Advanced Energy Industries Decides Against Making Offer for XP Power

By Tamara Parker • Tuesday, June 18 15:17 • Permanent Link

Advanced Energy Industries, Inc. (NASDAQ: AEIS) has confirmed that it does not intend to make an offer for the shares of XP Power Limited (LSE: XPP). The possible offer, at 1950p per share, captured the potential of future market recovery while factoring in near and intermediate-term market and operational risks facing XP Power as a standalone company. This decision not to make a firm offer for XP Power is consistent with Advanced Energy’s commitment to financial discipline by targeting acquisitions that would generate a required return above its cost of capital.

In terms of financial performance, Advanced Energy reported a revenue of $370.3 million for the first quarter of 2024, representing a 6.1% increase from the prior quarter and a 23.4% increase from the same period last year. Gross margin also improved to 39.6%, compared to 38.3% in the prior quarter and 38.7% in the first quarter of the previous year.

Moreover, the company's operating income for the first quarter of 2024 was $60.4 million, reflecting a significant increase from $44.6 million in the prior quarter and $35.7 million in the first quarter of 2023. This resulted in an operating margin of 16.3%, up from 13.1% in the prior quarter and 13.2% in the first quarter of the previous year.

Additionally, Advanced Energy's net income for the first quarter of 2024 was $52.5 million, compared to $36.7 million in the prior quarter and $28.7 million in the first quarter of 2023. Earnings per share also showed improvement, reaching $1.31 compared to $0.91 in the prior quarter and $0.72 in the first quarter of the previous year.

In terms of cash flow, the company generated $70.4 million in cash from operations, representing a significant increase from $32.6 million in the prior quarter and $46.8 million in the first quarter of 2023. This strong cash generation allowed the company to repurchase approximately 1.3 million shares of its common stock for $100 million during the first quarter of 2024.

Today the company's shares have moved -0.2% to a price of $108.78. For more information, read the company's full 8-K submission here.

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