $79.0 million or 49 percent for the first six months of 2000.
Actual net loss for the 2001 six-month period was $9.5 million, or $0.30 per diluted share, compared with net income $24.4 million, or $0.75 per diluted share, for the six-month period ended June 30, 2000.
While the company has very low visibility on future order levels due to the current operating environment, it anticipates lower third quarter revenues in the $43 million to $46 million range, and a third quarter loss per share in the $0.16 to $0.19 range.
CONFERENCE CALL
Management will host a conference call today, July 11, 2001 at 5:00 pm Eastern time to discuss the 2001 second quarter results. You may access this conference call by dialing 800-982-3654. For a replay of this teleconference, please call 703-925-2533, passcode 5300361. The replay will be available through Wednesday, July 18, 2001. There will also be a webcast available at www.advanced-energy.com in the "Investor Relations" section.
ABOUT ADVANCED ENERGY
Advanced Energy is a global leader in the development, marketing, and support of technology solutions that are central in the manufacture of semiconductors, data storage products, and flat panel displays. Original equipment manufacturers (OEMs) and end-users around the world depend on AE products when plasma-based technology plays a vital role in their manufacturing process. AE offers a comprehensive suite of products for vacuum process systems, including power management, temperature sensing, dynamic temperature control, gas delivery management, process monitoring and machine control tools, ion-beam sources, and plasma abatement technologies. AE technology solutions are sold and supported globally by direct offices, representatives, and distributors. Founded in 1981, AE is a publicly held company traded on the Nasdaq National Market under the symbol AEIS. AE's URL is www.advanced-energy.com.
SAFE HARBOR STATEMENT
This press release contains certain forward-looking statements 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: the volatility and cyclicality of the semiconductor and semiconductor capital equipment industries, fluctuations in quarterly and annual revenues and operating results, Advanced Energy's ongoing ability to develop new products in a highly competitive industry characterized by increasingly rapid technological changes, and other risks described in Advanced Energy's Form 10-K, Forms 10-Q and other reports and statements, as filed with the Securities and Exchange Commission. These reports and statements are available on the SEC's website at www.sec.gov. Copies may also be obtained by contacting Advanced Energy's investor relations at 970-407-6732. The company assumes no obligation to update the information in this press release.
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PRO FORMA CONSOLIDATED INCOME STATEMENT
(IN THOUSANDS EXCEPT PER SHARE DATA)
Quarter Ended June 30, Six Months Ended June 30,
2001 2000 2001 2000
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
Sales $ 46,171 $ 85,701 $ 120,885 $ 160,729
Cost of sales 31,274 43,338 74,765 81,699
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Gross profit 14,897 42,363 46,120 79,030
Operating expenses:
Research and development 11,040 8,504 23,429 16,617
Sales and marketing 5,963 5,373 12,592 11,240
General and administrative 5,645 5,810 11,819 11,449
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(Loss) income from operations (7,751) 22,676 (1,720) 39,724
Other (expense) income (70) 731 117 851
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Net (loss) income before income taxes and minority interest (7,821) 23,407 (1,603) 40,575
(Benefit) provision for income taxes (3,039) 8,910 (913) 14,857
Minority interest in net income (loss) 105 (67) 40 (84)
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Pro forma net (loss) income $ (4,887) $ 14,564 $ (730) $ 25,802
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Pro forma net (loss) earnings per share:
Basic $ (0.15) $ 0.47 $ (0.02) $ 0.83
Diluted $ (0.15) $ 0.45 $ (0.02) $ 0.79
Basic weighted-average common shares outstanding 31,698 31,314 31,623 31,238
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Diluted weighted-average common shares outstanding 31,698 32,543 31,623 32,528
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THE PRO FORMA AMOUNTS HAVE BEEN ADJUSTED TO ELIMINATE THE FOLLOWING:
Excess, obsolete and warranty inventory charges 7,116 -- 7,116 --
Goodwill impairment 5,446 -- 5,446 --
Restructuring charge 614 -- 614 --
Litigation recovery -- -- (1,500) --
Merger costs -- 2,333 -- 2,333
Income tax effect (3,514) (887) (2,951) (887)
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$ 9,662 $ 1,446 $ 8,725 $ 1,446
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CONSOLIDATED INCOME STATEMENT
(IN THOUSANDS EXCEPT PER SHARE DATA)
Quarter Ended June 30, Six Months Ended June 30,
2001 2000 2001 2000
---------- ---------- ---------- ----------
(unaudited) (unaudited) (unaudited) (unaudited)
Sales $ 46,171 $ 85,701 $ 120,885 $ 160,729
Cost of sales 38,390 43,338 81,881 81,699
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Gross profit 7,781 42,363 39,004 79,030
Operating expenses:
Research and development 11,040 8,504 23,429 16,617
Sales and marketing 5,963 5,373 12,592 11,240
General and administrative 5,645 5,810 11,819 11,449
Goodwill impairment 5,446 -- 5,446 --
Restructuring charge 614 -- 614 --
Litigation recovery -- -- (1,500) --
Merger costs -- 2,333 -- 2,333
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(Loss) income from operations (20,927) 20,343 (13,396) 37,391
Other (expense) income (70) 731 117 851
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Net (loss) income before income taxes and minority interest (20,997) 21,074 (13,279) 38,242
(Benefit) provision for income taxes (6,553) 8,023 (3,864) 13,970
Minority interest in net income (loss) 105 (67) 40 (84)
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Net (loss) income $ (14,549) $ 13,118 $ (9,455) $ 24,356
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Net (loss) earnings per share:
Basic $ (0.46) $ 0.42 $ (0.30) $ 0.78
Diluted $ (0.46) $ 0.40 $ (0.30) $ 0.75
Basic weighted-average common shares outstanding 31,698 31,314 31,623 31,238
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Diluted weighted-average common shares outstanding 31,698 32,543 31,623 32,528
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ADDITIONAL INFORMATION - EBITDA:
(Loss) earnings before interest, taxes, depreciation and amortization $ (16,941) $ 23,077 $ (5,722) $ 42,240
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Pretax EBITDA diluted EPS $ (0.53) $ 0.71 $ (0.18) $ 1.30
After tax EBITDA diluted EPS $ (0.37) $ 0.48 $ (0.13) $ 0.83
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CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
June 30, December 31,
2001 2000
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ASSETS (unaudited) (unaudited)
Current Assets:
Cash and cash equivalents $ 32,448 $ 31,716
Marketable securities - trading 129,180 157,811
Accounts receivable 43,099 76,545
Notes receivable 2,472 2,472
Income tax receivable 9,865 74
Inventories 47,462 45,266
Other current assets 2,658 2,508
Deferred income tax assets, net 9,040 7,483
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Total current assets 276,224 323,875
Property and equipment, net 33,245 24,101
Goodwill and intangibles, net 24,936 9,890
Investments 2,452 1,824
Deferred debt issuance costs 2,015 2,261
Other assets 4,842 3,884
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Total assets $ 343,714 $ 365,835
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, trade $ 8,673 $ 18,250
Other current liabilities 15,198 16,210
Accrued income taxes payable 1,313 7,923
Current portion of long-term debt 216 1,337
Accrued interest payable on convertible subordinated notes 529 529
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Total current liabilities 25,929 44,249
Long-term Liabilities:
Capital leases and notes payable 230 1,043
Deferred income tax liability, net 1,116 --
Convertible subordinated notes payable 81,600 81,600
------------ ------------
Total long-term liabilities 82,946 82,643
Total liabilities 108,875 126,892
Minority interest 185 145
Stockholders' equity 234,654 238,798
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Total liabilities and stockholders' equity $ 343,714 $ 365,835
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CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
Six Months Ended June 30,
2001 2000
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(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (9,455) $ 24,356
Depreciation and amortization 8,397 5,163
Provision for inventory 7,116 --
Provision for restructuring 614 --
Loss on impairment of goodwill 5,446 --
Earnings from marketable securities, net (2,695) (4,781)
Accounts receivable and notes receivable 34,613 (9,259)
Inventories (5,134) (8,021)
Accounts payable, trade (9,932) 683
Income taxes (14,810) 1,976
Other (6,861) 2,621
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Net cash provided by operating activities 7,299 12,738
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CASH FLOWS FROM INVESTING ACTIVITIES:
Marketable securities 32,000 (10,000)
Proceeds from sale of equipment -- 150
Purchase of property and equipment, net (9,442) (5,279)
Purchase of investments (639) (531)
Acquisition of EMCO, net of cash acquired (29,932) --
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Net cash used in investing activities (8,013) (15,660)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net change from notes payable and capital lease obligations (1,934) (363)
Proceeds from common stock transactions 2,735 3,032
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Net cash provided by financing activities 801 2,669
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EFFECT OF CURRENCY TRANSLATION ON CASH 645 (666)
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 732 (919)
CASH AND EQUIVALENTS, beginning of period 31,716 21,043
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CASH AND EQUIVALENTS, end of period $ 32,448 $ 20,124
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