Axcelis Announces Financial Results For Third Quarter 2016

Expanding Customer Base Positions Company for Growth

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Nov 02, 2016, 04:01 ET

BEVERLY, Mass., Nov. 2, 2016 /PRNewswire/ -- Axcelis Technologies, Inc. (NASDAQ: ACLS) today announced financial results for the third quarter ended September 30, 2016. The Company reported third quarter revenue of $65.7 million, compared to $64.5 million for the second quarter of 2016. Operating profit for the quarter was $3.6 million, compared to $4.6 million for the second quarter. Net income for the quarter was $2.2 million, or $0.07 per diluted share. This compares to net income for the second quarter of 2016 of $2.9 million, or $0.10 per diluted share. Cash, cash equivalents and restricted cash were $72.5 million on September 30, 2016, compared to $67.8 million on June 30, 2016.

"Since the start of the year we have made significant progress on our penetration plans, placing Purion products in thirteen new customer fabs, including seven new customers and six new fabs for existing customers," said President and CEO Mary Puma. "These Purion penetrations position Axcelis for success as the industry enters a strong investment cycle, creating a strong foundation for growth in both 2017 and 2018."

"We remain focused on executing against gross margin initiatives that have already delivered solid increases in Purion product margins. Since ramping production of the full Purion product line with the Purion H in Q1 of 2015, system standard margins have improved 680 basis points on a rolling four quarter average," added Chief Financial Officer and Executive Vice President Kevin Brewer. "These actions along with additional planned improvements should allow us to achieve our goal of 40% gross margins by the end of 2017."

Business Outlook
For the fourth quarter ending December 31, 2016, Axcelis expects revenues of $65-70 million. Gross margin in the fourth quarter is expected to be in the 36-38% range. Fourth quarter operating profit is forecasted to be approximately $3-4 million with $0.04-0.08 earnings per diluted share.

Third Quarter 2016 Conference Call
The Company will host a conference call today, Wednesday, November 2, 2016 at 5:00 pm ET, to discuss results for the third quarter 2016. The call will be available to interested listeners via an audio webcast that can be accessed through the Investors page of Axcelis' website at www.axcelis.com, or by dialing 866.588.8911 (707.294.1561 outside North America). Participants calling into the conference call will be requested to provide the company name, Axcelis Technologies, and conference ID code: 98342071. Webcast replays will be available for 30 days following the call.

Safe Harbor Statement
This press release and the conference call contain forward-looking statements under the SEC safe harbor provisions. These statements, which include our guidance for future financial performance, are based on management's current expectations and should be viewed with caution. They are subject to various risks and uncertainties, many of which are outside the control of the Company, including the timing of orders and shipments, the conversion of orders to revenue in any particular quarter, or at all, the continuing demand for semiconductor equipment, relative market growth, continuity of business relationships with and purchases by major customers, competitive pressure on sales and pricing, increases in material and other production costs that cannot be recouped in product pricing and global economic, political and financial conditions. Our forecasted diluted earnings per share does not take into account option exercises during the quarter and assumes no change in the weighted average stock price from the prior quarter. These risks and other risk factors relating to Axcelis are described more fully in the most recent Form 10-K filed by Axcelis and in other documents filed from time to time with the Securities and Exchange Commission.

About Axcelis:
Axcelis (Nasdaq: ACLS), headquartered in Beverly, Mass., has been providing innovative, high-productivity solutions for the semiconductor industry for over 35 years. Axcelis is dedicated to developing enabling process applications through the design, manufacture and complete life cycle support of ion implantation systems, one of the most critical and enabling steps in the IC manufacturing process. Learn more about Axcelis at www.axcelis.com.

Company Contacts

Investor Relations:
Doug Lawson
978.787.9552

Editorial/Media:
Maureen Hart
978.787.4266

Axcelis Technologies, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited)

			Three months ended September 30,				Nine months ended September 30,
			2016		2015		2016		2015

Revenue:
	Product		$	59,302	$	73,795	$	180,336	$	214,073
	Services			6,348		5,522		17,286		16,964
		Total revenue		65,650		79,317		197,622		231,037
Cost of Revenue:
	Product			36,360		45,698		111,262		137,443
	Services			5,186		4,440		13,709		13,861
		Total cost of revenue		41,546		50,138		124,971		151,304

Gross profit				24,104		29,179		72,651		79,733

Operating expenses:
	Research and development			8,493		8,581		25,607		24,679
	Sales and marketing			5,992		6,322		17,742		17,808
	General and administrative			5,988		6,584		18,262		18,916
	Restructuring charges			—		—		282		18
		Total operating expenses		20,473		21,487		61,893		61,421

Income from operations				3,631		7,692		10,758		18,312

Other (expense) income:
	Interest income			53		7		161		16
	Interest expense			(1,342)		(1,274)		(3,727)		(3,627)
	Other, net			(55)		(167)		(352)		(551)
		Total other (expense) income		(1,344)		(1,434)		(3,918)		(4,162)

Income before income taxes				2,287		6,258		6,840		14,150

Income tax provision (benefit)				136		157		(196)		298

Net income			$	2,151	$	6,101	$	7,036	$	13,852

Net income per share:
		Basic	$	0.07	$	0.21	$	0.24	$	0.49
		Diluted	$	0.07	$	0.20	$	0.23	$	0.46

Shares used in computing net income per share:
		Basic weighted average common shares		29,221		28,700		29,118		28,480
		Diluted weighted average common shares		31,037		30,466		30,760		30,155

Axcelis Technologies, Inc. Consolidated Balance Sheets (In thousands, except per share amounts) (Unaudited)

		September 30,		December 31,
		2016		2015

	ASSETS
	Cash and cash equivalents	$	65,623	$	78,889
	Accounts receivable, net		44,993		36,868
	Inventories, net		117,001		109,408
	Prepaid expenses and other assets		25,864		19,652
	Property, plant and equipment, net		30,804		30,031
	Restricted cash		6,865		6,936
	Total assets	$	291,150	$	281,784

	LIABILITIES AND STOCKHOLDERS' EQUITY
	Accounts payable	$	20,241	$	19,849
	Accrued compensation		4,508		9,059
	Warranty		2,822		3,555
	Income taxes		235		143
	Deferred revenue		7,862		8,542
	Sale leaseback obligation		47,586		47,586
	Other liabilities		9,968		9,286
	Total liabilities		93,222		98,020

Commitments and contingencies
Stockholders' equity:
	Preferred stock, $0.001 par value, 30,000 shares authorized; none issued or outstanding		—		—
	Common stock, $0.001 par value, 75,000 shares authorized; 29,347 shares issued and outstanding at September 30, 2016; 29,025 shares issued and 28,995 shares outstanding at December 31, 2015		29		29
	Additional paid-in capital		533,392		529,089
	Treasury stock, at cost, no shares at September 30, 2016 and 30 shares at December 31, 2015		—		(1,218)
	Accumulated deficit		(335,669)		(342,705)
	Accumulated other comprehensive income (loss)		176		(1,431)
	Total stockholders' equity		197,928		183,764
	Total liabilities and stockholders' equity	$	291,150	$	281,784