Axcelis Announces Financial Results For Second Quarter 2017

Purion Platform Continues to Drive Strong Growth in Revenues, Operating Profit and Cash

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Aug 03, 2017, 16:01 ET

BEVERLY, Mass., Aug. 3, 2017 /PRNewswire/ -- Axcelis Technologies, Inc. (Nasdaq: ACLS) today announced financial results for the second quarter ended June 30, 2017.

The Company reported second quarter revenue of $102.8 million, compared to $86.9 million for the first quarter of 2017. Operating profit for the quarter was $12.5 million, compared to $10.7 million in the first quarter. Net income for the quarter was $13.9 million, or $0.42 per diluted share, compared to net income for the first quarter of 2017 of $9.5 million, or $0.29 per diluted share. Total cash was $115.4 million at June 30, 2017, compared to $76.2 million on March 31, 2017.

In 2017, the Company adopted Accounting Standard Update No. 2016-09 (ASU 2016-09), which addresses accounting for equity compensation expense and related tax effects. In the second quarter, this new standard had a $2.8 million positive impact on our net income and a $0.09 positive impact on earnings per share. This accounting change has no impact on the Company's operating results or cash flow. Excluding the effect of ASU 2016-09, net income for the quarter would have been $11.1 million, or $0.33 per diluted share.

President and CEO Mary Puma commented, "The Purion platform continued to gain momentum during the quarter, driving robust financial performance and market share gains. The industry remains in a period of strong growth with increased spending in memory and IoT. We're very pleased that 2017 will be a strong year for Axcelis. With greater visibility into the second half, we now anticipate total 2017 revenues of approximately $380 million with market share between 26 and 28 percent, at the high end of our previous estimates."

Business Outlook
For the third quarter ending September 30, 2017, Axcelis expects revenues of approximately $95 million. Gross margin in the third quarter is expected to be approximately 38%. Third quarter operating profit is forecasted to be approximately $10-12 million with earnings per diluted share of $0.27-0.31, prior to any tax effect of ASU 2016-09. Total cash for the quarter is expected to be around $120 million.

Second Quarter 2017 Conference Call
The Company will host a conference call today at 5:00 pm ET to discuss the Company's results for the second quarter of 2017. The call will be available to interested listeners via an audio webcast on 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 pass code: 44383784. Webcast replays will be available for 30 days following the call.

Use of Non-GAAP Financial Results
Adjusting net income to exclude the effects of income tax benefits and provisions of ASU 2016-09 is a non-GAAP financial measure. Since the Company is not a cash income tax payer in the US and ASU 2016-09 has had a significant impact on our reported net income in the second quarter, management will use adjusted net income and adjusted net income per diluted share to assist in our understanding of the Company's operating and financial performance. The Company believes the presentation of these non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing investors' ability to view the Company's results from management's perspective. The presentation of supplemental non-GAAP information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with GAAP.

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 expectations for increased 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, 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. 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 June 30,				Six months ended June 30,
			2017		2016		2017		2016

Revenue:
	Product		$	96,539	$	58,859	$	178,517	$	121,034
	Services			6,251		5,592		11,166		10,938
		Total revenue		102,790		64,451		189,683		131,972
Cost of Revenue:
	Product			57,689		34,638		104,486		74,902
	Services			6,039		4,682		11,421		8,523
		Total cost of revenue		63,728		39,320		115,907		83,425

Gross profit				39,062		25,131		73,776		48,547

Operating expenses:
	Research and development			11,256		8,478		21,151		17,114
	Sales and marketing			7,485		5,790		14,534		11,750
	General and administrative			7,791		6,232		14,848		12,274
	Restructuring charges			—		—		—		282
		Total operating expenses		26,532		20,500		50,533		41,420

Income from operations				12,530		4,631		23,243		7,127

Other (expense) income:
	Interest income			111		54		180		108
	Interest expense			(1,336)		(1,338)		(2,447)		(2,385)
	Other, net			16		(238)		(138)		(297)
		Total other expense		(1,209)		(1,522)		(2,405)		(2,574)

Income before income taxes				11,321		3,109		20,838		4,553

Income tax (benefit) provision				(2,611)		172		(2,600)		(332)

Net income			$	13,932	$	2,937	$	23,438	$	4,885

Net income per share:
		Basic	$	0.46	$	0.10	$	0.78	$	0.17
		Diluted	$	0.42	$	0.10	$	0.72	$	0.16

Shares used in computing net income per share:
		Basic weighted average common shares		30,589		29,097		30,183		29,066
		Diluted weighted average common shares		33,168		30,701		32,779		30,607

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

			June 30,		December 31,
			2017		2016

	ASSETS
	Cash and cash equivalents		$	108,558	$	70,791
	Accounts receivable, net			48,561		50,573
	Inventories, net			122,574		113,853
	Prepaid expenses and other assets			36,639		29,310
	Property, plant and equipment, net			31,617		30,840
	Restricted cash			6,793		6,864
		Total assets	$	354,742	$	302,231

	LIABILITIES AND STOCKHOLDERS' EQUITY
	Accounts payable		$	27,606	$	24,996
	Accrued compensation			12,170		5,142
	Warranty			3,872		2,668
	Income taxes			255		240
	Deferred revenue			14,902		11,009
	Sale leaseback obligation			47,692		47,586
	Other liabilities			9,807		9,135
		Total liabilities		116,304		100,776

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; 31,180 shares issued and outstanding at June 30, 2017; 29,518 shares issued and outstanding at December 31, 2016			31		30
	Additional paid-in capital			546,491		535,408
	Accumulated deficit			(308,266)		(331,704)
	Accumulated other comprehensive income (loss)			182		(2,279)
		Total stockholders' equity		238,438		201,455
		Total liabilities and stockholders' equity	$	354,742	$	302,231