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Press release content from PR Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from PR Newswire
Press release content from PR Newswire. The AP news staff was not involved in its creation.

Ultra Clean Reports Record Fourth Quarter and Full Year 2021 Financial Results

February 23, 2022 GMT
(PRNewsfoto/Ultra Clean Holdings, Inc.)
(PRNewsfoto/Ultra Clean Holdings, Inc.)
(PRNewsfoto/Ultra Clean Holdings, Inc.)
(PRNewsfoto/Ultra Clean Holdings, Inc.)
(PRNewsfoto/Ultra Clean Holdings, Inc.)

HAYWARD, Calif., Feb. 23, 2022 /PRNewswire/ -- Ultra Clean Holdings, Inc. (Nasdaq: UCTT), today reported its financial results for the fourth quarter and full year ended December 31, 2021.

“Record fourth quarter performance propelled UCT over the $2 billion revenue milestone for the year and represents a strong endorsement of our execution capabilities on every level,” said Jim Scholhamer, CEO. “By expanding our capabilities, leveraging our global footprint, and deepening our industry partnerships, we again outperformed the markets we serve. We expect 2022 to be another year of growth and believe we are ideally positioned to meet ongoing demand.”

“In 2021, UCT generated record cash flow from operations and grew earnings per share by 50 percent to the highest level in the company’s history,” added Sheri Savage, CFO. “We strategically deployed capital to meet capacity requirements and will continue to invest in our business to meet ongoing demand while strengthening our balance sheet to capitalize on future growth opportunities.”

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Fourth Quarter 2021 GAAP Financial Results

Total revenue was $615.1 million. Products contributed $533.8 million and Services added $81.3 million. Total gross margin was 21.0%, operating margin was 10.2%, and net income was $45.5 million or $1.01 and $1.00 per basic and diluted share. This compares to total revenue of $553.7million, gross margin of 20.6%, operating margin of 9.1%, and net income of $31.9 million or $0.71 and $0.70 per basic and diluted share in the prior quarter.

Fourth Quarter 2021 Non-GAAP Financial Results

On a non-GAAP basis, gross margin was 21.5%, operating margin was 12.6%, and net income was $55.5 million or $1.22 per diluted share. This compares to gross margin of 21.6%, operating margin of 12.4%, and net income of $48.8 million or $1.07 per diluted share in the prior quarter.

Full Year 2021 GAAP Financial Results

Total revenue was $2,101.6 million. Products contributed $1,803.9 million and Services added $297.7 million. Total gross margin was 20.5%, operating margin was 8.8%, and net income was $119.4 million or $2.75 and $2.69 per basic and diluted share. This compares to total revenue of $1,398.6 million, gross margin of 20.9%, operating margin of 8.7%, and net income of $77.6 million or $1.93 and $1.89 per basic and diluted share in the prior year.

Full Year 2021 Non-GAAP Financial Results

On a non-GAAP basis, the company reported gross margin of 21.4%, operating margin of 12.2%, and net income of $186.1 million or $4.20 per diluted share. This compares to gross margin of 21.4%, operating margin of 11.3%, and net income of $115.0 million or $2.80 per diluted share in the prior year.

First Quarter 2022 Outlook

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The Company expects revenue in the range of $580.0 million to $630.0 million and GAAP diluted net income per share to be between $0.80 and $1.00. The Company expects non-GAAP diluted net income per share to be between $1.06 and $1.26.

Conference Call

The call will take place at 1:45 p.m. PT and can be accessed by dialing 1-844-826-3034 or 1-412-317-5179. No passcode is required. A replay of the call will be available by dialing 1-877-344-7529 or 1-412-317-0088 and entering the confirmation code 3645393. The Webcast will be available on the Investor Relations section of the Company’s website at http://uct.com/investors/events/.

About Ultra Clean Holdings, Inc.

Ultra Clean Holdings, Inc. is a leading developer and supplier of critical subsystems, components and parts, and ultra-high purity cleaning and analytical services primarily for the semiconductor industry. Under its Products division, UCT offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping, and high-precision manufacturing. Under its Services Division, UCT offers its customers tool chamber parts cleaning and coating, as well as micro-contamination analytical services. Ultra Clean is headquartered in Hayward, California. Additional information is available at www.uct.com.

Use of Non-GAAP Measures

In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), management uses non-GAAP gross margin, non-GAAP operating margin and non-GAAP net income to evaluate the Company’s operating and financial results. We believe the presentation of non-GAAP results is useful to investors for analyzing our core business and business trends and comparing performance to prior periods, along with enhancing investors’ ability to view the Company’s results from management’s perspective. The presentation of this additional information should not be considered a substitute for results prepared in accordance with GAAP. Tables presenting reconciliations from GAAP results to non-GAAP results are included at the end of this press release.

The Company currently defines non-GAAP net income as net income (loss) before amortization of intangible assets, restructuring charges, executive transition costs, acquisition costs, fair value adjustments, depreciation adjustments, stock-based compensation, certain insurance proceeds, gain on sale of property and the tax effects of the foregoing adjustments.

A reconciliation of our guidance for non-GAAP net income per diluted share for the subsequent quarter is not available due to fluctuations in the geographic mix of our earnings from quarter to quarter, which impacts our tax rate and cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and we are unable to determine the probable significance of the unavailable information.

Safe Harbor Statement

The foregoing information contains, or may be deemed to contain, “forward-looking statements” (as defined in the US 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,” “projection,” “outlook,” “forecast,” “believes,” “plan,” “expect,” “future,” “intends,” “may,” “will,” “estimates,” “see,” “predicts,” “should” and similar expressions to identify these forward-looking statements. Forward looking statements included in this press release include our expectations about the semiconductor capital equipment market and outlook. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, the Company’s actual results may differ materially from the results predicted or implied by these forward-looking statements. These risks, uncertainties and other factors also 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 25, 2020 as 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 unless required by law.

Contact:
Rhonda Bennetto
SVP Investor Relations
rbennetto@uct.com

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in thousands, except per share data)














Three Months Ended


Twelve Months Ended


December 31,


December 25,


December 31,


December 25,


2021


2020


2021


2020













Revenues:












Product

$

533,859


$

299,495


$

1,803,939


$

1,131,151

Services


81,277



70,133



297,676



267,431

Total revenues


615,136



369,628



2,101,615



1,398,582

Cost of revenues:












Product


433,933



247,103



1,478,764



934,716

Services


52,117



44,880



192,874



172,105

Total cost of revenues


486,050



291,983



1,671,638



1,106,821

Gross profit


129,086



77,645



429,977



291,761

Operating expenses:












Research and development


7,771



3,987



24,508



14,829

Sales and marketing


14,090



6,569



48,178



25,128

General and administrative


44,493



33,915



171,618



130,434

Total operating expenses


66,354



44,471



244,304



170,391

Income from operations


62,732



33,174



185,673



121,370

Interest income


156



179



427



875

Interest expense


(6,634)



(3,758)



(24,183)



(16,852)

Other income (expense), net


(1,165)



(2,512)



(7,601)



(5,722)

Income before provision for income taxes


55,089



27,083



154,316



99,671

Provision for income taxes


6,303



4,349



27,931



19,281

Net income


48,786



22,734



126,385



80,390

Less: Net income attributable to noncontrolling interests


3,316



180



6,940



2,785

Net income attributable to UCT

$

45,470


$

22,554


$

119,445


$

77,605













Net income per share attributable to UCT common stockholders:












Basic

$

1.01


$

0.56


$

2.75


$

1.93

Diluted

$

1.00


$

0.55


$

2.69


$

1.89

Shares used in computing net income per share:












Basic


44,886



40,521



43,498



40,198

Diluted


45,525



41,353



44,351



41,074


ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in thousands)










December 31,


December 25,



2021


2020

ASSETS







Current assets:







Cash and cash equivalents


$

466,455


$

200,274

Accounts receivable, net of allowance



250,147



145,539

Inventories



379,235



180,385

Prepaid expenses and other current assets



41,260



18,895

Total current assets



1,137,097



545,093








Property, plant and equipment, net



242,347



159,150

Goodwill



270,044



171,132

Intangibles assets, net



245,696



160,519

Deferred tax assets, net



37,607



23,513

Operating lease right-of-use assets



83,357



37,821

Other non-current assets



9,242



5,315

Total assets


$

2,025,390


$

1,102,543








LIABILITIES AND STOCKHOLDERS' EQUITY







Current liabilities:







Bank borrowings


$

22,071


$

7,361

Accounts payable



332,897



121,328

Accrued compensation and related benefits



46,790



34,532

Operating lease liabilities



17,299



11,721

Other current liabilities



50,060



26,335

Total current liabilities



469,117



201,277








Bank borrowings, net of current portion



529,919



261,619

Deferred tax liabilities



54,889



33,571

Operating lease liabilities



65,923



31,050

Other liabilities



12,894



23,812

Total liabilities



1,132,742



551,329








Equity:







UCT stockholders' equity:







Common stock



511,628



309,589

Retained earnings



337,417



217,972

Accumulated other comprehensive gain (loss)



(167)



5,087

Total UCT stockholders' equity



848,878



532,648

Noncontrolling interest



43,770



18,566

Total equity



892,648



551,214

Total liabilities and stockholders' equity


$

2,025,390


$

1,102,543








ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in thousands)








Fiscal Year Ended


December 31,


December 25,


2021


2020

Cash flows from operating activities:






Net income

$

126,385


$

80,390

Adjustments to reconcile net income to net cash provided by operating activities (excluding assets acquired and liabilities assumed):






Depreciation and amortization


70,877



46,635

Stock-based compensation


15,765



12,743

Deferred income taxes


(3,200)



375

Change in the fair value of financial instruments and earn-out liability


12,438



7,653

Gain from insurance proceeds


(7,332)



Others


220



(2,402)

Changes in assets and liabilities:






Accounts receivable


(52,975)



(32,693)

Inventories


(125,120)



(8,017)

Prepaid expenses and other current assets


(3,397)



1,243

Other non-current assets


(800)



(106)

Accounts payable


172,524



(12,559)

Accrued compensation and related benefits


1,795



9,696

Operating lease assets and liabilities


(1,141)



(1,111)

Income taxes payable


8,851



2,785

Other liabilities


(1,827)



(7,354)

Net cash provided by operating activities


213,063



97,278

Cash flows from investing activities:






Purchases of property, plant and equipment


(59,342)



(36,427)

Proceeds from sale of property and equipment, including insurance proceeds


7,738



6,601

Settlement of forward contracts in conjunction with the acquisition of Ham-Let


(10,448)



Acquisition of business, net of cash acquired


(344,707)



Net cash used in investing activities


(406,759)



(29,826)

Cash flows from financing activities:






Proceeds from bank borrowings


415,168



76,690

Proceeds from issuance of common stock


193,536



604

Payments on bank borrowings and finance leases


(131,712)



(105,475)

Payments of debt issuance costs


(8,899)



Payment of contingent earn-out




(1,428)

Employees' taxes paid upon vesting of restricted stock units


(7,262)



(1,500)

Net cash provided by (used in) financing activities


460,831



(31,109)

Effect of exchange rate changes on cash and cash equivalents


(954)



1,400

Net increase in cash and cash equivalents


266,181



37,743

Cash and cash equivalents at beginning of period


200,274



162,531

Cash and cash equivalents at end of period

$

466,455


$

200,274


ULTRA CLEAN HOLDINGS, INC.

REPORTABLE SEGMENTS

GAAP TO NON-GAAP RECONCILIATION

(Unaudited; dollars in thousands)























GAAP



Non-GAAP




Three Months Ended



Three Months Ended




December 31, 2021



December 31, 2021



Products


Services


Consolidated


Products


Services


Consolidated

Revenues


$

533,859


$

81,277


$

615,136


$

533,859


$

81,277


$

615,136

Gross profit


$

99,926


$

29,160


$

129,086


$

101,964


$

30,183


$

132,147

Gross margin



18.7%



35.9%



21.0%



19.1%



37.1%



21.5%

Income from operations


$

52,391


$

10,341


$

62,732


$

63,007


$

14,507


$

77,514

Operating margin



9.8%



12.7%



10.2%



11.8%



17.9%



12.6%































Three Months Ended












December 31, 2021












Products


Services


Consolidated

Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in thousands)

Reported gross profit on a GAAP basis


$

99,926


$

29,160


$

129,086

Amortization of intangible assets (1)



658



1,023



1,681

Restructuring charges (2)



115





115

Stock-based compensation expense (3)



719





719

Fair value related adjustments (4)



546





546

Non-GAAP gross profit


$

101,964


$

30,183


$

132,147




















Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis



18.7%



35.9%



21.0%

Amortization of intangible assets (1)



0.1%



1.2%



0.3%

Restructuring charges (2)



0.0%





0.0%

Stock-based compensation expense (3)



0.2%





0.1%

Fair value related adjustments (4)



0.1%





0.1%

Non-GAAP gross margin



19.1%



37.1%



21.5%




















Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in thousands)

Reported income from operations on a GAAP basis


$

52,391


$

10,341


$

62,732

Amortization of intangible assets (1)



5,795



3,716



9,511

Restructuring charges (2)



(415)



24



(391)

Stock-based compensation expense (3)



4,241



426



4,667

Fair value related adjustments (4)



546





546

Acquisition related costs (5)



449





449

Non-GAAP income from operations


$

63,007


$

14,507


$

77,514




















Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis



9.8%



12.7%



10.2%

Amortization of intangible assets (1)



1.1%



4.6%



1.5%

Restructuring charges (2)



-0.1%



0.1%



-0.1%

Stock-based compensation expense (3)



0.8%



0.5%



0.8%

Fair value related adjustments (4)



0.1%



0.0%



0.1%

Acquisition related costs (5)



0.1%



0.0%



0.1%

Non-GAAP operating margin



11.8%



17.9%



12.6%




















1 Amortization of intangible assets related to the Company's business acquisitions

2 Represents severance, retention and costs related to facility closures

3 Represents compensation expense for stock granted to employees and directors

4 Represents acquisition fair value adjustments related to inventories

5 Represents costs related to the acquisition of Ham-Let


ULTRA CLEAN HOLDINGS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS

















Three Months Ended


Twelve Months Ended


December 31,


December 25,


September 24,


December 31,


December 25,


2021


2020


2021


2021


2020

Reconciliation of GAAP Net Income to Non-GAAP Net Income (in thousands)

Reported net income attributable to UCT on a GAAP basis

$

45,470


$

22,554


$

31,880


$

119,445


$

77,605

Amortization of intangible assets (1)


9,511



4,950



9,512



33,423



19,799

Restructuring charges (2)


(391)



1,003



1,580



1,301



4,573

Stock-based compensation expense (3)


4,667



3,760



4,324



16,758



12,899

Fair value related adjustments (4)


546



3,266



2,288



22,999



7,624

Acquisition related costs (5)


449



1,024



105



9,984



1,024

Insurance proceeds (6)








(7,332)



Gain on the sale of property (7)










(1,352)

Income tax effect of non-GAAP adjustments (8)


(2,336)



(2,521)



(2,760)



(12,804)



(8,200)

Income tax effect of valuation allowance (9)


(2,400)



(525)



1,828



2,332



994

Non-GAAP net income attributable to UCT

$

55,516


$

33,511


$

48,757


$

186,106


$

114,966
















Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in thousands)

Reported income from operations on a GAAP basis

$

62,732


$

33,174


$

50,584


$

185,673


$

121,370

Amortization of intangible assets (1)


9,511



4,950



9,512



33,423



19,799

Restructuring charges (2)


(391)



1,003



1,580



1,301



4,433

Stock-based compensation expense (3)


4,667



3,760



4,324



16,758



12,899

Fair value related adjustments (4)


546





2,388



10,117



Acquisition related costs (5)


449



1,024



105



9,984



1,024

Gain on the sale of property (7)










(1,352)

Non-GAAP income from operations

$

77,514


$

43,911


$

68,493


$

257,256


$

158,173
















Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis


10.2%



9.0%



9.1%



8.8%



8.7%

Amortization of intangible assets (1)


1.5%



1.3%



1.7%



1.6%



1.4%

Restructuring charges (2)


-0.1%



0.3%



0.4%



0.0%



0.3%

Stock-based compensation expense (3)


0.8%



1.0%



0.8%



0.8%



0.9%

Fair value related adjustments (4)


0.1%



0.0%



0.4%



0.5%



0.0%

Acquisition related costs (5)


0.1%



0.3%



0.0%



0.5%



0.1%

Gain on the sale of property (7)


0.0%



0.0%



0.0%



0.0%



-0.1%

Non-GAAP operating margin


12.6%



11.9%



12.4%



12.2%



11.3%
















Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in thousands)

Reported gross profit on a GAAP basis

$

129,086


$

77,645


$

114,070


$

429,977


$

291,761

Amortization of intangible assets (1)


1,681



1,023



1,680



6,063



4,090

Restructuring charges (2)


115



242



684



1,005



988

Stock-based compensation expense (3)


719



696



534



2,649



2,112

Fair value related adjustments (4)


546





2,388



10,117



Non-GAAP gross profit

$

132,147


$

79,606


$

119,356


$

449,811


$

298,951
















Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis


21.0%



21.0%



20.6%



20.5%



20.9%

Amortization of intangible assets (1)


0.3%



0.3%



0.3%



0.3%



0.3%

Restructuring charges (2)


0.0%



0.0%



0.2%



0.0%



0.0%

Stock-based compensation expense (3)


0.1%



0.2%



0.1%



0.1%



0.2%

Fair value related adjustments (4)


0.1%



0.0%



0.4%



0.5%



0.0%

Non-GAAP gross margin


21.5%



21.5%



21.6%



21.4%



21.4%


Reconciliation of GAAP Interest and other income (expense) to Non-GAAP Interest and other income (expense) (in thousands)

Reported interest and other income (expense) on a GAAP basis

$

(7,643)


$

(6,091)


$

(8,233)


$

(31,357)


$

(21,699)

Restructuring charges (2)










140

Fair value related adjustments (4)




3,266



(100)



12,882



7,624

Insurance proceeds (6)








(7,332)



Non-GAAP interest and other income (expense)

$

(7,643)


$

(2,825)


$

(8,333)


$

(25,807)


$

(13,935)
















Reconciliation of GAAP Earnings Per Diluted Share to Non-GAAP Earnings Per Diluted Share

Reported net income on a GAAP basis

$

1.00


$

0.55


$

0.70



2.69



1.89

Amortization of intangible assets (1)


0.21



0.12



0.21



0.75



0.48

Restructuring charges (2)


(0.01)



0.02



0.03



0.03



0.11

Stock-based compensation expense (3)


0.10



0.09



0.10



0.38



0.32

Fair value related adjustments (4)


0.01



0.08



0.05



0.52



0.19

Acquisition related costs (5)


0.01



0.02





0.23



0.02

Insurance proceeds (6)








(0.16)



Gain on the sale of property (7)








-



(0.03)

Income tax effect of non-GAAP adjustments (8)


(0.05)



(0.06)



(0.06)



(0.29)



(0.20)

Income tax effect of valuation allowance (9)


(0.05)



(0.01)



0.04



0.05



0.02

Non-GAAP net income

$

1.22


$

0.81


$

1.07


$

4.20


$

2.80

Weighted average number of diluted shares (thousands) on a non-GAAP basis


45,525



41,353



45,404



44,351



41,074












































































ULTRA CLEAN HOLDINGS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE

















Three Months Ended


Twelve Months Ended


December 31,


December 25,


September 24,


December 31,


December 25,


2021


2020


2021


2021


2020

(in thousands, except percentages)















Provision for income taxes on a GAAP basis

$

6,303


$

4,349


$

8,392



27,931



19,281

Income tax effect of non-GAAP adjustments (8)


2,336



2,521



2,760



12,804



8,200

Income tax effect of valuation allowance (9)


2,400



525



(1,828)



(2,332)



(994)

Non-GAAP provision for income taxes

$

11,039


$

7,395


$

9,324


$

38,403


$

26,487
















Income before income taxes on a GAAP basis

$

55,089


$

27,083


$

42,351



154,316



99,671

Amortization of intangible assets (1)


9,511



4,950



9,512



33,423



19,799

Restructuring charges (2)


(391)



1,003



1,580



1,301



4,573

Stock-based compensation expense (3)


4,667



3,760



4,324



16,758



12,899

Fair value related adjustments (4)


546



3,266



2,288



22,999



7,624

Acquisition related costs (5)


449



1,024



105



9,984



1,024

Insurance proceeds (6)








(7,332)



Gain on the sale of property (7)






(100)





(1,352)

Non-GAAP income before income taxes

$

69,871


$

41,086


$

60,060


$

231,449


$

144,238

Effective income tax rate on a GAAP basis


11.4%



16.1%



19.8%



18.1%



19.3%

Non-GAAP effective income tax rate


15.8%



18.0%



15.5%



16.6%



18.4%
















1 Amortization of intangible assets related to the Company's business acquisitions

2 Represents severance, retention and costs related to facility closures

3 Represents compensation expense for stock granted to employees and directors

4 Adjustments related to the fair values of inventories, contingent consideration, purchase obligation and forward hedge contracts

5 Represents costs related to acquisitions

6 Insurance proceeds pertaining to the Cinos fire in 2018

7 Represents gain realized on the sale of land in South Korea

8 Tax effect of items (1) through (7) above based on the non-GAAP tax rate

9 The Company's GAAP tax expense is generally higher than the Company's non-GAAP tax expense, primarily due to losses in the U.S. with full federal and state valuation allowances. The Company's non-GAAP tax rate and resulting non-GAAP tax expense considers the tax implications as if there was no federal or state valuation allowance position in effect.


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SOURCE Ultra Clean Holdings, Inc.