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TheStreet Open House

Advanced Energy Industries' CEO Presents At Citi Technology Conference (Transcript)

The three pillars of our three year strategy as we presented last year are margin expansion, revenue growth, and cash utilization. In the margin expansion, we have done a tremendous job so far taking cost out of the operation. We have restructured the company to be profitable comfortably during the downturns of the cycle. We have now transitioned into the next phase of cost reduction as we go from reduction in operating expenses into reduction of the cost of goods. That will be in the next phase and we have visibility to do about $15 million to $20 million cost reduction that will come from that effort of cost of goods.

We focus on revenue growth in both the years as we continue to both invest in R&D to develop the products in each of the markets we serve, but also expand geographically and increase the geographical areas we serve and I’ll talk about that in a minute. Our cash utilization, we effectively utilized the cash of the company as was demonstrated already by the share buyback we have completed, Danny will talk about that later, as well as investing in our self, invested in the company, in our growth and expansion globally.

Our factory in Shenzhen, China is one of the key enablers for us to continue to drive efficiencies, to drive cost. This is an award winning factory that has a tremendous quality capabilities, very flexible operation and very effective cycle time. We have implemented recently demand flow technology and mixed line manufacturing in Shenzhen in this factory, which effectively allows to continue to drive efficiency, reducing cost down, reducing of inventories and continuously managing the cycles of our business effectively.

This factory is also a place where we have started moving sub-components of our solar inverter business from their final assembly in test manufacturing site into these factory which will allow us to utilize the assets we have, the tools and methodologies we have developed, to reduce cost and better manage our capital.

Read the rest of this transcript for free on seekingalpha.com

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