Axcelis Announces Financial Results for the Second Quarter of 2006.BEVERLY Beverly, city (1990 pop. 38,195), Essex co., NE Mass., on Massachusetts Bay; inc. as a city 1894. Its chief manufactures are electronic and scientific equipment, consumer goods, and chemicals. , Mass. -- Experiences broad-based broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased demand across product portfolio and significant momentum with new product introductions Axcelis Technologies Axcelis Technologies, Inc. NASDAQ: ACLS engages in the design, manufacture, and servicing of capital equipment for the semiconductor manufacturing industry worldwide. , Inc. (Nasdaq: ACLS ACLS abbr. advanced cardiac life support ) today announced financial results for its second quarter ended June June: see month. 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 SEN. This is said to be an ancient word which signified justice. Co. Litt. 61 a. 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 restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and related costs of $3.8 million, or $0.04 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. Commenting on the Company's performance, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Mary Mary, the mother of Jesus Mary, in the Bible, mother of Jesus. Christian tradition reckons her the principal saint, naming her variously the Blessed Virgin Mary, Our Lady, and Mother of God (Gr., theotokos). Her name is the Hebrew Miriam. 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 (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. platform gained traction Traction Definition Traction is the use of a pulling force to treat muscle and skeleton disorders. Purpose Traction is usually applied to the arms and legs, the neck, the backbone, or the pelvis. 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 fol·low-on adj. Following as a related or consequent aspect or development: "Such contracts involve follow-on sales of maintenance services" Christian Science Monitor. 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 implant /im·plant/ (im-plant´) to insert or to graft (tissue, or inert or radioactive material) into intact tissues or a body cavity. process times by implanting clusters of boron boron (bōr`ŏn) [New Gr. from borax], chemical element; symbol B; at. no. 5; at. wt. 10.81; m.p. about 2,300°C;; sublimation point about 2,550°C;; sp. gr. 2.3 at 25°C;; valence +3. , 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 we're Contraction of we are. we're we are 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 Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" 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 North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. 27% and Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). 16%.The ion implantation Ion implantation A process that utilizes accelerated ions to penetrate a solid surface. The implanted ions can be used to modify the surface composition, structure, or property of the solid material. business (excluding SEN) accounted for 77% of total shipments in the second quarter while other products (RTP (1) (Rapid Transport Protocol) The protocol used in IBM's High Performance Routing (HPR) system. (2) (Realtime Transport Protocol) An IP protocol that supports real time transmission of voice and video. , Dry Strip and Curing) accounted for 23%. Service revenue (service labor, spare parts Spare parts, also referred to as Service Parts is a term used to indicate extra parts available and in proximity to the mechanical item, such as a automobile, boat, engine, for which they might be used. Spare parts are also called “spares. 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 Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. 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 Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments increased by $25.4 million (of which $24.2 million was received from the sale of convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. ) 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement This document contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. under the SEC safe harbor provisions. These statements, which include those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 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 Beverly is a city in Essex County, Massachusetts, United States. The population was 39,862 at the 2000 census. A resort, residential and manufacturing community, Beverly includes Beverly Farms and Prides Crossing. , 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 Rapid Thermal Processing (or RTP) refers to a semiconductor manufacturing process which heats silicon wafers to high temperatures (up to 1200 C or greater) on a timescale of several seconds or less. , 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 There are two kinds of addresses that are widely used on the Internet. One is a person's e-mail address, and the other is the address of a Web site, which is known as a URL. Following is an explanation of Internet e-mail addresses only. For more on URLs, see URL and Internet domain name. 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
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