Ultra Clean Holdings, Inc. (Nasdaq: UCTT), today reported its financial results for the fourth quarter and full year ended December 27, 2024.
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“UCT's fourth quarter capped off a strong year with total revenue growing 21 percent over the prior year, significantly outperforming the overall WFE market,” said Jim Scholhamer, CEO. “Our unique ability to support the key drivers of semiconductor innovation, including those required by advancements in artificial intelligence, position us well to benefit over the long-term.”
“Our cash flow generation for the year enabled us to make strategic investments to drive long-term growth,” said Sheri Savage, CFO. “We now have the global manufacturing capacity to support a $4 billion revenue run rate.”
Fourth Quarter 2024 GAAP Financial Results Total revenue was $563.3 million. Products contributed $503.5 million and Services added $59.8 million. Total gross margin was 16.3%, operating margin was 4.6%, and net income was $16.3 million or $0.36 per diluted share. This compares to total revenue of $540.4 million, gross margin of 17.3%, operating margin of 4.7%, and net loss of $(2.3) million or $(0.05) per diluted share, in the prior quarter.
Fourth Quarter 2024 Non-GAAP Financial Results On a non-GAAP basis, gross margin was 16.8%, operating margin was 7.0%, and net income was $22.9 million or $0.51 per diluted share. This compares to gross margin of 17.8%, operating margin of 7.3%, and net income of $15.9 million or $0.35 per diluted share in the prior quarter.
Full Year 2024 GAAP Financial Results Total revenue was $2,097.6 million. Products contributed $1,853.7 million and Services added $243.9 million. Total gross margin was 17.0% operating margin was 4.3%, and net income was $23.7 million or $0.52 per diluted share. This compares to total revenue of $1,734.5 million, gross margin of 16.0%, operating margin of 2.0%, and net loss of $(31.1) million or $(0.70) per diluted share in the prior year.
Full Year 2024 Non-GAAP Financial Results On a non-GAAP basis, the company reported gross margin of 17.5%, operating margin of 6.9%, and net income of $65.2 million or $1.44 per diluted share. This compares to gross margin of 16.6%, operating margin of 4.9%, and net income of $25.2 million or $0.56 per diluted share in the prior year.
First Quarter 2025 Outlook The Company expects revenue in the range of $505 million to $555 million. The Company expects GAAP diluted net income (loss) per share to be between $(0.11) and $0.09 and non-GAAP diluted net income per share to be between $0.22 and $0.42.
Conference Call The call will take place at 1:45 p.m. PT and can be accessed by dialing 1-800-836-8184 or 1-646-357-8785. No passcode is required. A replay of the call will be available by dialing 1-888-660-6345 or 1-646-517-4150 and entering the confirmation code 80801#. 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, 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 defines non-GAAP net income as net income (loss) before amortization of intangible assets, stock-based compensation, restructuring charges, acquisition activity costs, fair value adjustments, debt refinancing costs, legal-related costs 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 29, 2023, 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 millions, except per share data) Three Months Ended Twelve months ended December 27, December 29, December 27, December 29, 2024 2023 2024 2023(In millions, except per share amounts)Revenues: $ 503.5 $ 389.7 $ 1,853.7 $ 1,501.6Product 59.8 55.1 243.9 232.9Services 563.3 444.8 2,097.6 1,734.5Total revenuesCost of revenues:Product 428.5 335.0 1,569.7 1,290.5Services 43.0 38.7 171.6 166.7Total cost revenues 471.5 373.7 1,741.3 1,457.2Gross margin 91.8 71.1 356.3 277.3Operating expenses:Research and development 7.1 6.6 28.3 28.3Sales and marketing 14.4 13.2 57.3 51.8General and administrative 44.4 46.7 179.5 162.0Total operating expenses 65.9 66.5 265.1 242.1Income from operations 25.9 4.6 91.2 35.2Interest income 0.9 1.6 4.8 4.1Interest expense (10.7) (12.8) (46.5) (48.8)Other income (expense), net 8.4 (1.1) 17.7 (1.8)Income (loss) before provision for income taxes 24.5 (7.7) 67.2 (11.3)Provision for income tax 4.5 (6.2) 32.7 10.9Net income (loss) 20.0 (1.5) 34.5 (22.2)Less: Net income attributable to noncontrolling interests 3.7 2.3 10.8 8.9Net income (loss) attributable to UCT $ 16.3 $ (3.8) $ 23.7 $ (31.1)Net income (loss) per share attributable to UCT common stockholders:Basic $ 0.36 $ (0.08) $ 0.53 $ (0.70)Diluted $ 0.36 $ (0.08) $ 0.52 $ (0.70)Shares used in computing net income (loss) per share:Basic 45.1 44.7 44.9 44.7Diluted 45.4 44.7 45.3 44.7
ULTRA CLEAN HOLDINGS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited; in millions) December 27, December 29, 2024 2023ASSETSCurrent assets:Cash and cash equivalents $ 313.9 $ 307.0Accounts receivable, net of allowance for credit losses 241.1 180.8Inventories 381.0 374.5Prepaid expenses and other current assets 34.1 30.9Total current assets 970.1 893.2Property, plant and equipment, net 325.9 328.3Goodwill 265.3 265.2Intangible assets, net 184.9 215.3Deferred tax assets, net 3.1 3.1Operating lease right-of-use assets 161.0 151.7Other non-current assets 9.6 10.9Total assets $ 1,919.9 $ 1,867.7LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Bank borrowings $ 16.0 $ 17.6Accounts payable 212.5 192.9Accrued compensation and related benefits 50.1 47.7Operating lease liabilities 18.6 18.1Other current liabilities 38.4 33.7Total current liabilities 335.6 310.0Bank borrowings, net of current portion 476.5 461.2Deferred tax liabilities 16.1 19.0Operating lease liabilities 149.2 143.0Other liabilities 6.7 37.3Total liabilities 984.1 970.5Equity:UCT stockholders' equity:Common stock 0.1 0.1Additional paid-in capital 558.4 541.5Common shares held in treasury (45.0) (45.0)Retained earnings 370.4 346.7Accumulated other comprehensive loss (10.3) (4.4)Total UCT stockholders' equity 873.6 838.9Noncontrolling interests 62.2 58.3Total equity 935.8 897.2Total liabilities and equity $ 1,919.9 $ 1,867.7
ULTRA CLEAN HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited; in millions) Twelve months ended December 27, December 29, 2024 2023Cash flows from operating activities:Net income (loss) $ 34.5 $ (22.2)Adjustments to reconcile net income (loss) to net cash provided by operating activities (excluding assets acquired, liabilities assumed and noncontrolling interests at acquisition):Depreciation and amortization 45.7 37.6Amortization of intangible assets 30.4 24.1Stock-based compensation 17.4 12.1Amortization of debt issuance costs 3.0 3.9Loss (gain) on sale of property, plant and equipment 1.2 (0.9)Change in the fair value of financial instruments (29.2) 1.7Deferred income taxes (3.0) (12.4)Changes in assets and liabilities, net of effects of acquisitions:Accounts receivable (60.3) 78.5Inventories (6.5) 80.8Prepaid expenses and other current assets (3.2) 12.5Other non-current assets 1.3 -Accounts payable 26.4 (61.5)Accrued compensation and related benefits 2.4 (5.6)Income taxes payable 1.0 (5.2)Operating lease assets and liabilities 2.6 0.4Other liabilities 1.3 (7.9)Net cash provided by operating activities 65.0 135.9Cash flows from investing activities:Purchases of property, plant and equipment (63.5) (75.8)Acquisition of businesses, net of cash acquired – (46.1)Proceeds from sale of equipment – 2.2Net cash used in investing activities (63.5) (119.7)Cash flows from financing activities:Proceeds from bank borrowings 67.7 -Proceeds from issuance of common stock 2.0 0.8Extinguishment of bank borrowings (44.2) -Principal payments on bank borrowings (10.2) (38.6)Payment of debt issuance costs (2.5) (0.3)Employees' taxes paid upon vesting of restricted stock units (2.5) (2.2)Payments of dividends to a joint venture shareholder (0.5) (0.2)Repurchase of shares – (29.4)Net cash provided by (used in) financing activities 9.8 (69.9)Effect of exchange rate changes on cash and cash equivalents (4.4) 1.9Net increase (decrease) in cash and cash equivalents 6.9 (51.8)Cash and cash equivalents at beginning of period 307.0 358.8Cash and cash equivalents at end of period $ 313.9 $ 307.0
ULTRA CLEAN HOLDINGS, INC.REPORTABLE SEGMENTSGAAP TO NON-GAAP RECONCILIATION(Unaudited; dollars in millions) GAAP Non-GAAP ThreeMonthsEnded ThreeMonthsEnded December 27, 2024 December 27, 2024 Products Services Consolidated Products Services ConsolidatedRevenues $ 503.5 $ 59.8 $ 563.3 $ 503.5 $ 59.8 $ 563.3Gross profit $ 75.0 $ 16.8 $ 91.8 $ 76.7 $ 17.8 $ 94.5Gross margin 14.9% 28.1% 16.3% 15.2% 29.8% 16.8%Income from operations $ 23.5 $ 2.4 $ 25.9 $ 33.4 $ 5.8 $ 39.2Operating margin 4.7% 4.0% 4.6% 6.6% 9.7% 7.0% ThreeMonthsEnded December 27, 2024 Products Services ConsolidatedReconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions)Reported gross profit on a GAAP basis $ 75.0 $ 16.8 $ 91.8Amortization of intangible assets (1) 1.3 1.0 2.3Stock-based compensation expense (2) 0.4 – 0.4Non-GAAP gross profit $ 76.7 $ 17.8 $ 94.5Reconciliation of GAAP Gross margin to Non-GAAP Gross marginReported gross margin on a GAAP basis 14.9% 28.1% 16.3%Amortization of intangible assets (1) 0.2% 1.7% 0.4%Stock-based compensation expense (2) 0.1% -% 0.1%Non-GAAP gross margin 15.2% 29.8% 16.8%Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in millions)Reported income from operations on a GAAP basis $ 23.5 $ 2.4 $ 25.9Amortization of intangible assets (1) 4.6 2.9 7.5Stock-based compensation expense (2) 4.2 0.5 4.7Legal-related costs (3) 1.1 – 1.1Non-GAAP income from operations $ 33.4 $ 5.8 $ 39.2Reconciliation of GAAP Operating margin to Non-GAAP Operating marginReported operating margin on a GAAP basis 4.7% 4.0% 4.6%Amortization of intangible assets (1) 0.9% 4.8% 1.3%Stock-based compensation expense (2) 0.8% 0.9% 0.9%Legal-related costs (3) 0.2% -% 0.2%Non-GAAP operating margin 6.6% 9.7% 7.0%1 Amortization of intangible assets related to the Company's business acquisitions2 Represents compensation expense for stock granted to employees and directors3 Represents estimated costs related to certain legal proceedings
ULTRA CLEAN HOLDINGS, INC.UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS Three Months Ended Twelve months ended December 27, December 29, September 27, December 27, December 29, 2024 2023 2024 2024 2023Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (in millions)Reported net income (loss) attributable to UCT on a GAAP basis 16.3 $ (3.8) $ (2.3) 23.7 $ (31.1)Amortization of intangible assets (1) 7.5 7.2 7.6 30.4 24.1Stock-based compensation expense (2) 4.7 3.6 4.5 17.8 12.5Restructuring charges (3) – 3.4 0.3 2.3 9.2Acquisition related costs (4) – 3.4 0.6 1.0 4.3Fair value related adjustments (5) (7.1) 2.5 0.8 (29.1) 4.0Debt refinancing costs expensed (6) 0.4 – – 4.0 -Legal-related costs (7) 1.1 0.5 1.3 2.7 (0.4)Income tax effect of non-GAAP adjustments (8) (1.0) (3.4) (4.1) (6.1) (10.2)Income tax effect of valuation allowance (9) 1.0 (4.9) 7.2 18.5 12.8Non-GAAP net income attributable to UCT $ 22.9 $ 8.5 $ 15.9 $ 65.2 $ 25.2Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in millions)Reported income from operations on a GAAP basis $ 25.9 $ 4.6 $ 25.2 $ 91.2 $ 35.2Amortization of intangible assets (1) 7.5 7.2 7.6 30.4 24.1Stock-based compensation expense (2) 4.7 3.6 4.5 17.8 12.5Restructuring charges (3) – 3.4 0.3 2.3 9.2Acquisition related costs (4) – 3.4 0.6 1.0 4.3Fair value related adjustments (5) – 0.4 – – 0.4Legal-related costs (7) 1.1 0.5 1.3 2.7 (0.4)Non-GAAP income from operations $ 39.2 $ 23.1 $ 39.5 $ 145.4 $ 85.3Reconciliation of GAAP Operating margin to Non-GAAP Operating marginReported operating margin on a GAAP basis 4.6% 1.0% 4.7% 4.3% 2.0%Amortization of intangible assets (1) 1.3% 1.6% 1.4% 1.4% 1.4%Stock-based compensation expense (2) 0.9% 0.8% 0.8% 0.9% 0.7%Restructuring charges (3) -% 0.8% 0.1% 0.1% 0.5%Acquisition related costs (4) -% 0.1% 0.1% 0.1% 0.3%Fair value related adjustments (5) -% 0.1% -% -% 0.0%Legal-related costs (7) 0.2% 0.8% 0.2% 0.1% 0.0%Non-GAAP operating margin 7.0% 5.2% 7.3% 6.9% 4.9%Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions)Reported gross profit on a GAAP basis $ 91.8 $ 71.1 $ 93.4 $ 356.3 $ 277.3Amortization of intangible assets (1) 2.3 2.0 2.3 9.1 6.5Stock-based compensation expense (2) 0.4 0.5 0.3 1.9 1.5Restructuring charges (3) – 0.4 – 0.3 1.6Fair value related adjustments (5) – 0.4 – – 0.4Non-GAAP gross profit $ 94.5 $ 74.4 $ 96.0 $ 367.6 $ 287.3Reconciliation of GAAP Gross margin to Non-GAAP Gross marginReported gross margin on a GAAP basis 16.3% 16.0% 17.3% 17.0% 16.0%Amortization of intangible assets (1) 0.4% 0.4% 0.4% 0.4% 0.4%Stock-based compensation expense (2) 0.1% 0.1% 0.1% 0.1% 0.1%Restructuring charges (3) -% 0.1% -% 0.0% 0.1%Fair value related adjustments (5) -% 0.1% -% -% 0.0%Non-GAAP gross margin 16.8% 16.7% 17.8% 17.5% 16.6%Reconciliation of GAAP Other income (expense), net to Non-GAAP Other income (expense), net (in millions)Reported Other income (expense), net on a GAAP basis $ 8.4 $ (1.1) $ (4.1) $ 17.7 $ (1.8)Fair value related adjustments (5) (7.1) 2.1 0.8 (29.1) 4.9Debt refinancing costs expensed (6) 0.4 – – 4.0 -Non-GAAP Other income (expense), net $ 1.7 $ 1.0 $ (3.3) $ (7.4) $ 3.1Reconciliation of GAAP Income (Loss) Per Diluted Share to Non-GAAP Earnings Per Diluted ShareReported net income (loss) on a GAAP basis $ 0.36 $ (0.08) $ (0.05) $ 0.52 $ (0.70)Amortization of intangible assets (1) 0.17 0.16 0.17 0.67 0.54Stock-based compensation expense (2) 0.10 0.08 0.10 0.39 0.28Restructuring charges (3) – 0.08 0.00 0.05 0.20Acquisition related costs (4) – 0.08 0.01 0.02 0.10Fair value related adjustments (5) (0.16) 0.05 0.02 (0.64) 0.09Debt refinancing costs expensed (6) 0.01 – – 0.09 -Legal-related costs (7) 0.03 0.01 0.03 0.06 (0.01)Income tax effect of non-GAAP adjustments (8) (0.02) (0.08) (0.09) (0.13) (0.23)Income tax effect of valuation allowance (9) 0.02 (0.11) 0.16 0.41 0.29Non-GAAP net earnings $ 0.51 $ 0.19 $ 0.35 $ 1.44 $ 0.56Weighted average number of diluted shares (in millions) on a non-GAAP basis 45.4 44.9 45.5 45.3 45.1ULTRA CLEAN HOLDINGS, INC.UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE Three Months Ended Twelve months ended December 27, December 29, September 27, December 27, December 29, 2024 2023 2024 2024 2023Provision for income taxes on a GAAP basis $ 4.5 $ (6.2) $ 9.9 $ 32.7 $ 10.9Income tax effect of non-GAAP adjustments (8) 1.0 3.4 4.1 6.1 10.2Income tax effect of valuation allowance (9) (1.0) 4.9 (7.2) (18.5) (12.8)Non-GAAP provision for income taxes $ 4.5 $ 2.1 $ 6.8 $ 20.3 $ 8.3Income before income taxes on a GAAP basis $ 24.5 $ (7.7) $ 10.2 $ 67.2 $ (11.3)Amortization of intangible assets (1) 7.5 7.2 7.6 30.4 24.1Stock-based compensation expense (2) 4.7 3.6 4.5 17.8 12.5Restructuring charges (3) – 3.4 0.3 2.3 9.2Acquisition related costs (4) – 3.4 0.6 1.0 4.3Fair value related adjustments (5) (7.1) 2.5 0.8 (29.1) 5.4Debt refinancing costs expensed (6) 0.4 – – 4.0 -Legal-related costs (7) 1.1 0.5 1.3 2.7 (0.4)Non-GAAP income before income taxes $ 31.1 $ 12.9 $ 25.3 $ 96.3 $ 43.8Effective income tax rate on a GAAP basis 18.4% 80.5% 97.1% 48.7% (96.5)%Non-GAAP effective income tax rate 14.5% 16.4% 27.1% 21.1% 18.9%
1 Amortization of intangible assets related to the Company's business acquisitions2 Represents compensation expense for stock granted to employees and directors3 Represents severance, retention and costs related to facility closures4 Represents acquisition activity costs5 Fair value adjustments related to contingent consideration6 Represents the third party transaction costs related to the amended credit agreement and the previously capitalized costs of extinguished debt7 Represents estimated costs related to certain legal proceedings8 Tax effect of items (1) through (7) above based on the non-GAAP tax rate9 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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