Axcelis Announces Financial Results for the Second Quarter of 2006
Experiences broad-based demand across product portfolio and significant momentum with new product introductions
BEVERLY, Mass.--(BUSINESS WIRE)--Aug. 2, 2006-- Axcelis Technologies, Inc. (Nasdaq: ACLS) today announced financial results for its second quarter ended June 30, 2006. The Company reported revenues of $117.6 million, compared to $97.9 million for the first quarter of 2006. Worldwide revenues for the second quarter, which include revenues of SEN Corporation, an SHI and Axcelis Company, the Company's 50% owned joint venture in Japan, were $198.2 million, compared to $145.8 million for the preceding quarter. Net income for the second quarter was $12.1 million, or $0.12 per share, compared to net income for the first quarter of 2006 of $0.5 million, or $0.01 per share. In the corresponding quarter for the previous year, the Company reported net revenues of $92.2 million, worldwide revenues of $191.4 million, and net income of $0.7 million, or $0.01 per share, which included restructuring and related costs of $3.8 million, or $0.04 per diluted share.
Commenting on the Company's performance, Chairman and CEO Mary Puma said, "We achieved positive financial results in the second quarter, driven by broad-based demand across our product portfolio. New products continued to gather momentum as our Optima single wafer platform gained traction in the market. The platform's significant productivity and yield advantages are generating significant customer interest. During the quarter, we secured two key penetrations for our new single wafer Optima HD high dose system and multiple follow-on orders for our single wafer Optima MD mid dose implanter. We also landed a major order for our dry strip system from a significant memory device manufacturer, as well as several strategic placements for our film curing system."
"During the quarter we introduced the Optima HD Imax, the industry's first implanter to deliver the power of molecular implants for advanced memory and logic devices," continued Puma. "This highly enabling technology allows customers to dramatically boost productivity and reduce low energy, high dose implant process times by implanting clusters of boron, instead of individual atoms. The design builds on traditional, proven implant technology, and can be easily integrated into production - a compelling benefit for customers. We're very excited about the additional productivity and process advantages this new version of the Optima HD will provide to customers."
Axcelis believes that reporting the combined revenues of SEN, a 50% owned unconsolidated subsidiary of Axcelis, with Axcelis' own revenues, is useful to investors. SEN's ion implant products are covered by a license from Axcelis and therefore the combined revenue of the two companies indicates the full market penetration of Axcelis' technology.
Second Quarter Detail
Shipments and Margins
Shipments before provision for deferred revenue for the second quarter totaled $116.6 million with worldwide shipments, including SEN, totaling $195.7 million. Axcelis shipments, excluding SEN, were up 18.4% from the first quarter of 2006 and worldwide shipments, including SEN, were up 31.6%.
Geographically, Axcelis systems shipments, excluding SEN, were to: Asia 57%, North America 27% and Europe 16%.
The ion implantation business (excluding SEN) accounted for 77% of total shipments in the second quarter while other products (RTP, Dry Strip and Curing) accounted for 23%.
Service revenue (service labor, spare parts and consumables), excluding SEN, was $46.9 million for the quarter, up 6.3% from the first quarter of 2006.
Gross margin for the second quarter was 40.8%, up from 39.9% in the preceding quarter.
Orders and Backlog
Orders (new systems bookings and service excluding SEN) received for the second quarter totaled $159.1 million, compared to $96.9 million for the first quarter of 2006. New system bookings, excluding service, amounted to $112.2 million compared to $52.8 million for the preceding quarter. Worldwide orders, including SEN, were $260.3 million, compared to $178.7 million for the first quarter of 2006.
Backlog plus deferred systems revenue at quarter end was $128.9 million. Backlog consists of systems only (i.e., excluding service contracts) that are generally scheduled to ship within six months.
Balance Sheet
Cash, cash equivalents and short-term investments increased by $25.4 million (of which $24.2 million was received from the sale of convertible debentures) to $176.2 million at June 30, 2006. The Company ended the quarter with working capital of $265.1 million.
Business Outlook
Axcelis' financial outlook for the third quarter of 2006 assumes no material change in the semiconductor spending environment. Revenues in the third quarter are expected to be in a range of $117.0 million to $127.0 million. Worldwide revenues, including SEN, are expected to be in a range of $187.0 million to $202.0 million. The Company anticipates gross margins to be in a range of 42% to 43% and results of operations to provide earnings per share in the range of $0.11 to $0.15 per share.
Axcelis assumes no responsibility to update guidance. Axcelis will only confirm or update guidance via a press release.
Second Quarter 2006 Conference Call
The Company will be hosting a conference call today, Wednesday, August 2, 2006, beginning at 5:00 pm ET. The purpose of the call is to discuss second quarter results and to provide guidance for the third quarter of 2006. The call will be available to interested listeners via an audio webcast that can be accessed through Axcelis' home page at www.axcelis.com, or by dialing 1-800-479-1628 (1-719-457-2729 outside North America). Participants calling into the conference call will be requested to provide the company name: Axcelis Technologies, the conference leader: Maureen Hart, and pass code: #5745391. A webcast replay will be available from 8:00 pm ET on August 2, 2006 until 5:00 pm ET September 1, 2006.
Safe Harbor Statement
This document contains forward-looking statements under the SEC safe harbor provisions. These statements, which include those relating to the company developing new products, building its position in the ion implant market, and its 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, our ability to implement successfully our profit plans, 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 Technologies, Inc.
Axcelis Technologies, Inc., headquartered in Beverly, Massachusetts, provides innovative, high-productivity solutions for the semiconductor industry. Axcelis is dedicated to developing enabling process applications through the design, manufacture and complete life cycle support of ion implantation, rapid thermal processing, and cleaning and curing systems. Axcelis Technologies has key product development centers in Beverly, Massachusetts, as well as in Saijo, Japan through its joint venture, SEN Corporation, an SHI and Axcelis Company. The company's Internet address is: www.axcelis.com.
Axcelis Technologies, Inc.
Consolidated Balance Sheets
In thousands
(Unaudited)
June December
30, 31,
2006 2005
--------- ---------
Assets
Current assets
Cash and cash equivalents $69,347 $71,417
Marketable securities 94,880 93,797
Restricted cash 9,225 8,037
Accounts receivable, net 103,636 79,379
Inventories, net 130,583 109,972
Prepaid expenses and other current assets 35,816 32,767
--------- ---------
Total current assets 443,487 395,369
Property, plant & equipment, net 66,777 71,443
Investment in SEN 120,604 108,815
Goodwill 46,773 46,773
Intangible assets 14,861 16,100
Restricted cash, long-term portion 2,718 3,195
Other assets 21,704 19,748
--------- ---------
$716,924 $661,443
========= =========
Liabilities and stockholders' equity
Current liabilities
Accounts payable $30,656 $25,556
Accrued compensation 18,424 18,437
Warranty 5,276 5,739
Income taxes 2,478 3,021
Deferred revenue 34,728 30,140
Other current liabilities 12,627 11,333
Current portion, long term debt 74,217 -
--------- ---------
Total current liabilities 178,406 94,226
Long-term debt 75,457 125,000
Long-term deferred revenue 8,932 11,177
Other long-term liabilities 4,543 4,999
Commitments and contingencies - -
Stockholders' equity
Preferred Stock - -
Common stock 101 101
Additional paid-in capital 466,020 466,454
Deferred compensation - (5,385)
Treasury stock (1,218) (1,218)
Accumulated deficit (18,498) (31,187)
Accumulated other comprehensive income (loss) 3,181 (2,724)
--------- ---------
449,586 426,041
--------- ---------
$716,924 $661,443
========= =========
Axcelis Technologies, Inc.
Consolidated Statements of Operations
In thousands, except per share amounts
(Unaudited)
Three months Six months
ended ended
June 30, June 30,
----------------- -------------------
2006 2005 2006 2005
-------- -------- --------- ---------
Revenue
Systems $67,734 $48,947 $120,138 $108,640
Services 46,863 39,003 90,944 77,444
Royalties, primarily from SEN 3,043 4,228 4,479 6,130
-------- -------- --------- ---------
117,640 92,178 215,561 192,214
Cost of Revenue 69,698 53,238 128,577 111,477
-------- -------- --------- ---------
Gross profit 47,942 38,940 86,984 80,737
Operating expenses
Research & development 18,191 17,543 36,403 33,410
Sales and marketing 11,569 12,004 22,176 23,874
General and administrative 11,419 11,819 22,272 23,002
Amortization of intangible
assets 627 612 1,239 1,224
Restructuring charges 399 2,083 94 3,882
-------- -------- --------- ---------
42,205 44,061 82,184 85,392
-------- -------- --------- ---------
Income (loss) from operations 5,737 (5,121) 4,800 (4,655)
Other income (expense)
Equity income of SEN 6,146 7,626 8,362 9,965
Interest income 1,915 1,284 3,566 2,294
Interest expense (2,446) (1,656) (4,087) (3,310)
Other-net 1,339 (423) 684 (437)
-------- -------- --------- ---------
6,954 6,831 8,525 8,512
-------- -------- --------- ---------
Income before income taxes 12,691 1,710 13,325 3,857
Income taxes 547 961 636 1,210
-------- -------- --------- ---------
Net income $12,144 $749 $12,689 $2,647
======== ======== ========= =========
Net income per share
Basic $0.12 $0.01 $0.13 $0.03
Diluted $0.12 $0.01 $0.13 $0.03
Shares used in computing net
income per share
Basic 100,958 100,199 100,921 100,169
Diluted 101,080 100,604 101,098 100,737
CONTACT: Company Contact: Axcelis Technologies, Inc. Maureen Hart, 978-787 4266 Fax: 978-787 4275 maureen.hart@axcelis.com or
Investor Contact: Axcelis Technologies, Inc. Stephen Bassett, 978-787 4000 Fax: 978-787 9133 investor.relations@axcelis.com or
Agency Contact: Loomis Group Heather Smith, 617-638 0022 Fax: 617-638 0033 smithh@loomisgroup.com SOURCE: Axcelis Technologies
