For more information, contact:

Lawrence D. Firestone
Advanced Energy Industries, Inc.
Annie Leschin/Vanessa Lehr
Advanced Energy Industries, Inc.

Advanced Energy Announces 2008 Third Quarter Financial Results Driven by Record Solar Revenues

Fort Collins, Colo., October 22, 2008
– Advanced Energy Industries, Inc. (Nasdaq GM: AEIS) today announced financial results for the third quarter ended September 30, 2008. Sales for the third quarter of 2008 were $84.5 million, which represented a 6.6% decline from $90.5 million in the same quarter a year ago and a 4.0% decline from $88.0 million in the second quarter of 2008. The decrease was attributed mainly to weakening global economic conditions and continued challenges in the semiconductor capital equipment market. Our book to bill ratio for the quarter was 0.92:1, with an ending backlog of $48.9 million.

Despite the overall decline in revenue, sales to non-semiconductor markets grew 11% sequentially to 48% of total sales for the quarter. Non-semiconductor performance was driven by sales to the solar market, which represented 23% of total revenue, and sales to the flat panel display market, which were also strong at 11% of total sales. Service sales grew to 18% of total revenue, as customers evaluated the benefits of making near-term investments versus extending the life of their existing equipment with upgrades and maintenance during these challenging economic times.

Gross margin for the third quarter was 41.7%, up from 40.6% in the third quarter of 2007, and 40.1% in the second quarter of 2008, due principally to a more favorable product mix.

Net income for the third quarter of 2008 was $5.4 million, or $0.13 per diluted share, compared to $5.9 million, or $0.13 per diluted share, in the third quarter of 2007. Net income also decreased sequentially from $5.9 million or $0.14 per diluted share in the second quarter of 2008.

“Sales to the solar market reached their highest levels yet, and were once again key to the success of our quarterly results, aided by strength in sales to the flat panel display market and our service business. We continued to build out our non-semiconductor businesses with new products such as our recently announced 500KW Solaron inverter. The expansion of this product portfolio will allow us to penetrate larger inverter installations, including utilities and solar farms. Overall, we were pleased with our performance in the third quarter, especially in light of the particularly challenging economic environment,” said Dr. Hans Betz, president and chief executive officer of Advanced Energy. “Unfortunately, the distressed economic conditions are impacting all markets and have led us to guide lower revenues and earnings for the fourth quarter. We will, however, take important steps to manage costs in order to maintain a healthy business, while investing in key products and markets to position the company for future opportunities.”

Fourth Quarter 2008 Guidance

The Company anticipates fourth quarter 2008 results to be within the following ranges:
• Sales of $66 million to $72 million.
• Earnings per share of ($0.05) to $0.01

Third Quarter 2008 Conference Call

Management will host a conference call today, Wednesday, October 22, 2008 at 5:00 pm Eastern Daylight Time to discuss Advanced Energy's financial results. Domestic callers may access this conference call by dialing 888-713-4717. International callers may access the call by dialing 706-634-7937. Participants will need to provide a conference passcode 68332373. For a replay of this teleconference, please call 800-642-1687 or 706-645-9291, and enter the passcode 68332373. The replay will be available through 12:00 a.m. Eastern Daylight Time, October 24, 2008. A webcast will also be available on the Investor Relations webpage at

About Advanced Energy
Advanced Energy® is a global leader in innovative power and control technologies for high-growth, thin-film manufacturing and solar power generation. Specifically, AE targets solar grid-tie inverters, solar cells, semiconductors, flat panel displays, data storage products, architectural glass and other advanced applications.

The Company’s expectations with respect to financial results for the fourth quarter of 2008 are forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are 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 industries the company serves, particularly the semiconductor industry, the timing of orders received from customers, the company's ability to realize cost improvement benefits from the global operations initiatives underway, and unanticipated changes to management's estimates, reserves or allowances. These and other risks are described in Advanced Energy's Form 10-K, Forms 10-Q and other reports and statements filed with the Securities and Exchange Commission. These reports and statements are available on the SEC's website at Copies may also be obtained from Advanced Energy's website at or by contacting Advanced Energy's investor relations at 970-407-6555. Forward-looking statements are made and based on information available to the company on the date of this press release. 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,
                                          2008      2007      2008      2007

    Sales                               $84,510   $90,492  $261,393  $300,863
    Cost of sales                        49,249    53,765   155,008   170,873
    Gross profit                         35,261    36,727   106,385   129,990

    Operating expenses:
      Research and development           14,681    12,937    41,528    37,883
      Selling, general and
       administrative                    14,337    15,537    42,760    46,169
      Amortization of intangible assets     223       201       689       727
      Restructuring charges                 522       556     1,589     3,505
          Total operating expenses       29,763    29,231    86,566    88,284

    Income from operations                5,498     7,496    19,819    41,706

    Other income, net                       429       308     2,330     3,367
    Income from continuing operations
     before income taxes                  5,927     7,804    22,149    45,073
    Provision for income taxes             (558)   (1,948)   (4,951)  (14,879)

    Net income                           $5,369    $5,856   $17,198   $30,194

    Basic earnings per share              $0.13     $0.13     $0.40     $0.67

    Diluted earnings per share            $0.13     $0.13     $0.40     $0.66

    Basic weighted-average common
     shares outstanding                  41,787    45,248    42,773    45,117

    Diluted weighted-average common
     shares outstanding                  42,201    45,761    43,183    45,696

                                (in thousands)

                                                 September 30,    December 31,
                                                     2008              2007


    Current assets:
      Cash and cash equivalents                    $81,232           $94,588
      Marketable securities                         53,687           110,676
      Accounts receivable, net                      65,582            64,188
      Inventories, net                              53,637            50,532
      Deferred income taxes                         13,747            23,696
      Other current assets                           4,037             4,289
    Total current assets                           271,922           347,969

    Property and equipment, net                     29,819            30,912

    Long-term investments                           33,307             1,483
    Deposits and other                               5,869             5,562
    Goodwill and intangibles, net                   68,587            67,768
    Customer service equipment, net                  1,223             1,236
    Deferred income tax assets, net                 19,292             4,098

    Total assets                                  $430,019          $459,028


    Current liabilities:
      Trade accounts payable                       $14,431           $12,424
      Other accrued expenses                        28,584            29,590
    Total current liabilities                       43,015            42,014

    Long-term liabilities                            9,109             9,953

    Total liabilities                               52,124            51,967

    Stockholders' equity                           377,895           407,061
    Total liabilities and stockholders' equity    $430,019          $459,028

SOURCE Advanced Energy Industries, Inc.