ARCHIVED  March 1, 1996

Advanced Energy stock dips 17%

FORT COLLINS — A turbulent semiconductor-equipment industry has helped push Advanced Energy Industries Inc.’s stock price down 17.5 percent since the company went public last fall.
The stock was issued at $10 a share but closed Friday at $8.25 a share. At one time in January, Advanced Energy’s stock had fallen to $6.62, down 33.8 percent from the original offering. It has since rebounded to the $8 to $9.50 range.
The decline comes even as Advanced Energy posts record fourth-quarter revenues and strong income.
Analysts say the company simply entered the market at the wrong time.
Advanced Energy reported revenues of $26.2 million during the fourth quarter, up 90 percent from fourth-quarter 1994 revenues of $13.7 million. Net income for the period reached $2.7 million, compared with $700,000 for the same period last year.
The company’s strong performance recently prompted two analysts to issue “buy recommendations” on the company’s stock.
Such recommendations helped the company hold its own March 2, when other semiconductor-equipment stocks took a drubbing.
Richard Beck, Advanced Energy’s chief financial officer, said semiconductor-equipment stocks were booming last July, when the company began preparations for going public.
“We had decided that it would probably be an opportune time for us to go public,” he said. That strong market continued until late October 1995, right as the company’s stock was preparing to hit the market.
Beck said 65 companies tried to go public during the same week as Advanced Energy, but only 47 of them were able to punch their offerings through as the semiconductor-equipment market went south.
“The timing wasn’t very good for the offering, as it turned out,” Beck said.
Advanced Energy originally envisioned an offering price of $13 to $15 per share but revised that downward to $11 to $13 per share. As the stock hit the market, the asking price became $10 per share. The stock price shot up briefly, rising as high as $11 in December.
Beck said the January decline to $6.62 can be attributed to an institutional investor that was unloading all its semiconductor-equipment stocks.
John Stratakos, president of ENI, a competitor of Advanced Energy based in Rochester, N.Y., said Advanced Energy’s stock was not overpriced.
“In the long run, technology stocks are the place to be, but you’re going to have to ride out a lot of vacillation in between,” he said.
One local stock analyst, who asked not to be identified, said last fall was difficult for high-tech stocks.
“That’s when technology stocks took a tumble,” the analyst said. “In my mind, when they did their offering, they came out at just the wrong time.”
But the analyst noted that Advanced Energy announced three contracts Dec. 21 worth up to $16 million, and the company’s financials remain strong.
Beck said Advanced Energy’s strategy for boosting the stock price is to continue performing well.
“We don’t like being below the offering price,” he said.
The company maintains an active investor-relations program and intends to “keep out in front of the investment community.” He said Advanced Energy soon will make presentations to the investment community in Boston and New York and will attend a high-tech investment conference in April and May. Additionally, the company will attend a major trade show in Europe this month. About 30 percent of the company’s stock is held by European investors.
Beck said it’s important that investors know Advanced Energy isn’t completely tied to the semiconductor-equipment industry. That market accounts for 60 percent of the company’s business, with 30 percent tied to data storage and the balance to other markets.
“People are beginning to have some awareness,” he said.
Advanced Energy 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.

FORT COLLINS — A turbulent semiconductor-equipment industry has helped push Advanced Energy Industries Inc.’s stock price down 17.5 percent since the company went public last fall.
The stock was issued at $10 a share but closed Friday at $8.25 a share. At one time in January, Advanced Energy’s stock had fallen to $6.62, down 33.8 percent from the original offering. It has since rebounded to the $8 to $9.50 range.
The decline comes even as Advanced Energy posts record fourth-quarter revenues and strong income.
Analysts say the company simply entered the market at the wrong time.
Advanced Energy reported…

Christopher Wood
Christopher Wood is editor and publisher of BizWest, a regional business journal covering Boulder, Broomfield, Larimer and Weld counties. Wood co-founded the Northern Colorado Business Report in 1995 and served as publisher of the Boulder County Business Report until the two publications were merged to form BizWest in 2014. From 1990 to 1995, Wood served as reporter and managing editor of the Denver Business Journal. He is a Marine Corps veteran and a graduate of the University of Colorado Boulder. He has won numerous awards from the Colorado Press Association, Society of Professional Journalists and the Alliance of Area Business Publishers.
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