Advanced Energy Industries

Advanced Energy Industries has spent more than three decades perfecting power—enabling design breakthroughs and driving growth for leading semiconductor and industrial customers. Their precision power and control technologies, along with their applications know-how, have created close partnerships and perpetual innovation in thin-film and industrial manufacturing.

Founded in 1981, Advanced Energy has built a diversified and global business, delivering advanced power and control technologies to customers across a broad range of industries. The AE team, deployed throughout North America, Europe, and Asia, provides technical expertise and responsive and agile power solutions for thin-film and industrial manufacturing.
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​Advanced Energy Industries, Inc. designs, manufactures, sells, and supports power conversion and control products that transform power into various usable forms. It offers process power systems, including direct current (DC), pulsed DC, low frequency, high voltage, and radio frequency (RF) power supplies, as well as matching networks and remote plasma sources for reactive gas applications and RF instrumentation. The company also provides power control modules and thermal instrumentation products for rapid thermal processing, chemical vapor deposition, crystal growing, and other semiconductor and solar applications, as well as in chemical processing, glass manufacturing, and other general industrial power applications; and high voltage products for various applications, including semiconductor wafer processing and metrology, scientific instrumentation, mass spectrometry, industrial printing, and analytical x-ray systems. In addition, it offers repair, conversions, upgrades, and refurbishments services. The company markets and sells its products through direct sales force, independent sales representatives, and distributors in the United States, Europe, and Asia. Advanced Energy Industries, Inc. was founded in 1981 and is headquartered in Fort Collins, Colorado.
(Summary) (Company) (Chart)

21 January 2018
Price $77.53
1yr Target $89.50
Analysts 6
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 15.43%
Yield 0.00%
1yr Tot Return 15.43%

P/E 15.15
PEG 0.32
Beta 1.26

EPS (ttm) $5.12
EPS next yr $4.97
Forward P/E 15.62
EPS next 5yr 47.40%
1yr Price Support $235.57

Market Cap $3.08 Bil
Revenues $627.10 Mil
Earnings $205.50 Mil
Profit Margin 32.76%

Quick Ratio 5.10
Current Ratio 5.90
Debt/Equity 0.00

1yr RevGR 16.60%
3yr RevGR 6.96%
5yr RevGR -1.32%

1yr EarnGR ---
3yr EarnGR ---
5yr EarnGR 30.81%

1yr DivGR ---
3yr DivGR ---
5yr DivGR ---

ROA 32.80%
ROE 45.50%

Overview

Advanced Energy provides highly-engineered, mission-critical, precision power conversion, measurement and control solutions to global customers. They design, manufacture, sell and support power conversion products and solutions that transform power into various usable forms in various applications ranging from manufacturing and industrial processes to instrumentation and test and measurement. The market for power conversion solutions is large with hundreds of suppliers and subsystem/component manufacturers. AEIS focuses on highly-engineered products that solve their customers’ toughest mission-critical applications.

The Company's process power products enable manufacturing processes that use thin films for various products, such as semiconductor devices, flat panel displays, thin film renewables, hard and industrial coatings and architectural glass. They also supply power control modules for controlling thermal processes, and thermal instrumentation products for advanced temperature measurement, both of which provide solutions for semiconductor, thin film industrial, and heavy industry. Remote plasma sources are used in the thin films processing industries and in gas abatement applications. The Compay's high voltage products offer unique power solutions for semiconductor, analytical instrumentation, industrial x-ray, and medical imaging applications. Their network of global service support centers provides revenue as we offer repair services, conversions, upgrades, and refurbishments to companies using our products.

In 2014, in connection with broadening product offerings, the Compay acquired all of the outstanding common stock of HiTek Power Group and UltraVolt, Inc., which offer a comprehensive portfolio of high voltage and custom built power conversion products. These products target applications including semiconductor wafer processing and metrology, scientific instrumentation, mass spectrometry, industrial printing and analytical x-ray systems for industrial and analytical applications, as well as high voltage power supplies and modules ranging from benchtop and rack mount systems to microsize printed circuit board mount modules.

In 2014 the Company also acquired the intellectual property from AEG Power Solutions' Power Control Modules which is comprised of the Thyro-Family of products and accessories and has applications in different industries ranging from materials' thermal processing through chemical processing, glass manufacturing and numerous other general industrial power applications.

​Products and Services

The Company's products are designed to enable new process technologies, improve productivity, and lower the cost of ownership for our customers. They also provide repair and maintenance services for all of their products.

In 2014, AEIS changed their organizational structure from two business units (formerly known as the Thin Films Business Unit and the Solar Energy Business Unit) to a single functional organization with various product lines organized as reportable segments, Precision Power and Inverters. 

​AEIS principally serves OEMs and end customers in the semiconductor, flat panel display, high voltage, solar panel, and other industrial capital equipment markets. The Company's products are used in diverse markets, applications, and processes including the manufacture of capital equipment for semiconductor devices, thin film applications for thin film renewables and architectural glass, and for other thin film applications including flat panel displays, and industrial coatings. These markets can be cyclical in nature. Therefore, demand for products and the financial results can change as demand for manufacturing equipment and repair and maintenance services change in response to consumer demand. Other factors, such as global economic and market conditions and technological advances in fabrication processes and renewable applications can also have an impact on our financial results, both positively and negatively. 

The process power systems include direct current, pulsed DC, low frequency, high voltage, and radio frequency power supplies, matching networks, remote plasma sources for reactive gas applications and RF instrumentation. These power conversion systems refine, modify, and control the raw electrical power from a utility and convert it into power that may be customized and is predictable and repeatable.

The power control modules and thermal instrumentation products are used in the semiconductor industry, including adjacent thin film applications for solar PV and light emitting diode industries, and heavy industries, for thermal control and temperature measurement solutions for applications in which time-temperature cycles affect material properties, productivity, and yield. These products are used in rapid thermal processing, chemical vapor deposition, crystal growing, and other semiconductor and solar applications requiring non-contact temperature measurement. They are also used in chemical processing, glass manufacturing and numerous other general industrial power applications.

The high voltage products are designed to meet the demanding requirements of original equipment manufacturers worldwide. Their high voltage power solutions and custom built power conversion products offer high frequency, high voltage topology, providing wide input and output operating ranges while retaining excellent stability and efficiencies ranging from benchtop and rackmount systems to microsize printed circuit board mount modules. The products target applications including semiconductor wafer processing and metrology, scientific instrumentation, mass spectrometry, industrial printing and analytical x-ray systems for industrial and analytical applications.

The global support services group offers in-warranty and out-of-warranty repair services in the regions in which the Company operates, providing AEIS with preventive maintenance opportunities. Our customers continue to pursue low cost of ownership of their capital equipment and are increasingly sensitive to the significant costs of system downtime. They expect that suppliers offer comprehensive local repair service and customer support. To meet these market requirements, AEIS maintains a worldwide support organization comprising of both direct and indirect activities through partnership with local distributors primarily in the United States, China, Japan, South Korea, Taiwan, Germany, and Great Britain. 

​Markets

The Company's products compete in markets for high tech manufacturing capital equipment and renewable energy production. These markets are not generally subject to seasonality; however, they are cyclical due to sudden changes in customers’ manufacturing capacity requirements and spending, which depend in part on capacity utilization, demand for customers’ products, inventory levels relative to demand, government incentives and subsidies, and access to affordable capital. 

SEMICONDUCTOR CAPITAL EQUIPMENT

Customers in the semiconductor capital equipment market incorporate our products into equipment that make integrated circuits. The Company's power conversion systems provide the energy to enable thin film processes, such as deposition and etch, and high voltage applications such as ion implant, wafer inspection and metrology.

The thermal instrumentation products measure the temperature of the processed substrate or the process chamber. The remote plasma sources deliver ionized gases for reactive chemical processes used in cleaning, surface treatment, and gas abatement. Precise control over the energy delivered to plasma-based processes enables the production of integrated circuits with reduced feature sizes and increased speed and performance.

INDUSTRIAL POWER

Customers in the industrial capital equipment market incorporate industrial process power and specialty power products into a wide variety of equipment used in applications such as thin films, advanced material fabrication, analytical instrumentation and industrial x-ray.

In the thin film equipment market, the Company's products are used in the manufacturing of products such as flat panel displays, architectural glass, solar PV panels, and similar thin film coating including consumer products, hard, decorative, and optical coating. The thermal specialty power products are used in applications including metal alloy/ceramic fabrication and treatment, glass manufacturing, industrial furnace and chemical processing application. The high voltage specialty power products are used in applications including scanning electron microscopy, medical equipment, and analytical instrumentation applications such as x-ray, mass spectroscopy.

GLOBAL SUPPORT

The Company's network of global service support centers provides local repair and field service capability in key regions as well as provides upgrades and refurbishment services, and sales of used equipment to businesses that use our products.

Customers

Products are sold worldwide to approximately 200 OEMs and integrators and directly to more than 1,500 end users. The Company's ten largest customers accounted for approximately 67.7% of sales in 2016, 61.2% of sales in 2015, and 59.7% of sales in 2014. AEIS expects that the sale of products to their largest customers will continue to account for a significant percentage of our sales for the foreseeable future.

Applied Materials Inc., the Company's largest customer, accounted for 35.2% of sales in 2016, 29.8% of sales in 2015, and 29.8% of sales in 2014. Lam Research accounted for 20.7% of sales in 2016, 20.3% of sales in 2015, and 19.9% of sales in 2014. No other customer accounted for greater than 10% of sales in 2016, 2015, or 2014. 

​My Assessment

I believe this is a rock solid company that's about one week past the optimal buy price of around $70. But it's not too late to get into it and the probability of success has probably increased since it just moved above it's 200 day moving average. I think this stock is easily headed toward $90 per share and could easily hit triple digits in the next 12 months for a nearly 30% return. Obviously any pullback toward that $70 entry this week would make this an even sweeter deal. I expect to pick up shares of this company as funds become available with the intent of holding for at least $100 per share and more.