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Advanced Energy Moves To Loss In First Quarter

Lower revenue, goodwill impairment charges, and restructing charges hurt the company's earnings.

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Advanced Energy Industries


reported on April 23, 2009 that it swung to a loss during Q1 FY09, hurt by restructuring charges, goodwill impairment charges and lower revenue. Net loss stood at $79.76 million or $1.90 per share compared to a profit of $5.97 million or $0.13 per share in the comparable quarter last year. The latest consensus estimate was a loss of $0.45 per share.

Total sales plummeted 63.3% year-over-year to $32.63 million from $88.89 million a year ago, as the global financial crisis reduced consumer and commercial spending, resulting in limited capital expansion. Furthermore, revenue from the non-semiconductor markets, which accounted for 47.0% of the total sales, plunged 53.0% sequentially to $15.30 million, hurt by maximum decline in the solar market. Revenue from the semiconductor capital equipment market, which accounted for 29.4% of the total sales, declined 57.5% sequentially to $9.60 million, hurt by order declines. The book-to-bill ratio was at 0.87:1.00 with a backlog of $24.40 million, down from last year's backlog of $28.60 million. Approximately 60.0% or $14.70 million of this backlog is shippable in Q2 FY09.

Effective April 1, 2009, Advanced Energy reduced its global workforce by approximately 330 people, or 22.0% of total headcount, across all functional areas and geographies and lowered the compensation of management and executive officers by an additional 5.0%, thereby totaling 15.0% overall. Effective April 3, 2009, Yuval Wasserman took charge as the company's Executive Vice President and Chief Operating Officer.

Looking forward, AEIS forecasts Q2 FY09 sales between $30.00 million and $36.00 million. In addition, it projected loss in the range of $0.41 per share to $0.34 per share. Also, it anticipates gross margins to be in the range of 15.30% to 21.40%.