Advanced Energy Industries Inc. (AEIS, Financial) filed Quarterly Report for the period ended 2009-06-30.
Advanced Energy is a global leader in the development and support of technologies critical to high-technology high-growth manufacturing processes used in the production of semiconductors flat panel displays data storage products solar cells architectural glass and other advanced product applications. Leveraging a diverse product portfolio and technology leadership Advanced Energy creates solutions that maximize process impact improve productivity and lower the cost of ownership for its customers. This portfolio includes a comprehensive line of technology solutions in power flow thermal management and plasma and ion beam sources for original equipment manufacturers and end-users around the world. Advanced Energy operates in regional centers in North America Asia and Europe and offers global sales and support through direct offices representatives and distributors Advanced Energy Industries Inc. has a market cap of $455.81 million; its shares were traded at around $10.87 with and P/S ratio of 1.39.
Our global support business experienced a decline in sales falling to $8.8 million, or 24.8% of total sales, for the three months ended June 30, 2009 and $16.5 million, or 24.2% of total sales, for the six months ended June 30, 2009. This was a decrease from $16.1 million, or 18.3% of total sales, for the three months ended June 30, 2008 and $31.3 million, or 17.7% of total sales, for the six months ended June 30, 2008. The decrease in absolute dollars resulted in large part from a continuing practice by our customers of utilizing idle equipment for spare parts in efforts to conserve cash as opposed to repairing malfunctioning or worn parts.
Our gross profit was $7.9 million, or 22.2% of sales, for the three months ended June 30, 2009, as compared to $35.3 million, or 40.1% of sales for the three months ended June 30, 2008. Similarly, gross profit decreased to $14.3 million, or 21.0% of sales, for the six months ended June 30, 2009, from $71.1 million, or 40.2% of sales, for the six months ended June 30, 2008. The large decrease was due to an overall decrease in production volume related to the weakening economy which resulted in a lack of absorption of our factory costs therefore reducing our gross margin. We reduced our overall manufacturing costs throughout 2008 and in the first three months of 2009 by reducing fixed production and overhead costs including personnel costs through restructuring activities; however despite our ongoing efforts to reduce costs, we currently have excess manufacturing capacity related to buildings, machinery and unabsorbed overhead expenses.
Other income, net consists primarily of investment income and expense, foreign exchange gains and losses and other miscellaneous gains, losses, income and expense items. Other income, net was $0.6 million for the three months ended June 30, 2009, as compared to $0.9 million for the three months ended June 30, 2008. Similarly, other income, net decreased to $1.0 million for the six months ended June 30, 2009 from $1.9 million for the six months ended June 30, 2008. The decrease in both periods was due to a reduction in interest rates earned on our cash and investments.
During the six months ended June 30, 2009, we generated $24.4 million in cash from net changes in marketable securities and $0.1 million of proceeds from stock option exercises and used $1.4 million for capital expenditures and $1.1 million for operating activities, resulting in a $21.0 million increase in available cash (including $1.0 million of unfavorable effects of international currency exchange rates on cash).
Net cash flows used in operating activities in the six months ended June 30, 2009 were $1.1 million, compared to $20.6 million cash provided by operating activities in the six months ended June 30, 2008. The $21.6 million decrease in net cash flows from operating activities was due to a $107.6 million decrease in net income, offset by a $69.8 million increase in non-cash reconciling items such as goodwill impairment, depreciation and amortization, stock-based compensation, restructuring charges, provision for excess and obsolete inventory, provision for doubtful accounts and deferred income taxes and a $16.2 million increase in cash flows from changes in operating assets and liabilities, principally the collection of receivables.
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Advanced Energy is a global leader in the development and support of technologies critical to high-technology high-growth manufacturing processes used in the production of semiconductors flat panel displays data storage products solar cells architectural glass and other advanced product applications. Leveraging a diverse product portfolio and technology leadership Advanced Energy creates solutions that maximize process impact improve productivity and lower the cost of ownership for its customers. This portfolio includes a comprehensive line of technology solutions in power flow thermal management and plasma and ion beam sources for original equipment manufacturers and end-users around the world. Advanced Energy operates in regional centers in North America Asia and Europe and offers global sales and support through direct offices representatives and distributors Advanced Energy Industries Inc. has a market cap of $455.81 million; its shares were traded at around $10.87 with and P/S ratio of 1.39.
Highlight of Business Operations:
Product sales to our non-semiconductor equipment markets declined year over year, accounting for $14.6 million, or 41.0%, of total sales, for the three months ended June 30, 2009, as compared to $36.6 million, or 41.6% of total sales, for the three months ended June 30, 2008. Additionally, sales to our non-semiconductor equipment markets were $29.9 million, or 43.9% of total sales, for the six months ended June 30, 2009, as compared to $63.5 million, or 35.9% of total sales, for the six months ended June 30, 2008. Our non-semiconductor equipment markets were also adversely affected by a number of the pervasive factors mentioned above, such as the credit constraints in the financial markets and the negative trends in consumer spending. The drop in end market demand reduced factory utilization and significantly reduced the need for capacity expansion in our non-semiconductor markets. The markets that comprise our non-semiconductor equipment markets include solar, flat panel display, data storage, architectural glass, and other industrial thin-film manufacturing equipment. Our customers in these markets, other than the solar market, are predominantly large original equipment manufacturers (OEMs) for new equipment. Our customers in the solar market are predominantly large system integrators, independent power producers and public utilities.Our global support business experienced a decline in sales falling to $8.8 million, or 24.8% of total sales, for the three months ended June 30, 2009 and $16.5 million, or 24.2% of total sales, for the six months ended June 30, 2009. This was a decrease from $16.1 million, or 18.3% of total sales, for the three months ended June 30, 2008 and $31.3 million, or 17.7% of total sales, for the six months ended June 30, 2008. The decrease in absolute dollars resulted in large part from a continuing practice by our customers of utilizing idle equipment for spare parts in efforts to conserve cash as opposed to repairing malfunctioning or worn parts.
Our gross profit was $7.9 million, or 22.2% of sales, for the three months ended June 30, 2009, as compared to $35.3 million, or 40.1% of sales for the three months ended June 30, 2008. Similarly, gross profit decreased to $14.3 million, or 21.0% of sales, for the six months ended June 30, 2009, from $71.1 million, or 40.2% of sales, for the six months ended June 30, 2008. The large decrease was due to an overall decrease in production volume related to the weakening economy which resulted in a lack of absorption of our factory costs therefore reducing our gross margin. We reduced our overall manufacturing costs throughout 2008 and in the first three months of 2009 by reducing fixed production and overhead costs including personnel costs through restructuring activities; however despite our ongoing efforts to reduce costs, we currently have excess manufacturing capacity related to buildings, machinery and unabsorbed overhead expenses.
Other income, net consists primarily of investment income and expense, foreign exchange gains and losses and other miscellaneous gains, losses, income and expense items. Other income, net was $0.6 million for the three months ended June 30, 2009, as compared to $0.9 million for the three months ended June 30, 2008. Similarly, other income, net decreased to $1.0 million for the six months ended June 30, 2009 from $1.9 million for the six months ended June 30, 2008. The decrease in both periods was due to a reduction in interest rates earned on our cash and investments.
During the six months ended June 30, 2009, we generated $24.4 million in cash from net changes in marketable securities and $0.1 million of proceeds from stock option exercises and used $1.4 million for capital expenditures and $1.1 million for operating activities, resulting in a $21.0 million increase in available cash (including $1.0 million of unfavorable effects of international currency exchange rates on cash).
Net cash flows used in operating activities in the six months ended June 30, 2009 were $1.1 million, compared to $20.6 million cash provided by operating activities in the six months ended June 30, 2008. The $21.6 million decrease in net cash flows from operating activities was due to a $107.6 million decrease in net income, offset by a $69.8 million increase in non-cash reconciling items such as goodwill impairment, depreciation and amortization, stock-based compensation, restructuring charges, provision for excess and obsolete inventory, provision for doubtful accounts and deferred income taxes and a $16.2 million increase in cash flows from changes in operating assets and liabilities, principally the collection of receivables.
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