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Axcelis Technologies Inc. Reports Operating Results (10-Q)

November 05, 2010 | About:
10qk

10qk

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Axcelis Technologies Inc. (ACLS) filed Quarterly Report for the period ended 2010-09-30.

Axcelis Technologies Inc. has a market cap of $265.5 million; its shares were traded at around $2.56 with and P/S ratio of 2. ACLS is in the portfolios of Arnold Schneider of Schneider Capital Management, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Product revenue, which includes systems sales, sales of spare parts and product upgrades, was $66.2 million, or 88.1% of revenue, for the three months ended September 30, 2010, compared with $25.9 million, or 73.9% of revenue for the three months ended September 30, 2009. Product revenue was $157.1 million, or 86.4% of revenue for the nine months ended September 30, 2010, compared with $69.4 million, or 73.6% of revenue for the nine months ended September 30, 2009. System sales were $39.1 million, or 52.1% of revenue, for the three months ended September 30, 2010, compared with $10.1 million, or 28.8% of revenue, for the three months ended September 30, 2009. System sales were $77.3 million, or 42.5% of revenue, for the nine months ended September 30, 2010, compared with $26.7 million, or 28.3% of revenue, for the nine months ended September 30, 2009. The increase in product revenue in the three and nine month period ended September 30, 2010 is attributable to the strengthening of the semiconductor market and a related increase in capital spending by semiconductor manufacturers. In addition, we also believe we are gaining market share with our single wafer ion implant systems for high current and high energy applications (the Optima HDx and Optima XEx), as customers are showing a higher acceptance of our technology.

Included in total revenue of $75.1 million for the three month period ended September 30, 2010, is revenue from sales of ion implantation products and service of $64.2 million, or 85.5% of total revenue, compared with $28.1 million, or 80.2% of total revenue, for the three months ended September 30, 2009. Revenue from sales of ion implantation products and service accounted for $153.2 million, or 84.3% of revenue, for the nine months ended September 30, 2010, compared to $77.7 million, or 82.2% of revenue, in the nine months ended September 30, 2009. The dollar increase was due to the factors discussed above for product revenue.

The Companys product revenues include sales of spare parts and product upgrades as well as complete systems. We refer to the business of selling spare parts and product upgrades, combined with the sale of maintenance labor and service contracts and service hours, as the aftermarket business. Included in total revenue of $75.1 million is revenue from our aftermarket business of $36.0 million for the three months ended September 30, 2010, compared to $24.9 million for the three months ended September 30, 2009. The revenue from our aftermarket business was $104.5 million for the nine months ended September 30, 2010, compared to $67.2 million for the nine months ended September 30, 2009. Aftermarket revenue generally increases with expansion of the installed base of systems but can fluctuate period to period based on capacity utilization at customers manufacturing facilities, which affects the sale of spare parts and demand for equipment service.

Research and development expense was $9.9 million in the three months ended September 30, 2010, an increase of $2.3 million, or 30.3%, compared with $7.6 million in the three months ended September 30, 2009. The increase was primarily due to increased payroll costs ($1.1 million), increased consulting costs ($0.9 million) and increased project material costs ($0.2 million). Research and development expense was $28.5 million for the nine months ended September 30, 2010, an increase of $3.6 million or 14.5%, compared with $24.9 million for the nine months ended September 30, 2009. The increase was comprised of increased payroll

In general the increase in sales and marketing expense is indicative of the improved market for our products. Sales and marketing expense was $7.2 million in the three months ended September 30, 2010, an increase of $1.5 million, or 26.3%, compared with $5.7 million for the three months ended September 30, 2009. The increase was primarily due to increased supplies and marketing service expenses of ($0.7 million), increased professional fee expenses ($0.3 million), increased travel costs ($0.3 million) and increased freight expenses ($0.3 million). Sales and marketing expense was $20.4 million for the nine months ended September 30, 2010, an increase of $1.5 million, or 7.9%, compared with $18.9 million for the nine months ended September 30, 2009. The increase was driven primarily by increased supplies and marketing service expenses ($0.8 million), increased travel costs ($0.8 million), increased freight expenses ($0.4 million), increased professional fees ($0.3 million), offset by decreased payroll costs ($0.3 million), decreased other miscellaneous expense ($0.3 million) and decreased taxes ($0.2 million).

General and administrative expense was $7.9 million for the three months ended September 30, 2010, equal to the spending in the three months ended September 30, 2009. General and administrative expense was $23.0 million for the nine months ended September 30, 2010, a decrease of $4.1 million, or 15.1%, compared with $27.1 million in the nine months ended September 30, 2009. The decrease was primarily due to decreased professional fee expenses ($5.0 million) and decreased other miscellaneous expense ($0.3 million), offset by increased payroll expense ($1.2 million).

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