Advanced Energy will go public

FORT COLLINS – Advanced Energy Industries Inc. soon will join the ranks of Northern Colorado’s public companies.

The Fort Collins-based maker of power-conversion and control systems registered with the U.S. Securities & Exchange Commission Sept. 21 to issue common stock valued at as much as $53.8 million.

That figure assumes the maximum offering price of $13 per share and issuance of the full 4.14 million shares by the company and certain stockholders. The company itself could receive closer to $26.4 million if fewer shares are issued or if the price per share is lower.

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Officers and directors of the company will be paid between $13.2 million and $15.6 million for the 1.2 million shares they hold.

Advanced Energy will be traded on the National Association of Securities Dealers Automated Quotations, or Nasdaq, exchange under the ticker symbol “AEIS.” The stock is expected to become effective in mid-November.

The registration represents the second initial public offering by a Fort Collins company in a month. Applied Computer Technology Inc. registered an offering Aug. 14.

Originally, Advanced Energy’s offering price was to be $13 to $15 per share. But Richard Beck, chief financial officer, said the underwriters lowered the price to $11 to $13 because of market conditions.

“The technology stocks that we use as comparables have been down substantially,” Beck said.

Founded in 1981 in Fort Collins, Advanced Energy’s products take electrical energy from utilities, change its frequencies and voltages and regulate it within very precise limits to power manufacturing processes for semiconductors, data-storage devices, CD-ROMs, compact discs and video discs.

The company has enjoyed explosive sales growth during the past couple of years. Sales in 1994 reached $51.9 million, a 64.2 percent increase from the $31.6 million in 1993.

During the first half of 1995, growth was even more dramatic, with sales reaching $43 million, a 72 percent increase form the first half of 1994.

Beck attributed the growth to increased demand and increased market share relevant to its competition, mainly ENI of Rochester, N.Y.

John Stratakos, president of ENI, said it’s too soon to tell what effect Advanced Energy’s public offering will have on competition between the companies, but he noted that Advanced Energy will now have ample cash reserves.

He said ENI has been ahead in one type of generator product while Advanced Energy has led in another. That is changing, though, he said.

“Through innovation, each of us has been able to erode the other’s market share,” Stratakos said.

Advanced Energy employs 476 full-time workers and another 128 part-time employees. Beck said the company recently added about 60 employees.

Advanced Energy occupies 90,000 square feet in Fort Collins and has been expanding rapidly. It added 32,000 square feet last year, and another 56,000 square feet is under construction, with occupancy slated for February 1996.

The public offering will facilitate that growth.

Up to 4.14 million shares of common stock will be offered. Of that, 2.4 million will be sold by the company, and 1.2 million by officers and directors. The underwriters, New York-based Lehman Bros. and UBS Securities Inc., have a 30-day option to purchase 540,000 more shares from the company.

Advanced Energy could earn anywhere from $26.4 million to $38.2 million from the offering, depending on the exact offering price and whether the underwriters exercise their option.

Proceeds will be used:

” To repay about $4.5 million in debts to certain stockholders.

” To pay off about $2.3 million in a revolving line of credit.

” For $6.7 million in equipment, leasehold improvements and furnishings for the new facility.

” For general corporate purposes, including working capital.

Neil Nordby, president of Nordby International Inc., a Boulder-based financial-information firm, said Advanced Energy should do well in the market.

“Anything to do with semiconductors has obviously been very white-hot for the past 12 to 18 months,” Nordby said.

Nordby, noting that Northern Colorado serves as headquarters for only five public companies, said offerings from Advanced Energy and Applied Computer reflect well on the region’s economy.

“It’s a bullish indicator when your public companies swell from five to seven,” he said.