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• Revenue of $117.5 million
• Non-GAAP EPS of $0.20 per diluted share
• Generated $25 million in cash

FORT COLLINS, Colo., October 29, 2012—Advanced Energy Industries, Inc. (Nasdaq:AEIS) today announced financial results for the third quarter ended September 30, 2012. The company posted third quarter sales of $117.5 million compared to $115.7 million in the second quarter of 2012 and $128.5 million in the third quarter of 2011. Income from continuing operations was $5.7 million or $0.15 per diluted share. On a non-GAAP basis, income from continuing operations was $7.6 million or $0.20 per diluted share. The non-GAAP measures exclude a $3.0 million restructuring charge taken in the third quarter. A reconciliation of non-GAAP income from continuing operations and earnings per share is provided in the tables below. The company ended the quarter with $173.7 million in cash and marketable securities, having generated $24.7 million of cash during the quarter.

"The record performance of our Solar Energy business unit bolstered our results this quarter, driving higher sequential sales and profitability, and balancing out the cyclicality of our Thin Films business," said Garry Rogerson, CEO. "The third quarter marked the one-year anniversary of the implementation of our strategic plan to reduce our cost structure, position us to grow revenues and more effectively utilize our cash. This quarter's results demonstrate the significant progress we have made. Our new financial model gives us the ability to profitably weather the peaks and troughs of our revenue."

Thin Films Business Unit

Thin Films sales decreased 12% to $56.8 million in the third quarter of 2012 from $64.8 million in the second quarter of 2012, primarily driven by capital spending reductions in the semiconductor market, and ongoing oversupply in the solar panel market. Thin Films sales declined 26% from $76.8 million in the third quarter of 2011.

Solar Energy Business Unit                                                                                        

Solar Energy sales were $60.7 million in the third quarter of 2012, an increase of 20% from $50.8 million in the second quarter of 2012. Solar Energy sales increased 17% from $51.7 million in the third quarter of 2011 as large scale commercial and utility deployments and growing demand in North America continued to fuel growth.

Income from Continuing Operations

Income from continuing operations for the third quarter was $5.7 million or $0.15 per diluted share, compared to income from continuing operations of $8.8 million or $0.22 per diluted share in the second quarter of 2012 and $7.2 million or $0.16 per diluted share in the same period last year. On a non-GAAP basis, excluding the impact of the $3.0 million restructuring charge, income from continuing operations was $7.6 million or $0.20 per diluted share, up from $7.3 million or $0.18 per diluted share in the second quarter of 2012.

Restructuring Charge

The company incurred a $3.0 million charge this quarter related to the restructuring plan that was announced on September 28, 2011. During the quarter the company completed the transfer of manufacturing of certain solar inverter subcomponents to its Shenzhen, China factory.

The remainder of the restructuring plan is expected to be implemented over the next 3 months as the company further reduces its cost structure by consolidating certain facilities and centralizing other activities. As a result, the company anticipates further charges in the amount of $1 to $2 million, principally for consolidating locations, and another $1 million in additional severance costs over this timeframe. Once complete, the restructuring plan, along with other cost savings initiatives and margin improvements, is currently expected to deliver annual savings in excess of $30 million, well ahead of our original plan. 

Fourth Quarter 2012 Guidance                                                                                   

The company anticipates fourth quarter 2012 results from continuing operations to be within the following ranges:

• Sales of $105 million to $115 million
• Non-GAAP per share earnings of $0.13 to $0.18

Third Quarter 2012 Conference Call

Management will host a conference call tomorrow, Tuesday, October 30, 2012, at 8:30 a.m. Eastern Time to discuss Advanced Energy's financial results. Domestic callers may access this conference call by dialing 888-713-4216. International callers may access the call by dialing 617-213-4868. Participants will need to provide conference pass code 30390582. For a replay of this teleconference, please call 888-286-8010 or 617-801-6888, and enter the pass code 20587244. The replay will be available for two weeks following the conference call. A webcast will also be available on the Investor Relations web page at http://ir.advanced-energy.com.

About Advanced Energy

Advanced Energy (Nasdaq:AEIS) is a global leader in innovative power and control technologies for high-growth, thin-film manufacturing and solar-power generation. 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. 

This release includes GAAP and non-GAAP operating income and per share earnings data. These non-GAAP measures are not in accordance with, or an alternative for, similar measures calculated under generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Advanced Energy believes that these non-GAAP measures provide useful information to management and investors regarding financial and business trends relating to its financial condition and results of operations. Additionally, the company believes that these non-GAAP measures, in combination with its financial results calculated in accordance with GAAP, provides investors with additional perspective. While some of these excluded items may be incurred and reflected in the company's GAAP financial results in the foreseeable future, the company believes that the items excluded from certain non-GAAP measures do not accurately reflect the underlying performance of its continuing operations for the period in which they are incurred. The use of non-GAAP measures has limitations in that they do not reflect all of the amounts associated with its results of operations as determined in accordance with GAAP and these measures should only be used to evaluate the company's results of operations in conjunction with the corresponding GAAP measures.

For additional information on the items excluded from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.

Forward-Looking Statements

The company's expectations with respect to guidance to financial results for the fourth quarter ending December 31, 2012, anticipated cost savings and restructuring activities 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 risks and uncertainties include, but are not limited to: the effects of global macroeconomic conditions upon demand for our products, the volatility and cyclicality of the industries the company serves, particularly the semiconductor industry, the continuation of RPS (renewable portfolio standards), the timing and availability of incentives and grant programs in North America and Europe related to the renewable energy market, renewable energy project delays resulting from solar panel price declines and increased competition in the solar inverter equipment market, the timing of orders received from customers, the company's ability to realize benefits from cost improvement efforts and any restructuring plans, the ability to obtain materials and manufacture products, 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 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.