Ultra Clean Announces Fourth Quarter and Fiscal Year 2016 Financial Results
HAYWARD, Calif., Feb. 22, 2017 /PRNewswire/ -- Ultra Clean Holdings, Inc. (Nasdaq: UCTT), a leading developer and supplier of critical systems and subsystems for the semiconductor capital equipment, flat panel, medical, energy and research industries, today reported its financial results for the fourth quarter and fiscal year ended December 30, 2016.
"2016 was a year of extraordinary growth for UCT. Total revenue and semiconductor revenue reached record highs and together with continued focus on operational excellence resulted in a significantly improved bottom line," said Jim Scholhamer, President and CEO. "By expanding our capabilities beyond gas panels and keeping pace with exceptional market demand, we are creating an even stronger link with our customers and have been able to capitalize on new opportunities. We are well positioned to reach our longer-term revenue and profitability goals."
GAAP Financial ResultsTotal revenue for the fourth quarter of 2016 was $174.5 million, an increase of 19.4% over the third quarter of 2016 and 68.8% from the same period a year ago. Semiconductor revenue increased 20.6% from the third quarter of 2016 and 60.7% from the same period a year ago. Total revenue from outside the U.S. rose 23.8% sequentially and 126.2% over the same period a year ago. Gross margin for the fourth quarter of 2016 was 17.0% compared with 16.1% for the prior quarter and 12.9% for the same period a year ago. Net income for the fourth quarter was $10.0 million, or $0.30 per share (basic and diluted), compared with net income of $2.6 million, or $0.08 per share (basic and diluted) in the previous quarter, and a net loss of $15.8 million, or $0.49 per share (basic and diluted) for the same period a year ago.
Net cash for the fourth quarter 2016 increased $6.7 million compared to the third quarter of 2016. Cash and cash equivalents were $52.5 million, an increase of $5.2 million compared with the third quarter of 2016. Outstanding debt was $67.8 million, a decrease of $1.5 million compared with the third quarter of 2016.
Total revenue for fiscal 2016 was $562.8 million, an increase of 20.0% from fiscal 2015. Semiconductor revenue increased 17.3% over 2015. Revenue outside the U.S. was 48.0% of total revenue in 2016 compared with 34.5% in 2015. Gross margin for 2016 was 15.4% compared with 15.1% for 2015. Net income for 2016 was $10.1 million, or $0.31 per basic share and $0.30 per diluted share compared with a net loss of $10.7 million, or $0.34 per share (basic and diluted) in 2015.
Non-GAAP Financial ResultsNon-GAAP net income for the fourth quarter of 2016 was $12.0 million and non-GAAP net income per diluted share was $0.36. Non-GAAP net income and non-GAAP net income per diluted share exclude pre-tax charges for intangible asset amortization, costs related to the closure of one of the Company's U.S. facilities, impairment charges for obsolete equipment held for sale, as well as costs incurred to terminate a contractual obligation related to our 3D printing business in Singapore, offset by the corresponding increase in tax expense from these items. This compares to third quarter non-GAAP net income and non-GAAP net income per diluted share of $5.7 million and $0.17, respectively, and non-GAAP net loss of $0.3 million and non-GAAP net loss per diluted share of $0.01 for the fourth quarter of 2015.
Non-GAAP net income for fiscal year 2016 was $21.4 million and non-GAAP net income per diluted share was $0.65. Non-GAAP net income and non-GAAP net income per diluted share exclude: (i) pre-tax charges for intangible assets amortization, costs related to our executive transition, costs related to the closure of one of the Company's U.S. facilities, impairment charges for obsolete equipment held for sale, as well as costs incurred to terminate a contractual obligation related to our 3D printing business in Singapore, offset by the corresponding increase in tax expense from these items and (ii) income tax expense related to the tax valuation allowances. This compares to prior fiscal year non-GAAP net income and non-GAAP net income per diluted share of $10.2 million and $0.32, respectively.
The Company has provided a reconciliation of GAAP to non-GAAP financial measures in the financial statement tables included in this press release.
First Quarter 2017 OutlookThe Company expects revenue to be between $190.0 million to $197.0 million and GAAP net income per diluted share to be in the range of $0.37 to $0.42. The Company expects non-GAAP net income per diluted share to be in the range of $0.40 to $0.45.
Conference CallUCT will conduct a conference call today, Wednesday, February 22, 2017, beginning at 1:45 p.m. PDT. The call-in number is (844) 826-3034 (domestic) and (412) 317-5179 (international). A replay of the conference will be available for seven days following the call at (877) 344-7529 (domestic) and (412) 317-0088 (international). The confirmation number for live broadcast and replay is 10100095 (all callers).
About Ultra Clean Holdings, Inc. Ultra Clean Holdings, Inc. is a leading developer and supplier of critical systems and subsystems for the semiconductor capital equipment, flat panel, medical, energy and research industries. Ultra Clean offers its customers an integrated outsourced solution for gas delivery systems and other subassemblies, improved design-to-delivery cycle times, component neutral design and manufacturing and component testing capabilities. Ultra Clean's customers are primarily original equipment manufacturers for the semiconductor capital equipment, flat panel, medical, energy and research industries. Ultra Clean is headquartered in Hayward, California. Additional information is available at www.uct.com.
Use of Non-GAAP MeasuresManagement uses non-GAAP net income and net income per diluted share 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 of non-GAAP results to U.S. GAAP results are included at the end of this press release. A reconciliation of our guidance for non-GAAP net income per diluted share for the first quarter of fiscal year 2017 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," "predicts," and similar expressions to identify these forward-looking statements. Forward looking statements included in this press release include our expectations about achieving our longer-term revenue and profitability goals and with respect to our first quarter 2017 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, 2015 as filed with the Securities and Exchange Commission and subsequently filed quarterly reports on Form 10-Q. Additional information will also be set forth in our annual report on Form 10-K for the year ended December 30, 2016. 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:Sheri BrummUCT Senior VP Finance, CFO510-576-4705
Annie LeschinInvestor Relations415-775-1788
|
ULTRA CLEAN HOLDINGS, INC. | |||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
|
(Unaudited; in thousands, except per share data) | |||||||||||
|
Three months ended |
Twelve months ended | ||||||||||
|
December 30, |
December 25, |
December 30, |
December 25, | ||||||||
|
2016 |
2015 |
2016 |
2015 | ||||||||
|
Sales |
$ |
174,545 |
$ |
103,420 |
$ |
562,759 |
$ |
469,103 | |||
|
Cost of goods sold |
144,844 |
90,079 |
475,976 |
398,073 | |||||||
|
Gross profit |
29,701 |
13,341 |
86,783 |
71,030 | |||||||
|
Operating expenses: |
|||||||||||
|
Research and development |
2,818 |
2,259 |
9,900 |
9,578 | |||||||
|
Sales and marketing |
3,031 |
3,005 |
11,568 |
11,499 | |||||||
|
General and administrative |
11,182 |
11,391 |
42,924 |
44,112 | |||||||
|
Total operating expenses |
17,031 |
16,655 |
64,392 |
65,189 | |||||||
|
Income from operations |
12,670 |
(3,314) |
22,391 |
5,841 | |||||||
|
Interest and other income (expense), net |
(181) |
(163) |
(3,444) |
(2,234) | |||||||
|
Income before provision for income taxes |
12,489 |
(3,477) |
18,947 |
3,607 | |||||||
|
Income tax provision |
2,536 |
12,311 |
8,896 |
14,339 | |||||||
|
Net income |
$ |
9,953 |
$ |
(15,788) |
$ |
10,051 |
$ |
(10,732) | |||
|
Net income per share: |
|||||||||||
|
Basic |
$ |
0.30 |
$ |
(0.49) |
$ |
0.31 |
$ |
(0.34) | |||
|
Diluted |
$ |
0.30 |
$ |
(0.49) |
$ |
0.30 |
$ |
(0.34) | |||
|
Shares used in computing net income per share: |
|||||||||||
|
Basic |
32,877 |
32,212 |
32,632 |
31,564 | |||||||
|
Diluted |
33,526 |
32,212 |
33,150 |
31,564 | |||||||
|
ULTRA CLEAN HOLDINGS, INC. | ||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
|
(Unaudited; in thousands) | ||||||
|
December 30, |
December 25, | |||||
|
2016 |
2015 | |||||
|
ASSETS |
||||||
|
Current assets: |
||||||
|
Cash and cash equivalents |
$ |
52,465 |
$ |
50,103 | ||
|
Accounts receivable, net of allowance |
74,663 |
59,148 | ||||
|
Inventory |
103,861 |
72,716 | ||||
|
Other current assets |
6,461 |
8,172 | ||||
|
Total current assets |
237,450 |
190,139 | ||||
|
Equipment and leasehold improvements, net |
18,858 |
17,267 | ||||
|
Goodwill |
85,248 |
85,248 | ||||
|
Purchased intangibles, net |
37,024 |
42,782 | ||||
|
Deferred tax asset, net |
1,355 |
- | ||||
|
Other non-current assets |
762 |
717 | ||||
|
Total assets |
$ |
380,697 |
$ |
336,153 | ||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||
|
Current liabilities: |
||||||
|
Bank borrowings |
$ |
16,819 |
$ |
12,744 | ||
|
Accounts payable |
71,189 |
39,660 | ||||
|
Other current liabilities |
13,053 |
11,800 | ||||
|
Total current liabilities |
101,061 |
64,204 | ||||
|
Bank borrowings, net of current portion |
50,931 |
62,795 | ||||
|
Deferred tax liability |
9,917 |
5,026 | ||||
|
Other long-term liabilities |
2,657 |
3,185 | ||||
|
Total liabilities |
164,566 |
135,210 | ||||
|
Stockholders' equity: |
||||||
|
Common stock |
178,477 |
172,975 | ||||
|
Retained earnings |
38,037 |
27,986 | ||||
|
Accumulated other comprehensive income (loss) |
(383) |
(18) | ||||
|
Total stockholders' equity |
216,131 |
200,943 | ||||
|
Total liabilities and stockholders' equity |
$ |
380,697 |
$ |
336,153 | ||
|
ULTRA CLEAN HOLDINGS, INC. | ||||||||||
|
UNAUDITED RECONCILATION OF GAAP TO NON-GAAP ADJUSTED RESULTS | ||||||||||
|
Three Months Ended |
Twelve Months Ended | |||||||||
|
December 30, |
September 23, |
December 25, |
December 30, |
December 25, | ||||||
|
2016 |
2016 |
2015 |
2016 |
2015 | ||||||
|
Reconciliation of GAAP Net Income to Non-GAAP Net Income (in thousands) |
||||||||||
|
Reported net income on a GAAP basis |
$ 9,953 |
$ 2,614 |
$ (15,788) |
$ 10,051 |
$ (10,732) | |||||
|
Amortization of intangible assets (1) |
1,439 |
1,438 |
2,170 |
5,757 |
6,212 | |||||
|
Executive transition costs (2) |
- |
925 |
421 |
925 |
2,783 | |||||
|
Restructuring charges (3) |
109 |
(105) |
245 |
251 |
245 | |||||
|
Acquisition costs (4) |
- |
- |
- |
- |
642 | |||||
|
Impairment of "held for sale" assets (5) |
666 |
- |
- |
666 |
- | |||||
|
Termination of contractual obligation (6) |
438 |
- |
- |
438 |
- | |||||
|
Income tax effect of non-GAAP adjustments (7) |
(549) |
(574) |
(794) |
(1,664) |
(2,767) | |||||
|
Income tax effect of valuation allowance (8) |
(49) |
1,391 |
13,424 |
4,964 |
13,859 | |||||
|
Non-GAAP net income |
$ 12,007 |
$ 5,689 |
$ (322) |
$ 21,388 |
$ 10,242 | |||||
|
Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in thousands) |
||||||||||
|
Reported income from operations on a GAAP basis |
$ 12,670 |
$ 6,700 |
$ (3,314) |
$ 22,391 |
$ 5,841 | |||||
|
Amortization of intangible assets (1) |
1,439 |
1,438 |
2,170 |
5,757 |
6,212 | |||||
|
Executive transition costs (2) |
- |
925 |
421 |
925 |
2,783 | |||||
|
Restructuring charges (3) |
109 |
(105) |
245 |
251 |
245 | |||||
|
Acquisition costs (4) |
- |
- |
- |
- |
642 | |||||
|
Impairment of "held for sale" assets (5) |
666 |
- |
- |
666 |
- | |||||
|
Termination of contractual obligation (6) |
438 |
- |
- |
438 |
- | |||||
|
Non-GAAP income from operations |
$ 15,322 |
$ 8,958 |
$ (478) |
$ 30,428 |
$ 15,723 | |||||
|
Reconciliation of GAAP Operating margin to Non-GAAP Operating margin |
||||||||||
|
Reported operating margin on a GAAP basis |
7.3% |
4.6% |
(3.2%) |
4.0% |
1.2% | |||||
|
Amortization of intangible assets (1) |
0.8% |
1.0% |
2.1% |
1.0% |
1.3% | |||||
|
Executive transition costs (2) |
- |
0.6% |
0.4% |
0.2% |
0.6% | |||||
|
Restructuring charges (3) |
0.1% |
(0.1%) |
0.2% |
- |
0.1% | |||||
|
Acquisition costs (4) |
- |
- |
- |
- |
0.1% | |||||
|
Impairment of "held for sale" assets (5) |
0.4% |
- |
- |
0.1% |
- | |||||
|
Termination of contractual obligation (6) |
0.2% |
- |
- |
0.1% |
- | |||||
|
Non-GAAP operating margin |
8.8% |
6.1% |
(0.5%) |
5.4% |
3.3% | |||||
|
Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in thousands) |
||||||||||
|
Reported gross profit on a GAAP basis |
$ 29,701 |
$ 23,491 |
$ 13,341 |
$ 86,783 |
$ 71,030 | |||||
|
Impairment of "held for sale"assets (5) |
636 |
- |
- |
636 |
- | |||||
|
Non-GAAP gross profit |
$ 30,337 |
$ 23,491 |
$ 13,341 |
$ 87,419 |
$ 71,030 | |||||
|
Reconciliation of GAAP Gross margin to Non-GAAP Gross margin |
||||||||||
|
Reported gross margin on a GAAP basis |
17.0% |
16.1% |
12.9% |
15.4% |
15.1% | |||||
|
Impairment of "held for sale"assets (5) |
0.4% |
- |
- |
0.1% |
- | |||||
|
Non-GAAP gross margin |
17.4% |
16.1% |
12.9% |
15.5% |
15.1% | |||||
|
1 |
Amortization of intangible assets related to the Company's acquisitions of AIT, Marchi and Miconex |
|
2 |
Represents expense for termination benefits paid to former executives of the Company |
|
3 |
Adjustment to previous restructuring reserve related to the abandonment of one of the Company's facilities |
|
4 |
Costs incurred related to the acquisitions of Marchi and Miconex |
|
5 |
Impairment of assets classified as "held for sale" related to our 3D printing business in Singapore |
|
6 |
Amount paid related to the termination of a long-term contractual obligation related to our 3D printing business in Singapore |
|
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 substantially 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. |
|
Three Months Ended |
Twelve Months Ended | |||||||||
|
December 30, |
September 23, |
December 25, |
December 30, |
December 25, | ||||||
|
2016 |
2016 |
2015 |
2016 |
2015 | ||||||
|
Reconciliation of GAAP Earnings Per Diluted Share to Non-GAAP Earnings Per Diluted Share |
||||||||||
|
Reported net income on a GAAP basis |
$ 0.30 |
$ 0.08 |
$ (0.49) |
$ 0.30 |
$ (0.34) | |||||
|
Amortization of intangible assets |
0.04 |
0.04 |
0.07 |
0.18 |
0.20 | |||||
|
Executive transition costs |
- |
0.03 |
0.01 |
0.03 |
0.09 | |||||
|
Restructuring charges |
- |
- |
0.01 |
0.01 |
0.01 | |||||
|
Acquisition costs |
- |
- |
- |
- |
0.02 | |||||
|
Impairment of "held for sale" equipment |
0.02 |
- |
- |
0.02 |
- | |||||
|
Termination of contractual obligation |
0.01 |
- |
- |
0.01 |
- | |||||
|
Income tax effect of non-GAAP adjustments |
(0.01) |
(0.02) |
(0.03) |
(0.05) |
(0.09) | |||||
|
Income tax effect of valuation allowance |
- |
0.04 |
0.42 |
0.15 |
0.43 | |||||
|
Non-GAAP net income |
$ 0.36 |
$ 0.17 |
$ (0.01) |
$ 0.65 |
$ 0.32 | |||||
|
Weighted average number of diluted shares (thousands) |
33,526 |
33,100 |
32,212 |
33,150 |
31,564 | |||||
|
ULTRA CLEAN HOLDINGS, INC. | ||||||||||
|
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE | ||||||||||
|
Three Months Ended |
Twelve Months Ended | |||||||||
|
December 30, |
September 23, |
December 25, |
December 30, |
December 25, | ||||||
|
2016 |
2016 |
2015 |
2016 |
2015 | ||||||
|
(in thousands, except percentages) |
||||||||||
|
Provision for income taxes on a GAAP basis |
$ 2,536 |
$ 2,750 |
$ 12,311 |
$ 8,896 |
$ 14,339 | |||||
|
Income tax effect of non-GAAP adjustments (1) |
549 |
574 |
794 |
1,664 |
2,767 | |||||
|
Income tax effect of valuation allowance (2) |
49 |
(1,391) |
(13,424) |
(4,964) |
(13,859) | |||||
|
Non-GAAP provision for income taxes |
$ 3,134 |
$ 1,933 |
$ (319) |
$ 5,596 |
$ 3,247 | |||||
|
Income before income taxes on a GAAP basis |
$ 12,489 |
$ 5,364 |
$ (3,477) |
$ 18,947 |
$ 3,607 | |||||
|
Amortization of intangible assets |
1,439 |
1,438 |
2,170 |
5,757 |
6,212 | |||||
|
Executive transition costs |
- |
925 |
421 |
925 |
2,783 | |||||
|
Restructuring charges |
109 |
(105) |
245 |
251 |
245 | |||||
|
Impairment of "held for sale" assets |
666 |
- |
- |
666 |
- | |||||
|
Termination of a long-term contractual obligation |
438 |
- |
- |
438 |
- | |||||
|
Acquisition costs |
- |
- |
- |
- |
642 | |||||
|
Non-GAAP income before income taxes |
$ 15,141 |
$ 7,622 |
$ (641) |
$ 26,984 |
$ 13,489 | |||||
|
Effective income tax rate on a GAAP basis |
20.3% |
51.3% |
(354.1%) |
47.0% |
397.5% | |||||
|
Non-GAAP effective income tax rate |
20.7% |
25.4% |
49.7% |
20.7% |
24.1% | |||||
|
1 |
Tax effect of items (1) through (6) above based on the non-gaap tax rate |
|
2 |
The Company's GAAP tax expense is substantially 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. |
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SOURCE Ultra Clean Holdings, Inc.