FORT COLLINS, Colo., July 23 /EMWNews/ -- Advanced Energy

Industries, Inc. (Nasdaq: AEIS) today announced financial results for the

second quarter ended June 30, 2008. Sales of $88.0 million were driven by a

36% sequential increase in sales to non-semiconductor markets, which

reached 48% of our total sales. Sales to the solar market led the way,

topping 14% of total sales for the quarter, while service revenues also hit

a record high. Total second quarter sales declined 1% versus the first

quarter of 2008, and declined 14.6% from $103.0 million in the second

quarter of 2007, both due to the continued weakness in the semiconductor

capital equipment market. Our book to bill ratio for the quarter was strong

at 1.05:1.



    Gross margin for the second quarter was 40.1% versus 43.6% in the

second quarter of 2007 due to lower sales and the related overhead

absorption. Sequentially, gross margins were fractionally down from 40.3%

in the first quarter of 2008.



    Net income for the second quarter of 2008 was $5.9 million, or $0.14

per diluted share, as cost reduction efforts controlled our operating

expenses, compared to $11.7 million, or $0.25 per diluted share in the

second quarter of 2007. Net income decreased sequentially from $6.0 million

in the first quarter of 2008, but earnings per diluted share for the second

quarter of 2008 were slightly higher due to shares repurchased during the

quarter.



    "We executed on our diversification strategy, growing non-semiconductor

revenue to record levels this quarter. Sales in each of our major

non-semiconductor markets demonstrated strong growth, and demand for our

products in the solar market reached its highest level yet," said Dr. Hans

Betz, president and chief executive officer of Advanced Energy. "Further,

we believe our ability to address these emerging markets will serve us well

as we develop new applications for our technology and navigate through this

cycle in the semiconductor market."



    Third Quarter 2008 Guidance



    The Company anticipates third quarter 2008 results to be within the

following ranges:






    -- Sales of $82 million to $88 million.

    -- Earnings per share of $0.07 to $0.12



    Second Quarter 2008 Conference Call



    Management will host a conference call today, Wednesday, July 23, 2008

at 5:00 pm Eastern Daylight Time to discuss Advanced Energy's financial

results. Domestic callers may access this conference call by dialing

877-627-6511 and International callers may access the call by dialing

719-325-4916. Participants will need to provide the conference passcode

9067934. For a replay of this teleconference, please call 888-203-1112, or

719-457-0820 and enter the passcode 9067934. The replay will be available

through 12:00 a.m. Eastern Daylight Time, July 25, 2008. A webcast will

also be available on the Investor Relations webpage at

http://ir.advanced-energy.com.

    About Advanced Energy



    Advanced Energy(R) develops innovative power and control technologies

that enable high-growth, plasma thin-film manufacturing processes

worldwide, including semiconductors, flat panel displays, data storage

products, solar cells, architectural glass, and other advanced product

applications. Advanced Energy(R) also develops grid connect inverters for

the solar energy market.



    The Company's expectations with respect to financial results for the

third quarter of 2008 are forward-looking statements within the meaning of

Section 27A of the Securities Act of 1933 and Section 21E of the Securities

Exchange Act of 1934. Forward-looking statements are subject to known and

unknown risks and uncertainties that could cause actual results to differ

materially from those expressed or implied by such statements. Such risks

and uncertainties include, but are not limited to: the volatility and

cyclicality of the industries the company serves, particularly the

semi-conductor industry, the timing of orders received from customers, the

company's ability to realize cost improvement benefits from the global

operations initiatives underway, and unanticipated changes to management's

estimates, reserves or allowances. These and other risks are described in

Advanced Energy's Form 10-K, Forms 10-Q and other reports and statements

filed with the Securities and Exchange Commission. These reports and

statements are available on the SEC's website at http://www.sec.gov. Copies

may also be obtained from Advanced Energy's website at

http://www.advanced-energy.com or by contacting Advanced Energy's investor

relations at 970-407-6555. Forward-looking statements are made and based on

information available to the company on the date of this press release. The

company assumes no obligation to update the information in this press

release.










    CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

    (in thousands, except per share data)



                                     Three Months Ended     Six Months Ended

                                    June 30,      March 31,      June 30,

                                 2008      2007     2008      2008      2007



    Sales                      $87,996  $103,049  $88,887  $176,883  $210,372

    Cost of sales               52,720    58,094   53,039   105,759   117,108

    Gross profit                35,276    44,955   35,848    71,124    93,264



    Operating expenses:

         Research and

          development           13,762    12,911   13,085    26,847    24,946

         Selling, general and

          administrative        13,955    15,414   14,468    28,423    30,632

         Amortization of

          intangible assets        226       202      240       466       526

         Restructuring charges     393       158      674     1,067     2,950

              Total operating

               expenses         28,336    28,685   28,467    56,803    59,054



    Income from operations       6,940    16,270    7,381    14,321    34,210



    Other income, net              996     1,505      905     1,901     3,059

    Income from continuing

     operations before income

     taxes                       7,936    17,775    8,286    16,222    37,269

    Provision for income taxes  (2,073)   (6,108)  (2,320)   (4,393)  (12,931)



    Net income                  $5,863   $11,667   $5,966   $11,829   $24,338



    Basic earnings per share     $0.14     $0.26    $0.13     $0.27     $0.54



    Diluted earnings per share   $0.14     $0.25    $0.13     $0.27     $0.53



    Basic weighted-average

     common shares outstanding  41,869    45,161   44,662    43,265    45,051



    Diluted weighted-average

     common shares outstanding  42,290    45,992   45,065    43,686    45,834







    CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

    (in thousands)



                                                  June 30,        December 31,

                                                    2008             2007

    ASSETS



    Current assets:

         Cash and cash equivalents                $106,178           $94,588

         Marketable securities                      33,556           110,676

         Accounts receivable, net                   61,301            64,188

         Inventories, net                           48,431            50,532

         Deferred income taxes                      15,243            23,696

         Other current assets                        4,485             4,289

    Total current assets                           269,194           347,969



    Property and equipment, net                     30,434            30,912



    Long-term investments                           36,002             1,483

    Deposits and other                               5,831             5,562

    Goodwill and intangibles, net                   70,160            67,768

    Customer service equipment, net                  1,069             1,236

    Deferred income tax assets, net                 15,629             4,098



    Total assets                                  $428,319          $459,028





    LIABILITIES AND STOCKHOLDERS' EQUITY



    Current liabilities:

         Trade accounts payable                    $13,364           $12,424

         Other accrued expenses                     27,836            29,590

    Total current liabilities                       41,200            42,014



    Long-term liabilities                            9,611             9,953



    Total liabilities                               50,811            51,967



    Stockholders' equity                           377,508           407,061

    Total liabilities and stockholders'

     equity                                       $428,319          $459,028