Advanced energy reports first quarter 2023 results
Denver--(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 first quarter ended march 31, 2023. “our first quarter results demonstrate the benefits of our diversification strategy, as record revenue in the industrial and medical market drove total revenue growth of seven percent year-over-year,” said steve kelley, president and ceo of advanced energy. “our operational performance and new product execution are driving high levels of customer engagement, which we believe will translate into a record number of design wins in 2023.” first quarter results sales were $425.0 million in the first quarter of 2023, compared with $490.7 million in the fourth quarter of 2022 and $397.5 million in the first quarter of 2022. gaap net income from continuing operations was $31.8 million or $0.84 per diluted share in the quarter, compared with $45.3 million or $1.20 per diluted share in the prior quarter, and $36.9 million or $0.98 per diluted share a year ago. non-gaap net income was $47.0 million or $1.24 per diluted share in the first quarter of 2023. this compares with $64.2 million or $1.70 per diluted share in the fourth quarter of 2022, and $46.7 million or $1.24 per diluted share in the first quarter of 2022. advanced energy generated $31.9 million of cash flow from continuing operations during the quarter and paid $3.8 million in a quarterly dividend. second quarter 2023 guidance based on the company’s current view, beliefs, and assumptions, guidance is within the following ranges: q2 2023 revenue $410 million +/- $20 million gaap eps from continuing operations $0.62 +/- $0.25 non-gaap eps $1.00 +/- $0.25 conference call management will host a conference call today, may 3, 2023, at 4:30 p.m. eastern time to discuss the first 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 production, medical and life sciences, data center computing, networking, and telecommunications. 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. trust. 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, inflationary pressures, economic downturns, and volatility and cyclicality of the industries we serve; (c) the impact of political and geographical risks, including trade and export regulations, other effects of 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 and lawsuits 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; and (n) changes and adjustments to the tax expense and benefits related to the u.s. tax law changes, 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 march 31, december 31, 2023 2022 2022 sales, net $ 425,040 $ 397,459 $ 490,740 cost of sales 269,929 253,143 312,926 gross profit 155,111 144,316 177,814 gross margin % 36.5 % 36.3 % 36.2 % operating expenses: research and development 51,610 43,614 49,637 selling, general, and administrative 55,358 49,318 57,407 amortization of intangible assets 7,062 5,509 7,033 restructuring 1,043 1,218 5,636 total operating expenses 115,073 99,659 119,713 operating income 40,038 44,657 58,101 other expense, net (550 ) (842 ) (2,701 ) income from continuing operations, before income taxes 39,488 43,815 55,400 provision for income taxes 7,736 6,953 10,055 income from continuing operations 31,752 36,862 45,345 loss from discontinued operations, net of income taxes (831 ) (98 ) (1,600 ) net income 30,921 36,764 43,745 loss from continuing operations attributable to noncontrolling interest — (14 ) — net income attributable to advanced energy industries, inc. $ 30,921 $ 36,778 $ 43,745 basic weighted-average common shares outstanding 37,475 37,549 37,405 diluted weighted-average common shares outstanding 37,757 37,770 37,683 earnings per share attributable to advanced energy industries, inc: continuing operations: basic earnings per share $ 0.85 $ 0.98 $ 1.21 diluted earnings per share $ 0.84 $ 0.98 $ 1.20 discontinued operations: basic loss per share $ (0.02 ) $ — $ (0.04 ) diluted loss per share $ (0.02 ) $ — $ (0.04 ) net income: basic earnings per share $ 0.83 $ 0.98 $ 1.17 diluted earnings per share $ 0.82 $ 0.97 $ 1.16 advanced energy industries, inc. condensed consolidated balance sheets (unaudited) (in thousands) march 31, december 31, 2023 2022 assets current assets: cash and cash equivalents $ 461,665 $ 458,818 accounts and other receivables, net 291,629 300,683 inventories 401,530 376,012 other current assets 55,486 53,001 total current assets 1,210,310 1,188,514 property and equipment, net 152,762 148,462 operating lease right-of-use assets 95,861 100,177 other assets 84,613 84,056 goodwill and intangible assets, net 465,155 470,959 total assets $ 2,008,701 $ 1,992,168 liabilities and stockholders’ equity current liabilities: accounts payable $ 185,835 $ 170,467 other accrued expenses 162,176 185,805 current portion of long-term debt 20,000 20,000 current portion of operating lease liabilities 16,249 16,771 total current liabilities 384,260 393,043 long-term debt 348,389 353,262 other long-term liabilities 180,139 179,596 long-term liabilities 528,528 532,858 total liabilities 912,788 925,901 total stockholders' equity 1,095,913 1,066,267 total liabilities and stockholders’ equity $ 2,008,701 $ 1,992,168 advanced energy industries, inc. condensed consolidated statement of cash flows (unaudited) (in thousands) three months ended march 31, 2023 2022 cash flows from operating activities: net income $ 30,921 $ 36,764 less: loss from discontinued operations, net of income taxes (831 ) (98 ) income from continuing operations, net of income taxes 31,752 36,862 adjustments to reconcile net income to net cash from operating activities: depreciation and amortization 16,523 13,888 stock-based compensation expense 6,801 3,928 provision for deferred income taxes (617 ) (1,060 ) loss on disposal and sale of assets 115 276 changes in operating assets and liabilities, net of assets acquired (22,694 ) (43,981 ) net cash from operating activities from continuing operations 31,880 9,913 net cash from operating activities from discontinued operations (2,069 ) (92 ) net cash from operating activities 29,811 9,821 cash flows from investing activities: purchases of property and equipment (16,210 ) (13,075 ) acquisitions, net of cash acquired — (600 ) net cash from investing activities (16,210 ) (13,675 ) cash flows from financing activities: payments on long-term borrowings (5,000 ) (5,000 ) dividend payments (3,814 ) (3,789 ) purchase and retirement of common stock — (6,594 ) net payments related to stock-based awards (1,991 ) (2,430 ) net cash from financing activities (10,805 ) (17,813 ) effect of currency translation on cash 51 (1,469 ) net change in cash and cash equivalents 2,847 (23,136 ) cash and cash equivalents, beginning of period 458,818 544,372 cash and cash equivalents, end of period $ 461,665 $ 521,236 advanced energy industries, inc. supplemental information (unaudited) (in thousands) net sales by market three months ended march 31, december 31, 2023 2022 2022 semiconductor equipment $ 194,209 $ 202,957 $ 232,455 industrial and medical 123,020 82,898 119,327 data center computing 59,659 76,238 94,525 telecom and networking 48,152 35,366 44,433 total $ 425,040 $ 397,459 $ 490,740 net sales by geographic region three months ended march 31, december 31, 2023 2022 2022 north america $ 180,942 $ 182,721 $ 230,461 asia 179,183 162,047 197,368 europe 62,566 46,665 61,146 other 2,349 6,026 1,765 total $ 425,040 $ 397,459 $ 490,740 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 march 31, december 31, 2023 2022 2022 gross profit from continuing operations, as reported $ 155,111 $ 144,316 $ 177,814 adjustments to gross profit: stock-based compensation 383 231 391 facility expansion, relocation costs and other 957 1,284 1,162 acquisition-related costs 53 (502 ) 73 non-gaap gross profit 156,504 145,329 179,440 non-gaap gross margin 36.8 % 36.6 % 36.6 % operating expenses from continuing operations, as reported 115,073 99,659 119,713 adjustments: amortization of intangible assets (7,062 ) (5,509 ) (7,033 ) stock-based compensation (6,418 ) (3,697 ) (4,450 ) acquisition-related costs (878 ) (1,668 ) (1,660 ) restructuring (1,043 ) (1,218 ) (5,636 ) non-gaap operating expenses 99,672 87,567 100,934 non-gaap operating income $ 56,832 $ 57,762 $ 78,506 non-gaap operating margin 13.4 % 14.5 % 16.0 % reconciliation of non-gaap measure - income excluding certain items three months ended march 31, december 31, 2023 2022 2022 income from continuing operations, less non-controlling interest, net of income taxes $ 31,752 $ 36,876 $ 45,345 adjustments: amortization of intangible assets 7,062 5,509 7,033 acquisition-related costs 931 1,166 1,733 facility expansion, relocation costs, and other 957 1,284 1,162 restructuring 1,043 1,218 5,636 unrealized foreign currency gain 1,053 (1,285 ) 5,378 acquisition-related costs and other included in other expense, net — — (3,817 ) tax effect of non-gaap adjustments (1,121 ) (1,069 ) (2,042 ) non-gaap income, net of income taxes, excluding stock-based compensation 41,677 43,699 60,428 stock-based compensation, net of taxes 5,304 3,025 3,776 non-gaap income, net of income taxes $ 46,981 $ 46,724 $ 64,204 advanced energy industries, inc. selected other data (unaudited) reconciliation of non-gaap measure - per share earnings excluding certain items three months ended march 31, december 31, 2023 2022 2022 diluted earnings per share from continuing operations, as reported $ 0.84 $ 0.98 $ 1.20 add back: per share impact of non-gaap adjustments, net of tax 0.40 0.26 0.50 non-gaap earnings per share $ 1.24 $ 1.24 $ 1.70 reconciliation of q2 2023 guidance low end high end revenue $390 million $430 million reconciliation of non-gaap earnings per share gaap earnings per share $ 0.37 $ 0.87 stock-based compensation 0.17 0.17 amortization of intangible assets 0.19 0.19 restructuring and other 0.09 0.09 tax effects of excluded items (0.07 ) (0.07 ) non-gaap earnings per share $ 0.75 $ 1.25
