Company Quick10K Filing
Axcelis
Price18.38 EPS0
Shares34 P/E85
MCap622 P/FCF-1,802
Net Debt-162 EBIT12
TEV459 TEV/EBIT38
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-06
10-K 2020-12-31 Filed 2021-02-26
10-Q 2020-09-30 Filed 2020-11-06
10-Q 2020-06-30 Filed 2020-08-05
10-Q 2020-03-31 Filed 2020-05-06
10-K 2019-12-31 Filed 2020-03-02
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-07
10-Q 2019-03-31 Filed 2019-05-08
10-K 2018-12-31 Filed 2019-03-11
10-Q 2018-09-30 Filed 2018-11-02
10-Q 2018-06-30 Filed 2018-08-03
10-Q 2018-03-31 Filed 2018-05-04
10-K 2017-12-31 Filed 2018-03-14
10-Q 2017-09-30 Filed 2017-11-03
10-Q 2017-06-30 Filed 2017-08-04
10-Q 2017-03-31 Filed 2017-05-05
10-K 2016-12-31 Filed 2017-03-14
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-08
10-Q 2016-03-31 Filed 2016-05-05
10-K 2015-12-31 Filed 2016-03-04
10-Q 2015-09-30 Filed 2015-11-05
10-Q 2015-06-30 Filed 2015-08-05
10-Q 2015-03-31 Filed 2015-05-06
10-K 2014-12-31 Filed 2015-03-11
10-Q 2014-09-30 Filed 2014-11-06
10-Q 2014-06-30 Filed 2014-08-08
10-Q 2014-03-31 Filed 2014-05-08
10-K 2013-12-31 Filed 2014-03-03
10-Q 2013-09-30 Filed 2013-11-08
10-Q 2013-06-30 Filed 2013-08-02
10-Q 2013-03-31 Filed 2013-05-06
10-K 2012-12-31 Filed 2013-03-01
10-Q 2012-09-30 Filed 2012-11-05
10-Q 2012-06-30 Filed 2012-08-07
10-Q 2012-03-31 Filed 2012-05-04
10-K 2011-12-31 Filed 2012-02-29
10-Q 2011-09-30 Filed 2011-11-04
10-Q 2011-06-30 Filed 2011-08-05
10-Q 2011-03-31 Filed 2011-05-06
10-K 2010-12-31 Filed 2011-03-14
10-Q 2010-09-30 Filed 2010-11-05
10-Q 2010-06-30 Filed 2010-08-06
10-Q 2010-03-31 Filed 2010-05-12
10-K 2009-12-31 Filed 2010-03-15
8-K 2021-02-10
8-K 2020-11-05
8-K 2020-07-31
8-K 2020-05-19
8-K 2020-05-05
8-K 2020-02-05
8-K 2019-12-03
8-K 2019-10-31
8-K 2019-09-24
8-K 2019-08-14
8-K 2019-08-06
8-K 2019-05-14
8-K 2019-05-07
8-K 2019-02-06
8-K 2018-11-01
8-K 2018-08-02
8-K 2018-05-16
8-K 2018-05-02
8-K 2018-02-06

ACLS 10Q Quarterly Report

Part 1 - Financial Information
Item 1. Financial Statements.
Note 1. Nature of Business
Note 2. Stock - Based Compensation
Note 3. Leases
Note 4. Revenue
Note 5. Receivables and Allowances for Credit Losses
Note 6. Computation of Net Earnings per Share
Note 7. Accumulated Other Comprehensive Income
Note 8. Cash, Cash Equivalents and Restricted Cash
Note 9. Inventories, Net
Note 10. Product Warranty
Note 11. Fair Value Measurements
Note 12. Financing Arrangements
Note 13. Income Taxes
Note 14. Concentration of Risk
Note 15. Share Repurchase
Note 16. Contingencies
Note 17. Recent Accounting Guidance
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Item 6. Exhibits.
EX-10.1 acls-20210331xex10d1.htm
EX-31.1 acls-20210331xex31d1.htm
EX-31.2 acls-20210331xex31d2.htm
EX-33.1 acls-20210331xex33d1.htm
EX-33.2 acls-20210331xex33d2.htm

Axcelis Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
55044033022011002012201420172020
Assets, Equity
12510075502502012201420172020
Rev, G Profit, Net Income
3525155-5-152012201420172020
Ops, Inv, Fin

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

Or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to               

Commission file number 000-30941

AXCELIS TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware

34-1818596

(State or other jurisdiction of
incorporation or organization)

(IRS Employer
Identification No.)

108 Cherry Hill Drive

Beverly, Massachusetts 01915

(Address of principal executive offices, including zip code)

(978787-4000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common Stock, $0.001 par value

ACLS

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No .

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 

Emerging growth company

If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes  No 

As of May 3, 2021 there were 33,599,897 shares of the registrant’s common stock outstanding.

Table of Contents

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements (Unaudited)

Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020

3

Consolidated Statements of Comprehensive Income for the three months ended March 31, 2021 and 2020

4

Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020

5

Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2021 and 2020

6

Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020

7

Notes to Consolidated Financial Statements (Unaudited)

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Overview

19

Critical Accounting Estimates

19

Results of Operations

20

Liquidity and Capital Resources

25

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

27

Item 4.

Controls and Procedures

27

PART II - OTHER INFORMATION

28

Item 1.

Legal Proceedings

28

Item 1A.

Risk Factors

28

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

28

Item 3.

Defaults Upon Senior Securities

28

Item 4.

Mine Safety Disclosures

28

Item 5.

Other Information

28

Item 6.

Exhibits

29

2

Table of Contents

PART 1—FINANCIAL INFORMATION

Item 1.    Financial Statements.

Axcelis Technologies, Inc.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

Three months ended

March 31,

    

2021

    

2020

    

Revenue:

Product

$

126,609

$

112,133

Services

 

6,167

 

6,858

Total revenue

 

132,776

 

118,991

Cost of revenue:

Product

 

70,334

 

67,172

Services

 

6,007

 

6,270

Total cost of revenue

 

76,341

 

73,442

Gross profit

 

56,435

 

45,549

Operating expenses:

Research and development

 

15,685

 

14,606

Sales and marketing

 

10,387

 

8,204

General and administrative

 

10,013

 

9,036

Total operating expenses

 

36,085

 

31,846

Income from operations

 

20,350

 

13,703

Other (expense) income:

Interest income

 

33

 

482

Interest expense

 

(1,029)

 

(1,303)

Other, net

 

(1,153)

 

(620)

Total other expense

 

(2,149)

 

(1,441)

Income before income taxes

 

18,201

 

12,262

Income tax provision

 

1,721

 

1,041

Net income

$

16,480

$

11,221

Net income per share:

Basic

$

0.49

$

0.34

Diluted

$

0.48

$

0.33

Shares used in computing net income per share:

Basic weighted average common shares

 

33,715

 

32,872

Diluted weighted average common shares

 

34,643

 

34,057

See accompanying Notes to these Consolidated Financial Statements

3

Table of Contents

Axcelis Technologies, Inc.

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

Three months ended

March 31,

    

2021

    

2020

    

Net income

$

16,480

$

11,221

Other comprehensive loss:

Foreign currency translation adjustments

 

(1,372)

 

(1,112)

Amortization of actuarial loss and other adjustments from pension plan, net of tax

 

20

 

57

Total other comprehensive loss

(1,352)

(1,055)

Comprehensive income

$

15,128

$

10,166

See accompanying Notes to these Consolidated Financial Statements

4

Table of Contents

Axcelis Technologies, Inc.

Consolidated Balance Sheets

(In thousands, except per share amounts)

(Unaudited)

    

March 31,

    

December 31,

 

2021

2020

 

ASSETS

Current assets:

Cash and cash equivalents

$

206,766

$

203,479

Accounts receivable, net

 

75,932

 

86,865

Inventories, net

 

174,381

 

161,076

Prepaid expenses and other current assets

 

22,513

 

19,371

Total current assets

 

479,592

 

470,791

Property, plant and equipment, net

 

30,459

 

29,840

Operating lease assets

4,213

4,542

Finance lease assets, net

20,216

20,544

Long-term restricted cash

 

753

 

753

Deferred income taxes

54,936

57,851

Other assets

 

39,123

 

40,303

Total assets

$

629,292

$

624,624

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

40,476

$

24,013

Accrued compensation

 

8,573

 

24,562

Warranty

 

4,181

 

4,280

Income taxes

 

648

 

654

Deferred revenue

 

20,417

 

21,221

Current portion of finance lease obligation

 

809

 

756

Other current liabilities

 

8,774

 

8,945

Total current liabilities

 

83,878

 

84,431

Long-term finance lease obligation

 

47,167

 

47,393

Long-term deferred revenue

 

1,725

 

1,837

Other long-term liabilities

 

8,862

 

9,361

Total liabilities

 

141,632

 

143,022

Commitments and contingencies (Note 16)

Stockholders’ equity:

Common stock, $0.001 par value, 75,000 shares authorized; 33,679 shares issued and outstanding at March 31, 2021; 33,633 shares issued and outstanding at December 31, 2020

 

34

 

34

Additional paid-in capital

 

567,199

 

570,102

Accumulated deficit

 

(81,656)

 

(91,969)

Accumulated other comprehensive income

 

2,083

 

3,435

Total stockholders’ equity

 

487,660

 

481,602

Total liabilities and stockholders’ equity

$

629,292

$

624,624

See accompanying Notes to these Consolidated Financial Statements

5

Table of Contents

Axcelis Technologies, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)

Accumulated

 

Additional

Other

Total

 

Common Stock

Paid-in

Accumulated

Comprehensive

Stockholders’

 

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income (Loss)

    

Equity

 

Balance at December 31, 2019

32,585

$

33

$

559,878

$

(140,226)

$

(258)

$

419,427

Net income

 

 

 

 

11,221

 

 

11,221

Foreign currency translation adjustments

 

 

 

 

 

(1,112)

 

(1,112)

Change in pension obligation

 

 

 

 

 

57

 

57

Exercise of stock options

 

540

 

1

 

4,498

 

 

 

4,499

Issuance of shares under Employee Stock Purchase Plan

 

1

 

 

19

 

 

 

19

Issuance of restricted common shares,
net of shares withheld

 

69

 

 

(1,162)

 

 

 

(1,162)

Stock-based compensation expense

1,724

1,724

Repurchase of common stock

 

(358)

 

(1)

 

(5,775)

 

(1,725)

 

 

(7,501)

Balance at March 31, 2020

 

32,837

$

33

$

559,182

$

(130,730)

$

(1,313)

$

427,172

Accumulated

Additional

Other

Total

Common Stock

Paid-in

Accumulated

Comprehensive

Stockholders’

    

Shares

    

Amount

    

Capital

    

Deficit

    

Income (Loss)

    

Equity

Balance at December 31, 2020

33,633

$

34

$

570,102

$

(91,969)

$

3,435

$

481,602

Net income

 

 

 

 

16,480

 

 

16,480

Foreign currency translation adjustments

 

 

 

 

 

(1,372)

 

(1,372)

Change in pension obligation

 

 

 

 

 

20

 

20

Exercise of stock options

 

268

 

 

2,512

 

 

 

2,512

Issuance of restricted common shares,
net of shares withheld

 

81

 

 

(2,354)

 

 

 

(2,354)

Stock-based compensation expense

 

 

2,407

 

 

 

2,407

Repurchase of common stock

 

(303)

 

 

(5,468)

 

(6,167)

 

 

(11,635)

Balance at March 31, 2021

 

33,679

$

34

$

567,199

$

(81,656)

$

2,083

$

487,660

See accompanying Notes to these Consolidated Financial Statements

6

Table of Contents

Axcelis Technologies, Inc.

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Three months ended

March 31,

    

2021

    

2020

    

Cash flows from operating activities

Net income

$

16,480

$

11,221

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

 

2,645

 

2,363

Deferred income taxes

 

1,613

 

899

Stock-based compensation expense

 

2,407

 

1,724

Provision for excess and obsolete inventory

 

984

 

802

Changes in operating assets and liabilities:

Accounts receivable

 

10,431

 

19,223

Inventories

 

(16,503)

 

1,924

Prepaid expenses and other current assets

 

(3,325)

 

(4,435)

Accounts payable and other current liabilities

 

(1,008)

 

1,689

Deferred revenue

 

(909)

 

4,859

Income taxes

 

2

 

53

Other assets and liabilities

 

2,281

 

(645)

Net cash provided by operating activities

 

15,098

 

39,677

Cash flows from investing activities

Expenditures for property, plant and equipment and capitalized software

 

(1,347)

 

(1,290)

Net cash used in investing activities

 

(1,347)

 

(1,290)

Cash flows from financing activities

Net settlement on restricted stock grants

 

(2,354)

 

(1,162)

Repurchase of common stock

 

(11,635)

 

(7,501)

Proceeds from Employee Stock Purchase Plan

 

 

19

Principal payments on finance lease obligation

(175)

Proceeds from exercise of stock options

2,512

4,499

Net cash used in financing activities

 

(11,652)

 

(4,145)

Effect of exchange rate changes on cash and cash equivalents

 

1,188

 

640

Net increase in cash, cash equivalents and restricted cash

 

3,287

 

34,882

Cash, cash equivalents and restricted cash at beginning of period

 

204,232

 

146,534

Cash, cash equivalents and restricted cash at end of period

$

207,519

$

181,416

See accompanying Notes to these Consolidated Financial Statements

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Axcelis Technologies, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Note 1.  Nature of Business

Axcelis Technologies, Inc. (“Axcelis” or the “Company”) was incorporated in Delaware in 1995, and is a producer of ion implantation equipment used in the fabrication of semiconductor chips in the United States, Europe and Asia. In addition, we provide extensive worldwide aftermarket service and support, including spare parts, equipment upgrades, used equipment and maintenance services to the semiconductor industry.

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments which are of a normal recurring nature and considered necessary for a fair presentation of these financial statements have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for other interim periods or for the year as a whole.

The balance sheet at December 31, 2020 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Axcelis Technologies, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020.

Note 2.  Stock-Based Compensation

We maintain the Axcelis Technologies, Inc. 2012 Equity Incentive Plan, as amended (the “2012 Equity Plan”), which became effective on May 2, 2012, and permits the issuance of options, restricted stock, restricted stock units (“RSUs”) and performance awards to selected employees, directors and consultants of the Company. Our 2000 Stock Plan (the “2000 Stock Plan”) expired on May 1, 2012 and no new grants may be made under that plan after that date. However, unexpired options granted under the 2000 Stock Plan, which have a 10-year term, remain outstanding and subject to the terms of the 2000 Stock Plan. We also maintain the Axcelis Technologies, Inc. 2020 Employee Stock Purchase Plan (the “2020 ESPP”), an Internal Revenue Code Section 423 plan.

The 2012 Equity Plan is more fully described in Note 13 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020.

We recognized stock-based compensation expense of $2.4 million and $1.7 million for the three-month periods ended March 31, 2021 and 2020, respectively. These amounts include compensation expense related to RSUs and non-qualified stock options.

In the three-month periods ended March 31, 2021 and 2020, we issued 0.3 million and 0.6 million shares of common stock, respectively, upon stock option exercises and vesting of RSUs. In the three-month periods ended March 31, 2021 and 2020, we received proceeds of $2.5 million and $4.5 million, respectively, in connection with the exercise of stock options.

Note 3.  Leases

We have operating leases for office space, warehouse space, computer and office equipment and vehicles used in our business operations. We have a finance lease as a result of the 2015 sale-leaseback of our corporate headquarters in Beverly, Massachusetts. All new agreements are reviewed to determine if they contain a lease component. A lease is a contract or part of a contract that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. We recognize the lease obligation on a discounted basis using the explicit or implicit discount rate stated within the agreement. We recognize a corresponding right-of-use asset, which is initially determined based upon the net present value of the associated liability and is adjusted for deferred costs and possible impairment, if

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any. For those lease agreements that do not indicate the applicable discount rate, we use our incremental borrowing rate. We have made the following policy elections: (i) operating leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet; (ii) we recognize lease expense for operating leases on a straight-line basis over the lease term; and (iii) we account for lease components and non-lease components that are fixed payments as one component. Some of our operating leases include one or more options to renew, with renewal terms that can extend the respective lease term 1 to 3 years. The exercise of lease renewal options are at our sole discretion. For lease extensions that are reasonably certain to occur, we have included these renewal periods in our calculation of the net present value of the lease obligation and related right-of-use asset. Certain leases also include options to purchase the leased property. The depreciable life of certain assets and leasehold improvements is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. The amounts of operating and finance lease right-of-use assets and related lease obligations recorded within our consolidated balance sheets are as follows:

March 31,

December 31,

Leases

Classification

2021

    

2020

    

 

Assets

(in thousands)

 

Operating leases

Operating lease assets

$

4,213

$

4,542

Finance lease

Finance lease assets *

 

20,216

 

20,544

Total leased assets

$

24,429

$

25,086

Liabilities

Current

Operating

Other current liabilities

$

2,387

$

2,573

Finance

Current portion of finance lease obligation

809

756

Noncurrent

Operating

Other long-term liabilities

1,812

1,949

Finance

Finance lease obligation

 

47,167

 

47,393

Total lease liabilities

$

52,175

$

52,671

* Finance lease assets are recorded net of accumulated depreciation of $48.7 million and include $0.7 million of prepaid financing costs as of March 31, 2021. Finance lease assets are recorded net of accumulated depreciation of $48.4 million and include $0.7 million of prepaid financing costs as of December 31, 2020.

All of our operating lease office locations support selling and servicing functions. Operating lease expense, and depreciation and interest expense relating to our finance lease obligation, are recognized within our consolidated statement of operations for the three months ended March 31, 2021 and 2020 as follows:

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Three months ended

 

March 31,

Lease cost

Classification

2021

    

2020

    

 

Operating lease cost

(in thousands)

 

Service

Cost of revenue

$

639

$

550

Research and development

Operating expenses

 

130

 

81

Sales and marketing*

Operating expenses

 

378

 

332

General and administrative*

Operating expenses

 

260

 

215

Total operating lease cost

$

1,407

$

1,178

Finance lease cost

Depreciation of leased assets

Cost of revenue, R&D, Sales and marketing and G&A

$

328

$

353

Interest on lease liabilities

Interest expense

 

1,279

 

1,303

Total finance lease cost

$

1,607

$

1,656

Total lease cost

$

3,014

$

2,834

* Sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $0.4 million and $0.2 million for the three months ended March 31, 2021 and 2020, respectively.

Our corporate headquarters, shown below under finance leases, has an original lease term of 22 years. All other locations are treated as operating leases, with lease terms ranging from 1 to 10 years. The tables below reflect the minimum cash outflow regarding our current lease obligations as well as the weighted-average remaining lease term and weighted-average discount rates used in our calculation of our lease obligations and right-of-use assets as of March 31, 2021:

Finance

Operating

    

Total

 

Maturity of Lease Liabilities

Leases

Leases

Leases

(in thousands)

2021

$

4,394

$

2,129

$

6,523

2022

 

5,980

 

1,673

 

7,653

2023

 

6,114

 

534

 

6,648

2024

 

6,252

 

126

 

6,378

2025

5,930

74

6,004

Thereafter

73,723

145

73,868

Total lease payments

$

102,393

$

4,681

$

107,074

Less interest portion*

(54,417)

(482)

(54,899)

Finance lease and operating lease obligations

$

47,976

$

4,199

$

52,175

* Finance lease interest calculated using the implied interest rate; operating lease interest calculated using estimated corporate borrowing rate.

March 31,

Lease term and discount rate

    

2021

Weighted-average remaining lease term (years):

Operating leases

2.3

Finance leases

 

15.8

Weighted-average discount rate:

Operating leases

 

4.5%

Finance leases

 

10.5%

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Our cash outflows from our operating leases include rent expense and other charges associated with these leases. These cash flows are included within the operating activities section of our statement of cash flows. Our cash flows from our finance lease include both an interest component and payment of principal component. The table below shows our cash outflows, by lease type and related section of our statement of cash flows, as well as the non-cash amount capitalized on our balance sheet in relation to our operating lease right-of-use assets for the three months ending March 31, 2021 and 2020, respectively:

Three months ended

March 31,

Cash paid for amounts included in the measurement of lease liabilities

    

2021

2020

(in thousands)

Operating cash outflows from operating leases

$

1,407

$

1,178

Operating cash outflows from finance leases

 

1,279

 

1,422

Financing cash outflows from finance leases

175

Operating lease assets obtained in exchange for operating lease liabilities

 

791

 

765

Finance lease assets obtained in exchange for new finance lease liabilities

$

$

Note 4. Revenue

To reflect the organization of our business operations, we divide revenue into two categories: revenue from sales of new systems and revenue arising from the sale of used systems, parts and labor to customers who own systems, which we refer to as “Aftermarket.”

Revenue by categories used by management are as follows:

Three months ended

March 31,

2021

2020

(in thousands)

Systems

$

80,991

$

82,338

Aftermarket

51,785

36,653

Total Revenue

$

132,776

$

118,991

We also consider revenue by geography. Revenue is allocated to geographic markets based upon the location to which our products are shipped and in which our services are performed. Revenue in our principal geographic markets is as follows:

Three months ended

March 31,

2021

2020

(in thousands)

North America

$

9,508

$

10,661

Asia Pacific

103,391

96,828

Europe

19,877

11,502

Total Revenue

$

132,776

$

118,991

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Our system sales revenue transactions give rise to contract liabilities (in the case of pre-payments and the fair value of goods and services to be delivered after the system delivery, such as installation and certain warranty obligations).

Contract liabilities are as follows:

March 31,

December 31,

2021

2020

(in thousands)

Contract liabilities

$

22,142

$

23,058

Contract liabilities are reflected as deferred revenue on the consolidated balance sheet and relate to payments invoiced or received in advance of completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations.

Three months ended

   

March 31,

2021

2020

(in thousands)

Balance, beginning of the period

$

23,058

$

29,251

Deferral of revenue

11,264

9,799

Recognition of deferred revenue

(12,180)

(4,944)

Balance, end of the period

$

22,142

$

34,106

The majority of our system transactions have payment terms of 90% due upon shipment of the tool and 10% due upon acceptance. Aftermarket transaction payment terms usually provide that payment is due either within 30 or 60 days after the service is provided or parts delivered.

Note 5. Receivables and Allowances for Credit Losses

All trade receivables are reported on the Consolidated Balance Sheets at their amortized cost adjusted for any write-offs and net of allowances for credit losses.

Axcelis maintains an allowance for credit losses, which represent an estimate of expected losses over the remaining contractual life of its receivables considering current market conditions and estimates for supportable forecasts when appropriate. The estimate is a result of the Company’s ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses in its receivable portfolio. Axcelis uses historical loss experience rates and applies them to a related aging analysis while also considering customer and/or economic risk where appropriate. Determination of the proper amount of allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, net earnings. The allowance takes into consideration numerous quantitative and qualitative factors that include receivable type, historical loss experience, loss migration, delinquency trends, collection experience, current economic conditions, estimates for supportable forecasts, when appropriate, and credit risk characteristics.

Axcelis evaluates the credit risk of the customer when extending credit based on a combination of various financial and qualitative factors that may affect its customers’ ability to pay. These factors may include the customer’s financial condition, past payment experience, and credit bureau report, as well as the value of the underlying collateral.

Management performs detailed reviews of Axcelis’ receivables on a quarterly basis to assess the adequacy of the allowances and to determine if any impairment has occurred. Amounts determined to be uncollectable are charged directly against the allowances, while amounts recovered on previously written-off accounts increase the allowances. Changes to the allowances for credit losses are maintained through adjustments to the provision for credit losses, which are charged to current period earnings.

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The following table shows changes of the allowances for credit losses related to trade receivables for the three months ended March 31, 2021 and 2020, respectively:

Three months ended

March 31,

2021

2020

(in thousands)

Balance, beginning of period

$

$

818

Provision for credit losses

Charge-offs

(818)

Recoveries

Balance, end of period

$

$

Note 6.  Computation of Net Earnings per Share

Basic earnings per share is computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased by the number of additional common shares that would have been outstanding if the potentially dilutive common shares issuable on exercise of stock options and vesting of RSUs had been issued, calculated using the treasury stock method.

The components of net earnings per share are as follows:

Three months ended

March 31,

    

2021

    

2020

    

Net income available to common stockholders

$

16,480

$

11,221

Weighted average common shares outstanding used in computing basic income per share