Advanced Energy starts new round of restructuring after REFUsol acquisition

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Advanced Energy Industries (AE) has started another round of restructuring aimed at taking advantage of the ‘fabless’ business model offered by recently acquired PV inverter company REFUsol.

The company said its reorganisation would include facility consolidation and further manufacturing centralisation.

AE's recent €59 million acquisition of REFUsol was said by the company to have allowed it to take advantage of additional cost saving opportunities of between US$18 to US$20 million annually, including approximately US$14 million of cash savings.

However, AE said that its second quarter restructuring charge would be approximately US$23 to US$26 million, of which US$20 to US$23 million would be non-cash in nature. AE said that charges associated with the restructuring over the next nine months would be in the range of US$30 to US$35 million, of which US$22 to US$27 million will be non-cash in nature.

AE has already reduced its manufacturing footprint in the US to increase gross margins by handling certain elements of central inverter manufacturing in China.

Further details of the manufacturing consolidation were not disclosed in a statement.

First quarter results

AE also announced first quarter 2013 financial results, generating PV segment sales of US$50.0 million, a decrease of 16.1% from US$59.6 million in the fourth quarter of 2012. The drop in sales was said to be due to first quarter seasonality but also revenue from commercial applications was slower than anticipated due to some financing and permitting delays.

The company guided total second quarter sales of US$132 million to US$145 million.

“We began 2013 with a sound first quarter,” said Garry Rogerson, CEO. “Having successfully established a highly efficient global distribution model, with localised R&D and streamlined manufacturing, we have laid the foundation for future growth. The recent acquisition of REFUsol positions our Solar Energy business for significant growth over the next two years by enhancing our product line, applications and geographic reach. While we expect this acquisition to be accretive in the next 12 months, we anticipate it to negatively impact earnings over the next six months. Together with the improving outlook for our Thin Films business, we are poised to achieve our aspirational goals.”

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