Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 31, 2013 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'AXCELIS TECHNOLOGIES INC | ' |
Entity Central Index Key | '0001113232 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 109,596,844 |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Revenue | ' | ' | ' | ' |
Product | $42,934 | $37,093 | $118,151 | $136,096 |
Services | 5,897 | 7,547 | 18,907 | 22,664 |
Total revenue | 48,831 | 44,640 | 137,058 | 158,760 |
Cost of revenue | ' | ' | ' | ' |
Product | 27,339 | 24,809 | 74,976 | 84,692 |
Services | 4,516 | 5,464 | 15,427 | 16,377 |
Total cost of revenue | 31,855 | 30,273 | 90,403 | 101,069 |
Gross profit | 16,976 | 14,367 | 46,655 | 57,691 |
Operating expenses | ' | ' | ' | ' |
Research and development | 8,148 | 9,851 | 25,857 | 31,999 |
Sales and marketing | 5,330 | 5,470 | 16,128 | 18,284 |
General and administrative | 6,164 | 6,325 | 19,165 | 20,611 |
Gain on sale of dry strip assets and intellectual property | ' | ' | -1,167 | ' |
Restructuring charges | 112 | 578 | 2,334 | 3,612 |
Total operating expenses | 19,754 | 22,224 | 62,317 | 74,506 |
Loss from operations | -2,778 | -7,857 | -15,662 | -16,815 |
Other income (expense) | ' | ' | ' | ' |
Interest income | 3 | 9 | 8 | 27 |
Interest expense | -193 | ' | -308 | ' |
Other, net | -1,252 | -627 | -671 | -999 |
Total other income (expense) | -1,442 | -618 | -971 | -972 |
Loss before income taxes | -4,220 | -8,475 | -16,633 | -17,787 |
Income taxes | 530 | 243 | 1,125 | 1,429 |
Net loss | ($4,750) | ($8,718) | ($17,758) | ($19,216) |
Net loss per share | ' | ' | ' | ' |
Basic and Diluted (in dollars per share) | ($0.04) | ($0.08) | ($0.16) | ($0.18) |
Shares used in computing net loss per share | ' | ' | ' | ' |
Basic and diluted weighted average common shares (in shares) | 109,074 | 107,855 | 108,573 | 107,521 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Consolidated Statements of Comprehensive Loss | ' | ' | ' | ' |
Net loss | ($4,750) | ($8,718) | ($17,758) | ($19,216) |
Other comprehensive income (loss): | ' | ' | ' | ' |
Foreign currency translation adjustments | 2,012 | 1,105 | 53 | -308 |
Amortization of actuarial losses from pension plan | 8 | ' | 24 | ' |
Comprehensive loss | ($2,730) | ($7,613) | ($17,681) | ($19,524) |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $48,317 | $44,986 |
Accounts receivable, net | 29,321 | 24,843 |
Inventories, net | 94,316 | 100,234 |
Restricted cash | 1,583 | 106 |
Prepaid expenses and other current assets | 5,066 | 5,056 |
Total current assets | 178,603 | 175,225 |
Property, plant and equipment, net | 32,311 | 34,413 |
Restricted cash, long-term | 825 | ' |
Other assets | 15,542 | 12,520 |
Total assets | 227,281 | 222,158 |
Current liabilities | ' | ' |
Accounts payable | 16,075 | 10,166 |
Accrued compensation | 7,309 | 7,283 |
Warranty | 1,461 | 1,700 |
Income taxes | 262 | 278 |
Deferred revenue | 3,911 | 6,423 |
Current portion of long-term debt | 185 | ' |
Other current liabilities | 4,250 | 3,932 |
Total current liabilities | 33,453 | 29,782 |
Long-term debt | 14,815 | ' |
Long-term deferred revenue | 154 | 456 |
Other long-term liabilities | 6,129 | 5,844 |
Total liabilities | 54,551 | 36,082 |
Commitments and contingencies (Note 13) | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock, $0.001 par value, 30,000 shares authorized; none issued or outstanding | ' | ' |
Common stock, $0.001 par value, 300,000 shares authorized; 109,586 shares issued and 109,466 shares outstanding at September 30, 2013;108,293 shares issued and 108,173 shares outstanding at December 31, 2012 | 110 | 108 |
Additional paid-in capital | 508,976 | 504,643 |
Treasury stock, at cost, 120 shares at September 30, 2013 and December 31, 2012 | -1,218 | -1,218 |
Accumulated deficit | -340,235 | -322,477 |
Accumulated other comprehensive income | 5,097 | 5,020 |
Total stockholders' equity | 172,730 | 186,076 |
Total liabilities and stockholders' equity | $227,281 | $222,158 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, except Per Share data, unless otherwise specified | ||
Consolidated Balance Sheets | ' | ' |
Preferred stock, par value (in dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 30,000 | 30,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 300,000 | 300,000 |
Common stock, shares issued | 109,586 | 108,293 |
Common stock, shares outstanding | 109,466 | 108,173 |
Treasury stock, shares | 120 | 120 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Cash flows from operating activities | ' | ' |
Net loss | ($17,758) | ($19,216) |
Adjustments to reconcile net loss to net cash used for operating activities: | ' | ' |
Depreciation and amortization | 3,948 | 5,419 |
Gain on sale of dry strip assets and intellectual property | -1,167 | ' |
Deferred taxes | 272 | 998 |
Stock-based compensation expense | 3,105 | 3,411 |
Provision for excess inventory | 2,451 | 678 |
Changes in operating assets & liabilities | ' | ' |
Accounts receivable | -4,359 | 10,143 |
Inventories | 3,455 | -3,496 |
Prepaid expenses and other current assets | -429 | 4,490 |
Accounts payable and other current liabilities | 6,276 | -11,601 |
Deferred revenue | -2,816 | -5,089 |
Income taxes | -14 | -135 |
Other assets and liabilities | -3,813 | 3,025 |
Net cash used for operating activities | -10,849 | -11,373 |
Cash flows from investing activities | ' | ' |
Proceeds from sale of dry strip assets and intellectual property | 1,200 | ' |
Expenditures for property, plant, and equipment | -484 | -536 |
(Increase) decrease in restricted cash | -1,477 | 1 |
Net cash used for investing activities | -761 | -535 |
Cash flows from financing activities | ' | ' |
Increase in restricted cash | -825 | ' |
Financing fees and other expenses | -473 | ' |
Proceeds from exercise of stock options | 1,113 | 863 |
Proceeds from Employee Stock Purchase Plan | 197 | 179 |
Proceeds from issuance of Term Loan | 15,000 | ' |
Net cash provided by financing activities | 15,012 | 1,042 |
Effect of exchange rate changes on cash | -71 | -791 |
Net increase (decrease) in cash and cash equivalents | 3,331 | -11,657 |
Cash and cash equivalents at beginning of period | 44,986 | 46,877 |
Cash and cash equivalents at end of period | $48,317 | $35,220 |
Nature_of_Business
Nature of Business | 9 Months Ended |
Sep. 30, 2013 | |
Nature of Business | ' |
Nature of Business | ' |
Note 1. Nature of Business | |
Axcelis Technologies, Inc. (“Axcelis” or the “Company”) is a worldwide producer of ion implantation and other processing equipment used in the fabrication of semiconductor chips in the United States, Europe and Asia. In addition, the Company provides extensive aftermarket service and support, including spare parts, equipment upgrades, and maintenance services to the semiconductor industry. | |
In December 2012, the Company sold its intellectual property rights and certain assets relating to the Company’s dry strip product line to Lam Research Corporation (“Lam”). As a result of this transaction, the Company has ceased the sale of 300 mm dry strip wafer processing equipment in the quarter ended September 30, 2013. The Company will be able to continue to sell dry strip systems for smaller wafers until December 2015 and to support its installed base of all dry strip systems indefinitely. The gain on this transaction is more fully described in Note 3 below and in Note 3 to the consolidated financial statements in the Company’s 2012 Annual Report on Form 10-K. | |
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, 2012 has been derived from the audited 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, 2012. | |
The Company, incorporated in December 1995, is a successor to an ion implantation business founded in 1978. | |
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2013 | |
Stock-Based Compensation | ' |
Stock-Based Compensation | ' |
Note 2. Stock-Based Compensation | |
The Company maintains the Axcelis Technologies, Inc. 2012 Equity Incentive Plan (the “2012 Equity Plan”), which became effective on May 2, 2012, and permits the issuance of options, restricted stock, restricted stock units and performance awards to selected employees, directors and consultants of the Company. The Company’s 2000 Stock Plan (the “2000 Stock Plan”), expired on May 1, 2012. Awards granted under the 2000 Stock Plan remain outstanding and subject to the terms of the 2000 Stock Plan until the exercise or expiration of such grants. The Company also maintains the Axcelis Technologies, Inc. Employee Stock Purchase Plan (the “ESPP”), an Internal Revenue Code Section 423 plan. | |
The 2012 Equity Plan and the ESPP are more fully described in Note 13 to the consolidated financial statements in the Company’s 2012 Annual Report on Form 10-K. | |
The Company recognized stock-based compensation expense of $1.5 million for both the three-month periods ended September 30, 2013 and 2012. The Company recognized stock-based compensation expense of $3.1 million and $3.4 million for the nine-month periods ended September 30, 2013 and 2012, respectively. These amounts include compensation expense related to restricted stock units, non-qualified stock options and stock to be issued to participants under the ESPP. | |
Gain_on_Sale_of_Dry_Strip_Asse
Gain on Sale of Dry Strip Assets and Intellectual Property | 9 Months Ended |
Sep. 30, 2013 | |
Gain on Sale of Dry Strip Assets and Intellectual Property | ' |
Gain on Sale of Dry Strip Assets and Intellectual Property | ' |
Note 3. Gain on Sale of Dry Strip Assets and Intellectual Property | |
In December 2012, the Company sold its dry strip assets and intellectual property to Lam. A portion of the purchase consideration (up to $2.0 million) was contingent upon the Company achieving certain milestones by June 30, 2013. The Company recorded nil and $1.2 million for the proceeds received based on its achievement of milestones during the three and nine months ended September 30, 2013, respectively. These amounts were partially offset by additional costs associated with the lab system purchased by Lam. | |
Computation_of_Net_Loss_per_Sh
Computation of Net Loss per Share | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Computation of Net Loss per Share | ' | |||||||||||||
Computation of Net Loss per Share | ' | |||||||||||||
Note 4. Computation of Net Loss per Share | ||||||||||||||
Basic earnings or loss per share is computed by dividing income available or loss attributable 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 to include the number of additional common shares that would have been outstanding if the potentially dilutive common shares had been issued, calculated using the treasury stock method. | ||||||||||||||
The components of net loss per share are as follows: | ||||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(in thousands, except per share data) | ||||||||||||||
Net loss attributable to common stockholders | $ | (4,750 | ) | $ | (8,718 | ) | $ | (17,758 | ) | $ | (19,216 | ) | ||
Weighted average common shares outstanding used in computing basic and diluted net loss per share | 109,074 | 107,855 | 108,573 | 107,521 | ||||||||||
Net loss per share | ||||||||||||||
Basic and Diluted | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.16 | ) | $ | (0.18 | ) | ||
The Company incurred net losses for the three and nine-month periods ended September 30, 2013 and 2012, and has excluded the incremental shares attributable to outstanding stock options, restricted stock and restricted stock units from the calculation of net loss per share because the effect would have been anti-dilutive. The following table sets forth the number of incremental shares excluded from the calculation above: | ||||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(in thousands) | ||||||||||||||
Incremental shares excluded from the calculation of net loss per share | 4,383 | 1,010 | 2,620 | 1,508 | ||||||||||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Accumulated Other Comprehensive Income | ' | ||||||||||
Accumulated Other Comprehensive Income | ' | ||||||||||
Note 5. Accumulated Other Comprehensive Income | |||||||||||
The following table presents the changes in accumulated other comprehensive income, net of tax, by component for the nine months ended September 30, 2013: | |||||||||||
Foreign | Defined benefit | Total | |||||||||
currency | pension plan | ||||||||||
(in thousands) | |||||||||||
Balance at December 31, 2012 | $ | 5,375 | $ | (355 | ) | $ | 5,020 | ||||
Other comprehensive loss before reclassifications | 53 | — | 53 | ||||||||
Amounts reclassified from accumulated other comprehensive income (1) | — | 24 | 24 | ||||||||
Net current-period other comprehensive income | 53 | 24 | 77 | ||||||||
Balance at September 30, 2013 | $ | 5,428 | $ | (331 | ) | $ | 5,097 | ||||
(1) Amount presented before taxes as the tax effect is not material to the consolidated financial statements. | |||||||||||
Inventories_net
Inventories, net | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventories, net | ' | |||||||
Inventories, net | ' | |||||||
Note 6. Inventories, net | ||||||||
The components of inventories are as follows: | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Raw materials | $ | 58,265 | $ | 72,013 | ||||
Work in process | 22,622 | 12,253 | ||||||
Finished goods (completed systems) | 13,429 | 15,968 | ||||||
$ | 94,316 | $ | 100,234 | |||||
When recorded, inventory reserves are intended to reduce the carrying value of inventories to their net realizable value. The Company establishes inventory reserves when conditions exist that indicate inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand for the Company’s products or market conditions. The Company regularly evaluates the ability to realize the value of inventories based on a combination of factors including the following: forecasted sales or usage, estimated product end of life dates, estimated current and future market value and new product introductions. Purchasing and usage alternatives are also explored to mitigate inventory exposure. As of September 30, 2013 and December 31, 2012, inventories are stated net of inventory reserves of $34.4 million and $33.6 million respectively. | ||||||||
During the three and nine months ended September 30, 2013, the Company recorded a charge to cost of sales of nil and $2.1 million, respectively, for 300mm dry strip components. Under the terms of the agreement with Lam, the Company was permitted to manufacture and sell dry strip products through September 2013. Due to changes in the forecasted sales of the Company’s dry strip products that become known during the nine months ended September 30, 2013, a portion of the dry strip inventory components were determined to be non-recoverable. | ||||||||
During the three months and nine months ended September 30, 2013, the Company recorded a charge to cost of sales of $0.1 million and $0.6 million, respectively, due to production levels below normal capacity. During the three months and nine months ended September 30, 2012, the Company recorded a charge to cost of sales of $1.1 million and $1.2 million, respectively, due to production levels below normal capacity. | ||||||||
Restructuring_Charges
Restructuring Charges | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Restructuring Charges | ' | ||||
Restructuring Charges | ' | ||||
Note 7. Restructuring Charges | |||||
In 2012, the Company completed reductions in force related to actions taken by management to control costs, improve the focus of its operations, sustain future profitability and conserve cash. As of December 31, 2012, approximately $0.7 million of these costs were accrued and unpaid. | |||||
During the nine months ended September 30, 2013, the Company implemented further actions, which resulted in restructuring charges for severance and related costs of $2.3 million recorded. The liability at September 30, 2013 of $0.1 million is expected to be paid primarily in the fourth quarter of 2013. | |||||
Changes in the Company’s restructuring liability, which consists primarily of severance and related costs, included in amounts reported as other current liabilities, are as follows: | |||||
(In thousands) | |||||
Balance at December 31, 2012 | $ | 659 | |||
Severance and related costs | 2,333 | ||||
Cash payments | (2,861 | ) | |||
Balance at September 30, 2013 | $ | 131 | |||
Product_Warranty
Product Warranty | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Product Warranty | ' | |||||||
Product Warranty | ' | |||||||
Note 8. Product Warranty | ||||||||
The Company generally offers a one year warranty for all of its systems, the terms and conditions of which vary depending upon the product sold. For all systems sold, the Company accrues a liability for the estimated cost of standard warranty at the time of system shipment and defers the portion of systems revenue attributable to the fair value of non-standard warranty. Costs for non-standard warranty are expensed as incurred. Factors that affect the Company’s warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs. The Company periodically assesses the adequacy of its recorded liability and adjusts the amount as necessary. | ||||||||
The changes in the Company’s standard product warranty liability are as follows: | ||||||||
Nine months ended | ||||||||
September 30, | ||||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Balance at January 1 (beginning of year) | $ | 1,801 | $ | 3,697 | ||||
Warranties issued during the period | 1,401 | 2,170 | ||||||
Settlements made during the period | (1,107 | ) | (2,550 | ) | ||||
Changes in estimate of liability for pre-existing warranties during the period | (586 | ) | (1,155 | ) | ||||
Balance at September 30 (end of period) | $ | 1,509 | $ | 2,162 | ||||
Amount classified as current | $ | 1,461 | $ | 2,107 | ||||
Amount classified as long-term | 48 | 55 | ||||||
Total warranty liability | $ | 1,509 | $ | 2,162 | ||||
Fair_Value_Measurements
Fair Value Measurements | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Fair Value Measurements | ' | |||||||||||||
Note 9. Fair Value Measurements | ||||||||||||||
Certain of the assets and liabilities on the Company’s balance sheet are reported at their “fair value.” Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. | ||||||||||||||
(a) Fair Value Hierarchy | ||||||||||||||
The accounting guidance for fair value measurement requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is as follows: | ||||||||||||||
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. | ||||||||||||||
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. | ||||||||||||||
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. | ||||||||||||||
(b) Assets and Liabilities Measured at Fair Value on a Recurring Basis | ||||||||||||||
The Company’s money market funds are included in cash and cash equivalents in the consolidated balance sheets, and are considered a level 1 investment as they are valued at quoted market prices in active markets. The carrying value of our term loan which is carried at amortized cost approximates fair value based on current market pricing of similar debt and is categorized as level 2. | ||||||||||||||
The following table sets forth Company’s assets which are measured at fair value on a recurring basis by level within the fair value hierarchy. | ||||||||||||||
September 30, 2013 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
(in thousands) | ||||||||||||||
Assets | ||||||||||||||
Cash equivalents: | ||||||||||||||
Money market funds | $ | 4,882 | $ | — | $ | — | $ | 4,882 | ||||||
December 31, 2012 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
(in thousands) | ||||||||||||||
Assets | ||||||||||||||
Cash equivalents: | ||||||||||||||
Money market funds | $ | 29,179 | $ | — | $ | — | $ | 29,179 | ||||||
(c) Other Financial Instruments | ||||||||||||||
The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents (which are comprised primarily of deposit and overnight sweep accounts), accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value due to their short-term maturities. | ||||||||||||||
Financing_Arrangements
Financing Arrangements | 9 Months Ended |
Sep. 30, 2013 | |
Financing Arrangements | ' |
Financing Arrangements | ' |
Note 10. Financing Arrangements | |
Bank Credit Facility | |
Effective July 5, 2013, the Company terminated a revolving credit facility with Silicon Valley Bank (“SVB”) pursuant to an Amended and Restated Loan and Security Agreement dated April 25, 2011 as amended. The facility provided for borrowings up to $30.0 million, based primarily on accounts receivable, and was subject to certain financial covenants requiring the Company to maintain minimum levels of operating results and liquidity. The Company used the facility to support letters of credit. The Company paid a $0.3 million early termination fee to SVB during the quarter ended September 30, 2013. | |
With the termination of this facility, the Company has cash collateralized two letters of credit issued by SVB in the aggregate amount of $1.5 million which are presented as restricted cash on the balance sheet as of September 30, 2013 . As described in Note 15 below, the Company reinstated a revolving credit facility with SVB in October 2013. | |
Term Loan Secured by Real Estate | |
On July 5, 2013, the Company entered into a Business Loan Agreement with Northern Bank & Trust Company (the “Bank”), which provides for a three year term loan of $15.0 million, secured by the Company’s real estate in Beverly, Massachusetts (the “Term Loan”). The Company will use the proceeds of the Term Loan as needed to fund growth, specifically investments in the leading edge Purion ion implant platform, and other working capital and general corporate purposes. $0.8 million of the loan proceeds are held in a restricted interest reserve escrow account which is classified as restricted cash, long-term on the consolidated balance sheets. The Company incurred debt issuance costs of $0.2 million which will be amortized over the life of the Term Loan. | |
The Term Loan bears interest at the rate of 5.5% per annum, with payments of principal beginning August 5, 2014 on a 10 year amortization schedule of the principal on a straight-line basis. Interest is payable monthly beginning on August 5, 2013. All outstanding principal and unpaid interest is due and payable on July 5, 2016. In addition, under the Term Loan, the Company must comply with financial covenants relating to debt service ratio, net worth and liquidity. | |
As of September 30, 2013, the Company was in compliance with all covenant requirements of the Term Loan. | |
Income_Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2013 | |
Income Taxes | ' |
Income Taxes | ' |
Note 11. Income Taxes | |
Income tax expense relates principally to operating results of foreign entities in jurisdictions, primarily in Europe and Asia, where the Company earns taxable income. The Company has significant net operating losses in the United States and certain tax jurisdictions and, as a result, does not pay significant income taxes in those jurisdictions. | |
During the three months ended September 30, 2013, the Company incurred charges related to the write-off of deferred tax assets in certain foreign jurisdictions that are no longer realizable which resulted in a noncash tax expense of $0.3 million. This tax expense did not have a significant impact on the Company’s results of operations or cash flows for the three and nine months ended September 30, 2013. | |
As of December 31, 2012 the Company’s valuation allowance related to income taxes was approximately $145.0 million. The Company is in a three year cumulative loss position in the United States. As a result, the Company maintains a 100% valuation allowance to reduce the carrying value of the related deferred tax assets to zero. The Company will continue to maintain a full valuation allowance for those tax assets until sustainable future levels of profitability are evident. | |
Concentration_of_Risk
Concentration of Risk | 9 Months Ended |
Sep. 30, 2013 | |
Concentration of Risk | ' |
Concentration of Risk | ' |
Note 12. Concentration of Risk | |
For the three months ended September 30, 2013, two customers accounted for approximately 19.0% and 14.5% of consolidated revenue. For the nine months ended September 30, 2013, two customers accounted for approximately 10.9% and 10.4% of consolidated revenue. | |
For the three months ended September 30, 2012, three customers accounted for approximately 16.1%, 13.1% and 10.9% of consolidated revenue, respectively. For the nine months ended September 30, 2012, two customers accounted for approximately 21.3% and 11.4% of consolidated revenue, respectively. | |
At September 30, 2013, three customers accounted for 18.3%, 12.7%, and 11.2% of consolidated gross accounts receivable. At December 31, 2012, two customers accounted for 11.9% and 11.5% of consolidated gross accounts receivable, respectively. | |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Contingencies | ' |
Contingencies | ' |
Note 13. Contingencies | |
(a) Litigation | |
The Company is not presently a party to any litigation that it believes might have a material adverse effect on its business operations. The Company is, from time to time, a party to litigation that arises in the normal course of its business operations. | |
(b) Indemnifications | |
The Company’s system sales agreements typically include provisions under which the Company agrees to take certain actions, provide certain remedies and defend its customers against third-party claims of intellectual property infringement under specified conditions and to indemnify customers against any damage and costs awarded in connection with such claims. The Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the accompanying consolidated financial statements. | |
Recent_Accounting_Guidance
Recent Accounting Guidance | 9 Months Ended |
Sep. 30, 2013 | |
Recent Accounting Guidance | ' |
Recent Accounting Guidance | ' |
Note 14. Recent Accounting Guidance | |
Accounting Standards or Updates Recently Adopted | |
Effective January 1, 2013, the Company adopted Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified out of Accumulated Other Comprehensive Income. This newly issued accounting update requires that companies present either in a single note or parenthetically on the face of the financial statements, the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. If a component is not required to be reclassified to net income in its entirety, companies would instead cross reference to the related footnote for additional information. As this update only requires enhanced disclosure, the adoption of this update did not impact the Company’s financial position or results of operations. | |
Accounting Standards or Updates Not Yet Effective | |
The Company has evaluated the accounting guidance recently issued and has determined that these standards or updates will not have a material impact on its financial position or results of operations. | |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events | ' |
Subsequent Events | ' |
Note 15. Subsequent Events | |
On October 31, 2013, the Company entered into a revolving credit facility agreement (the “facility”) with Silicon Valley Bank (“SVB”) that provides for borrowings of up to $10.0 million, based primarily on accounts receivable. The facility has certain financial covenants requiring the Company to maintain minimum levels of operating results and liquidity. The agreement will terminate on October 31, 2015. The Company will use the facility to support letters of credit and if needed, to fund a ramp in business. Upon the establishment of the facility, SVB released the Company from a cash collateralization arrangement with respect to $1.5 million of letters of credit issued by SVB, and these outstanding letters of credit were deemed covered by the facility. | |
Computation_of_Net_Loss_per_Sh1
Computation of Net Loss per Share (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Computation of Net Loss per Share | ' | |||||||||||||
Schedule of components of net loss per share | ' | |||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(in thousands, except per share data) | ||||||||||||||
Net loss attributable to common stockholders | $ | (4,750 | ) | $ | (8,718 | ) | $ | (17,758 | ) | $ | (19,216 | ) | ||
Weighted average common shares outstanding used in computing basic and diluted net loss per share | 109,074 | 107,855 | 108,573 | 107,521 | ||||||||||
Net loss per share | ||||||||||||||
Basic and Diluted | $ | (0.04 | ) | $ | (0.08 | ) | $ | (0.16 | ) | $ | (0.18 | ) | ||
Schedule of the number of incremental shares excluded from the calculation of net loss per share | ' | |||||||||||||
Three months ended | Nine months ended | |||||||||||||
September 30, | September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(in thousands) | ||||||||||||||
Incremental shares excluded from the calculation of net loss per share | 4,383 | 1,010 | 2,620 | 1,508 |
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended | ||||||||||
Sep. 30, 2013 | |||||||||||
Accumulated Other Comprehensive Income | ' | ||||||||||
Schedule of changes in accumulated other comprehensive income, net of tax | ' | ||||||||||
Foreign | Defined benefit | Total | |||||||||
currency | pension plan | ||||||||||
(in thousands) | |||||||||||
Balance at December 31, 2012 | $ | 5,375 | $ | (355 | ) | $ | 5,020 | ||||
Other comprehensive loss before reclassifications | 53 | — | 53 | ||||||||
Amounts reclassified from accumulated other comprehensive income (1) | — | 24 | 24 | ||||||||
Net current-period other comprehensive income | 53 | 24 | 77 | ||||||||
Balance at September 30, 2013 | $ | 5,428 | $ | (331 | ) | $ | 5,097 | ||||
(1) Amount presented before taxes as the tax effect is not material to the consolidated financial statements. |
Inventories_net_Tables
Inventories, net (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventories, net | ' | |||||||
Schedule of components of inventories | ' | |||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Raw materials | $ | 58,265 | $ | 72,013 | ||||
Work in process | 22,622 | 12,253 | ||||||
Finished goods (completed systems) | 13,429 | 15,968 | ||||||
$ | 94,316 | $ | 100,234 |
Restructuring_Charges_Tables
Restructuring Charges (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Restructuring Charges | ' | ||||
Schedule of changes in restructuring liability | ' | ||||
(In thousands) | |||||
Balance at December 31, 2012 | $ | 659 | |||
Severance and related costs | 2,333 | ||||
Cash payments | (2,861 | ) | |||
Balance at September 30, 2013 | $ | 131 |
Product_Warranty_Tables
Product Warranty (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Product Warranty | ' | |||||||
Schedule of standard product warranty | ' | |||||||
Nine months ended | ||||||||
September 30, | ||||||||
2013 | 2012 | |||||||
(in thousands) | ||||||||
Balance at January 1 (beginning of year) | $ | 1,801 | $ | 3,697 | ||||
Warranties issued during the period | 1,401 | 2,170 | ||||||
Settlements made during the period | (1,107 | ) | (2,550 | ) | ||||
Changes in estimate of liability for pre-existing warranties during the period | (586 | ) | (1,155 | ) | ||||
Balance at September 30 (end of period) | $ | 1,509 | $ | 2,162 | ||||
Amount classified as current | $ | 1,461 | $ | 2,107 | ||||
Amount classified as long-term | 48 | 55 | ||||||
Total warranty liability | $ | 1,509 | $ | 2,162 |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Fair Value Measurements | ' | |||||||||||||
Schedule of assets measured at fair value on recurring basis | ' | |||||||||||||
September 30, 2013 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
(in thousands) | ||||||||||||||
Assets | ||||||||||||||
Cash equivalents: | ||||||||||||||
Money market funds | $ | 4,882 | $ | — | $ | — | $ | 4,882 | ||||||
December 31, 2012 | ||||||||||||||
Fair Value Measurements | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
(in thousands) | ||||||||||||||
Assets | ||||||||||||||
Cash equivalents: | ||||||||||||||
Money market funds | $ | 29,179 | $ | — | $ | — | $ | 29,179 | ||||||
Nature_of_Business_Details
Nature of Business (Details) (Dry strip product line, intellectual property rights and certain assets) | 12 Months Ended |
Dec. 31, 2012 | |
mm | |
Dry strip product line, intellectual property rights and certain assets | ' |
Sale of assets | ' |
Size of dry strip wafer processing equipment (in millimeters) | 300 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Stock-Based Compensation | ' | ' | ' | ' |
Stock-based compensation expense (in dollars) | $1.50 | $1.50 | $3.10 | $3.40 |
Gain_on_Sale_of_Dry_Strip_Asse1
Gain on Sale of Dry Strip Assets and Intellectual Property (Details) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Dry strip product line, intellectual property rights and certain assets | Dry strip product line, intellectual property rights and certain assets | ||
Maximum | |||
Sale of assets | ' | ' | ' |
Contingent purchase price | ' | ' | $2,000,000 |
Gain on sale of dry strip assets and intellectual property | $1,167,000 | $1,200,000 | ' |
Computation_of_Net_Loss_per_Sh2
Computation of Net Loss per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Computation of Net Loss per Share | ' | ' | ' | ' |
Net loss attributable to common stockholders | ($4,750) | ($8,718) | ($17,758) | ($19,216) |
Weighted average common shares outstanding used in computing basic and diluted net loss per share | 109,074 | 107,855 | 108,573 | 107,521 |
Net loss per share | ' | ' | ' | ' |
Basic and Diluted (in dollars per share) | ($0.04) | ($0.08) | ($0.16) | ($0.18) |
Number of incremental shares excluded from the calculation of net loss per share | ' | ' | ' | ' |
Incremental shares excluded from the calculation of net loss per share (in shares) | 4,383 | 1,010 | 2,620 | 1,508 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (Details) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Changes in accumulated other comprehensive income, net of tax | ' |
Balance at the beginning of period | $5,020 |
Other comprehensive loss before reclassifications | 53 |
Amounts reclassified from accumulated other comprehensive income | 24 |
Net current-period other comprehensive income | 77 |
Balance at the end of period | 5,097 |
Foreign currency | ' |
Changes in accumulated other comprehensive income, net of tax | ' |
Balance at the beginning of period | 5,375 |
Other comprehensive loss before reclassifications | 53 |
Net current-period other comprehensive income | 53 |
Balance at the end of period | 5,428 |
Defined benefit pension plan | ' |
Changes in accumulated other comprehensive income, net of tax | ' |
Balance at the beginning of period | -355 |
Amounts reclassified from accumulated other comprehensive income | 24 |
Net current-period other comprehensive income | 24 |
Balance at the end of period | ($331) |
Inventories_net_Details
Inventories, net (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Mar. 31, 2013 | Sep. 30, 2013 | |
Dry strip product line, intellectual property rights and certain assets | Dry strip product line, intellectual property rights and certain assets | ||||||
mm | |||||||
Inventories, net | ' | ' | ' | ' | ' | ' | ' |
Raw materials | $58,265,000 | ' | $58,265,000 | ' | $72,013,000 | ' | ' |
Work in process | 22,622,000 | ' | 22,622,000 | ' | 12,253,000 | ' | ' |
Finished goods (completed systems) | 13,429,000 | ' | 13,429,000 | ' | 15,968,000 | ' | ' |
Inventories, net | 94,316,000 | ' | 94,316,000 | ' | 100,234,000 | ' | ' |
Inventory reserves | 34,400,000 | ' | 34,400,000 | ' | 33,600,000 | ' | 2,100,000 |
Inventories, net | ' | ' | ' | ' | ' | ' | ' |
Cost of sales due to non-recoverable inventory components | 34,400,000 | ' | 34,400,000 | ' | 33,600,000 | ' | 2,100,000 |
Size of dry strip wafer equipment and products, Company license to make and sell (in millimeters) | ' | ' | ' | ' | ' | 300 | ' |
Cost of sales due to below normal production capacity | $100,000 | $1,100,000 | $600,000 | $1,200,000 | ' | ' | ' |
Restructuring_Charges_Details
Restructuring Charges (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Severance | Severance | |||||
Restructuring charges | ' | ' | ' | ' | ' | ' |
Restructuring costs accrued and unpaid | ' | ' | ' | ' | $100,000 | $700,000 |
Changes in restructuring liability | ' | ' | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | ' | ' | 659,000 | ' |
Severance and related costs | -112,000 | -578,000 | -2,334,000 | -3,612,000 | 2,333,000 | ' |
Cash payments | ' | ' | ' | ' | -2,861,000 | ' |
Balance at the end of the period | ' | ' | ' | ' | $131,000 | ' |
Product_Warranty_Details
Product Warranty (Details) (USD $) | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
Product Warranty | ' | ' | ' |
Product warranty period | '1 year | ' | ' |
Changes in product warranty liability | ' | ' | ' |
Balance at the beginning of the period | $1,801 | $3,697 | ' |
Warranties issued during the period | 1,401 | 2,170 | ' |
Settlements made during the period | -1,107 | -2,550 | ' |
Changes in estimate of liability for pre-existing warranties during the period | -586 | -1,155 | ' |
Balance at the end of the period | 1,509 | 2,162 | ' |
Product warranty classification | ' | ' | ' |
Amount classified as current | 1,461 | 2,107 | 1,700 |
Amount classified as long-term | 48 | 55 | ' |
Total warranty liability | $1,509 | $2,162 | ' |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (Recurring, Money market funds, USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Level 1 | ' | ' |
Fair Value Measurements | ' | ' |
Money market funds | $4,882 | $29,179 |
Total | ' | ' |
Fair Value Measurements | ' | ' |
Money market funds | $4,882 | $29,179 |
Financing_Arrangements_Details
Financing Arrangements (Details) (USD $) | 9 Months Ended | 3 Months Ended | 0 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2013 | Jul. 05, 2013 | Apr. 25, 2011 | Jul. 05, 2013 | |
Revolving credit facility | Revolving credit facility | Revolving credit facility | Term Loan | ||
item | |||||
Financial Arrangements | ' | ' | ' | ' | ' |
Maximum borrowing capacity under the credit facility | ' | ' | ' | $30,000,000 | ' |
Early termination fee | ' | 300,000 | ' | ' | ' |
Number of letters of credit cash collateralized | ' | ' | 2 | ' | ' |
Term | ' | ' | ' | ' | '3 years |
Amount of loan | ' | ' | ' | ' | 15,000,000 |
Loan proceeds held in restricted interest reserve escrow | -825,000 | ' | ' | ' | 800,000 |
Debt issuance costs | ($473,000) | ' | ' | ' | $200,000 |
Interest rate per annum (as a percent) | ' | ' | ' | ' | 5.50% |
Amortization schedule | ' | ' | ' | ' | '10 years |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 0 Months Ended | 3 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2012 | Sep. 30, 2013 |
Income Taxes | ' | ' |
Noncash tax expense related to the write-off of deferred tax assets in certain foreign jurisdictions | ' | $0.30 |
Deferred tax assets valuation allowance | 145 | ' |
Cumulative loss position in the United States | '3 years | ' |
Percentage of valuation allowance | 100.00% | ' |
Deferred tax assets, net of valuation allowance | $0 | ' |
Concentration_of_Risk_Details
Concentration of Risk (Details) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | |
Consolidated Revenue | Consolidated Revenue | Consolidated Revenue | Consolidated Revenue | Consolidated Revenue | Consolidated Revenue | Consolidated Revenue | Consolidated Revenue | Consolidated Revenue | Consolidated Revenue | Consolidated Revenue | Consolidated Revenue | Consolidated Revenue | Consolidated gross accounts receivable | Consolidated gross accounts receivable | Consolidated gross accounts receivable | Consolidated gross accounts receivable | Consolidated gross accounts receivable | Consolidated gross accounts receivable | Consolidated gross accounts receivable | |
Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | Customer concentration risk | Credit concentration risk | Credit concentration risk | Credit concentration risk | Credit concentration risk | Credit concentration risk | Credit concentration risk | Credit concentration risk | |
item | item | item | item | One customer | One customer | One customer | One customer | Second customer | Second customer | Second customer | Second customer | Third customer | item | item | One customer | One customer | Second customer | Second customer | Third customer | |
Concentration of risk | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of customers | 2 | 3 | 2 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3 | 2 | ' | ' | ' | ' | ' |
Percentage of concentration risk | ' | ' | ' | ' | 19.00% | 16.10% | 10.90% | 21.30% | 14.50% | 13.10% | 10.40% | 11.40% | 10.90% | ' | ' | 18.30% | 11.90% | 12.70% | 11.50% | 11.20% |
Subsequent_Events_Details
Subsequent Events (Details) (Revolving credit facility, USD $) | Apr. 25, 2011 | Oct. 31, 2013 |
In Millions, unless otherwise specified | Subsequent event | |
Subsequent events | ' | ' |
Maximum borrowing capacity under the credit facility | $30 | $10 |
Amount of letters of credit cash collateralized released | ' | $1.50 |