10-year

10-Year Anniversary Promotion (20% off)

Join GuruFocus Premium Membership Now for Only $279/Year

The largest discount in the last 10 years

Save up to $500 on Global Membership.

Don't Miss It !

Free 7-day Trial
All Articles and Columns »

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

November 06, 2009 | About:
10qk

10qk

18 followers
Axcelis Technologies Inc. (ACLS) filed Quarterly Report for the period ended 2009-09-30.

Axcelis Technologies is a leading producer of ion implantation equipment used in the fabrication of semiconductors. The company also produces dry strip photostabilization and rapid thermal processing equipment which is used in semiconductor manufacturing primarily before and after the ion implantation process. In addition the company provides extensive aftermarket service and support including spare parts equipmentupgrades maintenance services and customer training. Axcelis Technologies Inc. has a market cap of $90.4 million; its shares were traded at around $0.87 with and P/S ratio of 0.3.

Highlight of Business Operations:

Product revenue, which includes systems sales, sales of spare parts and product upgrades, was $25.9 million, or 73.9% of revenue, for the three months ended September 30, 2009, compared with $32.5 million, or 69.9% of revenue for the three months ended September 30, 2008. Product revenue was $69.4 million, or 73.6% of revenue for the nine months ended September 30, 2009, compared with $163.5 million, or 78.5% of revenue for the nine months ended September 30, 2008. System sales were $10.1 million, or 28.8% of revenue, for the three months ended September 30, 2009, compared with $8.9 million, or 19.1% of revenue, for the three months ended September 30, 2008. System sales were $26.7 million, or 28.3% of revenue, for the nine months ended September 30, 2009, compared with $89.2 million, or 42.8% of revenue, for the nine months ended September 30, 2008. The decline in product revenue in the three and nine month period ended September 30, 2009 is attributable to a weak semiconductor market and a related decrease in capital spending by semiconductor manufacturers.

Research and development expense was $7.6 million in the three months ended September 30, 2009, a decrease of $8.3 million, or 52.2%, compared with $15.9 million in the three months ended September 30, 2008. The decrease was due to decreased payroll costs ($3.4 million), decreased consulting costs ($1.3 million), decreased project material costs ($0.7 million), decreased development asset amortization and depreciation costs ($2.3 million) and decreased other miscellaneous expenses ($0.6 million). Research and development expense was $24.9 million for the nine months ended September 30, 2009, a decrease of $24.8 million or 49.8%, compared with $49.7 million for the nine months ended September 30, 2008. The decrease was due to decreased payroll costs ($10.4 million), decreased consulting costs ($2.8 million), decreased project material costs ($3.2 million), decreased development asset amortization and depreciation costs ($6.6 million) and decreased other miscellaneous expenses ($1.8 million).

Sales and marketing expense was $5.7 million in the three months ended September 30, 2009, a decrease of $6.7 million, or 54.0%, compared with $12.4 million for the three months ended September 30, 2008. The decrease was due to decreased payroll costs ($2.4 million), decreased professional fee expenses ($2.2 million), decreased supplies and marketing service expenses ($0.6 million), decreased travel costs ($0.8 million), decreased freight costs ($0.3 million), and decreased other miscellaneous expenses ($0.4 million). Sales and marketing expense was $18.9 million for the nine months ended September 30, 2009, a decrease of $17.9 million, or 48.6%, compared with $36.8 million for the nine months ended September 30, 2008. The decrease was driven primarily by decreased payroll costs ($8.1 million), decreased professional fee expenses ($3.7 million), decreased supplies and marketing service expenses ($2.4 million), decreased travel cost ($2.1 million), decreased freight costs ($0.9 million), and decreased other miscellaneous expense ($0.7 million).

General and administrative expense was $7.9 million for the three months ended September 30, 2009, a decrease of $2.7 million or 25.4%, compared with $10.6 million in the three months ended September 30, 2008. The decrease was due to decreased payroll costs ($1.4 million), decreased professional fee expenses ($0.9 million), decreased amortization expense ($0.2 million) and decreased other miscellaneous expenses ($0.2 million). General and administrative expense was $27.1 million for the nine months ended September 30, 2009, a decrease of $4.2 million, or 13.4%, compared with $31.3 million in the nine months ended September 30, 2008. The decrease was due to decreased payroll costs ($4.0 million), decreased amortization costs ($0.6 million), decreased other miscellaneous expenses ($0.6 million), offset by increased professional fees ($1.0 million).

On March 30, 2009, pursuant to the Share Purchase Agreement with SHI and SEN, we sold all of our common shares in SEN to SHI for proceeds of $132.8 million before advisor fees and other expenses of $10.6 million, of which $7.1 million was paid during the quarter ended June 30, 2009. We used $86.4 million ($83.3 million principal and $3.1 million accrued interest and bank fee), of that amount to pay in full our outstanding obligations on our 4.25% Convertible Senior Subordinated Notes.

During the three and nine months ended September 30, 2009, we experienced negative cash flows from operations. This was predominately driven by the net loss from operations attributable to the depressed semiconductor equipment market and the resultant decline in revenues. Unrestricted cash and cash equivalents at September 30, 2009 were $41.2 million, compared to $37.7 million at December 31, 2008. The Major components of the change in unrestricted cash and cash equivalents during the nine months ended September 30, 2009 are net proceeds of $122.2 million from the sale of our investment in SEN, repayment of outstanding convertible debentures of $86.4 million (including accrued interest), and cash used for operations of $37.8 million.

Read the The complete ReportACLS is in the portfolios of Arnold Schneider of Schneider Capital Management.

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.5/5 (2 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK