Advanced Energy to Wind Down Solar Inverter Business to Focus on Precision Power Business
30 June 2015 - 6:30AM
FORT COLLINS, Colo., June 29, 2015 (GLOBE
NEWSWIRE) -- Advanced Energy Industries, Inc. (NASDAQ:AEIS), a
leader in precision power conversion, today announced that it has
made a strategic decision to focus solely on its Precision Power
business and wind down its Solar Inverter business, which is
operated under AE Solar Energy Inc., AEI Power GmbH and their
subsidiaries.
"Following on the heels of a strong 2014 and first
quarter 2015 in Precision Power that reinforced the strength of our
business model, and after an extensive strategic process over the
last six months, we concluded that focusing solely on our Precision
Power business, and exiting the Solar Inverter business aligns with
our long-term goal of maximizing value for our shareholders," said
Yuval Wasserman, President and CEO of Advanced Energy.
Advanced Energy expects to record a pre-tax charge
of approximately $260 million to $290 million related to the wind
down of the Solar Inverter business operations, the majority of
which will be recorded in the second quarter of 2015. Of this write
down, approximately $150 million relates to the impairment of
goodwill and intangibles, $45 million to $75 million to the write
down of inventory, fixed and other assets, $15 million for employee
termination cost, $10 million for tax valuation allowances and the
remaining $40 million for other costs to exit the
business. Cash costs for severance and other expenses related
to this decision are expected to range from $30 million to $45
million of which we expect $20 million to $30 million will be in
2015 with the remainder in subsequent years. These costs will be
recorded as impairment and restructuring charges on the company's
income statement. The company plans to fund the cash costs through
internally generated funds.
Over the past six months the company has engaged
in a rigorous process exploring and evaluating various strategic
alternatives for the Solar Inverter business, including a potential
sale, joint venture, partnership, spin-off, licensing and other
alternatives. To date, strategic discussions with third parties
regarding the sale of the entire business have not provided
sufficient value and terms that were in the best interest of our
shareholders, customers, employees and partners. Therefore,
the company has made the decision to wind down the Solar Inverter
business.
The company anticipates an orderly wind down of
the Solar Inverter business, with AE Solar Energy Inc., AEI Power
GmbH and their subsidiaries supporting their customers, the
installed base and fulfilling customer purchase orders on hand.
About Advanced
Energy
Advanced Energy (Nasdaq:AEIS) is a global
leader in innovative power and control technologies for
high-growth, precision power conversion solutions. Advanced
Energy is headquartered in Fort Collins, Colorado, with
dedicated support and service locations around the world. For more
information, go to www.advanced-energy.com.
Please refer to the Form 8-K regarding this
release furnished today to the Securities and Exchange
Commission.
Forward-Looking
Statements
The company's statements regarding the anticipated
financial impact of the wind down of the Solar Inverter business
and other statements that are not historical information 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 forward-looking statements include statements
which may be preceded by the words "plan," "will," "expect,"
"anticipate" or similar words. Risks and uncertainties that
could cause or contribute to such differences include, but are not
limited to: (a) potential decreases in customer orders and sales
and disruptions in operations, supplier relationships and employee
relations given the decision to wind down the Solar Inverter
business, (b) the company's ability to identify and execute upon a
sale of the assets (if any) of the Solar Inverter business,
(c) unanticipated developments that may prevent or delay wind
down or sale activities, (d) the quarter-end financial close
process which may result in material adjustments from our
expectations stated in this press release, (e) other facts we
discover that would require us to record additional charges that
may be materially different from our expectations stated in the
press release, (f) the company's ability to realize on its plan to
avoid costs as it winds down the Solar Inverter business, (g) the
accuracy of the company's estimates and assumptions on which its
financial statement projections are based, including estimates and
assumptions related to the wind down of the Solar Inverter
business, (h) the effects of global macroeconomic conditions upon
demand for our products; (i) the impact of price changes
resulting from a variety of factors; (j) the timing of orders
received from customers; (k) the company's ability to realize
benefits from cost improvement efforts including avoided costs,
restructuring plans and inorganic growth; (l) the company's
ability to obtain materials and manufacture products; and (m)
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 www.sec.gov.
Copies may also be obtained from Advanced Energy's website at
www.advancedenergy.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. The company is not updating
guidance previously provided. The Solar Inverter business is solely
operated by and under AE Solar Energy Inc., AEI Power GmbH and
their subsidiaries.
CONTACT: Annie Leschin
Advanced Energy Industries, Inc.
970.407.6555
ir@aei.com
Tom Liguori, EVP & CFO
Advanced Energy Industries, Inc.
970.407.6570
tom.liguori@aei.com
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Advanced Energy Industries, Inc. via
Globenewswire
HUG#1932709
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