Industry Demand Softens: Ultra Clean Gains Orders in Two New Markets
MENLO PARK, Calif., Feb. 19 /PRNewswire-FirstCall/ -- Ultra Clean Holdings, Inc. (NASDAQ:UCTT), a leading developer and supplier of critical subsystems for the semiconductor capital equipment, flat panel, solar and medical device industries, today reported its financial results for the fourth quarter ended on December 28, 2007. Revenues for the fourth quarter of 2007 were $92.8 million, compared to revenues of $95.5 million in the third quarter of 2007, a decrease of 2.9%, and compared to revenues of $107.5 million for the same period a year ago, a 13.7% decrease. The company recorded net income of $2.3 million, or $0.10 per diluted share, during the fourth quarter of 2007, compared to $3.5 million or $0.16 per diluted share, for the third quarter of 2007 and net income of $4.7 million, or $0.22 per diluted share, for the same period a year ago. Gross margin for the fourth quarter of 2007 was 12.7%, compared to 14.0% for the third quarter of 2007, and 15.3% for the same period a year ago.
Clarence Granger, Ultra Clean's Chairman and Chief Executive Officer commented: "Our results reflect very challenging industry conditions. Though industry demand was down, increased year-end rescheduling actions by our customers resulted in inefficiencies which drove higher operating costs. While we hit our guidance range for both revenue and earnings per share, and generated $11.2 million in cash, we look to significantly improve our performance in the short term." Cash at the end of the fourth quarter of 2007 was $33.4 million, an increase of $5.4 million from $28.0 million at the end of the third quarter of 2007, and an increase of $10.1 million from $23.3 million at the end of the fourth quarter of 2006. Third party debt at the end of the fourth quarter was $22.2 million, a decrease of $5.8 million from $28.0 million at the end of the third quarter of 2007 and a decrease of $9.4 million from $31.6 million at the end of the fourth quarter of 2006.
Granger continued, "I am pleased to announce two new product orders from recently added customers. One is for a sub-system which brings new functionality to a medical device assembly which we currently produce. The other is our first non-gas delivery process module for a customer who previously had purchased only gas-delivery equipment. These wins reflect further success toward our stated objective to grow faster than the semiconductor capital equipment industry by capturing a significant share of the expanding outsourced equipment market." Commenting on Ultra Clean's corporate outlook, Granger noted, "While we remain very confident in our strategic direction and our long term ability to grow faster than the industry, we remain cautious about the near term outlook, due to uncertain market conditions. We expect that revenue for the first quarter of 2008 will range between $90 million and $97 million, and net income per share to range between $0.08 and $0.14 per share, inclusive of an expected $0.01 per share charge for amortization of intangibles and $0.04 per share charge related to SFAS 123(R)." Ultra Clean will conduct a conference call today, Tuesday, February 19, 2008, beginning at 2:00 p.m. PDT at 800/909-4145 (domestic) and 212/231-2900 (international). A replay of the webcast will be available for fourteen days following the conference call at 800/633-8284 (domestic) and 402/977-9140 (international). The confirmation number for the live broadcast and replays is 21373680 (all callers). The conference call will also be webcast live and be available for fourteen days on our website.
About Ultra Clean Holdings, Inc.
Ultra Clean Holdings, Inc. is a developer and supplier of critical subsystems for the semiconductor capital equipment, flat panel, solar and medical device industries. Ultra Clean offers its customers an integrated outsourced solution for gas delivery systems and other subassemblies, improved design-to-delivery cycle times, component neutral design and manufacturing and component testing capabilities. Ultra Clean's customers are primarily original equipment manufacturers for the semiconductor capital equipment, flat panel, solar and medical device industries. Ultra Clean is headquartered in Menlo Park, California. Additional information is available at http://www.uct.com/.
Safe Harbor Statement The foregoing information contains, or may be deemed to contain, "forward-looking statements" (as defined in the U.S. Private Securities Litigation Reform Act of 1995) which reflect our current views with respect to future events and financial performance. We use words such as "anticipates," "believes," "plan," "expect," "future,"' "intends," "may," "will," "should," "estimates," "predicts," "potential," "continue" and similar expressions to identify these forward-looking statements. Forward looking statements included in the press release include estimates made with respect to our fourth quarter revenue and diluted earnings per share. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, our actual results may differ materially from the results predicted or implied by these forward- looking statements. These risks, uncertainties and other factors include, among others, those identified in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations' and elsewhere in our annual report on Form 10-K for the year ended December 29, 2006 and quarterly report on Form 10-Q for the quarter ended September 28, 2007 filed with the Securities and Exchange Commission. Ultra Clean Holdings, Inc. undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information future developments or otherwise.
Ultra Clean Holdings, Inc
Condensed Consolidated Income Statements Three months ended Twelve months ended
December 28, December 29, December 28, December 29,
2007 2006 2007 2006 Sales $92,758 $107,499 $403,807 $337,228 Cost of goods sold 80,944 91,085 346,050 286,542 Gross profit 11,814 16,414 57,757 50,686 Operating expenses:
Research and development 710 914 2,985 3,051
Sales and marketing 1,661 1,333 5,914 4,644
General and
administrative 6,612 5,846 25,091 17,657
Total operating
expenses 8,983 8,093 33,990 25,352 Income from operations 2,831 8,321 23,767 25,334 Interest and other income
(expense), net (347) (619) (1,797) (1,758) Income before income tax
provision 2,484 7,702 21,970 23,576 Income tax provision 223 3,040 5,887 7,266 Net income $2,261 $4,662 $16,083 $16,310 Net income per share:
Basic $0.11 $0.22 $0.75 $0.85
Diluted $0.10 $0.22 $0.73 $0.83 Shares used in computing
net income per share:
Basic 21,510 20,941 21,317 19,220
Diluted 22,225 21,624 22,118 19,649 Ultra Clean Holdings, Inc
Condensed Consolidated Balance Sheets December 28, December 29,
2007 2006
ASSETS
Current assets:
Cash and cash equivalents $33,447 $23,321
Accounts receivable 34,846 44,543
Inventory 49,646 47,914
Other current assets 6,552 5,489
Total current assets 124,491 121,267 Equipment and leasehold improvements, net 14,094 9,433
Goodwill 34,248 33,490
Other intangible assets 20,762 22,112
Other non-current assets 4,389 745
Total assets $197,984 $187,047 LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Bank borrowings $3,575 $4,206
Accounts payable 36,826 37,583
Other current liabilities 4,478 7,891
Total current liabilities 44,879 49,680 Bank debt and other long-term liabilities 23,511 30,199
Total liabilities 68,390 79,879 Stockholders' equity
Common stock 89,008 82,046
Retained earnings 40,586 25,122
Total stockholders' equity 129,594 107,168
Total liabilities and stockholders' equity $197,984 $187,047
DATASOURCE: Ultra Clean Holdings, Inc.
CONTACT: Jack Sexton, CFO of Ultra Clean Holdings, Inc., +1-650-617-4121 Web site: http://www.uct.com/
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