UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
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
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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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.
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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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.:
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the 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
Number of shares outstanding of the issuer’s common stock as of May 3, 2022:
ULTRA CLEAN HOLDINGS, INC.
TABLE OF CONTENTS
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ITEM 1. |
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3 |
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ITEM 2. |
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
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24 |
ITEM 3. |
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32 |
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ITEM 4. |
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32 |
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ITEM 1. |
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33 |
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ITEM 1A. |
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33 |
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ITEM 2. |
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33 |
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ITEM 3. |
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33 |
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ITEM 4. |
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33 |
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ITEM 5. |
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33 |
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ITEM 6. |
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33 |
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34 |
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- 2 -
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
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April 1, |
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December 31, |
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(In millions, except par value) |
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2022 |
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2021 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net of allowance for doubtful accounts of $ |
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Inventories |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Goodwill |
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Intangibles assets, net |
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Deferred tax assets, net |
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Operating lease right-of-use assets |
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Other non-current assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Bank borrowings |
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$ |
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$ |
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Accounts payable |
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Accrued compensation and related benefits |
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Operating lease liabilities |
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Other current liabilities |
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Total current liabilities |
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Bank borrowings, net of current portion |
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Deferred tax liabilities |
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Operating lease liabilities |
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Other liabilities |
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Total liabilities |
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and contingencies (See Note 9) |
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Equity: |
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UCT stockholders’ equity: |
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Preferred stock — $ |
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Common stock — $ |
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Additional paid-in capital |
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Common shares held in treasury, at cost, |
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Retained earnings |
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Accumulated other comprehensive gain (loss) |
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( |
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Total UCT stockholders' equity |
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Noncontrolling interests |
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Total equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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(See accompanying Notes to Condensed Consolidated Financial Statements)
- 3 -
ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Three Months Ended |
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April 1, |
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March 26, |
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(In millions, except per share amounts) |
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2022 |
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2021 |
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Revenues: |
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Products |
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$ |
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$ |
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Services |
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Total revenues |
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Cost of revenues: |
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Products |
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Services |
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Total cost of revenues |
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Gross profit |
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Operating expenses: |
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Research and development |
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Sales and marketing |
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General and administrative |
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Total operating expenses |
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Income from operations |
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Interest income |
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Interest expense |
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Other income (expense), net |
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Income before provision for income taxes |
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Provision for income taxes |
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Net income |
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Less: Net income attributable to noncontrolling interests |
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Net income attributable to UCT |
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$ |
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$ |
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Net income per share attributable to UCT common stockholders: |
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Basic |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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Shares used in computing net income per share: |
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Basic |
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Diluted |
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(See accompanying Notes to Condensed Consolidated Financial Statements)
- 4 -
ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
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Three Months Ended |
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April 1, |
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March 26, |
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(In millions) |
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2022 |
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2021 |
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Net income |
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$ |
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$ |
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Other comprehensive gain (loss): |
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Change in cumulative translation adjustment |
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( |
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Change in fair value of derivatives |
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Total other comprehensive gain (loss) |
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( |
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Other comprehensive income, attributable to |
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Comprehensive income attributable to UCT |
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$ |
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$ |
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(See accompanying Notes to Condensed Consolidated Financial Statements)
- 5 -
ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Three Months Ended |
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April 1, |
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March 26, |
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(In millions) |
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2022 |
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2021 |
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Cash flows from operating activities: |
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Net income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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Depreciation and amortization |
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Amortization of intangible assets |
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Stock-based compensation |
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Amortization of debt issuance costs |
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Gain from insurance proceeds |
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Deferred income taxes |
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Change in the fair value of financial instruments and earn-out liability |
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Others |
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Changes in assets and liabilities: |
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Accounts receivable |
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( |
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Inventories |
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( |
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Prepaid expenses and other current assets |
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Other non-current assets |
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( |
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Accounts payable |
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Accrued compensation and related benefits |
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( |
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Income taxes payable |
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Operating lease assets and liabilities |
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Other liabilities |
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Net cash provided by (used in) operating activities |
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Cash flows from investing activities: |
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Purchases of property, plant and equipment |
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Proceeds from sale of equipment, including insurance proceeds |
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Net cash provided by (used in) investing activities |
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Cash flows from financing activities: |
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Proceeds from bank borrowings |
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Principal payments on bank borrowings and finance leases |
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Net cash used in financing activities |
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Effect of exchange rate changes on cash and cash equivalents |
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Net increase (decrease) in cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Supplemental cash flow information: |
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Income taxes paid, net of income tax refunds |
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$ |
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$ |
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Interest paid |
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$ |
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$ |
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Non-cash investing and financing activities: |
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Property, plant and equipment purchased included in accounts payable and other |
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$ |
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$ |
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(See accompanying Notes to Condensed Consolidated Financial Statements)
- 6 -
ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited)
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Three Months Ended |
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April 1, 2022 |
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Common Stock |
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Additional |
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Treasury shares |
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Retained |
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Accumulated |
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Total |
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Noncontrolling |
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Total |
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(In millions) |
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Shares |
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Amount |
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Capital |
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Shares |
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Amount |
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Earnings |
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Income (Loss) |
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Equity of UCT |
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Interests |
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Equity |
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Balance December 31, 2021 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance under employee stock plans |
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— |
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$ |
— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Other comprehensive loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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— |
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( |
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Balance April 1, 2022 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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Three Months Ended |
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March 26, 2021 |
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Common Stock |
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Treasury shares |
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(In millions) |
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Shares |
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Amount |
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Additional |
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Shares |
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Amount |
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Retained |
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Accumulated |
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Total |
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Noncontrolling |
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Total |
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Balance December 25, 2020 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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$ |
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$ |
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$ |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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Dividend payments to a joint venture shareholder |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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( |
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Other comprehensive loss |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
) |
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— |
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( |
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Balance March 26, 2021 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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$ |
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$ |
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$ |
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$ |
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- 7 -
ULTRA CLEAN HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization — Ultra Clean Holdings, Inc., (the “Company” or “UCT”) was incorporated in Delaware in November 2002 and became a publicly traded company on the NASDAQ Global Market in March 2004. 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. UCT offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping and part and component manufacturing, as well as tool chamber parts cleaning and coating, and micro-contamination analytical services. The Company has two reportable segments: Products and Services. The Company’s Products business primarily designs, engineers and manufactures production tools, components and parts, and modules and subsystems for the semiconductor and display capital equipment markets. Products include chemical delivery modules, frame assemblies, gas delivery systems, fluid delivery systems, precision robotics, process modules as well as other high-level assemblies. The Company’s Services business provides ultra-high purity parts cleaning, process tool part recoating, surface encapsulation and high sensitivity micro contamination analysis primarily for the semiconductor device makers and wafer fabrication equipment markets. In 2021, the Company completed the acquisition of Ham-Let (Israel-Canada) Ltd. (“Ham-Let” or “Fluid Solutions”), Fluid Solutions engages in the development, manufacturing and marketing of innovative control valves, fittings, and hoses for the control and monitoring of industrial systems in a variety of markets, including the Semiconductor market. These products are primarily used in ultra clean gas delivery systems as well as other systems for the transmission of liquids and gases.