May 5, 2014 - Advanced Energy Industries today announced financial results for the first quarter ended March 31, 2014. The company reported first quarter sales of $140.9 million compared with $152.6 million in the fourth quarter of 2013 and $111.8 million in the first quarter of 2013. Net income was $14.7 million or $0.35 per diluted share. On a non-GAAP basis, net income was $18.1 million or $0.43 per diluted share. A reconciliation of non-GAAP net income and earnings per share is provided in the tables below. Based on the current mix of profits between precision power products and inverters, the effective tax rate was approximately 12.5%. The company ended the quarter with $122.7 million in cash and marketable securities, a decrease of $27.0 million, primarily due to the acquisition of AEG Power Solutions GmbH line of Power Control Modules announced in January.
- Revenue of $141 million
- GAAP earnings of $0.35 per diluted share
- Non-GAAP earnings of $0.43 per diluted share
- Ended quarter with $123 million in cash
"We largely delivered the results we anticipated in the first quarter. Our diversified business and powerful manufacturing and distributed R&D model drove increased profitability year over year," said Garry Rogerson, CEO of Advanced Energy. "New precision power product lines are extending our reach into additional applications and geographies and new inverter products are being well received in our markets. While our margins were pressured by first quarter inverter seasonality and the impact of new products on our mix, our results demonstrate the advantages of our broadening product lines. With the completion of two successful acquisitions since the beginning of the year, we continue to generate and deploy our cash effectively. Overall, our business model is expanding our opportunities for future growth as we add adjacent power conversion products and new markets and continue our focus on reducing costs to drive year over year profitability."
Precision Power Products
Precision Power products sales were $82.9 million in the first quarter of 2014, a 5.4% decrease from $87.6 million in the fourth quarter of 2013 and a 34.1% increase from $61.8 million in the first quarter of 2013. Growth moderated this quarter after exceptionally strong fourth quarter sales to semiconductor applications, while the addition of new product lines added to the growth of our industrial applications.
Inverter sales were $58.1 million in the first quarter of 2014, down 10.6% from $64.9 million in the fourth quarter of 2013, and up 16.1% from $50.0 million in the first quarter of 2013. The convergence of multiple market dynamics this quarter caused revenues to decline sequentially more than expected during a typical seasonal first quarter.
Net income for the first quarter was $14.7 million or $0.35 per diluted share, including $0.3 million of acquisition-related expenses, compared with $34.4 million or $0.83 per diluted share in the fourth quarter of 2013, and $6.8 million or$0.17 per diluted share in the same period last year. On a non-GAAP basis, adjusted net income this quarter decreased to $18.1 million or $0.43 per diluted share from $27.8 million or $0.67 per diluted share in the fourth quarter of 2013, and increased from $11.7 million or $0.29 per diluted share in the same period last year.
Second Quarter 2014 Guidance
Consistent with industry reports, OEM customers are seeing a decline in their second quarter bookings compared to the last six months. This is resulting in lower order rates, balanced out to an extent by our diversified product portfolio. Based on this, guidance is within the following ranges:
- Sales of $135 million to $145 million
- Earnings per share of $0.26 to $0.31, excluding restructuring charges
- Non-GAAP earnings per share of $0.34 to $0.40