Axcelis Announces Financial Results for Fourth Quarter and Full Year 2018

Company Reports Growth in Revenues, Gross Margin and Cash

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Feb 06, 2019, 17:00 ET

BEVERLY, Mass., Feb. 6, 2019 /PRNewswire/ -- Axcelis Technologies, Inc. (Nasdaq: ACLS) today announced financial results for the fourth quarter ended December 31, 2018.

The Company reported fourth quarter revenue of $105.7 million, compared to $95.4 million for the third quarter of 2018. Operating profit for the quarter was $11.5 million, compared to $10.7 million for the third quarter. Net income for the quarter was $8.5 million, or $0.25 per diluted share, compared to net income for the third quarter of $8.8 million, or $0.26 per diluted share. Gross margin for the quarter was 41.2%, compared to 41.8% in the third quarter. Cash, cash equivalents and restricted cash were $184.9 million on December 31, 2018, compared to $155.6 million on September 30, 2018.

For the full year 2018, the Company reported revenue of $442.6 million, compared with $410.6 million for the full year 2017. Systems revenue for the year was $280.4 million, compared to $262.7 million in 2017. Operating profit was $60 million in 2018, compared to $47.8 million in 2017. Net income for the year was $45.9 million with diluted earnings per share of $1.35. This compares to 2017 net income of $127 million and earnings per share of $3.80. 2017 results were impacted by a significant excess inventory reserve adjustment and the reversal of the valuation allowance on our deferred tax assets.

"2018 was a strong year for Axcelis, with continued growth in revenues, gross margins and cash. Despite a memory market slowdown, Axcelis kept growing by expanding Purion products to a large and diverse group of customers," commented President and CEO Mary Puma. "We are focused on additional growth by investing in technology for new market segments and extending our global Purion footprint. These actions position us well to achieve our financial and strategic long-term goals."

Business Outlook
For the first quarter ending March 31, 2019, Axcelis expects revenues in the range of $90-95 million. Gross margin in the first quarter is expected to be around 41%. First quarter operating profit is forecasted to be in the range of $6-7 million. Earnings per diluted share is expected to be in the range of $0.10-0.13.

Fourth Quarter and Full Year 2018 Conference Call
The Company will host a conference call to discuss the Company's results for the fourth quarter and full year 2018 on Thursday, February 7, 2019 at 8:30 am ET. 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: 6379519. 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 Private Securities Litigation Reform Act safe harbor provisions. These statements, which include our expectations for spending in our industry and 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 that could cause actual results to differ materially from those in the forward-looking statements, many of which are outside the control of the Company, including that customer decisions to place orders or our product shipments may not occur when we expect, that orders may not be converted to revenue in any particular quarter, or at all, whether demand will continue for the semiconductor equipment we produce or, if not, whether we can successfully meet changing market requirements, and whether we will be able to maintain continuity of business relationships with and purchases by major customers. Increased competitive pressure on sales and pricing, increases in material and other production costs that cannot be recouped in product pricing and instability caused by changing global economic, political or financial conditions could also cause actual results to differ materially from those in our forward-looking statements. 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 40 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 December 31,				Twelve months ended December 31,
			2018		2017		2018		2017

Revenue:
	Product		$	98,883	$	110,446	$	415,922	$	387,124
	Services			6,800		5,950		26,653		23,437
		Total revenue		105,683		116,396		442,575		410,561
Cost of Revenue:
	Product			55,023		72,390		236,446		234,932
	Services			7,093		7,286		26,493		25,382
		Total cost of revenue		62,116		79,676		262,939		260,314

Gross profit				43,567		36,720		179,636		150,247

Operating expenses:
	Research and development			14,245		10,917		51,876		43,071
	Sales and marketing			9,362		7,197		34,608		28,532
	General and administrative			8,438		7,842		33,193		30,802
		Total operating expenses		32,045		25,956		119,677		102,405

Income from operations				11,522		10,764		59,959		47,842

Other (expense) income:
	Interest income			810		315		2,328		714
	Interest expense			(1,323)		(1,337)		(5,110)		(5,121)
	Other, net			(762)		396		(2,472)		396
		Total other expense		(1,275)		(626)		(5,254)		(4,011)

Income before income taxes				10,247		10,138		54,705		43,831

Income tax provision (benefit)				1,784		(81,542)		8,820		(83,128)

Net income			$	8,463	$	91,680	$	45,885	$	126,959

Net income per share:
		Basic	$	0.26	$	2.88	$	1.42	$	4.11
		Diluted	$	0.25	$	2.68	$	1.35	$	3.80

Shares used in computing net income per share:
		Basic weighted average common shares		32,467		31,801		32,286		30,886
		Diluted weighted average common shares		33,886		34,198		34,002		33,436

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


			December 31, 2018		December 31, 2017
ASSETS
Current assets:
	Cash and cash equivalents		$	177,993	$	133,407
	Short-term restricted cash			—		750
	Accounts receivable, net			78,727		75,302
	Inventories, net			129,000		120,544
	Prepaid expenses & other assets			11,051		9,772
	Total current assets			396,771		339,775
Property, plant and equipment, net				41,149		36,168
Restricted cash				6,909		6,723
Deferred income taxes				71,939		83,148
Other assets				31,673		22,404
		Total assets	$	548,441	$	488,218
	LIABILITIES AND STOCKHOLDERS' EQUITY

	Accounts payable		$	35,955	$	32,642
	Accrued compensation			19,218		20,955
	Warranty			4,819		4,112
	Income taxes			462		273
	Deferred revenue			19,513		16,181
	Other current liabilities			5,030		5,124
	Total current liabilities			84,997		79,287
Sales leaseback obligation				47,757		47,714
Long-term deferred revenue				3,071		1,964
Other long-term liabilities				4,279		5,643
		Total liabilities		140,104		134,608
Commitments and contingencies
Stockholders' equity:
	Common stock, $0.001 par value, 75,000 shares authorized; 32,559 shares issued and outstanding at December 31, 2018; 32,048 shares issued and outstanding at December 31, 2017			33		32
	Additional paid-in capital			565,116		556,147
	Accumulated deficit			(157,260)		(204,745)
	Accumulated other comprehensive income			448		2,176
		Total stockholders' equity		408,337		353,610
		Total liabilities and stockholders' equity	$	548,441	$	488,218