For more information, contact:

Richard Beck Advanced Energy Industries, Inc. 970.407.6204 dick.beck@aei.com

Cathy Kawakami Advanced Energy Industries, Inc. 970.407.6732 cathi.kawakami@aei.com

Advanced Energy Reports 2001 Third Quarter Results

FORT COLLINS, Colo., October 11, 2001—Advanced Energy Industries, Inc. (Nasdaq: AEIS) today reported financial results for the third quarter and nine-month period ended September 30, 2001. Advanced Energy is an industry-leading provider of critical technology solutions for the manufacture of semiconductors, data storage products, and flat panel displays.

 

For the third quarter, revenues were $38.7 million, down 60 percent compared to $96.3 million in the third quarter of 2000, and down 16 percent compared to revenues of $46.2 million in the second quarter of 2001.

Actual net loss for the third quarter of 2001 was $7.5 million, or $0.24 per diluted share, including a pretax charge of $1.2 million related to a technology investment. Excluding this charge, net loss for the third quarter of 2001 was $6.7 million or $0.21 per diluted share. This compares to actual net income of $16.3 million for the third quarter of 2000, or $0.50 per diluted share, and pro forma net income of $16.5 million, or $0.51 per diluted share for the third quarter of 2000. The company’s gross margin was 28.5 percent in the third quarter of 2001, primarily due to the lower revenue base.

“Our third quarter 2001 revenue is in line with the revenue forecast range we provided on August 15th. As expected, we continued to experience order cancellations and pushouts throughout the quarter from our OEM customers as their customers decreased capital spending plans. We did not experience any delays as a result of the tragedy on September 11th. We are currently reviewing further cost reductions company-wide as we continue to reposition the company to operate efficiently at this lower level of order activity,” said Doug Schatz, chairman and chief executive officer.

“Our ongoing commitment to product development enables us to continue our technological leadership, and further our market share lead. Third quarter design win activity includes products from all of our strategic business units. Our EMCO division’s mass flow meter, part of the Mach OneÔ product family, has been classified as a standard option for a key product line at a major OEM customer, representing a major milestone for EMCO’s semiconductor application opportunity,” said Mr. Schatz.

For the 2001 nine-month period, revenues were $159.6 million compared with $257.0 million for the first nine months of 2000. Gross profit for the 2001 nine-month period was $50.0 million, or 31.4 percent, a decrease compared with $125.9 million or 49.0 percent for the 2000 nine-month period.

Actual net loss for the 2001 nine-month period was $16.9 million, or $.53 per diluted share, compared with actual net income of $40.6 million, or $1.25 per diluted share, for the nine-month period ended September 30, 2000.

The company anticipates further decreases in orders in the current quarter and expects revenues in the $28 million to $33 million range in the fourth quarter of 2001.

Third Quarter Conference Call
Management will host a conference call today, Thursday, October 11, 2001 at 5:00 pm Eastern time to discuss the third quarter financial results. You may access this conference call by dialing 800-982-3472. International callers, please dial 703-871-3022. For a replay of this teleconference, please call 703-925-2533, passcode 5488332. The replay will be available through Thursday, October 18, 2001. There will also be a webcast available at www.advanced-energy.com.

About Advanced Energy
Advanced Energy is a global leader in the development, marketing, and support of technology solutions that are central in the manufacture of semiconductors, data storage products, and flat panel displays. Original equipment manufacturers (OEMs) and end-users around the world depend on AE products when plasma-based technology plays a vital role in their manufacturing process. AE offers a comprehensive suite of products for vacuum process systems, including power management, temperature sensing, dynamic temperature control, gas delivery management, process monitoring a