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

November 04, 2011 | About:
10qk

10qk

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Axcelis Technologies Inc. (ACLS) filed Quarterly Report for the period ended 2011-09-30.

Axcelis Technologies Inc. has a market cap of $151.1 million; its shares were traded at around $1.42 with a P/E ratio of 15.8 and P/S ratio of 0.5.

Highlight of Business Operations:

Product revenue, which includes systems sales, sales of spare parts and product upgrades, was $64.4 million, or 88.8% of revenue, for the three months ended September 30, 2011, compared with $66.2 million, or 88.1% of revenue for the three months ended September 30, 2010. Product revenue was $235.3 million, or 90.8% of revenue for the nine months ended September 30, 2011, compared with $157.1 million, or 86.4% of revenue for the nine months ended September 30, 2010. System sales were $35.1 million, or 48.5% of revenue, for the three months ended September 30, 2011, compared with $39.1 million, or 52.1% of revenue, for the three months ended September 30, 2010. System sales were $143.7 million, or 55.5% of revenue, for the nine months ended September 30, 2011, compared with $77.3 million, or 42.5% of revenue, for the nine months ended September 30, 2010. The decrease in product revenue in the three month period ended September 30, 2011 is attributable to the weakening of the semiconductor market and a related delay in capital spending by semiconductor manufacturers, following stronger quarters at the beginning of 2011, as reflected in the nine-month year over year comparisons. Despite this market slowdown, we believe we are gaining traction with our single wafer ion implant systems and with our dry strip products.

Service revenue, which includes the labor component of maintenance and service contracts and fees for service hours provided by on-site service personnel, was $8.1 million, or 11.2% of revenue, for the three months ended September 30, 2011, compared with $8.9 million, or 11.9% of revenue, for the three months ended September 30, 2010. Service revenue was $23.7 million, or 9.2% of revenue for the nine months ended September 30, 2011, compared with $24.7 million, or 13.6% of revenue for the nine months ended September 30, 2010. Service revenue is affected by the expansion of the installed base of off-warranty systems and can fluctuate from period to period based on capacity utilization at customers manufacturing facilities.

Included in total revenue of $72.5 million for the three month period ended September 30, 2011, is revenue from sales of ion implantation products and service of $51.1 million, or 70.5% of total revenue, compared with $64.2 million, or 85.5% of total revenue, for the three months ended September 30, 2010. The dollar decrease was due to the factors discussed above for product revenue. Revenue from sales of ion implantation products and service accounted for $187.8 million, or 72.5% of revenue, for the nine months ended September 30, 2011, compared to $153.2 million, or 84.3% of revenue, in the nine months ended September 30, 2010. The dollar increase was due to the factors discussed above for product revenue.

Gross profit from product revenue was 37.8% for the three months ended September 30, 2011, compared to gross profit of 27.7% for the three months ended September 30, 2010. The increase in gross profit of 10.1% is attributable to lower revenue deferrals and favorable absorption of fixed overhead costs which accounted for 7.9%, a higher mix of a parts and upgrade revenue which accounted for 1.8% and a lower provision for excess inventory which accounted for 0.4%. Gross profit from product revenue was 36.3% for the nine months ended September 30, 2011, compared with 28.8% for the nine months ended September 30, 2010. The increase in gross profit of 7.5% is attributable to higher systems sales volume and the related favorable absorption of fixed overhead costs which accounted for 16.0% and a lower provision for excess inventory which accounted for 0.5%, offset by a lower mix of parts and upgrade revenue at lower margins which reduced gross profit by 9.0%.

Sales and marketing expense was $7.2 million for the three months ended September 30, 2011, equal to the spending in the three months ended September 30, 2010. Sales and marketing expense was $22.7 million for the nine months ended September 30, 2011, an increase of $2.3 million, or 11.3%, compared with $20.4 million for the nine months ended September 30, 2011. The increase was primarily due to increased payroll costs ($2.1 million) due to the increased sales volume of our products experienced by the Company during the year, increased commission costs ($0.8 million), increased travel costs of ($0.3 million), increased freight costs ($0.5 million), and decreased supplies and marketing services expense ($1.4 million).

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