Back to news releases
07/29/2020

Ultra Clean Reports Second Quarter 2020 Financial Results

HAYWARD, Calif., July 29, 2020 /PRNewswire/ -- Ultra Clean Holdings, Inc. (Nasdaq: UCTT), today reported its financial results for the second quarter ended June 26, 2020.

"UCT delivered record revenue and profitability in the second quarter on increased demand across all areas of our business," said Jim Scholhamer, CEO. "A recovery in wafer starts drove our Services business upwards, and ongoing momentum in the equipment market led to an increase in our Products business. I want to thank our dedicated employees worldwide for their commitment to quality and solid execution in a challenging environment. UCT's results are a powerful testament to the engagement and loyalty of our customers, demonstrating growth across the board."

Second Quarter 2020 GAAP Financial Results

Total revenue was $344.8 million. SPS contributed $277.9 million and SSB added $66.9 million. Total gross margin was 21.4%, operating margin was 8.9%, and net income was $21.3 million or $0.53 and $0.52 per basic and diluted share. This compares to total revenue of $320.9 million, gross margin of 20.5%, operating margin of 7.0%, and net income of $9.4 million or $0.24 and $0.23 per basic and diluted share in the prior quarter.

Second Quarter 2020 Non-GAAP Financial Results

On a non-GAAP basis, gross margin was 22.0%, operating margin was 11.7%, and net income was $30.5 million or $0.75 per diluted share. This compares to gross margin of 20.9%, operating margin of 9.9%, and net income of $21.0 million or $0.52 per diluted share in the prior quarter.

Third Quarter 2020 Outlook

Due to limited visibility resulting from the pandemic, the Company has widened its guidance ranges to reflect the heightened uncertainty in the marketplace. The Company expects revenue in the range of $320.0 million to $360.0 million and GAAP diluted net income per share to be between $0.40 and $0.56. The Company expects non-GAAP diluted net income per share to be between $0.56 and $0.72.   

Conference Call

The call will take place at 3:30 p.m. PT and can be accessed by dialing 1-844-826-3034 or 1-412-317-5179. No passcode is required. A replay of the call will be available by dialing 1-877-344-7529 or 1-412-317-0088 and entering the confirmation code 10145593. The Webcast will be available on the Investor Relations section of the Company's website at http://uct.com/investors/events/.  

About Ultra Clean Holdings, Inc.

Ultra Clean Holdings, Inc. is a leading developer and supplier of critical subsystems, ultra-high purity cleaning and analytical services primarily for the semiconductor industry. Ultra Clean offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping and component manufacturing, and tool chamber parts cleaning and coating, as well as micro-contamination analytical services. Ultra Clean is headquartered in Hayward, California. Additional information is available at www.uct.com.

Use of Non-GAAP Measures

In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), management uses non-GAAP gross margin, non-GAAP operating margin and non-GAAP net income to evaluate the Company's operating and financial results. We believe the presentation of non-GAAP results is useful to investors for analyzing our core business and 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 this additional information should not be considered a substitute for results prepared in accordance with GAAP. Tables presenting reconciliations from GAAP results to non-GAAP results are included at the end of this press release.

The Company currently defines non-GAAP net income as net income (loss) before amortization of intangible assets, restructuring charges, executive transition costs, acquisition costs, fair value adjustments, depreciation adjustments, stock-based compensation, and the tax effects of the foregoing adjustments.

A reconciliation of our guidance for non-GAAP net income per diluted share for the following quarter is not available due to fluctuations in the geographic mix of our earnings from quarter to quarter, which impacts our tax rate and cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and we are unable to determine the probable significance of the unavailable information.

Safe Harbor Statement

The foregoing information contains, or may be deemed to contain, "forward-looking statements" (as defined in the US Private Securities Litigation Reform Act of 1995) which reflect our current views with respect to future events and financial performance. We use words such as "anticipates," "projection," "outlook," "forecast," "believes," "plan," "expect," "future," "intends," "may," "will," "estimates," "see," "predicts," "should" and similar expressions to identify these forward-looking statements. Forward looking statements included in this press release include our expectations about the semiconductor capital equipment market and outlook. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, the Company's actual results may differ materially from the results predicted or implied by these forward-looking statements. These risks, uncertainties and other factors also include, among others, those identified in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations'' and elsewhere in our annual report on Form 10-K for the year ended December 27, 2019 as filed with the Securities and Exchange Commission. Ultra Clean Holdings, Inc. undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise unless required by law.

Contact:
Rhonda Bennetto, Vice President Investor Relations
rbennetto@uct.com

 

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in thousands, except per share data)














Three Months Ended


Six Months Ended


June 26, 


June 28, 


June 26, 


June 28, 

2020


2019


2020


2019













Revenues:












Product

$

277,892


$

210,390


$

537,275


$

410,635

Services


66,890



54,977



128,403



114,873

Total revenues


344,782



265,367



665,678



525,508

Cost of revenues:












Product


229,276



181,073



444,031



355,637

Services


41,628



36,125



82,107



76,905

Total cost of revenues


270,904



217,198



526,138



432,542

Gross profit


73,878



48,169



139,540



92,966

Operating expenses:












Research and development


3,827



3,921



7,251



7,352

Sales and marketing


5,876



5,366



11,668



10,761

General and administrative


33,350



29,911



67,247



57,702

Total operating expenses


43,053



39,198



86,166



75,815

Income from operations


30,825



8,971



53,374



17,151

Interest income


158



151



470



342

Interest expense


(3,773)



(6,674)



(8,961)



(13,263)

Other income (expense), net


560



133



(2,131)



1,212

Income before provision for income taxes


27,770



2,581



42,752



5,442

Provision for income taxes


5,691



2,835



10,156



4,342

Net income (loss)


22,079



(254)



32,596



1,100

Less: Net income (loss) attributable to noncontrolling interests


815



(52)



1,910



697

Net income (loss) attributable to UCT

$

21,264


$

(202)


$

30,686


$

403













Net income (loss) per share attributable to UCT common stockholders:

Basic

$

0.53


$

(0.01)


$

0.77


$

0.01

Diluted

$

0.52


$

(0.01)


$

0.75


$

0.01

Shares used in computing net income (loss) per share:












Basic


40,087



39,399



39,952



39,261

Diluted


40,834



39,399



40,774



39,556

 

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in thousands)










June 26, 


December 27,

2020

2019

ASSETS







Current assets:







  Cash and cash equivalents


$

214,364


$

162,531

  Accounts receivable, net of allowance



138,886



112,694

  Inventories



193,827



172,420

  Prepaid expenses and other current assets



18,660



19,400

Total current assets



565,737



467,045








Property, plant and equipment, net



148,143



145,272

Goodwill



171,132



171,087

Intangibles assets, net



170,419



180,318

Deferred tax assets, net



15,517



15,498

Operating lease right-of-use assets



38,895



34,877

Other non-current assets



4,919



5,209

Total assets


$

1,114,762


$

1,019,306








LIABILITIES AND STOCKHOLDERS' EQUITY







Current liabilities:







  Bank borrowings


$

7,735


$

8,842

  Accounts payable



140,082



133,058

  Accrued compensation and related benefits



27,668



24,825

  Operating lease liabilities



12,069



13,179

  Other current liabilities



39,337



30,694

Total current liabilities



226,891



210,598








Bank borrowings, net of current portion



322,132



283,390

Deferred tax liabilities 



25,183



25,183

Operating lease liabilities



33,455



28,828

Other liabilities



18,979



18,800

Total liabilities



626,640



566,799








Equity:







UCT stockholders' equity:







  Common stock



302,721



297,693

  Retained earnings



171,053



140,367

  Accumulated other comprehensive loss



(3,343)



(1,334)

Total UCT stockholders' equity



470,431



436,726

  Noncontrolling interest



17,691



15,781

Total equity



488,122



452,507

Total liabilities and equity


$

1,114,762


$

1,019,306

 

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in thousands)








Six Months Ended


June 26, 


June 28, 


2020


2019

Cash flows from operating activities:






Net income

$

32,596


$

1,100

Adjustments to reconcile net income to net cash provided by operating activities (excluding assets acquired and liabilities assumed):






      Depreciation and amortization


23,403



21,225

Stock-based compensation


6,150



5,777

Deferred income taxes


(17)



(2,077)

Change in the fair value of financial instruments and earn-out liability


4,186



52

Others


(239)



(274)

Changes in assets and liabilities:






Accounts receivable


(26,040)



10,001

Inventories


(21,459)



32,362

Prepaid expenses and other current assets


(1,567)



3,705

Other non-current assets


290



(566)

Accounts payable


6,520



(4,704)

Accrued compensation and related benefits


2,832



3,358

Operating lease assets and liabilities


(510)



467

Income taxes payable


4,887



(2,206)

Other liabilities


2,153



(203)

Net cash provided by operating activities


33,185



68,017

Cash flows from investing activities:






Purchases of property, plant and equipment


(17,049)



(6,750)

Acquisition of Dynamic Manufacturing Solutions, LLC




(29,873)

Proceeds from sale of equipment, including insurance proceeds


2,922



458

Net cash used in investing activities


(14,127)



(36,165)

Cash flows from financing activities:






Proceeds from bank borrowings


60,478



28,112

Proceeds from issuance of common stock


260



125

Payments on bank borrowings and finance leases


(26,261)



(32,389)

Withholding tax on employee equity compensation


(1,382)



(1,394)

Net cash provided by (used in) financing activities


33,095



(5,546)

Effect of exchange rate changes on cash and cash equivalents


(320)



(2,323)

Net increase in cash and cash equivalents


51,833



23,983

Cash and cash equivalents at beginning of period


162,531



144,145

Cash and cash equivalents at end of period

$

214,364


$

168,128

 

ULTRA CLEAN HOLDINGS, INC.

REPORTABLE SEGMENTS

GAAP TO NON-GAAP RECONCILIATION 

(Unaudited; dollars in thousands)























GAAP



Non-GAAP




Three Months Ended



Three Months Ended



June 26, 2020


June 26, 2020



SPS


SSB


Consolidated


SPS


SSB


Consolidated

Revenues


$

277,892


$

66,890


$

344,782


$

277,892


$

66,890


$

344,782

Gross profit


$

48,616


$

25,262


$

73,878


$

49,595


$

26,284


$

75,879

Gross margin



17.5%



37.8%



21.4%



17.8%



39.3%



22.0%

Income from operations


$

24,269


$

6,556


$

30,825


$

29,042


$

11,408


$

40,450

Operating margin



8.7%



9.8%



8.9%



10.5%



17.1%



11.7%































Three Months Ended












June 26, 2020












SPS


SSB


Consolidated

Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in thousands)

Reported gross profit on a GAAP basis


$

48,616


$

25,262


$

73,878

Amortization of intangible assets (1)



-



1,022



1,022

Restructuring charges (2)



253



-



253

Stock-based compensation expense (3)



726



-



726

Non-GAAP gross profit


$

49,595


$

26,284


$

75,879




















Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis



17.5%



37.8%



21.4%

Amortization of intangible assets (1)



0.0%



1.5%



0.3%

Restructuring charges (2)



0.1%



-



0.1%

Stock-based compensation expense (3)



0.2%



-



0.2%

Non-GAAP gross margin



17.8%



39.3%



22.0%




















Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in thousands)

Reported income from operations on a GAAP basis


$

24,269


$

6,556


$

30,825

Amortization of intangible assets (1)



1,173



3,776



4,949

Restructuring charges (2)



654



918



1,572

Stock-based compensation expense (3)



2,946



158



3,104

Non-GAAP income from operations


$

29,042


$

11,408


$

40,450




















Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis



8.7%



9.8%



8.9%

Amortization of intangible assets (1)



0.4%



5.6%



1.4%

Restructuring charges (2)



0.3%



1.4%



0.5%

Stock-based compensation expense (3)



1.1%



0.3%



0.9%

Non-GAAP operating margin



10.5%



17.1%



11.7%




















1    Amortization of intangible assets related to the Company's acquisitions of Thermal, FDS, QGT and DMS

2    Represents severance, retention and costs related to facility closures

3    Represents compensation expense for stock granted to employees and directors


 

ULTRA CLEAN HOLDINGS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS










Three Months Ended



June 26, 


June 28, 


March 27,



2020


2019


2020

Reconciliation of GAAP Net Income (loss) to Non-GAAP Net Income (in thousands)

Reported net income (loss) attributable to UCT on a GAAP basis


$ 21,264


$     (202)


$    9,423

Amortization of intangible assets (1)


4,949


5,053


4,951

Restructuring charges (2)


1,572


774


1,600

Stock-based compensation expense (3)


3,104


3,091


2,752

Fair value adjustments (4)


1,209


766


2,948

Acquisition related costs (5)


-


1,211


-

Depreciation adjustments (6)


-


(360)


-

Income tax effect of non-GAAP adjustments (7)


(2,037)


(1,991)


(2,291)

Income tax effect of valuation allowance (8)


470


2,344


1,663

Non-GAAP net income attributable to UCT


$ 30,531


$ 10,686


$  21,046








Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in thousands)

Reported income from operations on a GAAP basis


$ 30,825


$   8,971


$  22,550

Amortization of intangible assets (1)


4,949


5,053


4,951

Restructuring charges (2)


1,572


749


1,600

Stock-based compensation expense (3)


3,104


3,091


2,752

Fair value adjustments (4)


-


766


-

Acquisition related costs (5)


-


1,211


-

Depreciation adjustments (6)


-


(360)


-

Non-GAAP income from operations


$ 40,450


$ 19,481


$  31,853








Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis


8.9%


3.4%


7.0%

Amortization of intangible assets (1)


1.4%


1.9%


1.5%

Restructuring charges (2)


0.5%


0.2%


0.5%

Stock-based compensation expense (3)


0.9%


1.2%


0.9%

Fair value adjustments (4)


0.0%


0.3%


0.0%

Acquisition related costs (5)


0.0%


0.5%


0.0%

Depreciation adjustments (6)


0.0%


-0.1%


0.0%

Non-GAAP operating margin


11.7%


7.4%


9.9%








Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in thousands)

Reported gross profit on a GAAP basis


$ 73,878


$ 48,169


$  65,662

Amortization of intangible assets (1)


1,022


1,023


1,023

Restructuring charges (2)


253


350


233

Stock-based compensation expense (3)


726


509


307

Fair value adjustments (4)


-


766


-

Depreciation adjustments (6)


-


(316)


-

Non-GAAP gross profit


$ 75,879


$ 50,501


$  67,225








Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis


21.4%


18.2%


20.5%

Amortization of intangible assets (1)


0.3%


0.4%


0.3%

Restructuring charges (2)


0.1%


0.1%


0.0%

Stock-based compensation expense (3)


0.2%


0.2%


0.1%

Fair value adjustments (4)


0.0%


0.2%


0.0%

Depreciation adjustments (6)


0.0%


-0.1%


0.0%

Non-GAAP gross margin


22.0%


19.0%


20.9%








Reconciliation of GAAP Interest and other income (expense) to Non-GAAP Interest and other income (expense) (in thousands)

Reported interest and other income (expense) on a GAAP basis


$ (3,055)


$ (6,390)


$   (7,567)

Restructuring charges (2)


-


(25)


-

Fair value adjustments (4)


1,209


-


2,948

Non-GAAP interest and other income (expense)


$ (1,846)


$ (6,415)


$   (4,619)


 

ULTRA CLEAN HOLDINGS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS










Three Months Ended



June 26, 


June 28, 


March 27,



2020


2019


2020

Reconciliation of GAAP Earnings Per Diluted Share to Non-GAAP Earnings Per Diluted Share

Reported net income (loss) on a GAAP basis


$     0.52


$   (0.01)


$      0.23

Amortization of intangible assets (1)


0.12


0.13


0.12

Restructuring charges (2)


0.04


0.02


0.04

Stock-based compensation expense (3)


0.08


0.08


0.07

Fair value adjustments (4)


0.03


0.02


0.08

Acquisition related costs (5)


-


0.03


-

Depreciation adjustments (6)


-


(0.01)


-

Income tax effect of non-GAAP adjustments (7)


(0.05)


(0.05)


(0.06)

Income tax effect of valuation allowance (8)


0.01


0.06


0.04

Non-GAAP net income


$     0.75


$     0.27


$      0.52

Weighted average number of diluted shares (thousands) on a non-GAAP basis

40,834


39,734


40,704








ULTRA CLEAN HOLDINGS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE



Three Months Ended



June 26, 


June 28, 


March 27,



2020


2019


2020

(in thousands, except percentages)







Provision for income taxes on a GAAP basis


$   5,691


$   2,835


$    4,465

Income tax effect of non-GAAP adjustments (7)


2,037


1,991


2,291

Income tax effect of valuation allowance (8)


(470)


(2,344)


(1,663)

Non-GAAP provision for income taxes


$   7,258


$   2,482


$    5,093








Income before income taxes on a GAAP basis


$ 27,770


$   2,581


$  14,983

Amortization of intangible assets (1)


4,949


5,053


4,951

Restructuring charges (2)


1,572


774


1,600

Stock-based compensation expense (3)


3,104


3,091


2,752

Fair value adjustments (4)


1,209


766


2,948

Acquisition related costs (5)


-


1,211


-

Depreciation adjustments (6)


-


(360)


-

Non-GAAP income before income taxes


$ 38,604


$ 13,116


$  27,234

Effective income tax rate on a GAAP basis


20.5%


109.8%


29.8%

Non-GAAP effective income tax rate


18.8%


18.9%


18.7%



1    Amortization of intangible assets related to the Company's acquisitions of AIT, Thermal, FDS, QGT and DMS

2    Represents severance, retention and costs related to facility closures

3    Represents compensation expense for stock granted to employees and directors

4    Fair value adjustments related to contingent consideration, purchase obligation, DMS' sold inventories

5    Represents costs related to the acquisition of DMS

6    Depreciation adjustments related to QGT's fixed assets

7    Tax effect of items (1) through (6) above based on the non-GAAP tax rate shown below

8    The Company's GAAP tax expense is generally higher than the Company's non-GAAP tax expense, primarily due to losses in the U.S. with full federal and state valuation allowances. The Company's non-GAAP tax rate and resulting non-GAAP tax expense considers the tax implications as if there was no federal or state valuation allowance position in effect. 



 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/ultra-clean-reports-second-quarter-2020-financial-results-301102356.html

SOURCE Ultra Clean Holdings, Inc.

Subscribe to our alerts

Email Address: *
Mailing Lists *

 
Enter the code shown above.