Axcelis Announces Financial Results For Second Quarter 2019

Company Reports Solid Gross Margin Performance and Increases Full Year Gross Margin Estimates

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Aug 06, 2019, 16:01 ET

BEVERLY, Mass., Aug. 6, 2019 /PRNewswire/ -- Axcelis Technologies, Inc. (Nasdaq: ACLS) today announced financial results for the second quarter ended June 30, 2019.

The Company reported second quarter revenue of $74.3 million, compared to $91.5 million for the first quarter of 2019. Operating profit for the quarter was $2.0 million, compared to $7.1 million for the first quarter. Net income for the quarter was $0.6 million, or $0.02 per diluted share, compared to net income for the first quarter of $6.1 million, or $0.18 per diluted share. Gross margin for the quarter was 42.7%, compared to 41.0% in the first quarter. Cash, cash equivalents and restricted cash were $143.2 million on June 30, 2019, compared to $170.0 million on March 31, 2019.

President and CEO Mary Puma commented, "We remain committed to managing for profitability and preparing for the upturn. We are focused on revenue growth through investments in innovative technology for Purion product line extensions targeting new market segments." Puma continued, "These new Purion products are designed to create a sustainable competitive differentiation to support our customers' technology and manufacturing needs. These Purion products will fuel our growth when the market recovers."

Executive Vice President and CFO Kevin Brewer noted, "I am pleased with our second quarter gross margin results. Purion product extensions and margin improvement initiatives, as well as mix, are fueling strong gross margin performance, despite lower revenues. We now expect full year average gross margin to be 41.0 to 41.5%, up from 40.0 to 41.0%.

Business Outlook
For the third quarter ending September 30, 2019, Axcelis expects revenues to be in the range of $65-75 million. Gross margin in the third quarter is expected to be approximately 41%. Third quarter operating profit is forecasted to be approximately ($1.2) million to $2.0 million. Earnings per diluted share is expected to be in the range of breakeven, plus or minus $0.05.

Second Quarter 2019 Conference Call
The Company will host a call to discuss the results for the second quarter 2019 on Wednesday, August 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: 2690958. 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 over 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				Six months ended
		June 30,			June 30,
	2019		2018		2019		2018
Revenue:
Product	$	68,714	$	112,521	$	152,911	$	228,543
Services		5,591		6,812		12,871		12,975
Total revenue		74,305		119,333		165,782		241,518
Cost of revenue:
Product		37,188		63,913		84,518		132,287
Services		5,368		6,420		12,009		13,075
Total cost of revenue		42,556		70,333		96,527		145,362
Gross profit		31,749		49,000		69,255		96,156
Operating expenses:
Research and development		13,720		12,553		27,405		24,786
Sales and marketing		8,436		8,912		17,354		17,323
General and administrative		7,583		8,268		15,390		16,278
Total operating expenses		29,739		29,733		60,149		58,387
Income from operations		2,010		19,267		9,106		37,769
Other (expense) income:
Interest income		845		515		1,686		925
Interest expense		(1,311)		(1,127)		(2,541)		(2,464)
Other, net		(189)		(1,016)		(362)		(1,118)
Total other expense		(655)		(1,628)		(1,217)		(2,657)
Income before income taxes		1,355		17,639		7,889		35,112
Income tax provision		799		2,970		1,271		6,528
Net income	$	556	$	14,669	$	6,618	$	28,584
Net income per share:
Basic	$	0.02	$	0.46	$	0.20	$	0.89
Diluted	$	0.02	$	0.43	$	0.19	$	0.84
Shares used in computing net income per share:
Basic weighted average common shares		32,729		32,214		32,706		32,154
Diluted weighted average common shares		33,901		33,942		34,064		34,048

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

	June 30,		December 31,
	2019		2018
ASSETS
Current assets:
Cash and cash equivalents	$	136,340	$	177,993
Short-term restricted cash		149		—
Accounts receivable, net		62,279		78,727
Inventories, net		135,141		129,000
Prepaid expenses and other current assets		11,448		11,051
Total current assets		345,357		396,771
Property, plant and equipment, net		24,326		41,149
Operating lease assets		6,431		—
Finance lease assets, net		22,563		—
Long-term restricted cash		6,675		6,909
Deferred income taxes		70,598		71,939
Other assets		41,132		31,673
Total assets	$	517,082	$	548,441
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	21,771	$	35,955
Accrued compensation		7,695		19,218
Warranty		4,045		4,819
Income taxes		329		462
Deferred revenue		10,176		19,513
Current portion of long-term debt		108		—
Other current liabilities		7,960		5,030
Total current liabilities		52,084		84,997
Finance lease obligation		48,441		47,757
Long-term deferred revenue		3,904		3,071
Other long-term liabilities		7,187		4,279
Total liabilities		111,616		140,104
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value, 75,000 shares authorized; 32,297 shares issued and outstanding at June 30, 2019; 32,558 shares issued and outstanding at December 31, 2018		32		33
Additional paid-in capital		556,283		565,116
Accumulated deficit		(150,642)		(157,260)
Accumulated other comprehensive (loss) income		(207)		448
Total stockholders' equity		405,466		408,337
Total liabilities and stockholders' equity	$	517,082	$	548,441