HAYWARD, Calif., May 6, 2024 /PRNewswire/ -- Ultra Clean Holdings, Inc. (Nasdaq: UCTT), today reported its financial results for the first quarter ended March 29, 2024.
"UCT's first quarter revenue and earnings came in above midpoint due to pockets of strength in shipments related to High Bandwidth Memory and advanced packaging supporting AI as well as the operational efficiencies associated with those shipments," said Jim Scholhamer. "While not a clear sign of a broader industry recovery right now, we anticipate these areas remaining strong."
First Quarter 2024 GAAP Financial Results
Total revenue was $477.7 million. Products contributed $418.5 million and Services added $59.2 million. Total gross margin was 17.3%, operating margin was 3.6%, and net loss was $(9.4) million or $(0.21) per diluted share. This compares to total revenue of $444.8 million, gross margin of 16.0%, operating margin of 1.0%, and net loss of $(3.8) million or $(0.08) per diluted share, in the prior quarter.
First Quarter 2024 Non-GAAP Financial Results
On a non-GAAP basis, gross margin was 17.9%, operating margin was 6.5%, and net income was $12.1 million or $0.27 per diluted share. This compares to gross margin of 16.7%, operating margin of 5.2%, and net income of $8.5 million or $0.19 per diluted share in the prior quarter.
Second Quarter 2024 Outlook
The Company expects revenue in the range of $465 million to $515 million. The Company expects GAAP diluted net loss per share to be between $(0.13) and $0.07 and non-GAAP diluted net income per share to be between $0.16 and $0.36.
Conference Call
http://uct.com/investors/events/.
About Ultra Clean Holdings, Inc.
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 defines non-GAAP net income as net loss before amortization of intangible assets, stock-based compensation, restructuring charges, acquisition activity costs, fair value adjustments, 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
Contact:
[email protected]
ULTRA CLEAN HOLDINGS, INC. | |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||
(Unaudited; in millions, except per share data) | |||
Three Months Ended | |||
March 29, 2024 | March 31, 2023 | ||
Revenues: | |||
Product | $ 418.5 | $ 368.6 | |
Services | 59.2 | 64.7 | |
Total revenues | 477.7 | 433.3 | |
Cost of revenues: | |||
Product | 354.0 | 315.1 | |
Services | 41.1 | 45.2 | |
Total cost revenues | 395.1 | 360.3 | |
Gross margin | 82.6 | 73.0 | |
Operating expenses: | |||
Research and development | 7.0 | 7.1 | |
Sales and marketing | 13.7 | 13.1 | |
General and administrative | 44.6 | 40.4 | |
Total operating expenses | 65.3 | 60.6 | |
Income from operations | 17.3 | 12.4 | |
Interest income | 1.4 | 0.5 | |
Interest expense | (12.2) | (11.8) | |
Other income (expense), net | (3.8) | 2.8 | |
Income before provision for income taxes | 2.7 | 3.9 | |
Provision for income taxes | 9.9 | 3.5 | |
Net income (loss) | (7.2) | 0.4 | |
Less: Net income attributable to noncontrolling interests | 2.2 | 3.8 | |
Net loss attributable to UCT | $ (9.4) | $ (3.4) | |
Net loss per share attributable to UCT common stockholders: | |||
Basic | $ (0.21) | $ (0.08) | |
Diluted | $ (0.21) | $ (0.08) | |
Shares used in computing net loss per share: | |||
Basic | 44.6 | 44.8 | |
Diluted | 44.6 | 44.8 | |
ULTRA CLEAN HOLDINGS, INC. | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(Unaudited; in millions) | |||
March 29, | December 29, | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 293.0 | $ 307.0 | |
Accounts receivable, net of allowance for credit losses | 194.5 | 180.8 | |
Inventories | 388.1 | 374.5 | |
Prepaid expenses and other current assets | 33.1 | 30.9 | |
Total current assets | 908.7 | 893.2 | |
Property, plant and equipment, net | 329.2 | 328.3 | |
Goodwill | 265.2 | 265.2 | |
Intangible assets, net | 207.6 | 215.3 | |
Deferred tax assets, net | 3.3 | 3.1 | |
Operating lease right-of-use assets | 163.4 | 151.7 | |
Other non-current assets | 10.2 | 10.9 | |
Total assets | $ 1,887.6 | $ 1,867.7 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Bank borrowings | $ 17.0 | $ 17.6 | |
Accounts payable | 215.7 | 192.9 | |
Accrued compensation and related benefits | 37.1 | 47.7 | |
Operating lease liabilities | 18.3 | 18.1 | |
Other current liabilities | 41.3 | 33.7 | |
Total current liabilities | 329.4 | 310.0 | |
Bank borrowings, net of current portion | 458.2 | 461.2 | |
Deferred tax liabilities | 18.9 | 19.0 | |
Operating lease liabilities | 153.4 | 143.0 | |
Other liabilities | 38.6 | 37.3 | |
Total liabilities | 998.5 | 970.5 | |
Equity: | |||
UCT stockholders' equity: | |||
Common stock | 500.1 | 496.6 | |
Retained earnings | 337.3 | 346.7 | |
Accumulated other comprehensive loss | (6.5) | (4.4) | |
Total UCT stockholders' equity | 830.9 | 838.9 | |
Noncontrolling interests | 58.2 | 58.3 | |
Total equity | 889.1 | 897.2 | |
Total liabilities and equity | $ 1,887.6 | $ 1,867.7 | |
ULTRA CLEAN HOLDINGS, INC. | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||
(Unaudited; in millions) | |||
Three Months Ended | |||
March 29, | March 31, | ||
Cash flows from operating activities: | |||
Net income (loss) | $ (7.2) | $ 0.4 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 11.5 | 8.9 | |
Amortization of intangible assets | 7.7 | 5.8 | |
Stock-based compensation | 3.5 | 3.7 | |
Change in the fair value of financial instruments | 1.8 | 0.2 | |
Amortization of debt issuance costs | 1.0 | 1.0 | |
Deferred income taxes | (0.7) | (0.6) | |
Changes in assets and liabilities: | |||
Accounts receivable | (13.7) | 63.4 | |
Inventories | (13.6) | 10.9 | |
Prepaid expenses and other current assets | (0.8) | 6.3 | |
Other non-current assets | 0.7 | (1.7) | |
Accounts payable | 25.1 | (50.5) | |
Accrued compensation and related benefits | (10.6) | (14.7) | |
Income taxes payable | 2.1 | (1.6) | |
Operating lease assets and liabilities | (1.1) | (0.3) | |
Other liabilities | 4.1 | (3.2) | |
Net cash provided by operating activities | 9.8 | 28.0 | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (18.0) | (27.3) | |
Proceeds from sale of equipment | 0.1 | - | |
Net cash used in investing activities | (17.9) | (27.3) | |
Cash flows from financing activities: | |||
Principal payments on bank borrowings | (4.5) | (22.0) | |
Repurchase of shares | - | (14.2) | |
Net cash used in financing activities | (4.5) | (36.2) | |
Effect of exchange rate changes on cash and cash equivalents | (1.4) | (1.2) | |
Net decrease in cash and cash equivalents | (14.0) | (36.7) | |
Cash and cash equivalents at beginning of period | 307.0 | 358.8 | |
Cash and cash equivalents at end of period | $ 293.0 | $ 322.1 | |
ULTRA CLEAN HOLDINGS, INC. | |||||||||||
REPORTABLE SEGMENTS | |||||||||||
GAAP TO NON-GAAP RECONCILIATION | |||||||||||
(Unaudited; dollars in millions) | |||||||||||
GAAP | Non-GAAP | ||||||||||
Three Months Ended | Three Months Ended | ||||||||||
March 29, 2024 | March 29, 2024 | ||||||||||
Products | Services | Consolidated | Products | Services | Consolidated | ||||||
Revenues | $ 418.5 | $ 59.2 | $ 477.7 | $ 418.5 | $ 59.2 | $ 477.7 | |||||
Gross profit | $ 64.5 | $ 18.1 | $ 82.6 | $ 66.4 | $ 19.1 | $ 85.5 | |||||
Gross margin | 15.4 % | 30.6 % | 17.3 % | 15.8 % | 32.3 % | 17.9 % | |||||
Income from operations | $ 14.7 | $ 2.6 | $ 17.3 | $ 25.0 | $ 6.0 | $ 31.0 | |||||
Operating margin | 3.5 % | 4.4 % | 3.6 % | 6.0 % | 10.1 % | 6.5 % | |||||
Three Months Ended | |||||||||||
March 29, 2024 | |||||||||||
Products | Services | Consolidated | |||||||||
Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions) | |||||||||||
Reported gross profit on a GAAP basis | $ 64.5 | $ 18.1 | $ 82.6 | ||||||||
Amortization of intangible assets (1) | 1.3 | 1.0 | 2.3 | ||||||||
Stock-based compensation expense (2) | 0.6 | - | 0.6 | ||||||||
Non-GAAP gross profit | $ 66.4 | $ 19.1 | $ 85.5 | ||||||||
Reconciliation of GAAP Gross margin to Non-GAAP Gross margin | |||||||||||
Reported gross margin on a GAAP basis | 15.4 % | 30.6 % | 17.3 % | ||||||||
Amortization of intangible assets (1) | 0.3 % | 1.7 % | 0.5 % | ||||||||
Stock-based compensation expense (2) | 0.1 % | - % | 0.1 % | ||||||||
Non-GAAP gross margin | 15.8 % | 32.3 % | 17.9 % | ||||||||
Reconciliation of GAAP Income (loss) from operations to Non-GAAP Income from operations (in millions) | |||||||||||
Reported income from operations on a GAAP basis | $ 14.7 | $ 2.6 | $ 17.3 | ||||||||
Amortization of intangible assets (1) | 4.8 | 2.9 | 7.7 | ||||||||
Stock-based compensation expense (2) | 3.4 | 0.5 | 3.9 | ||||||||
Restructuring charges (3) | 1.8 | - | 1.8 | ||||||||
Acquisition-related costs (4) | 0.3 | - | 0.3 | ||||||||
Non-GAAP income from operations | $ 25.0 | $ 6.0 | $ 31.0 | ||||||||
Reconciliation of GAAP Operating margin to Non-GAAP Operating margin | |||||||||||
Reported operating margin on a GAAP basis | 3.5 % | 4.4 % | 3.6 % | ||||||||
Amortization of intangible assets (1) | 1.1 % | 4.9 % | 1.6 % | ||||||||
Stock-based compensation expense (2) | 0.8 % | 0.8 % | 0.8 % | ||||||||
Restructuring charges (3) | 0.5 % | - % | 0.4 % | ||||||||
Acquisition-related costs (4) | 0.1 % | - % | 0.1 % | ||||||||
Non-GAAP operating margin | 6.0 % | 10.1 % | 6.5 % | ||||||||
1 Amortization of intangible assets related to the Company's business acquisitions | |||||||||||
2 Represents compensation expense for stock granted to employees and directors | |||||||||||
3 Represents severance, retention and costs related to facility closures | |||||||||||
4 Represents acquisition activity costs | |||||||||||
ULTRA CLEAN HOLDINGS, INC. | |||||
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS | |||||
Three Months Ended | |||||
March 29, 2024 | March 31, 2023 | December 29, 2023 | |||
Reconciliation of GAAP Net Loss to Non-GAAP Net Income (in millions) | |||||
Reported net loss attributable to UCT on a GAAP basis | $ (9.4) | $ (3.4) | $ (3.8) | ||
Amortization of intangible assets (1) | 7.7 | 5.8 | 7.2 | ||
Stock-based compensation expense (2) | 3.9 | 3.7 | 3.6 | ||
Restructuring charges (3) | 1.8 | 0.2 | 3.4 | ||
Acquisition related costs (4) | 0.3 | - | 3.4 | ||
Fair value related adjustments (5) | 1.3 | - | 2.5 | ||
Legal-related costs (6) | - | - | 0.5 | ||
Income tax effect of non-GAAP adjustments (7) | (3.0) | (1.6) | (3.4) | ||
Income tax effect of valuation allowance (8) | 9.5 | 2.9 | (4.9) | ||
Non-GAAP net income attributable to UCT | $ 12.1 | $ 7.6 | $ 8.5 | ||
Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in millions) | |||||
Reported income from operations on a GAAP basis | $ 17.3 | $ 12.4 | $ 4.6 | ||
Amortization of intangible assets (1) | 7.7 | 5.8 | 7.2 | ||
Stock-based compensation expense (2) | 3.9 | 3.7 | 3.6 | ||
Restructuring charges (3) | 1.8 | 0.2 | 3.4 | ||
Acquisition related costs (4) | 0.3 | - | 3.4 | ||
Fair value related adjustments (5) | - | - | 0.4 | ||
Legal-related costs (6) | - | - | 0.5 | ||
Non-GAAP income from operations | $ 31.0 | $ 22.1 | $ 23.1 | ||
Reconciliation of GAAP Operating margin to Non-GAAP Operating margin | |||||
Reported operating margin on a GAAP basis | 3.6 % | 2.9 % | 1.0 % | ||
Amortization of intangible assets (1) | 1.6 % | 1.3 % | 1.6 % | ||
Stock-based compensation expense (2) | 0.8 % | 0.9 % | 0.8 % | ||
Restructuring charges (3) | 0.4 % | - % | 0.8 % | ||
Acquisition related costs (4) | 0.1 % | - % | 0.1 % | ||
Fair value related adjustments (5) | - % | - % | 0.1 % | ||
Legal-related costs (5) | - % | - % | 0.8 % | ||
Non-GAAP operating margin | 6.5 % | 5.1 % | 5.2 % | ||
Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions) | |||||
Reported gross profit on a GAAP basis | $ 82.6 | $ 73.0 | $ 71.1 | ||
Amortization of intangible assets (1) | 2.3 | 1.5 | 2.0 | ||
Stock-based compensation expense (2) | 0.6 | 0.3 | 0.5 | ||
Restructuring charges (3) | - | - | 0.4 | ||
Fair value related adjustments (5) | - | - | 0.4 | ||
Non-GAAP gross profit | $ 85.5 | $ 74.8 | $ 74.4 | ||
Reconciliation of GAAP Gross margin to Non-GAAP Gross margin | |||||
Reported gross margin on a GAAP basis | 17.3 % | 16.8 % | 16.0 % | ||
Amortization of intangible assets (1) | 0.5 % | 0.4 % | 0.4 % | ||
Stock-based compensation expense (2) | 0.1 % | 0.1 % | 0.1 % | ||
Restructuring charges (3) | - % | - % | 0.1 % | ||
Fair value related adjustments (5) | - % | - % | 0.1 % | ||
Non-GAAP gross margin | 17.9 % | 17.3 % | 16.7 % | ||
Reconciliation of GAAP Interest and other income (expense) to Non-GAAP Interest and other income (expense) (in millions) | |||||
Reported interest and other income (expense) on a GAAP basis | $ (14.6) | $ (8.5) | $ (12.3) | ||
Fair value related adjustments (5) | 1.3 | - | 2.1 | ||
Non-GAAP interest and other income (expense) | $ (13.3) | $ (8.5) | $ (10.2) | ||
Reconciliation of GAAP Loss Per Diluted Share to Non-GAAP Earnings Per Diluted Share | |||||
Reported net loss on a GAAP basis | $ (0.21) | $ (0.08) | $ (0.08) | ||
Amortization of intangible assets (1) | 0.17 | 0.13 | 0.16 | ||
Stock-based compensation expense (2) | 0.09 | 0.08 | 0.08 | ||
Restructuring charges (3) | 0.04 | - | 0.08 | ||
Acquisition related costs (4) | 0.01 | - | 0.08 | ||
Fair value related adjustments (5) | 0.03 | - | 0.05 | ||
Legal-related costs (6) | - | - | 0.01 | ||
Income tax effect of non-GAAP adjustments (7) | (0.07) | (0.03) | (0.08) | ||
Income tax effect of valuation allowance (8) | 0.21 | 0.07 | (0.11) | ||
Non-GAAP net earnings | $ 0.27 | $ 0.17 | $ 0.19 | ||
Weighted average number of diluted shares (in millions) on a non-GAAP basis | 45.1 | 45.3 | 44.9 | ||
ULTRA CLEAN HOLDINGS, INC. | |||||
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE | |||||
Three Months Ended | |||||
Provision (benefit) for income taxes on a GAAP basis | $ 9.9 | $ 3.5 | $ (6.2) | ||
Income tax effect of non-GAAP adjustments (7) | 3.0 | 1.6 | 3.4 | ||
Income tax effect of valuation allowance (8) | (9.5) | (2.9) | 4.9 | ||
Non-GAAP provision for income taxes | $ 3.4 | $ 2.2 | $ 2.1 | ||
Income (loss) before income taxes on a GAAP basis | $ 2.7 | $ 3.9 | $ (7.7) | ||
Amortization of intangible assets (1) | 7.7 | 5.8 | 7.2 | ||
Stock-based compensation expense (2) | 3.9 | 3.7 | 3.6 | ||
Restructuring charges (3) | 1.8 | 0.2 | 3.4 | ||
Acquisition related costs (4) | 0.3 | - | 3.4 | ||
Fair value related adjustments (5) | 1.3 | - | 2.5 | ||
Legal-related costs (6) | - | - | 0.5 | ||
Non-GAAP income before income taxes | $ 17.7 | $ 13.6 | $ 12.9 | ||
Effective income tax rate on a GAAP basis | 366.7 % | 89.7 % | 80.5 % | ||
Non-GAAP effective income tax rate | 19.7 % | 16.0 % | 16.4 % | ||
1 Amortization of intangible assets related to the Company's business acquisitions | |||||
2 Represents compensation expense for stock granted to employees and directors | |||||
3 Represents severance, retention and costs related to facility closures | |||||
4 Represents acquisition activity costs | |||||
5 Fair value adjustments related to contingent consideration | |||||
6 Represents estimated costs related to certain legal proceedings | |||||
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 | |||||
SOURCE Ultra Clean Holdings, Inc.
