For more information, contact:

Mike El-Hillow
Advanced Energy Industries, Inc.
Cathy Kawakami
Advanced Energy Industries, Inc.

Advanced Energy Reports Third Quarter 2003 Results

FORT COLLINS, Colo., Oct. 16—Advanced Energy (Nasdaq: AEIS) today reported financial results for the third quarter ended September 30, 2003.

Revenue for the third quarter of 2003 decreased 3 percent to $68.6 million, compared to third quarter 2002 revenue of $70.7 million. Revenue for the third quarter of 2003 increased 9 percent compared to second quarter 2003 revenue of $62.9 million.

Net loss for the third quarter of 2003 was $27.4 million or $0.85 per share including pre-tax charges of $2.2 million related to restructuring charges and an intangible asset impairment, and a non-cash charge of $22.4 million related to the Company's net deferred tax asset. The third quarter 2003 net loss compares to the third quarter 2002 net loss of $5.6 million or $0.17 per share, and the second quarter 2003 net loss of $5.8 million or $0.18 per share.

Sales for the nine months ended September 30, 2003 were $187.7 million compared to $181.5 million for the first nine months of 2002. Net loss for the 2003 nine-month period was $41.8 million, or $1.30 per share, compared to a net loss of $19.4 million, or $0.61 per share for the 2002 nine-month period.

Doug Schatz, chairman, president and chief executive officer, said, "The third quarter results met our expectations for moderate sequential improvement based on improving order trends and share gains in several end markets. Sales to the flat panel display, data storage and architectural glass markets all posted double-digit growth sequentially. Our technology lead is being validated across our end markets through continued design wins and share gains in both our power and flow product lines.

"We are continuing to see modestly improving industry conditions. However, based on the fact that the fourth quarter will include industry-wide shutdowns, including three weeks at AE, we anticipate a fourth quarter sales level similar to that of the third quarter," said Mr. Schatz.

Based on information currently available, the Company expects fourth quarter revenues to be relatively flat compared to the third quarter of 2003, and a loss per share range of $0.14 to $0.16, which assumes no tax benefit from the loss.

Third Quarter 2003 Conference Call

Management will host a conference call today, Thursday, October 16, 2003 at 5:00 pm Eastern time to discuss the financial results. You may access this conference call by dialing 888-713-4717. International callers may access the call by dialing 706-679-7720. For a replay of this teleconference, please call 706-645-9291, code 8360203. The replay will be available through Thursday, October 23, 2003. There will also be a webcast available at .

About Advanced Energy

Advanced Energy is a global leader in the development and support of technologies critical to high-technology manufacturing processes used in the production of semiconductors, flat panel displays, data storage products, compact discs, digital video discs, architectural glass, and other advanced product applications.

Leveraging a diverse product portfolio and technology leadership, AE creates solutions that maximize process impact, improve productivity and lower cost of ownership for its customers. This portfolio includes a comprehensive line of technology solutions in power, flow, thermal management, plasma and ion beam sources, and integrated process monitoring and control for original equipment manufacturers (OEMs) and end-users around the world.

AE operates in regional centers in North America, Asia and Europe and offers global sales and support through direct offices, representatives and distributors. Founded in 1981, AE is a publicly held company traded on the Nasdaq National Market under the symbol AEIS. For more information, please visit our corporate website: .

Safe Harbor Statement

This press release contains certain forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, the volatility and cyclicality of the semiconductor and semiconductor capital equipment industries, the timing of orders received from our customers, our ability to execute on the cost reduction initiatives currently underway, and other risks described in Advanced Energy's Form 10-K, Forms 10-Q as well as other reports and statements, as filed with the Securities and Exchange Commission. These reports and statements are available on the SEC's website at . Copies may also be obtained by contacting Advanced Energy's investor relations at 970-407-6732. The company assumes no obligation to update the information in this press release.

(in thousands, except per share data)

Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002

Sales $68,567 $70,674 $187,671 $181,454
Cost of sales 45,474 44,074 126,355 117,168
Gross profit 23,093 26,600 61,316 64,286

Operating expenses:
Research and development 12,979 12,185 38,897 36,020
Sales and marketing 7,329 9,738 23,920 25,201
General and administrative 6,340 7,245 17,487 21,073
Restructuring charges 1,011 3,220 3,288 3,220
Impairment of intangible
assets 1,175 -- 1,175 --
Litigation damages -- -- -- 5,313
Total operating expenses 28,834 32,388 84,767 90,827

Loss from operations (5,741) (5,788) (23,451) (26,541)

Other (expense) income, net (2,261) (2,797) (7,351) (3,370)
Loss before income taxes (8,002) (8,585) (30,802) (29,911)
(Provision) benefit for income
taxes (19,436) 3,005 (11,000) 10,469
Net loss $(27,438) $(5,580) $(41,802) $(19,442)

Basic and diluted net loss per
share $(0.85) $(0.17) $(1.30) $(0.61)

Basic and diluted weighted-average
common shares outstanding 32,286 32,073 32,217 31,994

(in thousands)

September 30, December 31,
2003 2002


Current Assets:
Cash and cash equivalents $33,004 $70,188
Marketable securities 103,376 102,159
Accounts receivable 53,967 43,885
Income tax receivable 14,089 14,720
Inventories 58,579 57,306
Other current assets 6,727 6,828
Deferred income tax assets, net -- 17,510
Total current assets 269,742 312,596

Property and equipment, net 43,426 41,178

Deposits and other 5,451 5,181
Goodwill and intangibles, net 87,051 86,601
Deferred debt issuance costs 3,266 4,091
Demonstration and customer service
equipment, net 4,250 6,086
Total assets $413,186 $455,733


Current Liabilities:
Trade accounts payable $21,023 $16,055
Other current liabilities 28,975 31,064
Current portion of capital
leases and senior borrowings 12,882 15,197
Accrued interest payable on
convertible subordinated notes 1,810 2,338
Total current liabilities 64,690 64,654

Long-term Liabilities:
Capital leases and senior
borrowings 7,506 10,665
Other long-term liabilities 697 694
Deferred income tax liability, net 3,777 8,663
Convertible subordinated notes
payable 187,718 187,718
Total long-term liabilities 199,698 207,740

Total liabilities 264,388 272,394

Stockholders' equity 148,798 183,339
Total liabilities and stockholders'
equity $413,186 $455,733

(in thousands)

Nine Months Ended September 30,
2003 2002

OPERATING ACTIVITIES (19,507) (20,173)



IN CASH AND CASH 1,132 1,553

EQUIVALENTS (37,184) 5,298
period 70,188 81,955
CASH AND EQUIVALENTS, end of period $33,004 $87,253