ADVANCED ENERGY INDUSTRIES INC
For the period ended Mar 31, 2025. Filed Apr 30, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 30, 2025
AEIS$197.01+6.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001558370-24-013949
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0001558370-25-005998
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 98 current paragraphs.
41 unchanged; 25 reworded; 30 added; 33 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 57 previous and 33 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
We continue to execute our previously announced manufacturing consolidation plan which includes the shutdown of our Zhongshan, China manufacturing site to be completed in 2025 and a focus on the introduction and launch of our new product initiatives. Additionally, we are monitoring tariffs announced by the U.S. government and the impact of any additional tariffs or other trade policy measures on our supply chain or to our customers. While the tariff impact was not material to our results in the first quarter of 2025, the effects could be material in future periods based on further tariff or other policy measures, retaliatory responses by other countries to the U.S. tariff announcements, or any related macroeconomic effects that could impact our product demand.
Current report
End Markets Summary and Trends
Current report
Advanced Energy generates revenue from the sale of a broad range of advanced and system power products and services to global original equipment manufacturers (“OEMs”) and end customers. Our customers select our products based on various performance metrics such as high power conversion efficiency, high power density, and low noise emission, as well as our ability to tailor our solutions to meet the unique requirements of their critical applications. The future growth and demand for our products is driven by a combination of factors within each of the end markets we serve, as follows:
Current report
The Semiconductor Equipment market supports and enables the long-term growing need for more production capacity and new process technologies to meet expanding demand for semiconductor devices across many applications driven by megatrends such as artificial intelligence (“AI”), energy efficiency, automobile electrification, and Internet of things (“IoT”).
Current report
Our portfolio of power conversion and related products includes plasma power, high-voltage power, system power, and adjacent sensing solutions. Our plasma power solutions are used to create plasma-based etch and deposition processes. Our semiconductor market products are incorporated into a wide range of applications, including dry etch and strip, deposition, ion implant, inspection and metrology, thermal, epitaxy, and back-end test and packaging.
Current report
The Semiconductor Equipment market continued to be driven by pockets of strength as growing demand for leading-edge devices in logic and memory used in AI applications offset headwinds in trailing-edge, U.S. export restrictions to China, and the potential impact of tariffs on the macroeconomic environment. We expect these trends to continue into 2025.
Current report
The Industrial and Medical market is fueled by continued investment in complex manufacturing processes, increased adoption of new industrial technologies such as automation and clean energy, and increased breadth and precision requirements of medical devices and life science equipment.
Current report
We supply this market with critical, precision power conversion products that deliver precise and highly reliable, low noise and/or differentiated power. In addition, our sensing, control, and instrumentation products complement our power solutions. Our products are used in a wide variety of applications, such as advanced material fabrication, medical devices, analytical instrumentation, test and measurement equipment, robotics, industrial production, and large-scale connected light-emitting diode lighting applications.
Current report
The Industrial and Medical market has been going through a downturn that started in mid-2023 driven by weakening end demand due to macroeconomic conditions and customer rebalancing elevated inventories as a result of supply chain disruptions in the prior years. These factors continued into the first quarter of 2025, but we believe growth will gradually return to this market as customer inventories approach normalized levels, potentially offset by the impact of tariffs on the macroeconomic environment.
Current report
The Data Center Computing market is driven by shifts from traditional enterprise, on-premise computing to cloud computing, as well as the rapid growth of AI and related investments. The accelerated pace of next generation AI processors has increased the power requirements for AI-based servers and racks, accelerated the transition to high-power 48 volt power shelf infrastructure, and increased the importance of high power efficiency, density, and reliability for server rack power solutions.
Current report
Our products are designed into data center server and storage systems and also used by cloud service providers and their partners in their custom designed server racks and power shelves.
Current report
Revenue in the Data Center Computing market was weak in the first quarter of 2024 driven by reduced investments by our hyperscale customers, but demand rebounded in the remainder of 2024 driven by accelerated investments in AI applications. In addition, customers started to ramp new generations of high-power solutions driven by AI requirements. These trends continued into the first quarter of 2025 and should support strong demand for the next few quarters.
Current report
Demand in the Telecommunication and Networking market is driven by adoption of more advanced mobile standards, such as 5G technologies, networking investments by telecommunication service providers, enterprises upgrading their communication networks, and data centers investing in their networks for AI-driven increased bandwidth.
Current report
We serve this market by providing application-specific AC-DC and DC-DC power conversion products to many leading OEMs of wireless infrastructure equipment and computer networking equipment.
Current report
End demand in the Telecom and Networking market weakened during 2024 but reached a stable level exiting the year. The market remained stable in the first quarter of 2025, and we expect current market conditions to continue for several quarters.
Current report
The increase in Semiconductor Equipment revenue was primarily due to a continued cyclical recovery and strong demand for platforms used in leading-edge process tools.
Current report
The decrease in Industrial and Medical revenue was primarily due to lower demand as a result of timing of programs and ongoing customer inventory rebalancing.
Current report
The increase in Data Center Computing revenue was due to increased hyperscale investments in new, AI-driven platforms and growth associated with design wins secured in 2024.
Current report
The modest decrease in Telecom and Networking revenue reflected the current market environment.
Current report
The increase in gross profit was largely due to increase in revenue and manufacturing cost improvements. Gross margin improved mainly due to the impact of higher volume, and approximately 170 basis points resulting from manufacturing cost reduction programs.
Current report
The increase in selling, general, and administrative expense was mainly due to professional services related to facility, infrastructure, and other transition costs.
Current report
On July 29, 2024, we approved actions in furtherance of our manufacturing consolidation initiatives intended to optimize our manufacturing footprint and cost structure, including the closure of our Zhongshan, China manufacturing facility (the “2024 Plan”).
Current report
We experienced a decrease in interest income on lower cash balances as a result of using cash on hand to fully prepay our Term Loan in September 2024, which also resulted in the lower interest expense.
Current report
As of March 31, 2025, certain countries in which the Company operates have implemented or are in the process of implementing the Pillar II minimum global effective tax rate regime as put forth by the Organization for Economic Cooperation and Development (“OECD”). As countries continue to make revisions to their legislation and release additional guidance with respect to the global minimum tax, we continue to determine any potential impact in the countries in which we operate. The impact of these changes may have a material impact on our cash tax expense and tax rate.
Current report
Share Repurchases
Current report
During the three months ended March 31, 2025, we paid $0.5 million and accrued an additional $0.4 million to repurchase 9,636 shares of our common stock at an average share price of $94.26. During the period from April 1, 2025 through April 29, 2025, we paid a total of $22.7 million to repurchase 0.3 million shares of our common stock at an average price per share of $83.78.
Current report
Net cash used in investing activities for the three months ended March 31, 2025 was $15.1 million primarily due to $13.9 million in purchases of property and equipment, which was largely driven by investments in our manufacturing footprint and capacity, and $1.2 million in purchases of investments.
Current report
Net cash used in investing activities for the three months ended March 31, 2024 was $18.7 million primarily due to $16.6 million in purchases of property and equipment, which was largely driven by investments in our manufacturing footprint and capacity, and $2.1 million in purchases of investments.
Current report
Net cash used in financing activities for the three months ended March 31, 2025 was $13.4 million and included $3.8 million for dividend payments; $0.5 million for repurchase of common stock; and $9.1 million in net payments related to stock-based award activities.
Current report
Net cash used in financing activities for the three months ended March 31, 2024 was $14.1 million and included $5.0 million for repayment of long-term debt; $3.8 million for dividend payments; and $5.3 million in net payments related to stock-based award activities.
Removed paragraphs (33)
Previous report
Airity Acquisition
Previous report
On June 20, 2024, we acquired Airity Technologies, Inc. (“Airity”), which is based in Redwood City, California. This acquisition adds high voltage power conversion technologies and products, which broadens our range of targeted applications within our Semiconductor Equipment and Industrial and Medical markets. SeeNote 2. Acquisitionsin Part I, Item 1 “Unaudited Consolidated Financial Statements.”
Previous report
2024 Restructuring Plan
Previous report
In July 2024, we approved further manufacturing consolidation initiatives, including the previously announced closure of our Zhongshan, China facility. In connection with the 2024 Plan, we recorded a $28.5 million charge primarily associated with expected employment-related charges and facility exit costs. We expect to incur $1.0 million to $2.0 million in additional charges related to our announced actions and continue to evaluate our operations and cost structure, which could result in incremental restructuring charges in future periods. For additional information, seeNote 11. Restructuring, Asset Impairments, and Other Chargesin Part I, Item 1 “Unaudited Consolidated Financial Statements.”
Previous report
Credit Agreement Amendment
Previous report
On September 9, 2024, we used existing cash on hand to prepay the full $345.0 million outstanding principal balance under our Term Loan Facility. As of September 30, 2024, our only outstanding debt is the Convertible Notes due in 2028. On the same date, we entered into an additional amendment to the Credit Agreement to increase the capacity on the Revolving Facility from $200.0 million to $600.0 million. SeeNote 16. Long-Term Debt in Part I, Item 1 “Unaudited Consolidated Financial Statements” for additional information.
Previous report
End Markets Summary
Previous report
The demand environment in each of our markets is impacted by macroeconomic conditions, various market trends, customer buying patterns, design wins, and other factors. Although we are currently experiencing a lower demand environment in certain markets, we continue to believe that the long-term market growth drivers support our long-term strategy, research and development efforts, and capital investments. However, in the short-term it is unclear how certain macroeconomic conditions, including the effect of higher interest rates impacting end customers’ capital investment, the timing of inventory digestion, and customer buying patterns, will affect customer demand and our revenue.
Previous report
The Semiconductor Equipment market is slowly recovering from a cyclical downturn, which began in the fourth quarter of 2022. Since the market bottomed in 2023, demand had modestly recovered in the first nine months of 2024, but a number of external factors continued to limit the market, including unfavorable macroeconomic conditions, prolonged weak demand for consumer electronics, low fab utilization, and U.S. export restrictions to China.
Previous report
We continue to believe the long-term growth drivers will support cyclical growth for this market as more manufacturing capacity is needed to support increasing demand for semiconductor devices and related capital equipment.
Previous report
Beginning in the second half of 2023, the impact of weaker macroeconomic conditions started to impact demand for our products in the Industrial and Medical Market. In addition, in the first nine months of 2024, elevated inventory levels of our products following the supply chain crisis and extended lead times resulted in high levels of inventory rebalancing by our customers. We expect these factors will continue to limit our revenue levels in the near term, but we believe the long-term growth drivers will enable growth to return to this market after end markets recover and our customer inventories return to normal levels.
Previous report
The Data Center Computing Market experienced weak demand starting in the first quarter of 2023 and continued until the first quarter of 2024, driven by reduced investments of our hyperscale customers, lower demand for Enterprise systems and the timing impact of large customer orders on our revenues. Starting in the second quarter of 2024, demand rebounded from both our hyperscale and enterprise customers, driven by accelerated investments in artificial intelligence and improved demand in the traditional server market, which we expect to continue for several quarters.
Previous report
Starting in 2023, leading companies in both the telecom and networking markets reported weakening demand. However, improved supply of critical components in 2023 drove higher customer orders and more than offset weakening market conditions, which continued in 2024. As end demand softens and customers rebalance their elevated inventory levels of our products, demand for our products declined meaningfully in the first nine months of 2024, which we expect to continue for several quarters.
Previous report
Total revenues in the three month period decreased from the same period in the prior year due to customer inventory rebalancing, resulting in lower demand in our Industrial and Medical and Telecom and Networking markets. This offset a modest revenue recovery in the Semiconductor Equipment market from the trough level a year ago and a demand recovery in the Data Center Computing market.
Previous report
Total revenues in the nine month period decreased from the same periods in the prior year due primarily to customer inventory rebalancing, resulting in lower demand in our Industrial and Medical and Telecom and Networking markets. The Semiconductor Equipment market modestly recovered from the cyclical trough in 2023, and revenue in the Data Center Computing market was impacted by weak demand in the first quarter followed by a rebound beginning in the second and third quarter driven by investments in artificial intelligence.
Previous report
The increase in Semiconductor Equipment revenue for the three month period was primarily due to improved demand for our products compared to the same period in the prior year. The revenue for the nine month period modestly increased from the cyclical trough in 2023.
Previous report
The decrease in Industrial and Medical revenues for both the three and nine month periods was primarily due to lower demand and customers working down their elevated inventories compared to a record year in 2023 and shortened lead times following the supply chain crisis.
Previous report
The increase in Data Center Computing revenue for the three and nine month periods was due to increased hyperscale investments mostly driven by artificial intelligence adoption, and, to a lesser degree, a recovery in demand for traditional enterprise servers.
Previous report
The decrease in Telecom and Networking revenues for both the three and nine month periods was due to the prior year benefit of improved supply of critical components. This enabled fulfillment of outstanding orders in 2023, which did not continue in 2024. In addition, we experienced a slow demand environment and inventory rebalancing from our customers, which we expect to continue.
Previous report
For both the three and nine month periods, the decrease in gross profit was largely due to the decline in revenue and higher operating costs based on investments made in 2023. Gross margin declined in both periods due to the decline in volume, which drove manufacturing utilization lower. This was partially offset by more favorable product mix, savings realized from our restructuring programs, and lower premiums paid for scarce parts.
Previous report
Selling, general, and administrative expense remained constant due to actions taken to control costs, including headcount reduction and lower variable employee compensation, partially offset by higher stock-based compensation cost.
Previous report
2024 Plan
Previous report
In July 2024, we approved further manufacturing consolidation initiatives, including the previously announced closure of our Zhongshan, China facility. In connection with the 2024 Plan, we recorded a $28.5 million charge primarily associated with expected employment-related charges and facility exit costs. We expect to incur $1.0 million to $2.0 million in additional charges related to our announced actions and continue to evaluate our operations and cost structure, which could result in incremental restructuring charges in future periods.
Previous report
We experienced an increase in interest income on higher cash balances, due in part to proceeds from the issuance of the Convertible Notes in the third quarter of 2023, our ability to concentrate cash in investment accounts, and higher short term market interest rates.
Previous report
Interest expense increased due to interest associated with the Convertible Notes and a higher interest rate on the portion of our Term Loan Facility subject to a variable interest rate. We prepaid in full the Term Loan Facility on September 9, 2024, and the interest rate swap contracts expired on September 10, 2024. Should we have future borrowings under our Term Loan Facility or Revolving Facility, those borrowings would be subject to a variable rate.
Previous report
The previously announced Zhongshan, China factory closure impacted our effective tax rate in both the three and nine months ended September 30, 2024. For the nine months ended September 30, 2024, our effective tax rate was higher than the same period in the prior year due to smaller beneficial discrete items in the current period relative to the larger beneficial discrete items in the prior period.
Previous report
As of January 1, 2024, the Pillar II minimum global effective tax rate of 15% enacted by the Organization for Economic Cooperation and Development (“OECD”) was effectuated. More than 140 countries agreed to enact the Pillar II global minimum tax. However, the timing of the implementation for each country varies. To date, we have determined that there was an immaterial global minimum tax liability as a result of Pillar II, as certain tax jurisdictions either will not have Pillar II enacted until after December 31, 2024 or satisfied the safe harbor test to prevent any minimum tax under Pillar II. We continue to monitor the jurisdictions for any changes and include any appropriate minimum tax throughout the year.
Previous report
On September 9, 2024, we used existing cash on hand to prepay the full $345.0 million outstanding principal balance under our Term Loan Facility. On the same date, we entered into an additional amendment to the Credit Agreement to increase the capacity on the Revolving Facility from $200.0 million to $600.0 million.
Previous report
SeeNote 16. Long-Term Debt in Part I, Item 1 “Unaudited Consolidated Financial Statements” for additional information.
Previous report
Net cash used in investing activities for the nine months ended September 30, 2024 was $60.5 million, primarily driven by the following:
Previous report
Net cash used in investing activities for the nine months ended September 30, 2023 was $50.2 million, primarily driven by the following:
Previous report
Net cash used in financing activities for the nine months ended September 30, 2024 was $374.4 million and included the following:
Previous report
Net cash from financing activities for the nine months ended September 30, 2023 was $454.2 million and included the following:
Reworded paragraphs (25)
Previous wording
This Quarterly Report on Form 10-Q (this “report”) contains, in addition to historical information, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements in this report that are not historical information are forward-looking statements. For example, statements relating to our beliefs, expectations, and plans are forward-looking statements, as are statements that certain actions, conditions, events, or circumstances will continue. The inclusion of words such as “anticipate,” “expect,” “estimate,” “can,” “may,” “might,” “continue,” “enable,” “plan,” “intend,” “should,” “could,” “would,” “will,” “likely,” “potential,” “believe,” and similar expressions and the negative versions thereof indicate forward-looking statements; however, not all forward-looking statements may contain such words or expressions. These forward-looking statements are based upon information available as of the date of this report and management’s current estimates, forecasts, and assumptions. Although we believe that our expectations reflected in or suggested by these forward-looking statements are reasonable, we may not achieve the results, performance, plans, or objectives expressed or implied by such forward-looking statements. Forward-looking statements involve risks and uncertainties, which are difficult to predict and many of which are beyond our control.
Current wording
This Quarterly Report on Form 10-Q (this “report”) contains, in addition to historical information, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements in this report that are not historical information are forward-looking statements. For example, statements relating to our beliefs, expectations, and plans are forward-looking statements, as are statements that certain actions, conditions, events, or circumstances will continue. The inclusion of words such as “anticipate,” “expect,” “estimate,” “can,” “may,” “might,” “continue,” “enable,” “plan,” “intend,” “should,” “could,” “would,” “will,” “likely,” “potential,” “believe,” and similar expressions and the negative versions thereof indicate forward-looking statements; however, not all forward-looking statements may contain such words or expressions.
Previous wording
Actual results could differ materially and adversely from those expressed in any forward-looking statements, and readers are cautioned not to place undue reliance on forward-looking statements. Factors that could contribute to these differences or prove our forward-looking statements, by hindsight, to be overly optimistic or unachievable include, but are not limited to, the risks and uncertainties listed above and described in Part I, Item 1A in the 2023 Form 10-K. We assume no obligation to update any forward-looking statement or provide the reasons why our actual results might differ.
Current wording
These risks and uncertainties could cause actual results to differ materially and adversely from those expressed in any forward-looking statements, and readers are cautioned not to place undue reliance on forward-looking statements. We assume no obligation to update any forward-looking statements.
Previous wording
Our precision power products and solutions are designed to enable new process technologies, improve productivity, lower the cost of ownership, and provide critical power capabilities for our customers. These products are designed to meet our customers’ demanding requirements in efficiency, flexibility, performance, and reliability. We also provide repair and maintenance services for our products.
Current wording
Our precision power products and solutions are designed to enable new process technologies, improve productivity, lower the cost of ownership, and provide critical power capabilities for our customers.
Previous wording
Our plasma power products offer solutions to enable innovation in complex semiconductor and thin film plasma processes such as dry etch and deposition. Our broad portfolio of high and low voltage power products is used in a wide range of applications, such as semiconductor equipment, industrial production, medical and life science equipment, data center computing, networking, and telecommunications. We also supply related sensing, controls, and instrumentation products primarily for advanced measurement and calibration of power and temperature for multiple industrial markets.
Current wording
Our plasma power products enable innovation in complex semiconductor and thin film plasma processes such as dry etch and deposition. Our broad portfolio of high and low voltage power products is used in a wide range of applications, such as semiconductor equipment, industrial production, medical and life science equipment, data center computing, networking, and telecommunications.
Previous wording
The following table sets forth certain data derived from our Consolidated Statements of Operations (in thousands):
Current wording
The following table sets forth certain data derived from our Consolidated Statements of Operations:
Previous wording
The following tables summarize net sales and percentages of net sales, by markets (in thousands):
Current wording
The following tables summarize net sales and percentages of net sales by markets:
Previous wording
The following table summarizes our operating expenses (in thousands) and as a percentage of revenue:
Current wording
The following table summarizes our operating expenses and as a percentage of revenue:
Previous wording
During the three and nine month periods we experienced an increase in R&D related to higher stock-based compensation expense as well as higher program and materials cost compared to the same periods in the prior year. This was partially offset by lower variable compensation cost.
Current wording
The increase in R&D was related to higher compensation costs, including stock-based compensation and higher program and materials costs compared to the same period in the prior year.
Previous wording
Amortization expense remained constant. We acquired new intangible assets in the Airity acquisition, but this was offset by certain other intangible assets reaching the end of their estimated useful life.
Current wording
Amortization expense declined primarily due to certain intangible assets reaching the end of their estimated useful life. This was partially offset by new intangible assets acquired in the Airity Acquisition in June 2024.
Previous wording
For additional information about this and prior year restructuring plans, seeNote 11. Restructuring, Asset Impairments, and Other Chargesin Part I, Item 1 “Unaudited Consolidated Financial Statements.”
Current wording
For additional information about this and prior year restructuring plans, seeNote 10. Restructuring, Asset Impairments, and Other Chargesin Part I, Item 1 “Unaudited Consolidated Financial Statements.”
Previous wording
Other income (expense), net consists primarily of foreign exchange gains and losses and other miscellaneous items. We had unrealized foreign exchange losses during the three and nine months ended September 30, 2024 compared to unrealized gains in the same periods in the prior year. Additionally, during the three months ended September 30, 2024, we incurred costs associated with foreign currency translation adjustments related to liquidated foreign operations and debt discount and fees associated with our Term Loan Facility prepayment. There were no such costs during the same periods in the prior year.
Current wording
Other income (expense), net consists primarily of foreign exchange gains and losses and other miscellaneous items. We had unrealized foreign exchange losses during the current period compared to unrealized gains in the same period in the prior year.
Previous wording
SeeNote 16. Long-Term Debt in Part I, Item 1 “Unaudited Consolidated Financial Statements” for information regarding our debt.
Current wording
SeeNote 15. Long-Term Debt in Part I, Item 1 “Unaudited Consolidated Financial Statements” for information regarding our debt.
Previous wording
The following table summarizes tax provision (benefit) (in thousands) and the effective tax rate for our income from continuing operations:
Current wording
The following table summarizes tax provision and the effective tax rate for our income from continuing operations:
Previous wording
Our effective tax rates differ from the U.S. federal statutory rate of 21% primarily due to the benefit of earnings in foreign jurisdictions which are subject to lower tax rates, as well as tax credits, partially offset by net U.S. tax on foreign operations.
Current wording
Our effective tax rates differ from the U.S. federal statutory rate of 21% primarily due to the benefit of earnings in foreign jurisdictions which are subject to lower tax rates, as well as tax credits, partially offset by net U.S. tax on foreign operations. The effective tax rate for 2025 was lower than the same period in 2024 primarily due to a more favorable mix of earnings.
Previous wording
Management uses non-GAAP operating income and non-GAAP earnings per share (“EPS”) to evaluate business performance without the impacts of certain non-cash charges and other charges which are not part of our usual operations. We use these non-GAAP measures to assess performance against business objectives and make business decisions, including developing budgets and forecasting future periods. In addition, management’s incentive plans include these non-GAAP measures as criteria for achievements. These non-GAAP measures are not prepared in accordance with U.S. GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. However, we believe these non-GAAP measures provide additional information that enables readers to evaluate our business from the perspective of management. The presentation of this additional information should not be considered a substitute for results prepared in accordance with U.S. GAAP.
Current wording
Management uses non-GAAP net income, non-GAAP operating income, and non-GAAP earnings per share (EPS”) to evaluate business performance without the impacts of certain non-cash charges and other charges which are not part of our usual operations. We use these non-GAAP measures to assess performance against business objectives, and make business decisions, including developing budgets and forecasting future periods. In addition, management’s incentive plans include certain of these non-GAAP measures as criteria for achievements. These non-GAAP measures are not prepared in accordance with U.S. GAAP and may differ from non-GAAP methods of accounting and reporting used by other companies. However, we believe these non-GAAP measures provide additional information that enables readers to evaluate our business from the perspective of management. The presentation of this additional information should not be considered a substitute for results prepared in accordance with U.S. GAAP.
Previous wording
The non-GAAP results presented below exclude the impact of non-cash related charges, such as stock-based compensation, amortization of intangible assets, and long-term unrealized foreign exchange gains and losses. In addition, we exclude discontinued operations and other non-recurring items such as acquisition-related costs, facility expansion and related costs, and restructuring expenses, as they are not indicative of future performance. The tax effect of our non-GAAP adjustments represents the anticipated annual tax rate applied to each non-GAAP adjustment after consideration of their respective book and tax treatments.
Current wording
The non-GAAP results presented below exclude the impact of non-cash related charges, such as stock-based compensation, amortization of intangible assets, and long-term unrealized foreign exchange gains and losses. In addition, we exclude discontinued operations and other items such as acquisition-related costs, facility, infrastructure, and other transition costs, and restructuring expenses, as they are not indicative of future performance. The tax effect of our non-GAAP adjustments represents the anticipated annual tax rate applied to each non-GAAP adjustment after consideration of their respective book and tax treatments.
Previous wording
Adequate liquidity and cash generation is important to the execution of our strategic initiatives. Our ability to fund our operations, acquisitions, capital expenditures, and product development efforts may depend on our ability to generate cash from operating activities, which is subject to future operating performance, as well as general economic, financial, competitive, legislative, regulatory, and other conditions, some of which may be beyond our control. Our primary sources of liquidity continue to be our available cash, cash generated from operations, and available borrowing capacity under the Revolving Facility (defined inNote 16. Long-Term Debt in Part I, Item 1 “Unaudited Consolidated Financial Statements”).
Current wording
Adequate liquidity and cash generation are important to the execution of our strategic initiatives. Our ability to fund our operations, acquisitions, capital expenditures, and product development efforts may depend on our ability to generate cash from operating activities, which is subject to future operating performance, as well as general economic, financial, competitive, legislative, regulatory, and other conditions, some of which may be beyond our control. Our primary sources of liquidity continue to be our available cash, cash generated from operations, and available borrowing capacity under the Revolving Facility (defined inNote 15. Long-Term Debt in Part I, Item 1 “Unaudited Consolidated Financial Statements”).
Previous wording
As of September 30, 2024, our cash and cash equivalents totaled $657.3 million, while our available funding under our Revolving Facility was $600.0 million. Additionally, we generated $50.3 million of cash flow from continuing operations in the nine months ended September 30, 2024. We believe our sources of liquidity will be adequate to meet anticipated debt service, share repurchase programs, and dividends. During the ordinary course of business, we evaluate our cash requirements and, if necessary, adjust our expenditures to reflect the current market conditions and our projected revenue and demand. Our capital expenditures are primarily directed towards manufacturing and operations and can materially influence our available cash for other initiatives.
Current wording
As of March 31, 2025, our cash and cash equivalents totaled $723.0 million, while our available funding under our Revolving Facility was $600.0 million. Additionally, we generated $29.2 million of cash flow from continuing operations in the three months ended March 31, 2025. We believe our sources of liquidity will be adequate to meet operational needs, including capital expenditures, as well as anticipated debt service, share repurchase programs, dividends, and strategic investments.
Previous wording
As of September 30, 2024, our only outstanding debt is the $575.0 million Convertible Notes, which mature on September 15, 2028 and carry a 2.5% interest rate.
Current wording
As of March 31, 2025, our only outstanding debt is the $575.0 million Convertible Notes, which mature on September 15, 2028 and carry a 2.5% interest rate. Should we have future borrowings under our Term Loan Facility or Revolving Facility, those borrowings would be subject to a variable rate.
Previous wording
In addition to the available capacity on the Revolving Facility, prior to the maturity date of our Credit Agreement, we may request an increase to the financing commitments in either the Term Loan Facility or Revolving Facility by an aggregate amount not to exceed $250.0 million. Any requested increase is subject to lender approval.
Current wording
As of March 31, 2025, no amounts were outstanding under the Revolving Facility, and we had $600.0 million in available funding. In addition to the available capacity on the Revolving Facility, prior to the maturity date of our Credit Agreement, we may request an increase to the financing commitments in either the Term Loan Facility or Revolving Facility by an aggregate amount not to exceed $250.0 million. Any requested increase is subject to lender approval.
Previous wording
For more information seeNote 16. Long-Term Debt in Part I, Item 1 “Unaudited Consolidated Financial Statements.”
Current wording
For more information seeNote 15. Long-Term Debt in Part I, Item 1 “Unaudited Consolidated Financial Statements.”
Previous wording
During the nine months ended September 30, 2024, we paid quarterly cash dividends of $0.10 per share, totaling $11.5 million. We currently anticipate that a cash dividend of $0.10 per share will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on our financial condition, results of operations, capital requirements, business conditions, and other factors.
Current wording
During the three months ended March 31, 2025, we paid quarterly cash dividends of $0.10 per share, totaling $3.8 million. We currently anticipate that a cash dividend of $0.10 per share will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of our Board and will depend on our financial condition, results of operations, capital requirements, business conditions, and other factors.
Previous wording
A summary of our cash from operating, investing, and financing activities is as follows (in thousands):
Current wording
A summary of our cash from operating, investing, and financing activities is as follows:
Previous wording
Net cash from operating activities from continuing operations for the nine months ended September 30, 2024 was $50.3 million, as compared to $128.2 million for the same period in the prior year. This $77.9 million decrease was primarily due to lower net income from continuing operations. Additionally, during the current year, we had a significant use of cash for inventories due to a strategic inventory buildup as well as lower cash flow from accounts receivable as a result of a decline in revenue. In addition, we had unfavorable changes in accounts payable, accrued expenses, and other liabilities.
Current wording
Net cash from operating activities from continuing operations for the three months ended March 31, 2025 was $29.2 million, as compared to $8.0 million for the same period in the prior year. This $21.2 million increase was primarily due to higher net income from continuing operations. Additionally, we had favorable changes in inventories, accounts payable, accrued expenses, and other liabilities. This was partially offset by an increase in accounts receivable.
Previous wording
During the nine months ended September 30, 2024, foreign currency translation had a minimal impact on cash. See “Foreign Currency Exchange Rate Risk” in Part I, Item 3 for more information**.**
Current wording
During the three months ended March 31, 2025, foreign currency translation had a minimal impact on cash. See “Foreign Currency Exchange Rate Risk” in Part I, Item 3 for more information**.**
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
These forward-looking statements are based upon information available as of the date of this report and management’s current estimates, forecasts, and assumptions. Although we believe that our expectations reflected in or suggested by these forward-looking statements are reasonable, we may not achieve the results, performance, plans, or objectives expressed or implied by such forward-looking statements. Forward-looking statements involve risks and uncertainties, which are difficult to predict and many of which are beyond our control.
Current report — wording carried from elsewhere
During the ordinary course of business, we evaluate our cash requirements and, if necessary, adjust our expenditures to reflect the current market conditions and our projected revenue and demand. Our capital expenditures are primarily directed towards manufacturing and operations and can materially influence our available cash for other initiatives. In addition, we may seek additional debt or equity financing from time to time; however, such additional financing may not be available on acceptable terms, if at all.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
In addition, we may seek additional debt or equity financing from time to time; however, such additional financing may not be available on acceptable terms, if at all.
Previous report — wording carried elsewhere
The interest rate swap contracts previously entered into related to the Term Loan Facility expired on September 10, 2024. Should we have future borrowings under our Term Loan Facility or Revolving Facility, those borrowings would be subject to a variable rate.
Previous report — wording carried elsewhere
As of September 30, 2024, no amounts were outstanding under the Revolving Facility, and we had $600.0 million in available funding.