EX-99.1 2 dp171761_ex9901.htm EXHIBIT 99.1

 

Exhibit 99.1

 

Press Release Source: Ultra Clean Holdings, Inc.

 

Ultra Clean Reports First Quarter Financial Results

 

 

HAYWARD, Calif., April 27, 2022 /PRNewswire/ Ultra Clean Holdings, Inc. (Nasdaq: UCTT), today reported its financial results for the first quarter ended April 1, 2022.

 

“The semiconductor industry is in a period of robust secular growth and increasing demand,” said Jim Scholhamer, CEO. “Appetite and appreciation for our products and services remains elevated, upheld by our persistent commitment to quality as recognized by key customers. We are confident in our proven ability to navigate and adapt to challenges, including those that affected our first quarter results.”

 

First Quarter 2022 GAAP Financial Results

 

Total revenue was $564.1 million. Products contributed $486.8 million and Services added $77.3 million. Total gross margin was 20.2%, operating margin was 8.1%, and net income was $27.9 million or $0.62 and $0.61 per basic and diluted share, respectively. This compares to total revenue of $615.1 million, gross margin of 21.0%, operating margin of 10.2%, and net income of $45.5 million or $1.01 and $1.00 per basic and diluted share, respectively, in the prior quarter.

 

First Quarter 2022 Non-GAAP Financial Results

 

On a non-GAAP basis, gross margin was 20.5%, operating margin was 10.9%, and net income was $43.3 million or $0.95 per diluted share. This compares to gross margin of 21.5%, operating margin of 12.6%, and net income of $55.5 million or $1.22 per diluted share in the prior quarter.

 

Second Quarter 2022 Outlook

 

The Company expects revenue in the range of $550.0 million to $630.0 million and GAAP diluted net income per share to be between $0.60 and $0.92. The Company expects non-GAAP diluted net income per share to be between $0.84 and $1.20.

 

Conference Call

 

The conference call and webcast 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 9474156. 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, legal related costs 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 31, 2021 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

SVP Investor Relations

rbennetto@uct.com

 

 

 

ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per share data)

 

   Three Months Ended
   April 1,  March 26,
   2022  2021
       
Revenues:          
Product  $486,831   $345,616 
Services   77,313    72,011 
Total revenues   564,144    417,627 
Cost of revenues:          
Product   399,539    283,569 
Services   50,877    47,120 
Total cost of revenues   450,416    330,689 
Gross profit   113,728    86,938 
Operating expenses:          
Research and development   6,839    4,208 
Sales and marketing   13,797    7,608 
General and administrative   47,381    34,712 
Total operating expenses   68,017    46,528 
Income from operations   45,711    40,410 
Interest income   65    98 
Interest expense   (6,413)   (3,605)
Other income (expense), net   5    (4,263)
Income before provision for income taxes   39,368    32,640 
Provision for income taxes   8,542    7,015 
Net income   30,826    25,625 
Less: Net income attributable to noncontrolling interests   2,896    628 
Net income attributable to UCT  $27,930   $24,997 
           
Net income per share attributable to UCT common stockholders:          
Basic  $0.62   $0.62 
Diluted  $0.61   $0.60 
Shares used in computing net income per share:          
Basic   44,927    40,564 
Diluted   45,593    41,639 

 

 

 

ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; in thousands)

 

   April 1,  December 31,
   2022  2021
ASSETS          
Current assets:          
  Cash and cash equivalents  $367,004   $466,455 
  Accounts receivable, net of allowance   279,274    250,147 
  Inventories   440,341    379,235 
  Prepaid expenses and other current assets   36,079    41,260 
Total current assets   1,122,698    1,137,097 
           
Property, plant and equipment, net   250,088    242,347 
Goodwill   268,521    270,044 
Intangibles assets, net   237,644    245,696 
Deferred tax assets, net   36,575    37,607 
Operating lease right-of-use assets   86,799    83,357 
Other non-current assets   9,315    9,242 
Total assets  $2,011,640   $2,025,390 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
  Bank borrowings  $19,489   $22,071 
  Accounts payable   288,121    332,897 
  Accrued compensation and related benefits   40,813    46,790 
  Operating lease liabilities   17,316    17,299 
  Other current liabilities   51,923    50,060 
Total current liabilities   417,662    469,117 
           
Bank borrowings, net of current portion   530,892    529,919 
Deferred tax liabilities   54,761    54,889 
Operating lease liabilities   68,837    65,923 
Other liabilities   13,386    12,894 
Total liabilities   1,085,538    1,132,742 
           
Equity:          
UCT stockholders’ equity:          
  Common stock   517,222    511,628 
  Retained earnings   365,347    337,417 
  Accumulated other comprehensive gain (loss)   (3,004)   (167)
Total UCT stockholders' equity   879,565    848,878 
  Non-controlling interest   46,537    43,770 
Total equity   926,102    892,648 
Total liabilities and stockholders' equity  $2,011,640   $2,025,390 

 

 

 

ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)

 

   Fiscal Year Ended
   April 1,  March 26,
   2022  2021
Cash flows from operating activities:          
Net income  $30,826   $25,625 
Adjustments to reconcile net income to net cash provided by operating activities:          
      Depreciation and amortization   18,903    11,823 
Stock-based compensation   5,596    3,465 
Deferred income taxes   1,390    1,236 
Change in the fair value of financial instruments and earn-out liability   285    11,639 
Gain from insurance proceeds   —    (7,332)
Others   181    101 
Changes in assets and liabilities:          
Accounts receivable   (29,127)   (22,502)
Inventories   (61,106)   (8,782)
Prepaid expenses and other current assets   4,590    3,018 
Other non-current assets   (73)   (1,011)
Accounts payable   (35,887)   43,266 
Accrued compensation and related benefits   (5,977)   (3,599)
Operating lease assets and liabilities   (511)   (315)
Income taxes payable   —    2,777 
Other liabilities   3,487    6,194 
Net cash provided by (used in) operating activities   (67,423)   65,603 
Cash flows from investing activities:          
Purchases of property, plant and equipment   (28,380)   (6,487)
Proceeds from sale of property and equipment, including insurance proceeds   —    7,332 
Net cash provided by (used in) investing activities   (28,380)   845 
Cash flows from financing activities:          
Proceeds from bank borrowings   —    6,627 
Payments on bank borrowings and finance leases   (2,672)   (8,243)
Others   —    (2)
Net cash used in financing activities   (2,672)   (1,618)
Effect of exchange rate changes on cash and cash equivalents   (976)   (847)
Net increase (decrease) in cash and cash equivalents   (99,451)   63,983 
Cash and cash equivalents at beginning of period   466,455    200,274 
Cash and cash equivalents at end of period  $367,004   $264,257 

 

 

 

ULTRA CLEAN HOLDINGS, INC.
REPORTABLE SEGMENTS
GAAP TO NON-GAAP RECONCILIATION 
(Unaudited; dollars in thousands)

 

   GAAP  Non-GAAP
   Three Months Ended  Three Months Ended
   April 1, 2022  April 1, 2022
   Products  Services  Consolidated  Products  Services  Consolidated
Revenues  $486,831   $77,313   $564,144   $486,831   $77,313   $564,144 
Gross profit  $87,292   $26,436   $113,728   $88,426   $27,459   $115,885 
Gross margin   17.9%    34.2%    20.2%    18.2%    35.5%    20.5% 
Income from operations  $37,573   $8,138   $45,711   $49,476   $12,157   $61,633 
Operating margin   7.7%    10.5%    8.1%    10.2%    15.7%    10.9% 

 

   Three Months Ended
   April 1, 2022
   Products  Services  Consolidated
Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in thousands)
Reported gross profit on a GAAP basis  $87,292   $26,436   $113,728 
Amortization of intangible assets (1)   657    1,023    1,680 
Stock-based compensation expense (3)   477    —    477 
Non-GAAP gross profit  $88,426   $27,459   $115,885 
                
Reconciliation of GAAP Gross margin to Non-GAAP Gross margin               
Reported gross margin on a GAAP basis   17.9%   34.2%   20.2%
Amortization of intangible assets (1)   0.2%   1.3%   0.2%
Stock-based compensation expense (3)   0.1%   —    0.1%
Non-GAAP gross margin   18.2%   35.5%   20.5%
                
Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in thousands)               
Reported income from operations on a GAAP basis  $37,573   $8,138   $45,711 
Amortization of intangible assets (1)   4,405    3,647    8,052 
Restructuring charges (2)   49    —    49 
Stock-based compensation expense (3)   5,077    372    5,449 
Legal-related costs (4)   2,200    —    2,200 
Acquisition related costs (5)   172    —    172 
Non-GAAP income from operations  $49,476   $12,157   $61,633 
                
Reconciliation of GAAP Operating margin to Non-GAAP Operating margin               
Reported operating margin on a GAAP basis   7.7%   10.5%   8.1%
Amortization of intangible assets (1)   0.9%   4.7%   1.4%
Restructuring charges (2)   0.0%   0.0%   0.0%
Stock-based compensation expense (3)   1.0%   0.5%   1.0%
Legal-related costs (4)   0.5%   0.0%   0.4%
Acquisition related costs (5)   0.1%   0.0%   0.1%
Non-GAAP operating margin   10.2%   15.7%   10.9%

 

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

2Represents severance, retention and costs related to facility closures

3Represents compensation expense for stock granted to employees and directors

4Represents estimated costs related to legal proceedings

5Represents costs related to the acquisition of Ham-Let

 

 

 

ULTRA CLEAN HOLDINGS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS

 

   Three Months Ended
   April 1,  March 26,  December 31,
   2022  2021  2021
Reconciliation of GAAP Net Income to Non-GAAP Net Income (in thousands)
Reported net income attributable to UCT on a GAAP basis  $27,930   $24,997   $45,470 
Amortization of intangible assets (1)   8,052    4,889    9,511 
Restructuring charges (2)   49    140    (391)
Stock-based compensation expense (3)   5,449    4,043    4,667 
Legal-related costs (4)   2,200    —    2,200 
Acquisition related costs (5)   172    1,337    449 
Fair value related adjustments (6)   —    11,582    546 
Insurance proceeds (7)   —    (7,332)   — 
Income tax effect of non-GAAP adjustments (8)   (2,611)   (2,639)   (2,336)
Income tax effect of valuation allowance (9)   2,084    1,140    (2,400)
Non-GAAP net income attributable to UCT  $43,325   $38,157   $57,716 
                
Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in thousands)
Reported income from operations on a GAAP basis  $45,711   $40,410   $62,732 
Amortization of intangible assets (1)   8,052    4,889    9,511 
Restructuring charges (2)   49    140    (391)
Stock-based compensation expense (3)   5,449    4,043    4,667 
Legal-related costs (4)   2,200    —    — 
Acquisition related costs (5)   172    1,337    449 
Fair value related adjustments (6)   —    —    546 
Non-GAAP income from operations  $61,633   $50,819   $77,514 
                
Reconciliation of GAAP Operating margin to Non-GAAP Operating margin      
Reported operating margin on a GAAP basis   8.1%   9.7%   10.2%
Amortization of intangible assets (1)   1.4%   1.2%   1.5%
Restructuring charges (2)   0.0%   0.0%   -0.1%
Stock-based compensation expense (3)   1.0%   1.0%   0.8%
Legal-related costs (4)   0.4%   —    — 
Acquisition related costs (5)   0.1%   0.3%   0.1%
Fair value related adjustments (6)   —    0.0%   0.1%
Non-GAAP operating margin   10.9%   12.2%   12.6%
                
Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in thousands) 
Reported gross profit on a GAAP basis  $113,728   $86,938   $129,086 
Amortization of intangible assets (1)   1,680    1,022    1,681 
Restructuring charges (2)   —    6    115 
Stock-based compensation expense (3)   477    980    719 
Fair value related adjustments (6)   —    —    546 
Non-GAAP gross profit  $115,885   $88,946   $132,147 
                
Reconciliation of GAAP Gross margin to Non-GAAP Gross margin
Reported gross margin on a GAAP basis   20.2%   20.8%   21.0%
Amortization of intangible assets (1)   0.2%   0.3%   0.3%
Restructuring charges (2)   —    0.0%   0.0%
Stock-based compensation expense (3)   0.1%   0.2%   0.1%
Fair value related adjustments (6)   —    —    0.1%
Non-GAAP gross margin   20.5%   21.3%   21.5%

 

 

 

 

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  $(6,343)  $(7,770)  $(7,643)
Fair value related adjustments (6)   —    11,582    — 
Insurance proceeds (7)   —    (7,332)   — 
Non-GAAP interest and other income (expense)  $(6,343)  $(3,520)  $(7,643)
                
Reconciliation of GAAP Earnings Per Diluted Share to Non-GAAP Earnings Per Diluted Share 
Reported net income on a GAAP basis  $0.61   $0.60   $1.00 
Amortization of intangible assets (1)   0.18    0.12    0.21 
Restructuring charges (2)   0.00    —    (0.01)
Stock-based compensation expense (3)   0.12    0.10    0.10 
Legal-related costs (4)   0.05    —    — 
Acquisition related costs (5)   —    0.03    0.01 
Fair value related adjustments (6)   —    0.28    0.01 
Insurance proceeds (7)   —    (0.18)   — 
Income tax effect of non-GAAP adjustments (8)   (0.06)   (0.06)   (0.05)
Income tax effect of valuation allowance (9)   0.05    0.03    (0.05)
Non-GAAP net income  $0.95   $0.92   $1.22 
Weighted average number of diluted shares (thousands) on a non-GAAP basis   45,593    41,639    45,525 

 

ULTRA CLEAN HOLDINGS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE

 

   Three Months Ended
   April 1,  March 26,  December 31,
   2022  2021  2021
(in thousands, except percentages)         
Provision for income taxes on a GAAP basis  $8,542   $7,015   $6,303 
Income tax effect of non-GAAP adjustments (8)   2,611    2,639    2,336 
Income tax effect of valuation allowance (9)   (2,084)   (1,140)   2,400 
Non-GAAP provision for income taxes  $9,069   $8,514   $11,039 
                
Income before income taxes on a GAAP basis  $39,368   $32,640   $55,089 
Amortization of intangible assets (1)   8,052    4,889    9,511 
Restructuring charges (2)   49    140    (391)
Stock-based compensation expense (3)   5,449    4,043    4,667 
Legal-related costs (4)   2,200    —    — 
Acquisition related costs (5)   172    1,337    449 
Fair value related adjustments (6)   —    11,582    546 
Insurance proceeds (7)   —    (7,332)   — 
Non-GAAP income before income taxes  $55,290   $47,299   $69,871 
Effective income tax rate on a GAAP basis   21.7%   21.5%   11.4%
Non-GAAP effective income tax rate   16.4%   18.0%   15.8%

 

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

2Represents severance, retention and costs related to facility closures

3Represents compensation expense for stock granted to employees and directors

4Represents estimated costs related to legal proceedings

5Represents costs related to the acquisition of Ham-Let

6Adjustments related to the fair values of inventories, contingent consideration, purchase obligation and forward hedge contracts

7Insurance proceeds pertaining to the Cinos fire in 2018

8Tax effect of items (1) through (7) above based on the non-GAAP tax rate

9The 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.