Advanced Energy Industries Inc 10-Q for FY2024 Q2

Advanced Energy Industries Inc (AEIS)

10-Q 2024-07-30 For: 2024-06-30

Added on April 11, 2026

About this 10-Q

Advanced Energy Industries Inc filed this 10-Q on July 30, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).

Headline figures

Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $364.95M; down 12.2% from $415.51M a year earlier
Net income: $15.03M; down 44.6% from net income of $27.14M a year earlier
Diluted EPS: $0.40; down 44.4% from $0.72 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2024
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Delaware	84-0846841
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1595 Wynkoop Street, Suite 800, Denver, Colorado	80202
(Address of principal executive offices)	(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	AEIS	Nasdaq Global Select Market



	PART I FINANCIAL INFORMATION

ITEM 1.	UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS	3

	Consolidated Balance Sheets	3

	Consolidated Statements of Operations	4

	Consolidated Statements of Comprehensive Income	5

	Consolidated Statements of Stockholders’ Equity	6

	Consolidated Statements of Cash Flows	7

	Notes to Consolidated Financial Statements	8

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	26

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	43

ITEM 4.	CONTROLS AND PROCEDURES	44

	PART II OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	44

ITEM 1A.	RISK FACTORS	45

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	45

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	45

ITEM 4.	MINE SAFETY DISCLOSURES	45

ITEM 5.	OTHER INFORMATION	45

ITEM 6.	EXHIBITS	46

	SIGNATURES	47


	June 30,		December 31,
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	986,148	$	1,044,556
Accounts receivable, net		262,419		282,430
Inventories		383,141		336,137
Other current assets		46,131		48,771
Total current assets		1,677,839		1,711,894
Property and equipment, net		180,624		167,665
Operating lease right-of-use assets		103,522		95,432
Other assets		130,782		136,448
Intangible assets, net		151,763		161,478
Goodwill		297,329		283,840
TOTAL ASSETS	$	2,541,859	$	2,556,757

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	157,523	$	141,850
Accrued payroll and employee benefits		53,559		73,595
Other accrued expenses		46,977		66,662
Customer deposits and other		12,479		15,997
Current portion of long-term debt		20,000		20,000
Current portion of operating lease liabilities		16,299		17,744
Total current liabilities		306,837		335,848
Long-term debt, net		887,309		895,679
Operating lease liabilities		97,251		89,330
Pension benefits		47,843		49,135
Other long-term liabilities		37,543		42,583
Total liabilities		1,376,783		1,412,575

Commitments and contingencies (Note 15)

Stockholders' equity:
Preferred stock, $0.001 par value, 1,000 shares authorized, none issued and outstanding		—		—
Common stock, $0.001 par value, 70,000 shares authorized; 37,671 and 37,318 issued and outstanding at June 30, 2024 and December 31, 2023, respectively		38		37
Additional paid-in capital		169,686		148,300
Accumulated other comprehensive income (loss)		(6,823)		6,114
Retained earnings		1,002,175		989,731
Total stockholders' equity		1,165,076		1,144,182
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,541,859	$	2,556,757



	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue, net	$	364,947	$	415,508	$	692,422	$	840,548
Cost of revenue		237,206		268,428		451,852		538,357
Gross profit		127,741		147,080		240,570		302,191

Operating expenses:
Research and development		52,335		51,413		102,171		103,023
Selling, general, and administrative		55,013		55,613		110,137		110,971
Amortization of intangible assets		6,800		7,075		13,747		14,137
Restructuring, asset impairments, and other charges		625		3,154		870		4,197
Total operating expenses		114,773		117,255		226,925		232,328
Operating income		12,968		29,825		13,645		69,863

Interest income		12,119		4,301		24,764		7,886
Interest expense		(6,956)		(2,858)		(14,083)		(5,588)
Other income (expense), net		638		982		2,017		(423)
Income from continuing operations, before income tax		18,769		32,250		26,343		71,738
Income tax provision		3,165		4,795		4,952		12,531
Income from continuing operations		15,604		27,455		21,391		59,207
Loss from discontinued operations, net of income tax		(575)		(315)		(1,146)		(1,146)
Net income	$	15,029	$	27,140	$	20,245	$	58,061

Basic weighted-average common shares outstanding		37,474		37,573		37,417		37,524
Diluted weighted-average common shares outstanding		37,777		37,803		37,733		37,804

Earnings per share:
Continuing operations:
Basic earnings per share	$	0.42	$	0.73	$	0.57	$	1.58
Diluted earnings per share	$	0.41	$	0.73	$	0.57	$	1.57
Discontinued operations:
Basic loss per share	$	(0.02)	$	(0.01)	$	(0.03)	$	(0.03)
Diluted loss per share	$	(0.02)	$	(0.01)	$	(0.03)	$	(0.03)
Net income:
Basic earnings per share	$	0.40	$	0.72	$	0.54	$	1.55
Diluted earnings per share	$	0.40	$	0.72	$	0.54	$	1.54



	Common Stock
						Accumulated
				Additional		Other				Total
				Paid-in		Comprehensive		Retained		Stockholders'
	Shares	Amount		Capital		Income (Loss)		Earnings		Equity
Balances, December 31, 2022	37,429	$	37	$	134,640	$	16,320	$	915,270	$	1,066,267
Stock issued from equity plans	100		—		(1,991)		—		—		(1,991)
Stock-based compensation	—		—		6,543		—		—		6,543
Dividends declared ($0.10 per share)	—		—		—		—		(3,814)		(3,814)
Other comprehensive loss	—		—		—		(2,013)		—		(2,013)
Net income	—		—		—		—		30,921		30,921
Balances, March 31, 2023	37,529		37		139,192		14,307		942,377		1,095,913
Stock issued from equity plans	121		1		606		—		—		607
Stock-based compensation	—		—		7,423		—		—		7,423
Dividends declared ($0.10 per share)	—		—		—		—		(3,778)		(3,778)
Other comprehensive loss	—		—		—		(2,026)		—		(2,026)
Net income	—		—		—		—		27,140		27,140
Balances, June 30, 2023	37,650	$	38	$	147,221	$	12,281	$	965,739	$	1,125,279

Balances, December 31, 2023	37,318	$	37	$	148,300	$	6,114	$	989,731	$	1,144,182
Stock issued from equity plans	116		—		(5,327)		—		—		(5,327)
Stock-based compensation	—		—		10,591		—		—		10,591
Dividends declared ($0.10 per share)	—		—		—		—		(3,810)		(3,810)
Other comprehensive loss	—		—		—		(7,969)		—		(7,969)
Deferred compensation	—		—		79		—		(79)		—
Net income	—		—		—		—		5,216		5,216
Balances, March 31, 2024	37,434		37		153,643		(1,855)		991,058		1,142,883
Stock issued from equity plans	93		—		(173)		—		—		(173)
Stock issuance (Note 2. Acquisition)	144		1		4,463		—		—		4,464
Stock-based compensation	—		—		10,720		—		—		10,720
Dividends declared ($0.10 per share)	—		—		—		—		(3,848)		(3,848)
Other comprehensive loss	—		—		—		(4,968)		—		(4,968)
Deferred compensation	—		—		1,033		—		(64)		969
Net income	—		—		—		—		15,029		15,029
Balances, June 30, 2024	37,671	$	38	$	169,686	$	(6,823)	$	1,002,175	$	1,165,076


	Consideration
Cash paid at closing	$	14,301
Advanced Energy common stock		4,463
Settlement of payables		(654)
Indemnity holdback payable on the one-year anniversary		1,500
Total fair value of purchase consideration	$	19,610


	Fair Value
Cash	$	539
Current assets and liabilities, net		372
Property and equipment		42
Deferred tax and other liabilities		(2,144)
Intangible assets		4,200
Goodwill (not deductible for tax purposes)		16,601
Total fair value of net assets acquired	$	19,610


		Foreign Currency Translation		Change in Fair Value of Cash Flow Hedges		Defined Employee Benefit Plan		Total
Balance at December 31, 2022	$	(12,823)	$	11,848	$	17,295	$	16,320
Other comprehensive income (loss) prior to reclassifications		(196)		595		—		399
Amounts reclassified from accumulated other comprehensive income (loss)		—		(2,412)		—		(2,412)
Balance at March 31, 2023		(13,019)		10,031		17,295		14,307
Other comprehensive income (loss) prior to reclassifications		(1,533)		2,555		—		1,022
Amounts reclassified from accumulated other comprehensive income (loss)		—		(2,756)		(292)		(3,048)
Balance at June 30, 2023	$	(14,552)	$	9,830	$	17,003	$	12,281


	Three Months Ended June 30,				Six Months Ended June 30,				To Caption on Consolidated
	2024		2023			2024		2023	Statements of Operations
Cash flow hedges	$	(2,751)	$	(2,756)	$	(5,536)	$	(5,168)	Interest expense
Defined employee benefit plan		(51)		(292)		(51)		(292)	Other income (expense), net
Total reclassifications	$	(2,802)	$	(3,048)	$	(5,587)	$	(5,460)


		June 30, 2024
Description	Balance Sheet Classification	Level 1		Level 2		Level 3		Total Fair Value
Certificates of deposit	Other current assets	$	—		184		—	$	184
Foreign currency forward contracts	Other accrued expenses	$	—		28		—	$	28
Interest rate swaps	Other current assets	$	—		2,163		—	$	2,163
Investments	Other assets	$	—		8,895		—	$	8,895


		December 31, 2023
Description	Balance Sheet Classification	Level 1		Level 2		Level 3		Total Fair Value
Certificates of deposit	Other current assets	$	—		163		—	$	163
Interest rate swaps	Other assets	$	—		6,995		—	$	6,995
Investments	Other assets	$	—		5,952		—	$	5,952


December 31, 2023	$	1,762
Additions		94
Deductions - write-offs, net of recoveries		(160)
June 30, 2024	$	1,696


	June 30, 2024
	Gross Carrying		Accumulated		Net Carrying		Weighted Average Remaining
	Amount		Amortization		Amount		Useful Life (in years)
Technology	$	100,257	$	(66,005)	$	34,252	7.3
Customer relationships		169,327		(64,606)		104,721	9.0
Trademarks and other		27,102		(14,312)		12,790	5.1
Total	$	296,686	$	(144,923)	$	151,763	8.3

	December 31, 2023
	Gross Carrying		Accumulated		Net Carrying		Weighted Average Remaining
	Amount		Amortization		Amount		Useful Life (in years)
Technology	$	97,961	$	(60,412)	$	37,549	6.8
Customer relationships		168,685		(58,835)		109,850	9.5
Trademarks and other		27,141		(13,062)		14,079	5.6
Total	$	293,787	$	(132,309)	$	161,478	8.5


Year Ending December 31,
2024 (remaining)	$	11,735
2025		21,541
2026		19,826
2027		17,923
2028		16,690
Thereafter		64,048
Total	$	151,763


	Six Months Ended June 30,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	20,245	$	58,061
Less: loss from discontinued operations, net of income tax		(1,146)		(1,146)
Income from continuing operations, net of income tax		21,391		59,207
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		33,918		32,966
Stock-based compensation		22,389		14,738
Amortization of debt issuance costs and debt discount		1,630		254
Deferred income tax benefit		(42)		(786)
Loss (gain) on disposal and sale of assets		(16)		192
Unrealized gain on investment		(567)		—
Changes in operating assets and liabilities, net of assets acquired
Accounts receivable, net		18,390		46,044
Inventories		(49,255)		(17,688)
Other assets		5,008		2,859
Accounts payable		14,331		(17,448)
Other liabilities and accrued expenses		(52,304)		(64,834)
Net cash from operating activities from continuing operations		14,873		55,504
Net cash from operating activities from discontinued operations		(876)		(3,090)
Net cash from operating activities		13,997		52,414

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of long-term investments		(2,401)		(3,128)
Purchases of property and equipment		(31,406)		(33,623)
Acquisitions, net of cash acquired		(13,762)		—
Net cash from investing activities		(47,569)		(36,751)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term borrowings		(10,000)		(10,000)
Dividend payments		(7,658)		(7,592)
Net payments related to stock-based awards		(5,500)		(1,384)
Net cash from financing activities		(23,158)		(18,976)

EFFECT OF CURRENCY TRANSLATION ON CASH AND CASH EQUIVALENTS		(1,678)		(253)

NET CHANGE IN CASH AND CASH EQUIVALENTS		(58,408)		(3,566)
CASH AND CASH EQUIVALENTS, beginning of period		1,044,556		458,818


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Semiconductor Equipment	$	188,321	$	173,177	$	368,224	$	367,386
Industrial and Medical		79,104		127,603		162,522		250,623
Data Center Computing		72,964		59,076		114,866		118,735
Telecom and Networking		24,558		55,652		46,810		103,804
Total	$	364,947	$	415,508	$	692,422	$	840,548


	Three Months Ended June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
North America	$	172,794	47.4	%	$	171,516	41.3	%	$	306,873	44.3	%	$	352,458	42.0	%
Asia		151,955	41.6			186,498	44.9			303,898	43.9			365,681	43.5
Europe		39,813	10.9			56,213	13.5			80,366	11.6			118,779	14.1
Other		385	0.1			1,281	0.3			1,285	0.2			3,630	0.4
Total	$	364,947	100.0	%	$	415,508	100.0	%	$	692,422	100.0	%	$	840,548	100.0	%


	Three Months Ended June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
United States	$	129,495	35.5	%	$	147,109	35.4	%	$	237,311	34.4	%	$	300,615	35.8	%
Mexico		42,934	11.8			23,617	5.7			68,815	9.9			50,489	6.0
Taiwan		39,108	10.7			29,345	7.1			78,581	11.3			65,706	7.8
China		22,682	6.2			53,192	12.8			41,573	6.0			90,648	10.8
All others		130,728	35.8			162,245	39.0			266,142	38.4			333,090	39.6
Total	$	364,947	100.0	%	$	415,508	100.0	%	$	692,422	100.0	%	$	840,548	100.0	%


December 31, 2023	$	283,840
Additions from acquisition		16,601
Foreign currency translation and other		(3,112)
June 30, 2024	$	297,329


	2023 Plan		2022 Plan		Other		Total
December 31, 2023	$	14,224	$	2,930	$	188	$	17,342
Costs incurred and charged to expense		(4)		57		—		53
Costs paid or otherwise settled		(6,994)		(2,987)		(188)		(10,169)
June 30, 2024	$	7,226	$	—	$	—	$	7,226


	Cumulative Cost Through
	June 30, 2024
	2023 Plan		2022 Plan		Total
Severance and related charges	$	17,099	$	14,044	$	31,143


December 31, 2023	$	4,007
Net increases to accruals		1,295
Warranty expenditures		(1,265)
Effect of changes in exchange rates		137
June 30, 2024	$	4,174


Year Ending December 31,
2024 (remaining)	$	11,473
2025		20,492
2026		17,902
2027		15,494
2028		15,102
Thereafter		62,966
Total lease payments		143,429
Less: Interest		(29,879)
Present value of lease liabilities	$	113,550


		June 30, 2024
Shares available for future issuance under the 2023 Incentive Plan		1,817
Shares available for future issuance under the ESPP		556


	Six Months Ended June 30, 2024
		Weighted-
		Average
	Number of	Grant Date
	RSUs	Fair Value
RSUs outstanding at beginning of period	917	$	85.96
RSUs granted	529	$	104.71
RSUs vested	(256)	$	87.78
RSUs forfeited	(78)	$	76.18
RSUs outstanding at end of period	1,112	$	95.14


Year Ending December 31,
2024 (remaining)	$	10,000
2025		20,000
2026		315,000
2027		—
2028		575,000
Total	$	920,000


	June 30, 2024
	Balance		Interest Rate
Convertible Notes due 2028	$	575,000	2.50%
Term Loan Facility due 2026 at fixed interest rate due to interest rate swap		211,969	1.17%
Term Loan Facility due 2026 at variable interest rate		133,031	6.19%
Total borrowings	$	920,000


	Three Months Ended June 30,								Change 2024 v. 2023
	2024				2023				Dollar		Percent
Semiconductor Equipment	$	188,321	51.6	%	$	173,177	41.7	%	$	15,144	8.7	%
Industrial and Medical		79,104	21.7			127,603	30.7			(48,499)	(38.0)	%
Data Center Computing		72,964	20.0			59,076	14.2			13,888	23.5	%
Telecom and Networking		24,558	6.7			55,652	13.4			(31,094)	(55.9)	%
Total	$	364,947	100.0	%	$	415,508	100.0	%	$	(50,561)	(12.2)	%

	Six Months Ended June 30,								Change 2024 v. 2023
	2024				2023				Dollar		Percent
Semiconductor Equipment	$	368,224	53.2	%	$	367,386	43.7	%	$	838	0.2	%
Industrial and Medical		162,522	23.5			250,623	29.8			(88,101)	(35.2)	%
Data Center Computing		114,866	16.6			118,735	14.1			(3,869)	(3.3)	%
Telecom and Networking		46,810	6.7			103,804	12.4			(56,994)	(54.9)	%
Total	$	692,422	100.0	%	$	840,548	100.0	%	$	(148,126)	(17.6)	%


Reconciliation of non-GAAP measure
Operating expenses and operating income from continuing	Three Months Ended June 30,				Six Months Ended June 30,
operations, excluding certain items (in thousands)	2024		2023		2024		2023
Gross profit from continuing operations, as reported	$	127,741	$	147,080	$	240,570	$	302,191
Adjustments to gross profit:
Stock-based compensation		1,056		589		1,885		972
Facility expansion, relocation costs and other		161		60		1,469		1,017
Acquisition-related costs		(57)		97		(13)		150
Non-GAAP gross profit		128,901		147,826		243,911		304,330
Non-GAAP gross margin		35.3%		35.6%		35.2%		36.2%

Operating expenses from continuing operations, as reported		114,773		117,255		226,925		232,328
Adjustments:
Amortization of intangible assets		(6,800)		(7,075)		(13,747)		(14,137)
Stock-based compensation		(10,328)		(7,348)		(20,504)		(13,766)
Acquisition-related costs		(1,934)		(1,165)		(3,200)		(2,043)
Restructuring, asset impairments, and other charges		(625)		(3,154)		(870)		(4,197)
Non-GAAP operating expenses		95,086		98,513		188,604		198,185
Non-GAAP operating income	$	33,815	$	49,313	$	55,307	$	106,145
Non-GAAP operating margin		9.3%		11.9%		8.0%		12.6%


Reconciliation of non-GAAP measure
Income from continuing operations, excluding certain items	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share amounts)	2024		2023		2024		2023
Income from continuing operations, less non-controlling interest, net of income tax	$	15,604	$	27,455	$	21,391	$	59,207
Adjustments:
Amortization of intangible assets		6,800		7,075		13,747		14,137
Acquisition-related costs		1,877		1,262		3,187		2,193
Facility expansion, relocation costs, and other		161		60		1,469		1,017
Restructuring, asset impairments, and other charges		625		3,154		870		4,197
Unrealized foreign currency loss (gain)		(1,545)		(2,266)		(3,302)		(1,213)
Tax effect of non-GAAP adjustments, including certain discrete tax benefits		(498)		(1,051)		(1,120)		(2,172)
Non-GAAP income, net of income tax, excluding stock-based compensation		23,024		35,689		36,242		77,366
Stock-based compensation, net of tax		8,993		6,191		17,687		11,495
Non-GAAP income, net of income tax	$	32,017	$	41,880	$	53,929	$	88,861
Non-GAAP diluted earnings per share	$	0.85	$	1.11	$	1.43	$	2.35

Exhibit		Incorporated by Reference
Number	Description	Form	File No.	Exhibit	Filing Date

3.1	Amended and Restated Certificate of Incorporation of Advanced Energy Industries, Inc.	8-K	000-26966	3.1	May 1, 2024

3.2	Third Amended and Restated By-Laws of Advanced Energy Industries, Inc.	8-K	000-26966	3.2	May 1, 2024

31.1	Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				Filed herewith

31.2	Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.				Filed herewith

32.1	Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				Filed herewith

32.2	Certification of the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				Filed herewith

101.INS	Inline XBRL Instance Document (The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)				Filed herewith

101.SCH	Inline XBRL Taxonomy Extension Schema Document.				Filed herewith

101.CAL	Inline XBRL Taxonomy Extension Calculation Link base Document.				Filed herewith

101.DEF	Inline XBRL Taxonomy Extension Definition Link base Document.				Filed herewith

101.LAB	Inline XBRL Taxonomy Extension Label Link base Document.				Filed herewith

101.PRE	Inline XBRL Taxonomy Extension Presentation Link base Document.				Filed herewith

104	Cover Page Interactive Data File (Formatted in Inline XBRL and contained in Exhibit 101)				Filed herewith


		ADVANCED ENERGY INDUSTRIES, INC.

Dated:	July 30, 2024	/s/ Paul Oldham
		Paul Oldham
		Chief Financial Officer and Executive Vice President

		/s/ Bernard R. Colpitts, Jr.
		Bernard R. Colpitts, Jr.
		Chief Accounting Officer and Controller


	/s/ Stephen D. Kelley
	Stephen D. Kelley
	Chief Executive Officer


	/s/ Paul Oldham
	Paul Oldham
	Chief Financial Officer & Executive Vice President