Record
quarterly revenue exceeds guidance resulting in 43% year over year
growth
Continued revenue growth expected for the
second half of 2021
Onto Innovation Inc. (NYSE: ONTO) today announced financial
results for the second quarter of 2021.
2021 Second Quarter Highlights
- Quarterly revenue of $193 million represents 43% year over year
growth compared to the second quarter of 2020 and 14% sequential
quarterly growth.
- Gross margin improved both year over year and over the first
quarter of 2021 to 55%.
- Specialty device and advanced packaging revenue grew by 45%
over the first quarter driven by:
- Strong demand for inspection systems which grew 24% over the
first quarter, and
- U.S. government approval of licenses for shipment of metrology
tools to specialty device customers in China resulted in $13
million of revenue in the second quarter.
- Revenue from RF communications and power customers increased to
over $24 million in the quarter, including the addition of four new
customers.
- Received orders from a new CMOS image sensor (CIS) customer in
China, while a top-3 CIS customer doubled their existing installed
base.
- Year to date cash flow from operations totaled $76 million or
21% of revenue; cash and marketable securities increased to $410.8
million.
Onto Innovation Inc.
Key Financial Data for the
Quarters Ended June 26, 2021,
March 27, 2021, and June 27,
2020
(in thousands, except per
share amounts)
U.S. GAAP
June 2021
March 2021
June 2020
Revenue
$
193,387
$
169,279
$
134,948
Gross profit margin
55
%
53
%
53
%
Operating income
$
35,941
$
27,485
$
7,930
Net income
$
35,051
$
24,113
$
7,424
Net income per diluted share
$
0.71
$
0.49
$
0.15
U.S. NON-GAAP
June 2021
March 2021
June 2020
Revenue
$
193,387
$
169,279
$
134,948
Gross profit margin
55
%
54
%
53
%
Operating income
$
49,652
$
41,874
$
24,205
Net income
$
45,879
$
36,339
$
20,813
Net income per diluted share
$
0.92
$
0.73
$
0.42
Michael Plisinski, chief executive officer for Onto Innovation
commented, “The Onto Innovation team continues to perform very
well, simultaneously improving our operational efficiencies while
managing strong customer demand for our solutions across the
semiconductor value chain. Underscoring that point, the midpoint of
third quarter guidance reflects our strengthened outlook for growth
of 54% over the same period in 2020. We see revenue growth
continuing into the fourth quarter and extending into the first
quarter of 2022, driven by expansions and node transitions in logic
and memory as well as the rapidly growing investments in packaging
and RF process technology.”
“We are also pleased with the progress made to bring our new
solutions into new markets further expanding our growth
opportunities,” Plisinski continued. “We estimate the new customers
being added for planar films, inspection of image sensors, and the
increasingly critical ramp of panel level packaging adds over $350
million to our served markets as we look ahead to 2022. These
market expansions are the result of our technical strength and
close collaboration with our customers that ensure we deliver the
solutions critical to their roadmaps.”
Second Quarter 2021 GAAP Financial Results
- Second quarter revenue totaled $193.4 million, an increase of
14% compared with $169.3 million for the first quarter of
2021.
- Gross profit margin was 55% of revenue in the second quarter,
compared to 53% in the first quarter of 2021. Second quarter gross
margin was positively impacted by the increase in revenue as well
as product mix.
- Operating expenses totaled $69.5 million, an increase of $6.5
million compared to $63.0 million in the first quarter of 2021. The
increase was primarily the result of increases in variable
compensation plan costs due to the Company’s forecast to exceed
plan targets.
- Operating income was $35.9 million, an increase of $8.4 million
compared to $27.5 million in the first quarter of 2021.
- GAAP net income was $35.1 million, or $0.71 per diluted share
and above the high end of guidance, compared with $24.1 million, or
$0.49 per diluted share, for the 2021 first quarter.
Second Quarter 2021 Non-GAAP Financial Results
- Gross profit margin was 55% of revenue for the second quarter
of 2021 compared to 54% for the first quarter of 2021 and 53% for
the second quarter of 2020.
- Operating income was $49.7 million, an increase of $7.8 million
and represented 26% of revenue in the second quarter of 2021. This
compares to operating income of $41.9 million in the first quarter
of 2021.
- Non-GAAP net income was $45.9 million, or $0.92 per diluted
share compared to non-GAAP net income of $36.3 million, or $0.73
per diluted share in the first quarter of 2021.
- Non-GAAP results exclude merger-related expenses, restructuring
costs, litigation expenses and the amortization of intangible
assets as detailed in the accompanying tables.
Balance Sheet
- As of June 26, 2021, cash and marketable securities increased
to $410.8 million, an increase of $17.9 million over the prior
quarter.
- Working capital increased $50.0 million from the 2021 first
quarter and ended the quarter at $678.5 million.
- Accounts receivable increased to $174.7 million in the quarter
mainly due to the increase in revenue and timing of shipments in
the quarter. In addition, inventory increased to $207.0 million by
quarter end.
Outlook
The Company is currently anticipating revenue for the third
quarter of 2021 to be in the range of $190 million to $200 million.
This guidance assumes that the safety protocols in place continue
to limit the impact of COVID-19 on our factories and our suppliers.
Within this revenue range the Company is expecting GAAP net income
per diluted share to be in the range of $0.62 to $0.76 and non-GAAP
net income per diluted share to be in the range of $0.85 to
$0.99.
Webcast and Conference Call Details
Onto Innovation will host a conference call at 4:30 p.m. Eastern
Time today, August 5, 2021, to discuss its second quarter 2021
financial results in greater detail. To participate in the call,
please dial (800) 496-4125 or International: +1 (929) 477-0591 and
reference conference ID 2955228 at least five (5) minutes prior to
the scheduled start time. A live webcast will also be available at
www.ontoinnovation.com.
To listen to the live webcast, please go to the website at least
fifteen (15) minutes early to register, download and install any
necessary audio software. There will be a replay of the conference
call available from 7:30 p.m. ET on August 5, 2021 until 7:30 p.m.
ET on August 19, 2021. To access the replay, please dial (888)
203-1112 and reference conference ID 2955228 at any time during
that period. A replay will also be available at
www.ontoinnovation.com.
Discussion of Non-GAAP Financial Measures
The Company has provided in this release non-GAAP financial
measures, including non-GAAP net income and non-GAAP EPS, which
exclude amortization of acquisition-related intangible assets,
certain acquisition-related expenses and benefits, litigation
expenses and restructuring costs. Non-GAAP net income and non-GAAP
EPS can also exclude certain other gains and losses that are either
isolated or cannot be expected to occur again with any
predictability, tax provisions/benefits related to the previous
items, and significant discrete tax events. We exclude the above
items because they are outside of our normal operations and/or, in
certain cases, are difficult to forecast accurately for future
periods.
We utilize several different financial measures, both GAAP and
non-GAAP, in analyzing and assessing the overall performance of our
business, in making operating decisions, forecasting and planning
for future periods, and determining payments under compensation
programs. We consider the use of the non-GAAP measures to be
helpful in assessing the performance of the ongoing operation of
our business. We believe that disclosing non-GAAP financial
measures provides useful supplemental data that, while not a
substitute for financial measures prepared in accordance with GAAP,
allows for greater transparency in the review of our financial and
operational performance. We also believe that disclosing non-GAAP
financial measures provides useful information to investors and
others in understanding and evaluating our operating results and
future prospects in the same manner as management and in comparing
financial results across accounting periods and to those of peer
companies. More specifically, management adjusts for the excluded
items for the following reasons:
Amortization of purchased intangible assets: we do not acquire
businesses and assets on a predictable cycle. The amount of
purchase price allocated to the purchased intangible assets and the
term of amortization can vary significantly and are unique to each
acquisition or purchase. We believe that excluding amortization of
purchased intangible assets allows the users of our financial
statements to better review and understand the historic and current
results of our operations, and also facilitates comparisons to peer
companies.
Merger or acquisition related expenses and benefits: we incur
expenses or benefits with respect to certain items associated with
our mergers and acquisitions, such as transaction and integration
costs, change in control payments, adjustments to the fair value of
assets, etc. We exclude such expenses or benefits as they are
related to acquisitions and have no direct correlation to the
operation of our on-going business.
Restructuring charges: we incur restructuring and impairment
charges on individual or groups of employed assets, which arise
from unforeseen circumstances and/or often occur outside of the
ordinary course of our on-going business. Although these events are
reflected in our GAAP financials, these unique transactions may
limit the comparability of our on-going operations with prior and
future periods.
Significant litigation charges or benefits and legal costs: we
may incur charges or benefits as well as legal costs in connection
with litigation and other contingencies unrelated to our core
operations. We exclude these charges or benefits, when significant,
as well as legal costs associated with significant legal matters,
because we do not believe they are reflective of on-going business
and operating results.
Income tax expense: we estimate the tax effect of the items
identified to determine a non-GAAP annual effective tax rate
applied to the pretax amount in order to calculate the non-GAAP
provision for income taxes. We also adjust for items for which the
nature and/or tax jurisdiction requires the application of a
specific tax rate or treatment.
From time to time in the future, there may be other items
excluded if we believe that doing so is consistent with the goal of
providing useful information to investors and management.
There are limitations in using non-GAAP financial measures
because the non-GAAP financial measures are not prepared in
accordance with generally accepted accounting principles and may be
different from non-GAAP financial measures used by other companies.
The non-GAAP financial measures are limited in value because they
exclude certain items that may have a material impact on our
reported financial results. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for the directly comparable financial measures prepared
in accordance with GAAP in the United States. Investors should
review the reconciliation of the non-GAAP financial measures to
their most directly comparable GAAP financial measures as provided
in the tables accompanying this press release.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
(the “Act”) which include Onto Innovation’s business momentum and
future growth; the benefit to customers of Onto Innovation’s
products and customer service; Onto Innovation’s ability to both
deliver products and services consistent with our customers’
demands and expectations and strengthen its market position; Onto
Innovation’s expectations regarding the semiconductor market
outlook; Onto Innovation’s 2021 and 2022 financial outlook; as well
as other matters that are not purely historical data. Onto
Innovation wishes to take advantage of the “safe harbor” provided
for by the Act and cautions that actual results may differ
materially from those projected as a result of various factors,
including risks and uncertainties, many of which are beyond Onto
Innovation’s control. Such factors include, but are not limited to,
the length, severity and potential business impact of the COVID-19
pandemic, the Company’s ability to leverage its resources to
improve its position in its core markets; its ability to weather
difficult economic environments; its ability to open new market
opportunities and target high-margin markets; the strength/weakness
of the back-end and/or front-end semiconductor market segments; and
fluctuations in customer capital spending. Additional information
and considerations regarding the risks faced by Onto Innovation are
available in Onto Innovation’s Form 10-K report for the year ended
December 26, 2020 and other filings with the Securities and
Exchange Commission. As the forward-looking statements are based on
Onto Innovation’s current expectations, the Company cannot
guarantee any related future results, levels of activity,
performance or achievements. Onto Innovation does not assume any
obligation to update the forward-looking information contained in
this press release.
About Onto Innovation
Onto Innovation is a leader in process control, combining global
scale with an expanded portfolio of leading-edge technologies that
include: Un-patterned wafer quality; 3D metrology spanning chip
features from nanometer scale transistors to large die
interconnects; macro defect inspection of wafers and packages;
elemental layer composition; overlay metrology; factory analytics;
and lithography for advanced semiconductor packaging. Our breadth
of offerings across the entire semiconductor value chain helps our
customers solve their most difficult yield, device performance,
quality, and reliability issues. Onto Innovation strives to
optimize customers’ critical path of progress by making them
smarter, faster and more efficient. Headquartered in Wilmington,
Massachusetts, Onto Innovation supports customers with a worldwide
sales and service organization. Additional information can be found
at www.ontoinnovation.com.
Source: Onto Innovation
Inc.
ONTO INNOVATION INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands) -
(Unaudited)
June 26, 2021
December 26,
2020
ASSETS
Current assets
Cash, cash equivalents and marketable
securities
$
410,839
$
373,722
Accounts receivable, net
174,662
149,251
Inventories
206,981
191,217
Prepaid and other assets
19,147
17,471
Total current assets
811,629
731,661
Net property, plant and equipment
88,015
87,950
Intangibles, net
619,777
624,989
Other assets
27,072
23,572
Total assets
$
1,546,493
$
1,468,172
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
Accounts payable and accrued
liabilities
$
87,642
$
77,258
Other current liabilities
45,526
42,833
Total current liabilities
133,168
120,091
Other non-current liabilities
83,762
83,335
Total liabilities
216,930
203,426
Stockholders’ equity
1,329,563
1,264,746
Total liabilities and stockholders’
equity
$
1,546,493
$
1,468,172
ONTO INNOVATION INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share amounts) - (Unaudited)
Three Months Ended
Six Months Ended
June 26,
March 27,
June 27,
June 26,
June 27,
2021
2021
2020
2021
2020
Revenue
$
193,387
$
169,279
$
134,948
$
362,666
$
274,876
Cost of revenue
87,931
78,810
63,363
166,741
140,660
Gross profit
105,456
90,469
71,585
195,925
134,216
Operating expenses:
Research and development
25,507
21,964
22,167
47,471
43,094
Sales and marketing
15,429
13,104
11,869
28,533
24,940
General and administrative
16,255
15,559
15,916
31,814
36,063
Amortization
12,324
12,357
13,703
24,681
27,435
Total operating expenses
69,515
62,984
63,655
132,499
131,532
Operating income
35,941
27,485
7,930
63,426
2,684
Interest income, net
304
361
686
665
1,896
Other expense, net
(289
)
(1,244
)
(1,198
)
(1,533
)
(1,166
)
Income before income taxes
35,956
26,602
7,418
62,558
3,414
Provision (benefit) for income taxes
905
2,489
(6
)
3,394
394
Net income
$
35,051
$
24,113
$
7,424
$
59,164
$
3,020
Earnings per share:
Basic
$
0.71
$
0.49
$
0.15
$
1.20
$
0.06
Diluted
$
0.71
$
0.49
$
0.15
$
1.19
$
0.06
Weighted average shares
outstanding:
Basic
49,193
49,000
48,736
49,105
49,417
Diluted
49,701
49,572
49,014
49,645
49,782
ONTO INNOVATION INC.
NON-GAAP FINANCIAL
SUMMARY
(In thousands, except
percentage and per share amounts) - (Unaudited)
Three Months Ended
Six Months Ended
June 26, 2021
March 27, 2021
June 27, 2020
June 26, 2021
June 27, 2020
Revenue
$
193,387
$
169,279
$
134,948
$
362,666
$
274,877
Gross profit
$
105,457
$
91,029
$
71,917
$
196,486
$
144,450
Gross margin as percentage of
revenue
55
%
54
%
53
%
54
%
53
%
Operating expenses
$
55,805
$
49,155
$
47,712
$
104,960
$
97,313
Operating income
$
49,652
$
41,874
$
24,205
$
91,526
$
47,137
Operating margin as a
percentage of revenue
26
%
25
%
18
%
25
%
17
%
Net income
$
45,879
$
36,339
$
20,813
$
82,218
$
40,553
Net income per diluted share
$
0.92
$
0.73
$
0.42
$
1.66
$
0.81
RECONCILIATION OF U.S. GAAP
GROSS PROFIT,
OPERATING EXPENSES AND
OPERATING INCOME TO NON-GAAP
GROSS PROFIT, OPERATING
EXPENSES AND OPERATING INCOME
(In thousands, except
percentages) - (Unaudited)
Three Months Ended
Six Months Ended
June 26, 2021
March 27, 2021
June 27, 2020
June 26, 2021
June 27, 2020
U.S. GAAP gross profit
$
105,456
$
90,469
$
71,585
$
195,925
$
134,216
Pre-tax non-GAAP items:
Merger and acquisition related
expenses
1
254
332
255
10,234
Restructuring expenses
—
306
—
306
—
Non-GAAP gross profit
$
105,457
$
91,029
$
71,917
$
196,486
$
144,450
U.S. GAAP gross margin as a
percentage of revenue
55
%
53
%
53
%
54
%
49
%
Non-GAAP gross margin as a
percentage of revenue
55
%
54
%
53
%
54
%
53
%
U.S. GAAP operating expenses
$
69,515
$
62,984
$
63,656
$
132,499
$
131,533
Pre-tax non-GAAP items:
Merger and acquisition related
expenses
1,386
969
1,678
2,355
3,614
Restructuring expenses
—
—
563
—
3,171
Litigation expenses
—
503
—
503
—
Amortization of intangibles
12,324
12,357
13,703
24,681
27,435
Non-GAAP operating expenses
55,805
49,155
47,712
104,960
97,313
Non-GAAP operating income
$
49,652
$
41,874
$
24,205
$
91,526
$
47,137
GAAP operating margin as a
percentage of revenue
19
%
16
%
6
%
17
%
1
%
Non-GAAP operating margin
as a percentage of revenue
26
%
25
%
18
%
25
%
17
%
ONTO INNOVATION INC.
RECONCILIATION OF U.S. GAAP
NET INCOME TO
NON-GAAP NET INCOME
(In thousands, except share
and per share data) - (Unaudited)
Three Months Ended
Six Months Ended
June 26, 2021
March 27, 2021
June 27, 2020
June 26, 2021
June 27, 2020
U.S. GAAP net income
$
35,051
$
24,113
$
7,424
$
59,164
$
3,020
Pre-tax non-GAAP items:
Merger and acquisition related
expenses
1,387
1,223
2,010
2,610
13,848
Restructuring expenses
—
306
563
306
3,171
Litigation expenses
—
503
—
503
—
Amortization of intangibles
12,324
12,357
13,703
24,681
27,435
Net tax provision adjustments
(2,883
)
(2,163
)
(2,887
)
(5,046
)
(6,921
)
Non-GAAP net income
$
45,879
$
36,339
$
20,813
$
82,218
$
40,553
Non-GAAP net income per
diluted share
$
0.92
$
0.73
$
0.42
$
1.66
$
0.81
ONTO INNOVATION INC
SUPPLEMENTAL INFORMATION -
RECONCILIATION OF THIRD QUARTER 2021
GAAP TO NON-GAAP
GUIDANCE
Low
High
Estimated GAAP net income per diluted
share
$
0.62
$
0.76
Estimated non-GAAP items:
Merger and acquisition related
expenses
0.03
0.03
Amortization of intangibles
0.26
0.26
Net tax provision adjustments
(0.06
)
(0.06
)
Estimated non-GAAP net income per diluted
share
$
0.85
$
0.99
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210805005926/en/
Michael Sheaffer +1.978.253.6273
Mike.Sheaffer@OntoInnovation.com
Onto Innovation (NYSE:ONTO)
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