BEVERLY, Mass., Feb. 13, 2015 /PRNewswire/ -- Axcelis
Technologies, Inc. (Nasdaq: ACLS) today released the following
letter to the Company's stockholders outlining the significant
actions the Company's Board of Directors and management team have
taken to create stockholder value and best position the Company for
the future.
The full text of the stockholder letter is as follows:
February 13, 2015
Dear Fellow Stockholders of Axcelis Technologies:
As we prepare for the 2015 Annual Meeting in May, we want to
inform you of the nine Board nominees that the Company will be
nominating for election this year and update you on the significant
actions the Axcelis Board and management team have taken to best
position the Company for the future.
AXCELIS HAS TAKEN BOLD ACTION TO CREATE STOCKHOLDER
VALUE
Your Board and management at Axcelis are executing on a
well-defined strategic plan designed to create sustainable,
long-term stockholder value. Since 2011, the Company has:
- Developed and introduced the full Purion product
offering, which is enabling us to gain share and establish a
leadership position in the ion implantation market;
- Significantly reduced operating expenses in
demonstrating our focus on cost discipline;
- Improved capital allocation and strengthened our
balance sheet to drive stockholder returns;
- Enhanced our management team by adding four new
executives to the top six positions at the company;
- Transformed our Board with fresh perspectives and
experienced leadership so that our 2015 slate will include a
total of five nominees – a majority of the Board – who are new or
who have served only one year; and
- Engaged in productive, ongoing discussions with stockholders
and incorporated their input into the Company's latest actions,
including our recent sale leaseback transaction, the nomination of
our new Board candidates and several governance policy
improvements.
Now is an exciting time for the Company, as we are just starting
to reap the benefits of these efforts, as evidenced by Axcelis'
strong operating and financial performance in the fourth quarter of
2014, strong solid outlook for 2015 and significant recent stock
price appreciation – up 67% since our 2014 Annual
Meeting.
DEVELOPMENT OF THE PURION PRODUCT FAMILY IS
WELL TIMED AND
THE PLATFORM IS GAINING MOMENTUM WITH
CUSTOMERS
Beginning with decisions made in 2011, the Axcelis management
team and Board maintained sufficient critical investment in the
Purion technology throughout a period of lower revenues. As a
result, the industry-leading Purion platform is now beginning to
drive substantial stockholder value.
Axcelis' development of a full Purion product family over the
last several years comes at an excellent time, as the ion
implantation market is poised for disruption. The Purion H, M,
and XE give Axcelis access to 100% of the ion implantation market,
something the Company had not achieved with its first-generation
Optima single wafer products. More importantly, the Purion common
platform, innovative scanned spot beam technology, advanced energy
filter and Eterna ELS source have enabled the Purion products to
gain momentum rapidly with potential customers:
- Two customers in the memory market are experiencing the full
power of the Purion platform – with all three types of Purion
products running in production.
- The newest member of the family, the Purion H high current
system, was first shipped in July
2014, and to date, the Company has installed six Purion H in
multiple fabs for memory applications, and expects additional
shipments in Q1 and Q2. The introduction of Purion H is
critical to Axcelis' market share gains, since the high current
market represents 60% of the ion implant market.
- There are multiple Purion M medium current systems running in
production at memory and foundry fabs, and customer interest is
high.
- The industry-leading Purion XE high energy implanter continues
to have success in memory and non-memory markets including sensors,
power devices and specialty logic chips.
Looking ahead, we believe 2015 will be a year of significant
demand for Purion – with the memory requirements for both DRAM and
NAND in mobile devices and data center applications increasing
rapidly.
THIRD PARTIES
AGREE THAT WE ARE POISED FOR GROWTH
WITH A PROMISING
STRATEGYi
"We have noted that
the crux of the long-term story lies in the company's ability to
gain traction for its new Purion product platform (medium and high
current). On this front, the company is also executing well,
where it is already seeing high volume production acceptance faster
than expected for its Purion H (high current) product. One
leading-edge memory customer has implemented Purion H into its new
DRAM fab, while a second DRAM customer is currently in
evaluations... Additionally, the company is targeting to seed
an evaluation unit with a leading-edge foundry for next generation
FinFET production. We believe these moves not only favorably
set up growth in 2015 but beyond as well." – Patrick Ho, Stifel,
Nicolaus & Company, February 6, 2015
"ACLS appears well
positioned for an exceptionally strong 2015, and we expect the
stock to move higher as the company garners more wins." – Y.
Edwin Mok, Needham & Company, February 6, 2015
"The faster than
expected ramp of Purion H systems is starting to show the potential
for ACLS to reach longer term goals of $115MM+/$0.20+ in peak
quarterly revenue/EPS (Co targets by C17). Our increased
target multiple represents increased confidence in meeting the
longer term targets." – Brett Piira, B. Riley & Co.,
February 6, 2015
|
AXCELIS HAS TAKEN DECISIVE STEPS TO INCREASE
PROFITABILITY AND DRIVE STOCKHOLDER VALUE
Reducing Operating Expenses – Axcelis has maintained
strong cost control discipline throughout Purion's development.
Over the past several years, the Company has reduced SG&A and
R&D significantly. From 2011 to 2014, our employee and
temporary worker headcount dropped from 1,046 to 765, representing
a 27% reduction. In 2012, 2013, and most recently, during the 2014
mid-year industry pause, Axcelis implemented three weeks of unpaid
furloughs, further controlling costs. In addition, our management
team continually evaluates additional cost reduction initiatives
with an intense focus on optimizing the cost structure of the
business without negatively impacting investments in Axcelis'
future.
Enhancing Gross Margin – As we conclude the ramp-up of
Purion H production from a cold start, which naturally had an
impact on gross margin, the Company has a detailed gross margin
improvement roadmap in place to exit 2015 in the high end of the
mid-30% range, and to achieve over 40% gross margins by 2017.
Combined, these actions have created significant operating
leverage, which will translate to increased profitability and cash
generation as top-line growth continues to be realized.
Improving Capital Allocation and Balance Sheet
Utilization – Development of an ion implantation system is
inherently capital-intensive, and our capital allocation discipline
continues to be a critical element to Axcelis' success. Over the
past several years, the Company has divested all of its non-core
assets, including the dry strip business, to focus exclusively on
ion implantation products. The majority of the required investment
for the Purion platform has been made and is starting to pay
dividends.
In addition, as we announced in early February, the Company
completed a sale leaseback transaction for Axcelis' headquarters
building with an affiliate of Middleton Partners. Under this
transaction, the Company received a purchase price of $49 million in cash, and signed a 22-year lease
on the property with very favorable terms. The sale leaseback
further enhanced our strong balance sheet and flexibility as we
grow the business.
AXCELIS' NEWLY ESTABLISHED MANAGEMENT TEAM AND
BOARD ARE COMMITTED TO ACTING IN THE BEST INTERESTS OF ALL AXCELIS
STOCKHOLDERS
Over the past several years, Axcelis has taken significant
actions to build a seasoned and experienced management team and to
institute best practices in corporate governance. The Company
has named new executives to four of the six top management
positions, including:
- Kevin Brewer as Executive
Vice President and Chief Financial Officer in June 2013.
- John Aldeborgh as
Executive Vice President, Customer Operations in January 2013.
- Bill Bintz as Executive
Vice President of Engineering and Marketing in April 2011.
- Doug Lawson as Executive
Vice President of Corporate Marketing and Strategy in November 2013.
In planning for anticipated Board succession, Axcelis commenced
a program in 2011 to refresh our Board of
Directors. Specifically:
- In 2011, Joseph Keithley was
added to the Board. Mr. Keithley spent almost 20 years as the
Chairman, CEO and President of Keithley Instruments, and has
brought to Axcelis significant operating experience and industry
knowledge.
- In 2014, stockholders elected two new Board
members: Arthur George and Barbara
Lundberg. Mr. George spent 30 years at Texas Instruments,
and has brought deep semiconductor industry knowledge to the Board.
Ms. Lundberg was the CEO and Vice Chairman of the Supervisory Board
of Tele-Fonika, and has provided significant strategic, operational
and financial execution expertise.
As expected, in August 2014, as
part of our Board renewal program, three current Axcelis Board
members, Stephen Hardis,
Brian Thompson and William Jennings indicated their desire not to
be nominated for re-election in May 2015. In connection with
these decisions, our Board adopted a policy not to nominate
director candidates who would be 75 years old or older upon
election. Our three retiring directors all made significant
contributions to our efforts over the years, and played strong
roles in the implementation of the Purion strategy and the
enhancement of the Axcelis management team, discussed above. We
thank them deeply for their contributions.
At the 2015 Annual Meeting, the Company will be nominating three
highly qualified new directors, each of whom will bring fresh and
valuable perspectives to our diverse Board. Notably, as part
of our ongoing commitment to our stockholders and listening to
their viewpoints, these new candidates were selected in conjunction
with stockholder feedback. The nominees include:
- Jim Green, who will bring
strong operating experience and a commitment to turnaround
management to the Axcelis Board. He has been the Chief Executive
Officer and President of Analogic Corporation since 2007. From 2005
to 2007, Mr. Green was Regional Vice President, California
Division, of Quest Diagnostics Incorporated, a leading provider of
diagnostic testing information and services. Before joining
Quest, Mr. Green served as Senior Vice President & General
Manager of Computed Tomography for Philips Medical Systems, a
global leader in the business of developing, manufacturing,
marketing, and servicing medical computed tomography systems.
- Duy-Loan Le, who is a
recognized semiconductor technologist with broad board experience
and extensive experience in various aspects of semiconductor design
and manufacturing. During her 31-year career at Texas
Instruments, Inc., Ms. Le became the first woman at TI elected to
the rank of Senior Fellow. Prior to this role, she held leadership
positions throughout TI. Ms. Le is currently the Embedded
Processing (EP) RAMP Manager, responsible for technology readiness
and product execution for TI's multibillion-dollar digital
business. Ms. Le has been awarded 24 patents and has seven pending
patent applications. Ms. Le is also a board member at National
Instruments, a supplier of measurement and control hardware and
software to the engineering and scientific communities to
accelerate productivity, innovation and discovery, and eSilicon, a
leading independent semiconductor design and manufacturing
solutions provider.
- Thomas St. Dennis, who
will bring a career's worth of significant semiconductor
experience, having served as the Chief Executive Officer at
FormFactor Inc. from 2010 to 2014, and as the Company's Executive
Chairman of the Board of Directors since 2013. Prior to
FormFactor, Mr. St. Dennis held various positions at Applied
Materials, Inc. from 1992 to 1999 and again from 2005 to
2009. He also served as Executive Vice President of Sales and
Marketing at Novellus Systems, Inc. from 2003 to 2005. From 1999 to
2003, Mr. St. Dennis was President and CEO of Wind River Systems,
Inc. Mr. St. Dennis is currently a director of Mattson
Technology, Inc., a provider of semiconductor wafer processing
equipment used in the fabrication of integrated circuits.
The Board is also nominating six current members, three of whom
joined the Board in the past four years:
- R. John Fletcher is Chief
Executive Officer of Fletcher
Spaght, Inc., a strategy consulting organization, which he
founded in 1983, and Managing Director of Fletcher Spaght Ventures,
a venture capital fund. Prior to founding Fletcher Spaght, Inc., Mr. Fletcher was a
Manager at the Boston Consulting Group. Mr. Fletcher is also a
director of The Spectranetics Corporation. During the past
five years, he was also a director of AutoImmune, Inc., Panacos,
Inc. and Marina Biotech, Inc.
- Arthur L. George, Jr. has
had a 30 year career at Texas Instruments, one of the world's
largest semiconductor companies and a highly innovative, high
performing global leader in analog, embedded processing and
wireless technologies. Until recently, Mr. George served as
Senior Vice President and Manager of TI's Analog Engineering
Operations, a position he held since 2010. Prior to this Mr.
George served as Senior Vice President and General Manager of TI's
High Performance Analog business unit. In addition to Axcelis,
Mr. George also serves on the Board of Directors of Nordson
Corporation, a manufacturer of precision dispensing equipment.
- Joseph Keithley has over
three decades of experience in high technology markets. Most
recently, Mr. Keithley was Chairman of the board, Chief Executive
Officer and President of Keithley Instruments, a supplier of test
and measurement systems for the electronics, wireless and
semiconductor industries, until the company's sale last
year. Since he joined Keithley Instruments in 1976, he held
several executive and management positions with the company. In
addition to Axcelis Technologies, Mr. Keithley holds the position
of Chairman of the board at Nordson Corporation and is on the board
of directors of Materion Corporation.
- Barbara J. Lundberg has
over thirty years of significant executive experience across
multiple industries, including deep experience with the issues
confronting growing technology and technology-based equipment
companies. From 2012 to 2013, Ms. Lundberg served as CEO and
Vice Chairman of the Supervisory Board of Tele-Fonika Kable, one of
the largest cable manufacturers in Europe. Prior to that, Ms. Lundberg was a
consultant with Kolaja & Partners, now part of Alvarez &
Marsal. Between 1999 and 2001, Ms. Lundberg was CEO of
Elektrim S.A., a multi-industry conglomerate and one of the largest
companies in Poland. Earlier in her career, Ms. Lundberg
worked primarily with U.S. technology and emerging growth
businesses, including opening the Silicon Valley office of Apax
Partners.
- Patrick H. Nettles has
served as Executive Chairman of the Board of Directors of CIENA
Corporation, a manufacturer of optical networking equipment, since
May 2001. Prior to that, Mr. Nettles served as Chairman of the
Board of Directors and Chief Executive Officer of CIENA from
October 2000, as its President, Chief
Executive Officer and Director from April
1994, and as its Director and Chief Executive Officer from
February 1994. Mr. Nettles is a
director of Progressive Corporation.
- Mary G. Puma is Axcelis'
Chief Executive Officer (since January
2002) and President (since May 2000). Ms. Puma has also
served as Chairman since May 2005, a
position that will be assigned to an independent director
immediately following the 2015 Annual Meeting. Prior to becoming
Chief Executive Officer, Ms. Puma served as Chief Operating Officer
from May 2000. In 1998, she became
General Manager and Vice President of the Company's predecessor,
the Implant Systems Division of Eaton Corporation, a global
diversified industrial manufacturer. In May
1996, she joined Eaton as General Manager of the Commercial
Controls Division. Prior to joining Eaton, Ms. Puma spent 15 years
in various marketing and general management positions for General
Electric Company. Ms. Puma is also a director of Nordson
Corporation and of Semiconductor Equipment and Materials
International (SEMI), a trade association.
With the nominations of Mr. Green, Mr. St. Dennis, and Ms. Le,
five of our nine nominated directors will have served one year
or less on the Axcelis Board, and all are independent, other than
Ms. Puma.
Lastly, as noted in Ms. Puma's above biography, to further
enhance our corporate governance, the Board will select one of the
independent directors to serve as a new independent Chairman of the
Board at the May 2015 Board
Meeting.
WITH THE RIGHT PLAN AND LEADERSHIP IN PLACE,
AXCELIS IS WELL POSITIONED FOR CONTINUED SUCCESS
The Board is committed to maintaining an open dialogue with our
stockholders, and we consider stockholder input as part of our
ongoing focus on creating long-term value and ensuring good
corporate governance. We are listening – in fact, we have
implemented many suggestions from our investors, such as
encouraging us to pursue a sale leaseback and providing us with
names of potential Board candidates.
We believe we have made great progress over the past several
years toward enhancing our business and capital structure, while
regaining market share in the ion implantation market. As a
result, Axcelis is well-positioned with our Purion strategy and
enhanced leadership team to gain further market share, improve
financial results and drive long-term value for all
stockholders.
Instructions for how to vote for Axcelis' Board nominees will be
sent to you separately when we file and mail you our proxy
materials.
Thank you for your continued support of Axcelis.
The Board of Directors of Axcelis Technologies, Inc.
Safe Harbor Statement
This letter contains forward-looking statements under the SEC
safe harbor provisions. These statements, which include our
guidance for future financial performance, are based on
management's current expectations and should be viewed with
caution. They are subject to various risks and uncertainties, many
of which are outside the control of the Company, including the
timing of orders and shipments, the conversion of orders to revenue
in any particular quarter, or at all, the continuing demand for
semiconductor equipment, relative market growth, continuity of
business relationships with and purchases by major customers,
competitive pressure on sales and pricing, increases in material
and other production costs that cannot be recouped in product
pricing and global economic, political and financial conditions.
These risks and other risk factors relating to Axcelis are
described more fully in the most recent Form 10-K filed by Axcelis
and in other documents filed from time to time with the Securities
and Exchange Commission.
Important Additional Information
Axcelis intends to file a proxy statement and WHITE proxy card
with the Securities and Exchange Commission (the "SEC") in
connection with the solicitation of proxies for the 2015 Annual
Meeting (the "Proxy Statement"). Axcelis, its directors, nominees
and certain of its executive officers will be participants in the
solicitation of proxies from stockholders in respect of the 2015
Annual Meeting. Information regarding the names of Axcelis'
directors and executive officers and their respective interests in
Axcelis by security holdings or otherwise is set forth in Axcelis'
proxy statement for the 2014 Annual Meeting of Stockholders, filed
with the SEC on March 25, 2014.
Axcelis' director nominees for the 2015 Annual Meeting has been
identified in this press release, which will be filed on a Current
Report on Form 8-K. To the extent holdings of such participants in
Axcelis' securities have changed, such changes have been reflected
on Initial Statements of Beneficial Ownership on Form 3 or
Statements of Change in Ownership on Form 4 filed with the SEC.
Additional information can also be found in Axcelis' Annual Report
on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on
March 3, 2014 and in Axcelis'
Quarterly Reports on Form 10-Q for the first three quarters of the
fiscal year ended December 31, 2014
filed with the SEC on May 8, 2014,
August 8, 2014 and November 6, 2014, respectively. Details
concerning the nominees of Axcelis' Board of Directors for election
at the 2015 Annual Meeting will be included in the Proxy Statement.
BEFORE MAKING ANY VOTING DECISION, INVESTORS AND STOCKHOLDERS OF
THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH OR
FURNISHED TO THE SEC, INCLUDING THE COMPANY'S DEFINITIVE PROXY
STATEMENT AND ANY SUPPLEMENTS THERETO BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Investors and stockholders will be able to
obtain a copy of the definitive proxy statement and other documents
filed by the Company free of charge from the SEC's website,
www.sec.gov. The Company's stockholders will also be able to
obtain, without charge, a copy of the definitive Proxy Statement
and other relevant filed documents by directing a request by mail
to Axcelis Technologies, Inc., 108 Cherry Hill Drive, Beverly, Massachusetts 01915, Attn: Corporate
Secretary, telephone: (978) 787-4000, or from the Company's
website, http://investor.axcelis.com.
About Axcelis
Axcelis (ACLS), headquartered in Beverly, Mass., has been providing innovative,
high-productivity solutions for the semiconductor industry for over
35 years. Axcelis is dedicated to developing enabling process
applications through the design, manufacture and complete life
cycle support of ion implantation systems, one of the most critical
and enabling steps in the IC manufacturing process. Learn more
about Axcelis at www.axcelis.com.
Contacts
Investor Relations:
Doug Lawson
978.787.9552
Sard Verbinnen & Co
John Christiansen / Denise DesChenes
415.618.8750 / 212.687.8080
iPermission to use quotations neither sought nor
obtained.
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SOURCE Axcelis Technologies, Inc.