ADVANCED ENERGY INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share data) |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended |
|
Year Ended |
|
||||||||||||||||
|
|
December 31, |
|
September 30, |
|
December 31, |
|
||||||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
|||||
Sales, net |
|
$ |
490,740 |
|
|
$ |
396,930 |
|
|
$ |
516,274 |
|
|
$ |
1,845,422 |
|
|
$ |
1,455,954 |
|
|
Cost of sales |
|
|
312,926 |
|
|
|
257,183 |
|
|
|
325,056 |
|
|
|
1,169,916 |
|
|
|
923,632 |
|
|
Gross profit |
|
|
177,814 |
|
|
|
139,747 |
|
|
|
191,218 |
|
|
|
675,506 |
|
|
|
532,322 |
|
|
| Gross margin % |
|
|
36.2 |
|
% |
|
35.2 |
|
% |
|
37.0 |
|
% |
|
36.6 |
|
% |
|
36.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Research and development |
|
|
49,637 |
|
|
|
40,966 |
|
|
|
49,760 |
|
|
|
191,020 |
|
|
|
161,831 |
|
|
| Selling, general, and administrative |
|
|
57,407 |
|
|
|
48,784 |
|
|
|
56,716 |
|
|
|
218,463 |
|
|
|
191,998 |
|
|
| Amortization of intangible assets |
|
|
7,033 |
|
|
|
5,556 |
|
|
|
7,049 |
|
|
|
26,114 |
|
|
|
22,060 |
|
|
| Restructuring expense |
|
|
5,636 |
|
|
|
2,231 |
|
|
|
121 |
|
|
|
6,814 |
|
|
|
4,752 |
|
|
| Total operating expenses |
|
|
119,713 |
|
|
|
97,537 |
|
|
|
113,646 |
|
|
|
442,411 |
|
|
|
380,641 |
|
|
| Operating income |
|
|
58,101 |
|
|
|
42,210 |
|
|
|
77,572 |
|
|
|
233,095 |
|
|
|
151,681 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Other income (expense), net |
|
|
(2,701 |
) |
|
|
704 |
|
|
|
8,940 |
|
|
|
8,646 |
|
|
|
(2,970 |
) |
|
| Income from continuing operations, before income taxes |
|
|
55,400 |
|
|
|
42,914 |
|
|
|
86,512 |
|
|
|
241,741 |
|
|
|
148,711 |
|
|
| Provision for income taxes |
|
|
10,055 |
|
|
|
3,187 |
|
|
|
11,639 |
|
|
|
39,850 |
|
|
|
14,004 |
|
|
| Income from continuing operations |
|
|
45,345 |
|
|
|
39,727 |
|
|
|
74,873 |
|
|
|
201,891 |
|
|
|
134,707 |
|
|
| Income (loss) from discontinued operations, net of income taxes |
|
|
(1,600 |
) |
|
|
(98 |
) |
|
|
(697 |
) |
|
|
(2,215 |
) |
|
|
73 |
|
|
| Net income |
|
|
43,745 |
|
|
|
39,629 |
|
|
|
74,176 |
|
|
|
199,676 |
|
|
|
134,780 |
|
|
| Income from continuing operations attributable to noncontrolling interest |
|
|
— |
|
|
|
(26 |
) |
|
|
9 |
|
|
|
16 |
|
|
|
44 |
|
|
| Net income attributable to Advanced Energy Industries, Inc. |
|
$ |
43,745 |
|
|
$ |
39,655 |
|
|
$ |
74,167 |
|
|
$ |
199,660 |
|
|
$ |
134,736 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Basic weighted-average common shares outstanding |
|
|
37,405 |
|
|
|
37,672 |
|
|
|
37,379 |
|
|
|
37,463 |
|
|
|
38,143 |
|
|
| Diluted weighted-average common shares outstanding |
|
|
37,683 |
|
|
|
37,866 |
|
|
|
37,630 |
|
|
|
37,721 |
|
|
|
38,355 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Earnings per share attributable to Advanced Energy Industries, Inc: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Continuing operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Basic earnings per share |
|
$ |
1.21 |
|
|
$ |
1.06 |
|
|
$ |
2.00 |
|
|
$ |
5.39 |
|
|
$ |
3.53 |
|
|
| Diluted earnings per share |
|
$ |
1.20 |
|
|
$ |
1.05 |
|
|
$ |
1.99 |
|
|
$ |
5.35 |
|
|
$ |
3.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Basic earnings (loss) per share |
|
$ |
(0.04 |
) |
|
$ |
— |
|
|
$ |
(0.02 |
) |
|
$ |
(0.06 |
) |
|
$ |
— |
|
|
| Diluted earnings (loss) per share |
|
$ |
(0.04 |
) |
|
$ |
— |
|
|
$ |
(0.02 |
) |
|
$ |
(0.06 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Net income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Basic earnings per share |
|
$ |
1.17 |
|
|
$ |
1.05 |
|
|
$ |
1.98 |
|
|
$ |
5.33 |
|
|
$ |
3.53 |
|
|
| Diluted earnings per share |
|
$ |
1.16 |
|
|
$ |
1.05 |
|
|
$ |
1.97 |
|
|
$ |
5.29 |
|
|
$ |
3.51 |
|
|
| ADVANCED ENERGY INDUSTRIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands) |
||||||
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
||
|
|
|
2022 |
|
2021 |
||
| ASSETS |
|
|
|
|
|
|
| Current assets: |
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
458,818 |
|
$ |
544,372 |
| Accounts and other receivable, net |
|
|
300,683 |
|
|
237,227 |
| Inventories |
|
|
376,012 |
|
|
338,410 |
| Other current assets |
|
|
53,001 |
|
|
42,225 |
| Total current assets |
|
|
1,188,514 |
|
|
1,162,234 |
|
|
|
|
|
|
|
|
| Property and equipment, net |
|
|
148,462 |
|
|
114,830 |
| Operating lease right-of-use assets |
|
|
100,177 |
|
|
101,769 |
| Other assets |
|
|
84,056 |
|
|
66,911 |
| Goodwill and intangible assets, net |
|
|
470,959 |
|
|
371,596 |
| Total assets |
|
$ |
1,992,168 |
|
$ |
1,817,340 |
|
|
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current liabilities: |
|
|
|
|
|
|
| Accounts payable |
|
$ |
170,467 |
|
$ |
193,708 |
| Other accrued expenses |
|
|
185,805 |
|
|
140,645 |
| Current portion of long-term debt |
|
|
20,000 |
|
|
20,000 |
| Current portion of operating lease liabilities |
|
|
16,771 |
|
|
15,843 |
| Total current liabilities |
|
|
393,043 |
|
|
370,196 |
|
|
|
|
|
|
|
|
| Long-term debt |
|
|
353,262 |
|
|
372,733 |
| Other long-term liabilities |
|
|
179,596 |
|
|
202,915 |
| Long-term liabilities |
|
|
532,858 |
|
|
575,648 |
|
|
|
|
|
|
|
|
| Total liabilities |
|
|
925,901 |
|
|
945,844 |
|
|
|
|
|
|
|
|
| Advanced Energy Industries, Inc. stockholders' equity |
|
|
1,066,267 |
|
|
870,851 |
| Noncontrolling interest |
|
|
— |
|
|
645 |
| Total stockholders’ equity |
|
|
1,066,267 |
|
|
871,496 |
| Total liabilities and stockholders’ equity |
|
$ |
1,992,168 |
|
$ |
1,817,340 |
| ADVANCED ENERGY INDUSTRIES, INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) (in thousands) |
||||||||
|
|
|
|
|
|
|
|
||
|
|
|
Year Ended December 31, |
||||||
|
|
|
2022 |
|
2021 |
||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
| Net income |
|
$ |
199,676 |
|
|
$ |
134,780 |
|
| Less: income (loss) from discontinued operations, net of income taxes |
|
|
(2,215 |
) |
|
|
73 |
|
| Income from continuing operations, net of income taxes |
|
|
201,891 |
|
|
|
134,707 |
|
|
|
|
|
|
|
|
|
||
| Adjustments to reconcile net income to net cash from operating activities: |
|
|
|
|
|
|
||
| Depreciation and amortization |
|
|
60,296 |
|
|
|
52,893 |
|
| Stock-based compensation expense |
|
|
19,849 |
|
|
|
15,739 |
|
| Provision for deferred income taxes |
|
|
(5,736 |
) |
|
|
1,326 |
|
| Discount on notes receivable |
|
|
— |
|
|
|
(638 |
) |
| (Gain) loss on disposal and sale of assets |
|
|
(3,962 |
) |
|
|
1,496 |
|
| Changes in operating assets and liabilities, net of assets acquired |
|
|
(88,607 |
) |
|
|
(64,609 |
) |
| Net cash from operating activities from continuing operations |
|
|
183,731 |
|
|
|
140,914 |
|
| Net cash from operating activities from discontinued operations |
|
|
(144 |
) |
|
|
(669 |
) |
| Net cash from operating activities |
|
|
183,587 |
|
|
|
140,245 |
|
|
|
|
|
|
|
|
|
||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
| Receipt of notes receivable |
|
|
— |
|
|
|
3,050 |
|
| Purchases of property and equipment |
|
|
(58,885 |
) |
|
|
(28,817 |
) |
| Acquisitions, net of cash acquired |
|
|
(149,387 |
) |
|
|
(21,535 |
) |
| Net cash from investing activities |
|
|
(208,272 |
) |
|
|
(47,302 |
) |
|
|
|
|
|
|
|
|
||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
| Proceeds from long-term borrowings |
|
|
— |
|
|
|
85,000 |
|
| Payment of debt-issuance costs |
|
|
— |
|
|
|
(1,350 |
) |
| Payments on long-term borrowings |
|
|
(20,000 |
) |
|
|
(13,750 |
) |
| Dividend payments |
|
|
(15,204 |
) |
|
|
(15,385 |
) |
| Purchase and retirement of common stock |
|
|
(26,635 |
) |
|
|
(78,125 |
) |
| Net payments related to stock-based awards |
|
|
(26 |
) |
|
|
(1,762 |
) |
| Net cash from financing activities |
|
|
(61,865 |
) |
|
|
(25,372 |
) |
|
|
|
|
|
|
|
|
||
| EFFECT OF CURRENCY TRANSLATION ON CASH |
|
|
996 |
|
|
|
(3,567 |
) |
|
|
|
|
|
|
|
|
||
| NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
|
(85,554 |
) |
|
|
64,004 |
|
| CASH AND CASH EQUIVALENTS, beginning of period |
|
|
544,372 |
|
|
|
480,368 |
|
| CASH AND CASH EQUIVALENTS, end of period |
|
$ |
458,818 |
|
|
$ |
544,372 |
|
| ADVANCED ENERGY INDUSTRIES, INC. SUPPLEMENTAL INFORMATION (UNAUDITED) (in thousands) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Sales by Market |
|
Three Months Ended |
|
Year Ended |
|||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|||||||||
|
|
|
2022 |
|
2021 |
|
2022 |
|
2022 |
|
2021 |
|||||
| Semiconductor Equipment |
|
$ |
232,455 |
|
$ |
179,346 |
|
$ |
266,600 |
|
$ |
930,809 |
|
$ |
710,174 |
| Industrial and Medical |
|
|
119,327 |
|
|
98,764 |
|
|
119,587 |
|
|
426,763 |
|
|
341,176 |
| Data Center Computing |
|
|
94,525 |
|
|
80,081 |
|
|
87,542 |
|
|
327,466 |
|
|
270,924 |
| Telecom and Networking |
|
|
44,433 |
|
|
38,739 |
|
|
42,545 |
|
|
160,384 |
|
|
133,680 |
| Total |
|
$ |
490,740 |
|
$ |
396,930 |
|
$ |
516,274 |
|
$ |
1,845,422 |
|
$ |
1,455,954 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Sales by Geographic Region |
|
Three Months Ended |
|
Year Ended |
|||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|||||||||
|
|
|
2022 |
|
2021 |
|
2022 |
|
2022 |
|
2021 |
|||||
| North America |
|
$ |
230,461 |
|
$ |
178,200 |
|
$ |
238,115 |
|
$ |
857,490 |
|
$ |
665,479 |
| Asia |
|
|
197,368 |
|
|
163,598 |
|
|
215,401 |
|
|
754,997 |
|
|
597,830 |
| Europe |
|
|
61,146 |
|
|
49,305 |
|
|
61,456 |
|
|
219,119 |
|
|
179,056 |
| Other |
|
|
1,765 |
|
|
5,827 |
|
|
1,302 |
|
|
13,816 |
|
|
13,589 |
| Total |
|
$ |
490,740 |
|
$ |
396,930 |
|
$ |
516,274 |
|
$ |
1,845,422 |
|
$ |
1,455,954 |
| 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 |
|
Year Ended |
||||||||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
||||||||||||||
|
|
|
2022 |
|
2021 |
|
2022 |
|
2022 |
|
2021 |
||||||||||
| Gross profit from continuing operations, as reported |
|
$ |
177,814 |
|
|
$ |
139,747 |
|
|
$ |
191,218 |
|
|
$ |
675,506 |
|
|
$ |
532,322 |
|
| Adjustments to gross profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Stock-based compensation |
|
|
391 |
|
|
|
(19 |
) |
|
|
454 |
|
|
|
1,478 |
|
|
|
764 |
|
| Facility expansion, relocation costs and other |
|
|
1,162 |
|
|
|
997 |
|
|
|
1,662 |
|
|
|
5,295 |
|
|
|
6,189 |
|
| Acquisition-related costs |
|
|
73 |
|
|
|
234 |
|
|
|
66 |
|
|
|
(299 |
) |
|
|
3,585 |
|
| Non-GAAP gross profit |
|
|
179,440 |
|
|
|
140,959 |
|
|
|
193,400 |
|
|
|
681,980 |
|
|
|
542,860 |
|
| Non-GAAP gross margin |
|
|
36.6 |
% |
|
|
35.5 |
% |
|
|
37.5 |
% |
|
|
37.0 |
% |
|
|
37.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Operating expenses from continuing operations, as reported |
|
|
119,713 |
|
|
|
97,537 |
|
|
|
113,646 |
|
|
|
442,411 |
|
|
|
380,641 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Amortization of intangible assets |
|
|
(7,033 |
) |
|
|
(5,556 |
) |
|
|
(7,049 |
) |
|
|
(26,114 |
) |
|
|
(22,060 |
) |
| Stock-based compensation |
|
|
(4,450 |
) |
|
|
(2,939 |
) |
|
|
(5,568 |
) |
|
|
(18,371 |
) |
|
|
(14,975 |
) |
| Acquisition-related costs |
|
|
(1,660 |
) |
|
|
(679 |
) |
|
|
(1,150 |
) |
|
|
(8,637 |
) |
|
|
(6,803 |
) |
| Facility expansion, relocation costs and other |
|
|
— |
|
|
|
(17 |
) |
|
|
— |
|
|
|
— |
|
|
|
(229 |
) |
| Restructuring charges |
|
|
(5,636 |
) |
|
|
(2,231 |
) |
|
|
(121 |
) |
|
|
(6,814 |
) |
|
|
(4,752 |
) |
| Non-GAAP operating expenses |
|
|
100,934 |
|
|
|
86,115 |
|
|
|
99,758 |
|
|
|
382,475 |
|
|
|
331,822 |
|
| Non-GAAP operating income |
|
$ |
78,506 |
|
|
$ |
54,844 |
|
|
$ |
93,642 |
|
|
$ |
299,505 |
|
|
$ |
211,038 |
|
| Non-GAAP operating margin |
|
|
16.0 |
% |
|
|
13.8 |
% |
|
|
18.1 |
% |
|
|
16.2 |
% |
|
|
14.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Reconciliation of Non-GAAP measure - income excluding certain items |
|
Three Months Ended |
|
Year Ended |
||||||||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
||||||||||||||
|
|
|
2022 |
|
2021 |
|
2022 |
|
2022 |
|
2021 |
||||||||||
| Income from continuing operations, less non-controlling interest, net of income taxes |
|
$ |
45,345 |
|
|
$ |
39,753 |
|
|
$ |
74,864 |
|
|
$ |
201,875 |
|
|
$ |
134,663 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
| Amortization of intangible assets |
|
|
7,033 |
|
|
|
5,556 |
|
|
|
7,049 |
|
|
|
26,114 |
|
|
|
22,060 |
|
| Acquisition-related costs |
|
|
1,733 |
|
|
|
913 |
|
|
|
1,216 |
|
|
|
8,338 |
|
|
|
10,388 |
|
| Facility expansion, relocation costs, and other |
|
|
1,162 |
|
|
|
1,014 |
|
|
|
1,662 |
|
|
|
5,295 |
|
|
|
6,418 |
|
| Restructuring charges |
|
|
5,636 |
|
|
|
2,231 |
|
|
|
121 |
|
|
|
6,814 |
|
|
|
4,752 |
|
| Unrealized foreign currency (gain) loss |
|
|
5,378 |
|
|
|
(134 |
) |
|
|
(6,169 |
) |
|
|
(7,645 |
) |
|
|
(3,543 |
) |
| Acquisition-related costs and other included in other (income) expense, net |
|
|
(3,817 |
) |
|
|
(3,093 |
) |
|
|
(4,685 |
) |
|
|
(8,417 |
) |
|
|
(2,186 |
) |
| Tax effect of non-GAAP adjustments |
|
|
(2,042 |
) |
|
|
3,017 |
|
|
|
855 |
|
|
|
(3,008 |
) |
|
|
(1,346 |
) |
| Non-GAAP income, net of income taxes, excluding stock-based compensation |
|
|
60,428 |
|
|
|
49,257 |
|
|
|
74,913 |
|
|
|
229,366 |
|
|
|
171,206 |
|
| Stock-based compensation, net of taxes |
|
|
3,776 |
|
|
|
2,233 |
|
|
|
4,697 |
|
|
|
15,444 |
|
|
|
12,042 |
|
| Non-GAAP income, net of income taxes |
|
$ |
64,204 |
|
|
$ |
51,490 |
|
|
$ |
79,610 |
|
|
$ |
244,810 |
|
|
$ |
183,248 |
|
| ADVANCED ENERGY INDUSTRIES, INC. SELECTED OTHER DATA (UNAUDITED) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of non-GAAP measure - per share earnings excluding certain items |
|
Three Months Ended |
|
Year Ended |
|||||||||||
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|||||||||
|
|
|
2022 |
|
2021 |
|
2022 |
|
2022 |
|
2021 |
|||||
| Diluted earnings per share from continuing operations, as reported |
|
$ |
1.20 |
|
$ |
1.05 |
|
$ |
1.99 |
|
$ |
5.35 |
|
$ |
3.51 |
| Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per share impact of non-GAAP adjustments, net of tax |
|
|
0.50 |
|
|
0.31 |
|
|
0.13 |
|
|
1.14 |
|
|
1.27 |
| Non-GAAP earnings per share |
|
$ |
1.70 |
|
$ |
1.36 |
|
$ |
2.12 |
|
$ |
6.49 |
|
$ |
4.78 |
|
Reconciliation of Q1 2023 Guidance |
||||||||
| Low End |
High End |
|||||||
| Revenue |
|
$395 million |
|
$435 million |
||||
| Reconciliation of non-GAAP earnings per share |
|
|
|
|
||||
| GAAP earnings per share |
$ |
0.51 |
|
$ |
1.01 |
|
||
| Stock-based compensation |
|
0.17 |
|
|
0.17 |
|
||
| Amortization of intangible assets |
|
0.19 |
|
|
0.19 |
|
||
| Restructuring and other |
|
0.04 |
|
|
0.04 |
|
||
| Tax effects of excluded items |
|
(0.06 |
) |
|
(0.06 |
) |
||
| Non-GAAP earnings per share |
$ |
0.85 |
|
$ |
1.35 |
|
||
