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10/27/2021

Ultra Clean Reports Third Quarter 2021 Financial Results

HAYWARD, Calif., Oct. 27, 2021 /PRNewswire/ -- Ultra Clean Holdings, Inc. (Nasdaq: UCTT), today reported its financial results for the third quarter ended September 24, 2021.

"UCT's third quarter performance and fourth quarter outlook demonstrate strong execution in a demanding environment across our end markets," said Jim Scholhamer, CEO. "UCT's operational and supply chain flexibility has proven to be advantageous in meeting customer demand. Ongoing, targeted investments in our business will expand our global capacity and position us well for sustainable growth."

Third Quarter 2021 GAAP Financial Results

Total revenue was $553.7 million. Products contributed $482.0 million and Services added $71.7 million. Total gross margin was 20.6%, operating margin was 9.1%, and net income was $31.9 million or $0.71 and $0.70 per basic and diluted share. This compares to total revenue of $515.2 million, gross margin of 19.4%, operating margin of 6.2%, and net income of $17.1 million or $0.39 per basic and diluted share in the prior quarter.

Third Quarter 2021 Non-GAAP Financial Results

On a non-GAAP basis, gross margin was 21.6%, operating margin was 12.4%, and net income was $48.8 million or $1.07 per diluted share. This compares to gross margin of 21.2%, operating margin of 11.7%, and net income of $43.7 million or $0.99 per diluted share in the prior quarter.

Fourth Quarter 2021 Outlook

The Company expects revenue in the range of $590.0 million to $630.0 million and GAAP diluted net income per share to be between $0.89 and $1.06. The Company expects non-GAAP diluted net income per share to be between $1.12 and $1.29.   

Conference Call

The call will take place at 1:45 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 10160642. 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, components and parts, and ultra-high purity cleaning and analytical services primarily for the semiconductor industry. Under its Products division, UCT offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping, and high-precision manufacturing. Under its Services Division, UCT offers its customers 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, certain insurance proceeds, gain on sale of property and the tax effects of the foregoing adjustments.

A reconciliation of our guidance for non-GAAP net income per diluted share for the subsequent 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 25, 2020 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


Nine Months Ended


September 24,


September 25,


September 24,


September 25,


2021


2020


2021


2020













Revenues:












Product

$

481,949


$

294,381


$

1,270,080


$

831,656

Services


71,703



68,895



216,399



197,298

Total revenues


553,652



363,276



1,486,479



1,028,954

Cost of revenues:












Product


393,343



243,582



1,044,831



687,613

Services


46,239



45,118



140,757



127,225

Total cost of revenues


439,582



288,700



1,185,588



814,838

Gross profit


114,070



74,576



300,891



214,116

Operating expenses:












Research and development


6,463



3,514



16,737



10,765

Sales and marketing


13,828



5,989



34,088



17,657

General and administrative


43,195



30,251



127,125



97,498

Total operating expenses


63,486



39,754



177,950



125,920

Income from operations


50,584



34,822



122,941



88,196

Interest income


114



226



271



696

Interest expense


(6,885)



(4,133)



(17,549)



(13,094)

Other income (expense), net


(1,462)



(1,079)



(6,436)



(3,210)

Income before provision for income taxes


42,351



29,836



99,227



72,588

Provision for income taxes


8,392



4,776



21,628



14,932

Net income


33,959



25,060



77,599



57,656

Less: Net income attributable to noncontrolling interests


2,079



695



3,624



2,605

Net income attributable to UCT

$

31,880


$

24,365


$

73,975


$

55,051













Net income per share attributable to UCT common stockholders:












Basic

$

0.71


$

0.60


$

1.73


$

1.37

Diluted

$

0.70


$

0.59


$

1.69


$

1.35

Shares used in computing net income per share:












Basic


44,757



40,367



42,883



40,091

Diluted


45,404



41,149



43,791



40,929


 

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in thousands)










September 24,


December 25,



2021


2020

ASSETS







Current assets:







  Cash and cash equivalents


$

456,980


$

200,274

  Accounts receivable, net of allowance



232,530



145,539

  Inventories



324,628



180,385

  Prepaid expenses and other current assets



38,615



18,895

Total current assets



1,052,753



545,093








Property, plant and equipment, net



227,849



159,150

Goodwill



263,574



171,132

Intangibles assets, net



261,007



160,519

Deferred tax assets, net



23,107



23,513

Operating lease right-of-use assets



87,008



37,821

Other non-current assets



8,698



5,315

Total assets


$

1,923,996


$

1,102,543








LIABILITIES AND STOCKHOLDERS '  EQUITY







Current liabilities:







  Bank borrowings


$

23,205


$

7,361

  Accounts payable



271,363



121,328

  Accrued compensation and related benefits



51,976



34,532

  Operating lease liabilities



18,203



11,721

  Other current liabilities



46,260



26,335

Total current liabilities



411,007



201,277








Bank borrowings, net of current portion



545,085



261,619

Deferred tax liabilities



44,400



33,571

Operating lease liabilities



69,470



31,050

Other liabilities



13,671



23,812

Total liabilities



1,083,633



551,329








Equity:







UCT stockholders' equity:







  Common stock



507,180



309,589

  Retained earnings



291,947



217,972

  Accumulated other comprehensive gain



911



5,087

Total UCT stockholders' equity



800,038



532,648

  Noncontrolling interest



40,325



18,566

Total equity



840,363



551,214

Total liabilities and stockholders' equity


$

1,923,996


$

1,102,543









 

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in thousands)








Nine Months Ended


September 24,


September 25,


2021


2020

Cash flows from operating activities:






Net income

$

77,599


$

57,656

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






Depreciation and amortization


50,303



35,064

Stock-based compensation


11,498



9,463

Deferred income taxes


811



(273)

Change in the fair value of financial instruments


12,991



4,376

Gain from insurance proceeds


(7,332)



Others


277



(1,939)

Changes in assets and liabilities:






Accounts receivable


(35,358)



(32,677)

Inventories


(70,513)



(2,964)

Prepaid expenses and other current assets


(752)



325

Other non-current assets


(257)



17

Accounts payable


119,472



(21,919)

Accrued compensation and related benefits


6,981



5,916

Operating lease assets and liabilities


(341)



(791)

Income taxes payable


1,033



3,169

Other liabilities


3,619



(2,538)

Net cash provided by operating activities


170,031



52,885

Cash flows from investing activities:






Purchases of property, plant and equipment


(42,725)



(26,535)

Proceeds from sale of equipment, including insurance proceeds


7,577



6,614

Acquisition of business, net of cash acquired


(355,155)



Net cash used in investing activities


(390,303)



(19,921)

Cash flows from financing activities:






Proceeds from bank borrowings


394,682



69,670

Proceeds from issuance of common stock


193,106



260

Principal payments on bank borrowings and finance leases


(93,909)



(85,688)

Payments of debt issuance costs


(8,899)



Employees' taxes paid upon vesting of restricted stock units


(7,013)



(1,422)

Others


(128)



(1,428)

Net cash provided by (used in) financing activities


477,839



(18,608)

Effect of exchange rate changes on cash and cash equivalents


(861)



(756)

Net increase in cash and cash equivalents


256,706



13,600

Cash and cash equivalents at beginning of period


200,274



162,531

Cash and cash equivalents at end of period

$

456,980


$

176,131

 

ULTRA CLEAN HOLDINGS, INC.

REPORTABLE SEGMENTS

GAAP TO NON-GAAP RECONCILIATION

(Unaudited; dollars in thousands)























GAAP



Non-GAAP




Three Months Ended



Three Months Ended



September 24, 2021


September 24, 2021



Products


Services


Consolidated


Products


Services


Consolidated

Revenues


$

481,949


$

71,703


$

553,652


$

481,949


$

71,703


$

553,652

Gross profit


$

88,606


$

25,464


$

114,070


$

92,870


$

26,486


$

119,356

Gross margin



18.4%



35.5%



20.6%



19.3%



36.9%



21.6%

Income from operations


$

43,753


$

6,831


$

50,584


$

57,436


$

11,057


$

68,493

Operating margin



9.1%



9.5%



9.1%



11.9%



15.4%



12.4%































Three Months Ended












September 24, 2021












Products


Services


Consolidated

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

Reported gross profit on a GAAP basis


$

88,606


$

25,464


$

114,070

Amortization of intangible assets (1)



658



1,022



1,680

Restructuring charges (2)



684



-



684

Stock-based compensation expense (3)



534



-



534

Fair value related adjustments (4)



2,388



-



2,388

Non-GAAP gross profit


$

92,870


$

26,486


$

119,356




















Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis



18.4%



35.5%



20.6%

Amortization of intangible assets (1)



0.1%



1.4%



0.3%

Restructuring charges (2)



0.2%



-



0.2%

Stock-based compensation expense (3)



0.1%



-



0.1%

Fair value related adjustments (4)



0.5%



-



0.4%

Non-GAAP gross margin



19.3%



36.9%



21.6%




















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

Reported income from operations on a GAAP basis


$

43,753


$

6,831


$

50,584

Amortization of intangible assets (1)



5,795



3,717



9,512

Restructuring charges (2)



1,545



35



1,580

Stock-based compensation expense (3)



3,850



474



4,324

Fair value related adjustments (4)



2,388



-



2,388

Acquisition related costs (5)



105



-



105

Non-GAAP income from operations


$

57,436


$

11,057


$

68,493




















Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis



9.1%



9.5%



9.1%

Amortization of intangible assets (1)



1.2%



5.2%



1.7%

Restructuring charges (2)



0.3%



-



0.4%

Stock-based compensation expense (3)



0.8%



0.7%



0.8%

Fair value related adjustments (4)



0.5%



-



0.4%

Non-GAAP operating margin



11.9%



15.4%



12.4%




















1    Amortization of intangible assets related to the Company's business acquisitions

2    Represents severance, retention and costs related to facility closures

3    Represents compensation expense for stock granted to employees and directors

4    Represents acquisition fair value adjustments related to inventories

5    Represents costs related to the acquisition of Ham-Let

 

ULTRA CLEAN HOLDINGS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS











Three Months Ended


September 24,


September 25,


June 25,


2021


2020


2021

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

Reported net income attributable to UCT on a GAAP basis

$

31,880


$

24,365


$

17,098

Amortization of intangible assets (1)


9,512



4,949



9,511

Restructuring charges (2)


1,580



400



(28)

Stock-based compensation expense (3)


4,324



3,284



3,724

Fair value related adjustments (4)


2,288



200



8,583

Acquisition related costs (5)


105



-



8,093

Gain on the sale of property (6)


-



(1,352)



-

Income tax effect of non-GAAP adjustments (7)


(2,760)



(1,352)



(5,259)

Income tax effect of valuation allowance (8)


1,828



(616)



1,956

Non-GAAP net income attributable to UCT

$

48,757


$

29,878


$

43,678










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

Reported income from operations on a GAAP basis

$

50,584


$

34,822


$

31,947

Amortization of intangible assets (1)


9,512



4,949



9,511

Restructuring charges (2)


1,580



260



(28)

Stock-based compensation expense (3)


4,324



3,284



3,724

Fair value related adjustments (4)


2,388



-



7,183

Acquisition related costs (5)


105



-



8,093

Gain on the sale of property (6)


-



(1,352)



-

Non-GAAP income from operations

$

68,493


$

41,963


$

60,430










Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis


9.1%



9.6%



6.2%

Amortization of intangible assets (1)


1.7%



1.4%



1.8%

Restructuring charges (2)


0.4%



0.1%



-

Stock-based compensation expense (3)


0.8%



0.9%



0.7%

Fair value related adjustments (4)


0.4%



-



1.4%

Acquisition related costs (5)


-



-



1.6%

Gain on the sale of property (6)


-



-0.4%



-

Non-GAAP operating margin


12.4%



11.6%



11.7%










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

Reported gross profit on a GAAP basis

$

114,070


$

74,576


$

99,883

Amortization of intangible assets (1)


1,680



1,022



1,680

Restructuring charges (2)


684



260



201

Stock-based compensation expense (3)


534



383



414

Fair value related adjustments (4)


2,388



-



7,183

Non-GAAP gross profit

$

119,356


$

76,241


$

109,361










Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis


20.6%



20.5%



19.4%

Amortization of intangible assets (1)


0.3%



0.3%



0.3%

Restructuring charges (2)


0.2%



0.1%



-

Stock-based compensation expense (3)


0.1%



0.1%



0.1%

Fair value related adjustments (4)


0.4%



-



1.4%

Non-GAAP gross margin


21.6%



21.0%



21.2%

 

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

$

(8,233)


$

(4,986)


$

(7,711)


Restructuring charges (2)


-



140



-


Fair value related adjustments (4)


(100)



200



1,400


Non-GAAP interest and other income (expense)

$

(8,333)


$

(4,646)


$

(6,311)












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

Reported net income on a GAAP basis

$

0.70


$

0.59


$

0.39


Amortization of intangible assets (1)


0.21



0.12



0.22


Restructuring charges (2)


0.03



0.01



-


Stock-based compensation expense (3)


0.10



0.08



0.09


Fair value related adjustments (4)


0.05



-



0.19


Acquisition related costs (5)


-



-



0.18


Gain on the sale of property (6)


-



(0.03)



-


Income tax effect of non-GAAP adjustments (7)


(0.06)



(0.03)



(0.12)


Income tax effect of valuation allowance (8)


0.04



(0.01)



0.04


Non-GAAP net income

$

1.07


$

0.73


$

0.99


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


45,404



41,149



44,253












ULTRA CLEAN HOLDINGS, INC.

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












Three Months Ended



September 24,


September 25,


June 25,



2021


2020


2021


(in thousands, except percentages)










Provision for income taxes on a GAAP basis

$

8,392


$

4,776


$

6,221


Income tax effect of non-GAAP adjustments (7)


2,760



1,352



5,259


Income tax effect of valuation allowance (8)


(1,828)



616



(1,956)


Non-GAAP provision for income taxes

$

9,324


$

6,744


$

9,524












Income before income taxes on a GAAP basis

$

42,351


$

29,836


$

24,236


Amortization of intangible assets (1)


9,512



4,949



9,511


Restructuring charges (2)


1,580



400



(28)


Stock-based compensation expense (3)


4,324



3,284



3,724


Fair value related adjustments (4)


2,288



200



8,583


Acquisition related costs (5)


105



-



8,093


Gain on the sale of property (6)


(100)



(1,352)



-


Non-GAAP income before income taxes

$

60,060


$

37,317


$

54,119


Effective income tax rate on a GAAP basis


19.8%



16.0%



25.7%


Non-GAAP effective income tax rate


15.5%



18.1%



17.6%












1    Amortization of intangible assets related to the Company's business acquisitions

2    Represents severance, retention and costs related to facility closures

3    Represents compensation expense for stock granted to employees and directors

4    Represents acquisition fair value adjustments related to inventories and fair value adjustments of purchase obligation

5    Represents costs related to acquisitions

6    Represents gain realized on the sale of land in South Korea

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

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:https://www.prnewswire.com/news-releases/ultra-clean-reports-third-quarter-2021-financial-results-301410203.html

SOURCE Ultra Clean Holdings, Inc.

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