Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 12, 2018 | Jun. 30, 2017 | |
Document and Entity Information | |||
Entity Registrant Name | AXCELIS TECHNOLOGIES INC | ||
Entity Central Index Key | 1,113,232 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 644,303,947 | ||
Entity Common Stock, Shares Outstanding | 32,128,818 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | |||
Product | $ 387,124 | $ 244,295 | $ 278,875 |
Services | 23,437 | 22,685 | 22,620 |
Total revenue | 410,561 | 266,980 | 301,495 |
Cost of revenue: | |||
Product | 234,932 | 149,007 | 181,060 |
Services | 25,382 | 18,375 | 18,729 |
Total cost of revenue | 260,314 | 167,382 | 199,789 |
Gross profit | 150,247 | 99,598 | 101,706 |
Operating expenses: | |||
Research and development | 43,071 | 34,402 | 32,586 |
Sales and marketing | 28,532 | 23,839 | 23,325 |
General and administrative | 30,802 | 24,452 | 25,059 |
Restructuring charges | 282 | 18 | |
Total operating expenses | 102,405 | 82,975 | 80,988 |
Income from operations | 47,842 | 16,623 | 20,718 |
Other (expense) income: | |||
Interest income | 714 | 238 | 64 |
Interest expense | (5,121) | (5,073) | (4,976) |
Other, net | 396 | (764) | (601) |
Total other expense | (4,011) | (5,599) | (5,513) |
Income before income taxes | 43,831 | 11,024 | 15,205 |
Income tax (benefit) provision | (83,128) | 23 | 527 |
Net income | $ 126,959 | $ 11,001 | $ 14,678 |
Net income per share: | |||
Basic (in dollars per share) | $ 4.11 | $ 0.38 | $ 0.51 |
Diluted (in dollars per share) | $ 3.80 | $ 0.36 | $ 0.49 |
Shares used in computing net income per share: | |||
Basic weighted average common shares | 30,866 | 29,195 | 28,595 |
Diluted weighted average common shares | 33,436 | 30,947 | 30,229 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 126,959 | $ 11,001 | $ 14,678 |
Other comprehensive income: | |||
Foreign currency translation adjustments | 4,347 | (847) | (2,664) |
Amortization of actuarial gains and other adjustments from pension plan | 108 | (1) | (43) |
Total other comprehensive income (loss) | 4,455 | (848) | (2,707) |
Comprehensive income | $ 131,414 | $ 10,153 | $ 11,971 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 133,407 | $ 70,791 |
Short-term restricted cash | 750 | |
Accounts receivable, net | 75,302 | 50,573 |
Inventories, net | 120,544 | 113,853 |
Prepaid expenses and other current assets | 9,772 | 5,512 |
Total current assets | 339,775 | 240,729 |
Property, plant and equipment, net | 36,168 | 30,840 |
Long-term restricted cash | 6,723 | 6,864 |
Deferred income taxes | 83,148 | 1,060 |
Other assets | 22,404 | 22,738 |
Total assets | 488,218 | 302,231 |
Current liabilities: | ||
Accounts payable | 32,642 | 24,996 |
Accrued compensation | 20,955 | 5,142 |
Warranty | 4,112 | 2,426 |
Income taxes | 273 | 240 |
Deferred revenue | 16,181 | 10,335 |
Other current liabilities | 5,124 | 4,592 |
Total current liabilities | 79,287 | 47,731 |
Sale leaseback obligation | 47,714 | 47,586 |
Long-term deferred revenue | 1,964 | 674 |
Other long-term liabilities | 5,643 | 4,785 |
Total liabilities | 134,608 | 100,776 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Common stock, $0.001 par value, 75,000 shares authorized; 32,048 shares issued and outstanding at December 31, 2017; 29,518 shares issued and outstanding at December 31, 2016 | 32 | 30 |
Additional paid-in capital | 556,147 | 535,408 |
Accumulated deficit | (204,745) | (331,704) |
Accumulated other comprehensive income (loss) | 2,176 | (2,279) |
Total stockholders' equity | 353,610 | 201,455 |
Total liabilities and stockholders' equity | $ 488,218 | $ 302,231 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Consolidated Balance Sheets | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 75,000 | 75,000 |
Common stock, shares issued | 32,048 | 29,518 |
Common stock, shares outstanding | 32,048 | 29,518 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at Dec. 31, 2014 | $ 28 | $ 519,153 | $ (1,218) | $ (357,383) | $ 1,276 | $ 161,856 |
Balance (in shares) at Dec. 31, 2014 | 28,213 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 14,678 | 14,678 | ||||
Foreign currency translation adjustments | (2,664) | (2,664) | ||||
Change in pension obligation | (43) | (43) | ||||
Exercise of stock options | $ 1 | 3,920 | 3,921 | |||
Exercise of stock options (in shares) | 759 | |||||
Issuance of shares under Employee Stock Purchase Plan | 441 | 441 | ||||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 47 | |||||
Issuance of restricted common shares | (7) | (7) | ||||
Issuance of restricted common shares (in shares) | 7 | |||||
Stock-based compensation expense | 5,582 | 5,582 | ||||
Balance at Dec. 31, 2015 | $ 29 | 529,089 | (1,218) | (342,705) | (1,431) | 183,764 |
Balance (in shares) at Dec. 31, 2015 | 29,026 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 11,001 | 11,001 | ||||
Foreign currency translation adjustments | (847) | (847) | ||||
Change in pension obligation | (1) | (1) | ||||
Exercise of stock options | $ 1 | 2,237 | 2,238 | |||
Exercise of stock options (in shares) | 392 | |||||
Issuance of shares under Employee Stock Purchase Plan | 325 | 325 | ||||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 22 | |||||
Issuance of restricted common shares | (11) | (11) | ||||
Issuance of restricted common shares (in shares) | 108 | |||||
Treasury shares returned to authorized, Value | (1,218) | $ 1,218 | ||||
Treasury shares returned to authorized, Shares | (30) | |||||
Reverse stock split issuance costs | (145) | (145) | ||||
Stock-based compensation expense | 5,131 | 5,131 | ||||
Balance at Dec. 31, 2016 | $ 30 | 535,408 | (331,704) | (2,279) | 201,455 | |
Balance (in shares) at Dec. 31, 2016 | 29,518 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 126,959 | 126,959 | ||||
Foreign currency translation adjustments | 4,347 | 4,347 | ||||
Change in pension obligation | 108 | 108 | ||||
Exercise of stock options | $ 2 | 15,512 | 15,514 | |||
Exercise of stock options (in shares) | 2,358 | |||||
Issuance of shares under Employee Stock Purchase Plan | 845 | 845 | ||||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 34 | |||||
Issuance of restricted common shares | (1,164) | (1,164) | ||||
Issuance of restricted common shares (in shares) | 138 | |||||
Stock-based compensation expense | 5,546 | 5,546 | ||||
Balance at Dec. 31, 2017 | $ 32 | $ 556,147 | $ (204,745) | $ 2,176 | $ 353,610 | |
Balance (in shares) at Dec. 31, 2017 | 32,048 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net income | $ 126,959 | $ 11,001 | $ 14,678 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 5,002 | 4,258 | 4,869 |
Gain on sale of equipment | (248) | ||
Deferred taxes | (82,085) | 519 | 779 |
Stock-based compensation expense | 5,672 | 5,179 | 5,575 |
Provision for doubtful accounts | 106 | ||
Provision for excess and obsolete inventory | (8,135) | 1,051 | 1,721 |
Changes in operating assets & liabilities: | |||
Accounts receivable | (23,573) | (14,135) | 5,171 |
Inventories | 5,703 | (6,572) | (15,938) |
Prepaid expenses and other current assets | (3,866) | (1,056) | 640 |
Accounts payable and other current liabilities | 25,000 | 810 | 6,005 |
Deferred revenue | 7,079 | 2,467 | 1,360 |
Income taxes | 14 | 102 | (46) |
Other assets and liabilities | (1,486) | (12,270) | (6,547) |
Net cash provided by (used in) operating activities | 56,284 | (8,788) | 18,267 |
Cash flows from investing activities | |||
Proceeds from sale of equipment | 270 | ||
Expenditures for property, plant and equipment and capitalized software | (7,285) | (2,506) | (1,830) |
Net cash used in investing activities | (7,285) | (2,236) | (1,830) |
Cash flows from financing activities | |||
Net settlement on restricted stock grants | (1,184) | (11) | (8) |
Financing fees and other expenses | (146) | (847) | |
Principal payments on term loan | (14,530) | ||
Principal payments on sale leaseback obligation | (392) | ||
Proceeds from financing obligations | 48,940 | ||
Proceeds from Employee Stock Purchase Plan | 739 | 277 | 441 |
Proceeds from exercise of stock options | 15,515 | 2,227 | 3,921 |
Net cash provided by financing activities | 15,070 | 2,347 | 37,525 |
Effect of exchange rate changes on cash and cash equivalents | (844) | 507 | 285 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 63,225 | (8,170) | 54,247 |
Cash, cash equivalents and restricted cash at beginning of period | 77,655 | 85,825 | 31,578 |
Cash, cash equivalents and restricted cash at end of period | 140,880 | 77,655 | 85,825 |
Supplemental disclosure of cash flow information | |||
Cash paid for Income taxes | 583 | 525 | 669 |
Cash paid for Interest | $ 5,315 | $ 4,815 | $ 3,985 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2017 | |
Nature of Business | |
Nature of Business | Note 1. Nature of Business Axcelis Technologies, Inc. (“Axcelis” or the “Company”) was incorporated in Delaware in 1995, and 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, used equipment and maintenance services to the semiconductor industry. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the footnotes. (a) Basis of Presentation The accompanying consolidated financial statements include the consolidated accounts of the Company and its wholly‑owned, controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior years' financial statements to conform to the current year’s presentation. Events occurring subsequent to December 31, 2017 have been evaluated for potential recognition or disclosure in the consolidated financial statements. (b) Use of Estimates The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates and judgments, including those related to revenue recognition, the realizable value of inventories, valuing stock-based compensation instruments and reserves relating to tax assets and liabilities. Actual amounts could differ from these estimates. Changes in estimates are recorded in the period in which they become known. (c) Foreign Currency The functional currency for substantially all operations outside the United States is the local currency. Financial statements for these operations are translated into United States dollars at year‑end rates as to assets and liabilities and average exchange rates during the year as to revenue and expenses. The resulting translation adjustments are recorded in stockholders’ equity as an element of accumulated other comprehensive income (loss). Foreign currency transaction gains and losses are included in other income (expense) in the Consolidated Statements of Operations. For the year ended December 31, 2017 the Company had $1.1 million in foreign exchange gains. For the year ended December 31, 2016 the Company had $0.6 million in foreign exchange losses. For the year ended December 31, 2015 the Company did not have any material foreign exchange gains or losses. (d) Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of ninety days or less. Cash equivalents consist primarily of money market funds, U.S Government and Agency Securities and deposit accounts. Cash equivalents are carried on the balance sheet at fair market value. (e) Inventories Inventories are carried at lower of cost or net realizable value, determined using the first‑in, first‑out (“FIFO”) method, or market. The Company periodically reviews its inventories and makes provisions as necessary for estimated obsolescence or damaged goods to ensure values approximate lower of cost or net realizable value. The amount of such markdowns is equal to the difference between cost of inventory and the estimated market value based upon assumptions about future demands, selling prices, and market conditions. The Company records an allowance for estimated excess inventory. The allowance is determined using management’s assumptions of materials usage, based on estimates of demand and market conditions. If actual market conditions become less favorable than those projected by management, additional inventory write‑downs may be required. (f) Property, Plant and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are recorded using the straight‑line method over the estimated useful lives of the related assets as follows: Asset Classification Estimated Useful Life Land and buildings (under lease) Lesser of the lease term or estimated useful life of the asset Machinery and equipment 7 to 10 years On January 30, 2015, the Company sold its corporate headquarters facility. As part of this sale, the Company also entered into a 22-year lease agreement. The Company accounted for the sale leaseback transaction as a financing arrangement for financial reporting purposes. The Company retained the historical costs of the property and the related accumulated depreciation on its financial books within property, plant and equipment and will continue to depreciate the property for financial reporting purposes over the lesser of its remaining useful life or its initial lease term of 22 years. Repairs and maintenance costs are expensed as incurred. Expenditures for renewals and betterments are capitalized. (g) Impairment of Long‑Lived Assets The Company records impairment losses on long-lived assets when events and circumstances indicate that these assets might not be recoverable. Recoverability is measured by a comparison of the assets’ carrying amount to their expected future undiscounted net cash flows. If such assets are considered to be impaired, the impairment is measured based on the amount by which the carrying value exceeds its fair value. The Company did not have any indicators of impairment during the period ending December 31, 2017. The Company did not record an impairment charge in the years ended December 31, 2017, 2016, or 2015. Actual performance could be materially different from our current forecasts, which could impact estimates of undiscounted cash flows and may result in the impairment of the carrying amount of the long-lived assets in the future. This could be caused by strategic decisions made in response to economic and competitive conditions, the impact of the economic environment on our customer base, or a material adverse change in the Company’s relationships with significant customers. (h) Concentration of Risk and Off‑Balance Sheet Risk Financial instruments that potentially subject the Company to concentrations of credit risk are principally cash equivalents and accounts receivable. The Company’s cash equivalents are principally maintained in investment grade money‑market funds, U.S. Government and Agency Securities and deposit accounts. The Company has no significant off‑balance‑sheet risk such as currency exchange contracts, option contracts or other hedging arrangements. The Company’s exposure to market risk for changes in interest rates relates primarily to cash equivalents. The primary objective of the Company’s investment activities is to preserve principal without significantly increasing risk. This is accomplished by investing in marketable high investment grade securities. The Company does not use derivative financial instruments to manage its investment portfolio and does not expect operating results or cash flows to be affected to any significant degree by any change in market interest rates. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral to secure accounts receivable. For selected overseas sales, the Company requires customers to obtain letters of credit before product is shipped. The Company maintains an allowance for doubtful accounts based on its assessment of the collectability of accounts receivable. The Company reviews the allowance for doubtful accounts quarterly. The Company does not have any off‑balance sheet credit exposure related to its customers. The Company’s customers consist of semiconductor chip manufacturers located throughout the world and net sales to its ten largest customers accounted for 73.3%, 70.2% and 76.8% of revenue in 2017, 2016 and 2015, respectively. For the year ended December 31, 2017 the Company had two customers representing 24.9% and 13.1% of total revenue, respectively. For the year ended December 31, 2016, the Company had one customer representing 17.0% of total revenue. For the year ended December 31, 2015, the Company had two customers representing 29.3% and 10.5% of total revenue, respectively. As of December 31, 2017, the Company had three customers account for 19.8%, 11.8% and 10.6% of consolidated accounts receivable, respectively. As of December 31, 2016, the Company had four customers account for 22.0%, 12.3%, 12.0% and 10.6% of consolidated accounts receivable, respectively. Some of the components and sub‑assemblies included in the Company’s products are obtained either from a sole source or a limited group of suppliers. Disruption to the Company’s supply source, resulting either from economic conditions or other factors, could affect its ability to deliver products to its customers. (i) Revenue Recognition The Company’s revenue recognition policy involves significant judgment by management. The Company considers a broad array of facts and circumstances in determining when to recognize revenue, including contractual obligations to the customer, the complexity of the customer’s post‑delivery acceptance provisions, payment history, customer creditworthiness and the installation process. The Company’s system sales transactions are made up of multiple elements, including the system itself and elements that are not delivered simultaneously with the system. These undelivered elements might include a combination of installation services, extended warranty and support and spare parts, all of which are covered generally by a single sales price. The Company’s system revenue arrangements with multiple elements are divided into separate units of accounting if specified criteria are met, including whether the delivered element has stand‑alone value to the customer. If the criteria are met, then the consideration received is allocated among the separate units based on their relative selling price, and the revenue is recognized separately for each of the separate units. The Company determines selling price for each unit of accounting (element) using vendor specific objective evidence (VSOE) or third‑party evidence (TPE), if they exist, otherwise, the Company uses best estimated selling price (BESP). The Company generally expects that it will not be able to establish TPE due to the nature of its products, and, as such, the Company typically will determine selling price using VSOE or BESP. Where required, the Company determines BESP for an individual element based on consideration of both market and Company‑specific factors, including the selling price and profit margin for similar products, the cost to produce the deliverable and the anticipated margin on that deliverable and the characteristics of the markets in which the deliverable is sold. Systems are not sold separately and VSOE or TPE is not available for the systems element. Therefore the selling price associated with systems is based on BESP. The allocated value for installation in the arrangement includes either (i) the relative selling price of the installation or (ii) the portion of the sales price that will not be received until the installation is completed (the “retention”). The selling price of elements such as extended warranty for support, spare parts and support labor is also based on BESP. For the majority of regions, the selling price of installation is based upon the fair value of the service performed, including labor, which is based upon the estimated time to complete the installation at hourly rates, and material components, both of which are sold separately, or VSOE. In regions where VSOE does not exist the Company uses BESP. Product revenue for products which have demonstrated market acceptance, is generally recognized upon shipment provided title and risk of loss has passed to the customer, evidence of an arrangement exists, prices are contractually fixed or determinable, collectability is reasonably assured through historical collection results and regular credit evaluations, and there are no uncertainties regarding customer acceptance. Revenue from installation services is recognized at the time acceptance has occurred, as defined in the sales documentation or, for certain customers, when both acceptance has occurred and retention payment has been received. Revenue for other elements is recognized at the time products are shipped or the related services are performed. The Company generally recognizes revenue for systems which have demonstrated market acceptance at the time of shipment because the customer’s post‑delivery acceptance provisions and installation process have been established to be routine, commercially inconsequential and perfunctory. The Company believes the risk of failure to complete a system installation is remote. For initial shipments of systems with new technologies or in the small number of instances where the Company is unsure of meeting the customer’s specifications or obtaining customer acceptance upon shipment of the system, it will defer the recognition of systems revenue and related costs until written customer acceptance of the system is obtained. This deferral period is generally within twelve months of shipment. Revenue related to maintenance and service contracts is recognized ratably over the duration of the contracts, or based on parts usage, where appropriate. Revenue related to service hours is recognized when the services are performed. Product revenue includes revenue from system sales, sales of spare parts, the spare parts component of maintenance and service contracts and product upgrades. Services revenue includes the labor component of maintenance and service contract amounts charged for on‑site service personnel. Axcelis reports revenue net of any taxes collected from customers and remitted to governmental authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. (j) Shipping and Handling Costs Shipping and handling costs are included in cost of revenue. (k) Stock‑Based Compensation The Company generally recognizes compensation expense for all stock-based payments to employees and directors, including grants of stock options and restricted stock units, based on the grant‑date fair value of those stock‑based payments using the Black‑Scholes option pricing model, adjusted for expected forfeitures. Other valuation models may be utilized in the limited circumstances where awards with market-based vesting considerations, such as the price of the Company’s common stock, or performance based awards, are granted. Stock‑based compensation expense is recognized ratably over the requisite service period. For each stock option or restricted stock unit grant with vesting based on a combination of time, market or performance conditions, where vesting will occur if either condition is met, the related compensation costs are recognized over the shorter of the explicit service period or the derived service period. See Note 11 for additional information relating to stock‑based compensation. (l) Income Taxes The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax basis, and operating loss and tax credit carryforwards. The Company’s consolidated financial statements contain certain deferred tax assets which have arisen primarily as a result of operating losses, as well as other temporary differences between financial and tax accounting. The Company establishes a valuation allowance if the likelihood of realization of the deferred tax assets is reduced based on an evaluation of objective verifiable evidence. Significant management judgment is required in determining the Company’s provision for income taxes, the Company’s deferred tax assets and liabilities and any valuation allowance recorded against those net deferred tax assets. The Company evaluates the weight of all available evidence to determine whether it is more likely than not that some portion or all of the net deferred income tax assets will not be realized. Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the expiration of statutes of limitations for particular tax positions, or obtaining new information on particular tax positions may cause a change to the effective tax rate. The Company recognizes accrued interest related to unrecognized tax benefits as interest expense and penalties as operating expense in the consolidated statements of operations. (m) Computation of Net Income per Share Basic earnings per share is computed by dividing income available to common stockholders (the numerator) by the weighted‑average number of common shares outstanding (the denominator) for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased 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 income per share are as follows: Year ended December 31, 2017 2016 2015 (in thousands, except per share data) Net income available to common stockholders $ 126,959 $ 11,001 $ 14,678 Weighted average common shares outstanding used in computing basic income per share 30,866 29,195 28,595 Incremental options and RSUs 2,570 1,752 1,634 Weighted average common shares used in computing diluted net income per share 33,436 30,947 30,229 Net income per share Basic $ 4.11 $ 0.38 $ 0.51 Diluted $ 3.80 $ 0.36 $ 0.49 Diluted weighted average common shares outstanding does not include options and restricted stock units outstanding to purchase 0.9 million and 0.9 million common equivalent shares for the periods ended December 31, 2016 and 2015, respectively, as their effect would have been anti-dilutive. (n) Accumulated Other Comprehensive Income The following table presents the changes in accumulated other comprehensive income, net of tax, by component for the year ended December 31, 2017: Foreign Defined benefit currency pension plan Total (in thousands) Balance at December 31, 2016 $ (1,591) $ (688) $ (2,279) Other comprehensive income and pension reclassification 4,347 108 4,455 Balance at December 31, 2017 $ 2,756 $ (580) $ 2,176 (o) Recent Accounting Guidance Accounting Standards or Updates Recently Adopted In July 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-11, “Simplifying the Measurement of Inventory,” which changes the inventory measurement principles for entities using the first-in, first-out (FIFO) or average cost methods. For entities utilizing one of these methods, the inventory measurement principle changes from lower of cost or market to the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the reasonably predictable costs of completion, disposal and transportation. The Company adopted this ASU prospectively in the first quarter of 2017, which did not have a material impact on our financial statements and disclosures. In March 2016, the FASB issued ASU No. 2016-09 “Compensation — Stock Compensation,” which changes the accounting for stock-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amended guidance eliminates the requirement to record excess tax benefits as a reduction in current taxes payable and an increase to additional paid-in capital. The Company adopted this ASU in the first quarter of 2017, in part prospectively and in part retrospectively, as permitted by the ASU. The Company prospectively adopted the provisions of ASU No. 2016-09 relating to the accounting for excess tax benefits. Axcelis had tax deductions in excess of recognized compensation cost of $29.5 million for the year ended December 31, 2017 which resulted in a tax benefit of $10.3 million. The Company retrospectively adopted the provisions of ASU 2016-09 related to the presentation of employee taxes. These provide that when an employer withholds shares for taxes on vesting of equity compensation, the value withheld is presented as a financing activity on the statement of cash flows. This resulted in a $1.2 million, eleven thousand and an eight thousand dollar reduction in net cash provided by financing activities for the years ended December 31, 2017, 2016 and 2015, respectively. Prior to adoption, these amounts were reflected within cash flows from operating activities. The Company has also elected to continue to estimate a forfeiture rate associated with our stock-based awards and related expense. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 203): Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” This ASU requires the statement of cash flows to explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are to be included with cash and cash equivalents when reconciling the beginning of period and end of period amounts shown on the statement of cash flows. On January 1, 2017, the Company early adopted this ASU retrospectively, resulting in $6.9 million of restricted cash being included in the beginning balances of cash, cash equivalents and restricted cash balances on the statement of cash flows for the periods presented. Please see Note 3 for additional information. Accounting Standards or Updates Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers” (Topic 606 ): Identifying Performance Obligations and Licensing , which further clarifies performance obligations in a contract with a customer. In May 2016, the FASB issued ASU 2016-12, “ Revenue from Contracts with Customers” (Topic 606): Narrow-Scope Improvements and Practical Expedients , which provides a more narrow interpretation of ASU No. 2014-09. In July, 2017, the FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) , which clarifies the transition periods related to public and private business entities . These ASUs (collectively referred to as “Topic 606”) are effective for annual reporting periods beginning after December 15, 2017 and interim periods within those annual periods. The Company has substantially completed the implementation of Topic 606 and has identified the necessary changes to its policies, processes, systems, and controls. The Company will adopt Topic 606, effective January 1, 2018, using the modified retrospective approach. The cumulative effect of adopting Topic 606 will be a $1.6 million increase to retained earnings on January 1, 2018. We have completed our assessment of the effect of adoption. Based on our assessment, under ASC 606 we will no longer value any installation performance obligation as the greater of the standalone selling price or retention, but rather only value installation at the standalone selling price. In February 2016, the FASB issued ASU No. 2016-02 “Leases.” In July, 2017, the FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) , which clarifies the transition periods related to public and private business entities . The ASU requires lessees to recognize the rights and obligations created by most leases as assets and liabilities on their balance sheet and continue to recognize expenses on their income statement over the lease term. It will also require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. We are currently evaluating the impact of ASU 2016-02 on the consolidated financial statements and disclosures. In August 2016, the FASB issued ASU No. 2016-15 “Classification of Certain Cash Receipts and Cash Payments.” The ASU is intended to add or clarify guidance on the classification of certain receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of ASU 2016-15 on the consolidated financial statements and disclosures. In March 2017, the FASB issued ASU No. 2017-07 “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The ASU is intended to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The amendment applies to all entities offering a defined benefit pension plan, other postretirement benefit plans, or other types of benefits accounted for under Topic 715. The amendments in the ASU require an employer to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The amendments in this ASU are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within the annual period. The amendments in this ASU should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. We are currently evaluating the impact of ASU 2017-07 on the consolidated financial statements and disclosures. |
Cash, cash equivalents and rest
Cash, cash equivalents and restricted cash | 12 Months Ended |
Dec. 31, 2017 | |
Cash, cash equivalents and restricted cash | |
Cash, cash equivalents and restricted cash | Note 3. Cash, cash equivalents and restricted cash December 31, 2017 2016 (dollars in thousands) Cash and cash equivalents $ $ Short-term and long-term restricted cash Total cash, cash equivalents and restricted cash $ $ As of December 31, 2017, the Company had $7.5 million in restricted cash which relates to a $5.9 million letter of credit associated with the security deposit for the sale leaseback transaction, a $0.8 million letter of credit relating to workers’ compensation insurance, a $0.7 million letter of credit associated with a bank guarantee and a $0.1 million deposit relating to customs activity. |
Accounts Receivable, net
Accounts Receivable, net | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable, net | |
Accounts Receivable, net | Note 4. Accounts Receivable, net The components of accounts receivable are as follows: December 31, 2017 2016 (in thousands) Trade receivables $ 75,302 $ 50,650 Allowance for doubtful accounts — (77) Trade receivables, net $ 75,302 $ 50,573 We record an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. Our allowance for doubtful accounts is established based on a specific assessment of collectability of our customer accounts. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be necessary. |
Inventories, net
Inventories, net | 12 Months Ended |
Dec. 31, 2017 | |
Inventories, net | |
Inventories, net | Note 5. Inventories, net The components of inventories are as follows: December 31, 2017 2016 (in thousands) Raw materials $ 82,313 $ 80,503 Work in process 31,651 14,117 Finished goods (completed systems) 6,580 19,233 Inventories, net $ 120,544 $ 113,853 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. In 2017, the Company recorded a net increase of $5.3 million in inventory reserves, which includes $6.2 million of write-down of excess inventory related to Legacy products. As of December 31, 2017 and 2016, inventories are stated net of inventory reserves of $14.2 million and $8.8 million respectively. During each of the years ended 2017, 2016 and 2015, the Company recorded charges to cost of sales of $8.1 million, $0.8 million and $0.5 million to reflect the lower of cost or net realizable value. The Company has inventory on consignment at customer locations as of December 31, 2017 and 2016, of $3.6 million and $3.4 million, respectively. |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, net. | |
Property, Plant and Equipment, net | Note 6. Property, Plant and Equipment, net The components of property, plant and equipment are as follows: December 31, 2017 2016 (in thousands) Land and buildings $ 76,260 $ 75,792 Machinery and equipment 11,477 9,472 Construction in process 6,982 1,704 Total cost 94,719 86,968 Accumulated depreciation (58,551) (56,128) Property, plant and equipment, net $ 36,168 $ 30,840 Depreciation expense was $2.2 million, $1.8 million and $2.4 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Assets Manufactured for Interna
Assets Manufactured for Internal Use, net | 12 Months Ended |
Dec. 31, 2017 | |
Assets Manufactured for Internal Use, net | |
Assets Manufactured for Internal Use, net | Note 7. Assets Manufactured for Internal Use, net The components of assets manufactured for internal use, included in amounts reported as other assets, are as follows: December 31, 2017 2016 (in thousands) Internal use assets $ 40,366 $ 42,776 Construction in process 301 1,745 Total cost 40,667 44,521 Accumulated depreciation (20,035) (22,838) Assets manufactured for internal use, net $ 20,632 $ 21,683 These products are used for research and development, training, and customer demonstration purposes. Depreciation expense was $2.8 million, $2.4 million and $2.5 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Product Warranty
Product Warranty | 12 Months Ended |
Dec. 31, 2017 | |
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 product warranty liability are as follows: Year ended December 31, 2017 2016 2015 (in thousands) Balance at January 1 (beginning of year) $ 2,666 $ 3,555 $ 1,526 Warranties issued during the period 5,671 3,125 4,305 Settlements made during the period (2,603) (4,249) (2,672) Changes in estimate of liability for pre-existing warranties during the period (1,232) 235 396 Balance at December 31 (end of period) $ 4,502 $ 2,666 $ 3,555 Amount classified as current $ 4,112 $ 2,426 $ 3,363 Amount classified as long-term 390 240 192 Total warranty liability $ 4,502 $ 2,666 $ 3,555 |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Dec. 31, 2017 | |
Financing Arrangements | |
Financing Arrangements | Note 9. Financing Arrangements Sale Leaseback Obligation On January 30, 2015, the Company sold its corporate headquarters facility for the purchase price of $48.9 million. As part of the sale, the Company also entered into a 22-year lease agreement with the buyer. The sale leaseback is accounted for as a financing arrangement for financial reporting and, as such, the Company recorded a financing obligation of $47.7 million as of December 31, 2017. The associated lease payments include both an interest component and payment of principal, with the underlying liability being extinguished at the end of the original lease term. The Company posted a collateralized security deposit of $5.9 million in the form of an irrevocable letter of credit at the time of the closing. In October 2015, this letter of credit was cash collateralized. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 10. Employee Benefit Plans (a) Defined Contribution Plan The Company maintains the Axcelis Long-Term Investment Plan, a defined contribution plan. All regular employees are eligible to participate and may contribute up to 35% of their compensation on a before-tax basis subject to Internal Revenue Service (“IRS”) limitations. Highly compensated employees may contribute up to 16% of their compensation on a before-tax basis subject to IRS limitations. In 2015, the Company implemented a matching contribution of up to one thousand U.S. dollars on a dollar-for-dollar basis on contributions by eligible participants. In 2016, the Company increased the matching contribution to a maximum of $1,200, on the basis of one dollar matched for each two dollars contributed by eligible participants. In 2017, the Company increased the matching contribution to 50% of employees’ pre-tax contributions on the first 6% of eligible compensation contributed to the plan. Total related expense was $0.5 million, $0.4 million and $0.4 million, for 2017, 2016 and 2015, respectively. (b) Other Compensation Plans The Company operates in foreign jurisdictions that require lump sum benefits, payable based on statutory regulations, for voluntary or involuntary termination. Where required, an annual actuarial valuation of the benefit plans is obtained. The Company has recorded an unfunded liability of $4.6 million and $4.0 million at December 31, 2017 and 2016, respectively, for costs associated with these compensation plans in foreign jurisdictions. The following table presents the classification of these liabilities in the Consolidated Balance Sheets: Year ended December 31, 2017 2016 (in thousands) Current: Accrued compensation $ 967 $ 902 Total current liabilities $ 967 $ 902 Long-term: Other long-term liabilities 3,583 3,057 Total liabilities $ 4,550 $ 3,959 The expense recorded in connection with these plans was $1.0 million, $0.8 million and $0.7 million during the years ended December 31, 2017, 2016 and 2015, respectively. |
Stock Award Plans and Stock Bas
Stock Award Plans and Stock Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Stock Award Plans and Stock Based Compensation | |
Stock Award Plans and Stock Based Compensation | Note 11. Stock Award Plans and Stock Based Compensation (a) Equity Incentive Plans The Company maintains the Axcelis Technologies, Inc. 2012 Equity Incentive Plan (the “2012 Equity Plan”), which became effective on May 2, 2012. Our 2000 Stock Plan (the “2000 Stock Plan”) expired on May 1, 2012 and no new grants may be made under that plan after that date. However, awards granted under the 2000 Stock Plan prior to the expiration remain outstanding and subject to the terms of the 2000 Stock Plan. The 2012 Equity Plan, as amended, reserves 6.5 million shares of common stock, $0.001 par value, for grant and permits the issuance of options, stock appreciation rights, restricted stock, restricted stock units, stock equivalents and awards of shares of common stock that are not subject to restrictions or forfeiture to selected employees, directors and consultants of the Company. In accordance with the terms of the 2012 Equity Plan, this reserves shares that were not issued under an award (because such award expires, is terminated unexercised or is forfeited) that was outstanding under the 2000 Stock Plan as of the May 2, 2012. The term of stock options granted under these plans is specified in the award agreements. Unless a lesser term is otherwise specified by the Compensation Committee of the Company’s Board of Directors, awards under the 2012 Equity Plan will expire seven years from the date of grant. In general, all awards issued under the 2000 Stock Plan expire ten years from the date of grant. Under the terms of these stock plans, the exercise price of a stock option may not be less than the fair market value of a share of the Company’s common stock on the date of grant. Under the 2012 Equity Plan, fair market value is defined as the last reported sale price of a share of the common stock on a national securities exchange as of any applicable date, as long as the Company’s shares are traded on such exchange. Stock options granted to employees generally vest over a period of four years, while stock options granted to non‑employee members of the Company’s Board of Directors generally vest over a period of six months and, once vested, are not affected by the director’s termination of service to the Company. In limited circumstances, the Company may grant stock option awards with market-based vesting conditions, such as the Company’s common stock price, or other performance conditions. Termination of service by an employee will cause options to cease vesting as of the date of termination, and in most cases, employees will have 90 days after termination to exercise options that were vested as of the termination of employment. In general, retiring employees will have one year after termination of employment to exercise vested options. The Company settles stock option exercises with newly issued common shares. Restricted stock units granted to employees during 2017 had both time-based vesting provisions and performance-based vesting provisions. Generally, unvested restricted stock unit awards expire upon termination of service to the Company. The Company settles restricted stock units upon vesting with newly issued common shares. No restricted stock was granted under either stock plan during the three year period ended December 31, 2017. As of December 31, 2017, there were 1.3 million shares available for grant under the 2012 Equity Plan. No shares are available for grant under the 2000 Stock Plan. As of December 31, 2017, there were 2.6 million options outstanding under the 2012 Equity Plan and the 2000 Stock Plan, collectively, and 0.6 million unvested restricted stock units outstanding under the 2012 Stock Plan. (b) Employee Stock Purchase Plan The Employee Stock Purchase Plan (the “Purchase Plan”) provides effectively all of the Company’s employees the opportunity to purchase common stock of the Company at less than market prices. Purchases are made through payroll deductions of up to 10% of the employee’s salary as elected by the participant, subject to certain caps set forth in the Purchase Plan. Employees may purchase the Company’s common stock at 85% of its market on the day the stock is purchased. The Purchase Plan is considered compensatory and as such, compensation expense has been recognized based on the benefit of the discounted stock price, amortized to compensation expense over each offering period of six months. Compensation expense relating to the Purchase Plan was approximately $0.1 million for each of the years ended December 31, 2017, 2016 and 2015. As of December 31, 2017, there were a total of 0.3 million shares reserved for issuance and available for purchase under the Purchase Plan. Less than 0.1 million shares were purchased under the Purchase Plan in each of the years ended December 31, 2017, 2016 and 2015. The Purchase Plan will expire in June 2020, unless re-approved by the stockholders. (c) Valuation of Stock Options and Restricted Stock Units For the purpose of valuing stock options with service conditions, the Company uses the Black‑Scholes option pricing model to calculate the grant‑date fair value of an award. The fair values of options granted were calculated using the following estimated weighted‑average assumptions: Year ended December 31, 2017 2016 2015 Weighted-average expected volatility N/A 49.3% — 56.7% 56.2% — 64.7% Weighted-average expected term N/A 4.7 years 4.6 — 4.7 years Risk-free interest rate N/A 1.1% — 2.0% 1.3% — 1.6% Expected dividend yield N/A 0% 0% Expected volatility—The Company considers a number of factors when estimating volatility for stock options granted. The Company’s method of estimating expected volatility relies on a combination of historical and implied volatility. The Company believes that this blended volatility results in an accurate estimate of the grant‑date fair value of employee stock options because it appropriately reflects the market’s current expectations of future volatility. Expected term—The Company calculated the weighted average expected term for stock options granted prior to July 1, 2012, using a forward looking lattice model of the Company’s stock price incorporating a suboptimal exercise factor and a projected post‑vest forfeiture rate. For stock options granted after July 1, 2012 to employees and to non‑employee members of the Company’s Board of Directors, the Company used the simplified method for estimating the expected life of “plain vanilla” options because it did not have sufficient exercise history to use a lattice model. The Company expects that it will use a lattice model once sufficient exercise history has been established. A change in the contractual life from 10 years to 7 years was made to reflect the fact that options granted after May 1, 2012 were granted under the 2012 Equity Incentive Plan, which limits option terms to seven years. Risk‑free interest rate - The yield on zero‑coupon U.S. Treasury securities for a period that is commensurate with the expected term assumption is used as the risk‑free interest rate. Expected dividend yield—Expected dividend yield was not considered in the option pricing formula since the Company does not pay dividends and has no current plans to do so in the future. In limited circumstances, the Company also issues stock option grants with vesting based on market conditions, such as the Company’s common stock price, or a combination of time or market or performance conditions. The fair values and derived service periods for all grants that have vesting based on market or performance conditions are estimated using the Monte Carlo valuation method. For each stock option grant with vesting based on a combination of time and performance or market conditions, where vesting will occur if either condition is met, the related compensation costs are recognized over the shorter of the explicit service period or the derived service period. The fair value of the Company’s restricted stock units is calculated based upon the fair market value of the Company’s stock at the date of grant. (d) Summary of Stock-based Compensation Expense The Company uses the straight‑line attribution method to recognize expense for stock‑based awards such that the expense associated with awards is evenly recognized throughout the period. The amount of stock‑based compensation recognized is based on the value of the portion of the awards that are ultimately expected to vest. The Company estimates forfeitures at the time of grant and revises them, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or “expirations” and represents only the unvested portion of the surrendered stock‑based award. Based on a historical analysis, a forfeiture rate of 5% per year was applied to stock‑based awards, including executive officer awards, for the years ended December 31, 2017, 2016 and 2015. For the year ended December 31, 2017, the Company recognized stock-based compensation expense of $5.7 million. Stock-based compensation expense was $5.2 million and $5.6 million for the years ended December 31, 2016 and 2015, respectively. The Company presents the expenses related to stock-based compensation in the same expense line items as cash compensation paid to its employees. For the year ended December 31, 2017, the Company used restricted stock units in its annual equity compensation program. For the year ended December 31, 2016, the Company primarily used restricted stock units in its annual equity compensation program. For the year ended December 31, 2015, the Company primarily used stock options in its annual equity compensation program. The benefit of tax deductions in excess of recognized compensation cost is reported as a financing cash flow, rather than as an operating cash flow. Axcelis had tax deductions in excess of recognized compensation cost of $29.5 million for the year ended December 31, 2017 which resulted in a tax benefit of $10.3 million. Because the Company did not recognize the benefit of tax deductions in excess of recognized compensation cost due to its cumulative net operating loss position, this had no impact on the Company’s consolidated statement of cash flows as of and for the years ended December 31, 2017, 2016 and 2015. (e) Stock Option Awards The following table summarizes the stock option activity for the year ended December 31, 2017: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term Value (in thousands) (years) (in thousands) Outstanding at December 31, 2016 4,951 $ 7.29 Granted — — Exercised (2,358) Canceled (15) Expired (2) Outstanding at December 31, 2017 2,576 $ $ 53,571 Exercisable at December 31, 2017 2,008 $ $ 43,236 Options Vested or Expected to Vest at December 31, 2017(1) 2,555 $ $ 53,189 (1) In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options. The total intrinsic value, which is defined as the difference between the market price at exercise and the price paid by the employee to exercise the options, for options exercised during the years ended December 31, 2017, 2016 and 2015 was $39.7 million, $2.5 million and $5.3 million, respectively. The total fair value of stock options vested during the years ended December 31, 2017, 2016 and 2015 was $3.1 million, $3.9 million and $5.4 million respectively. The weighted average grant-date fair value of options granted for the years ended December 31, 2016 and 2015 was $5.75 and $5.05, respectively. As of December 31, 2017, there was $2.3 million of total forfeiture‑adjusted unrecognized compensation cost related to non‑vested stock options granted under the 2012 Equity Incentive Plan and the 2000 Stock Plan. That cost is expected to be recognized over a weighted‑average period of 1.4 years. (f) Restricted Stock and Restricted Stock Units Restricted stock units (“RSUs”) represent the Company’s unfunded and unsecured promise to issue shares of the common stock at a future date, subject to the terms of the RSU Award Agreement in either the 2012 Equity Incentive Plan. The purpose of these awards is to assist in attracting and retaining highly competent employees and directors and to act as an incentive in motivating selected employees and directors to achieve long-term corporate objectives. RSU awards granted in 2017 included time vested share awards and awards with performance vesting conditions. No restricted stock awards were granted, or vested, during the years ended December 31, 2017, 2016 and 2015. The fair value of a restricted stock unit and restricted stock award is charged to expense ratably over the applicable service period. Changes in the Company’s non‑vested restricted stock units for the year ended December 31, 2017 is as follows: Weighted-Average Grant Date Fair Shares/units Value per Share (in thousands) Outstanding at December 31, 2016 548 $ 9.85 Granted 320 20.72 Vested (196) 11.32 Forfeited (55) 10.36 Outstanding at December 31, 2017 617 $ 14.93 The weighted average grant-date fair value of restricted stock units granted for the years ended December 31, 2017, 2016 and 2015 was $20.72, $9.73 and $12.12, respectively. Some restricted stock units provide for net share settlement to offset the personal income tax obligations of the employee’s restricted stock unit vesting. Vesting activity above reflects shares vested before net share settlement. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | Note 12. Stockholders’ Equity The Company may issue up to 75 million shares of common stock without additional shareholder approval. As of December 31, 2017 and 2016, there were 32.0 million and 29.5 million outstanding shares of common stock. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | Note 13. Fair Value Measurements 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 The Company’s money market funds and short-term investments 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 following table sets forth Company’s assets and liabilities which are measured at fair value by level within the fair value hierarchy. December 31, 2017 Fair Value Measurements Level 1 Level 2 Level 3 Total (in thousands) Assets Cash equivalents: Money market funds, U.S. Government Securities and Agency Investments $ 116,433 $ — $ — $ 116,433 December 31, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Total (in thousands) Assets Cash equivalents: Money market funds $ 54,170 $ — $ — $ 54,170 (c) Other Financial Instruments The carrying amounts reflected in the consolidated balance sheets for accounts receivable, prepaid expenses and other current and non‑current assets, restricted cash, accounts payable and accrued expenses approximate fair value due to their short‑term maturities. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 14. Commitments and Contingencies (a) Lease Commitments The Company leases manufacturing and office facilities and certain equipment under operating leases that expire through 2037. Rental expense was $3.9 million, $3.8 million and $3.8 million under operating leases for the years ended December 31, 2017, 2016 and 2015, respectively. Future minimum lease commitments on non‑cancelable operating leases for the year ended December 31, 2017 are as follows: Operating Leases (in thousands) 2018 $ 2,915 2019 1,836 2020 894 2021 420 2022 202 Thereafter 39 $ 6,306 (b) Sale Leaseback Financing Obligation In addition to the lease commitments as described above, the Company entered into a 22-year lease agreement relating to our corporate headquarters in Beverly, Massachusetts. The following table relates to the cash payment schedule associated with this lease obligation as of December 31, 2017: Lease Obligation (in thousands) 2018 $ 5,471 2019 5,594 2020 5,719 2021 5,848 2022 5,980 Thereafter 92,020 Total lease payments $ 120,632 Less interest portion (72,918) Sale leaseback obligation $ 47,714 (c) Purchase Commitments The Company has non‑cancelable contracts and purchase orders for inventory of $83.5 million at December 31, 2017. (d) 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. (e) 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. |
Business Segment and Geographic
Business Segment and Geographic Region Information | 12 Months Ended |
Dec. 31, 2017 | |
Business Segment and Geographic Region Information | |
Business Segment and Geographic Region Information | Note 15. Business Segment and Geographic Region Information The Company operates in one business segment, which is the manufacture of capital equipment for the semiconductor chip manufacturing industry. The principal market for semiconductor capital equipment is semiconductor chip manufacturers. Substantially all sales are made directly by the Company to its customers located in the United States, Europe and Asia Pacific. The Company’s ion implantation systems product line includes high current, medium current and high energy implanters. Other products include legacy dry strip equipment, curing systems, and thermal processing systems. In addition to new equipment, the Company provides post‑sales equipment service and support, including spare parts, equipment upgrades, used equipment, maintenance services and customer training. Revenue by product lines is as follows: Year ended December 31, 2017 2016 2015 (in thousands) Ion implantation systems and services $ 391,051 $ 248,885 $ 282,624 Other systems and services 19,510 18,095 18,871 Total revenue $ 410,561 $ 266,980 $ 301,495 Revenue and long‑lived assets by geographic region, based on the physical location of the operation recording the sale or the asset, are as follows: Long-Lived Revenue Assets (in thousands) 2017 United States $ 313,916 $ 56,089 Europe 26,936 — Asia Pacific 69,709 707 $ 410,561 $ 56,796 2016 United States $ 191,261 $ 52,006 Europe 25,436 — Asia Pacific 50,283 517 $ 266,980 $ 52,523 2015 United States $ 226,890 $ 41,729 Europe 24,209 — Asia Pacific 50,396 334 $ 301,495 $ 42,063 Long‑lived assets consist of property, plant and equipment, net, and assets manufactured for internal use. Operations in Europe and Asia Pacific consist of sales and service organizations. International revenue, which includes export sales from U.S. manufacturing facilities to foreign customers and sales by foreign subsidiaries and branches, was $348.5 million (84.9% of total revenue), $213.8 million (80.0% of total revenue) and $256.5 million (85.1% of total revenue) in 2017, 2016 and 2015, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | Note 16. Income Taxes Income before income taxes is as follows: Year ended December 31, 2017 2016 2015 (in thousands) United States $ 40,752 $ 8,880 $ 12,708 Foreign 3,079 2,144 2,497 Income before income taxes $ 43,831 $ 11,024 $ 15,205 Provision for income taxes is as follows: Year ended December 31, 2017 2016 2015 (in thousands) Current: United States Federal $ 430 $ — $ — State 32 49 (33) Foreign 230 (217) 374 Total current 692 (168) 341 Deferred: Federal (82,048) — — State (1,698) — — Foreign (74) 191 186 Total deferred (83,820) 191 186 Income tax provision $ (83,128) $ 23 $ 527 Reconciliations of income taxes at the United States Federal statutory rate to the effective income tax rate are as follows: Year ended December 31, 2017 2016 2015 (in thousands) Income tax benefit at the United States statutory rate $ 15,341 $ 3,859 $ 5,322 State income taxes 203 32 (22) Unrecognized tax benefits (285) (615) (174) Effect of change in valuation allowance (115,831) (7,765) (5,676) Foreign income tax rate differentials (312) 233 600 Unremitted earnings of foreign subsidiaries (8,933) 305 (102) Stock options (10,342) 264 379 Credit expirations — 3,565 — Repatriation of foreign earnings 4,556 — — Recognition of equity NOL's (1,165) — — Rate change 42,531 — — Credit generation (8,778) — — Discrete items, net 31 — (540) Other, net (144) 145 740 Income tax provision $ (83,128) $ 23 $ 527 Significant components of long‑term deferred income taxes are as follows: Year ended December 31, 2017 2016 Federal net operating loss carryforwards $ 56,646 $ 98,007 State net operating loss carryforwards 1,586 1,546 Foreign net operating loss carryforwards 758 673 Federal tax credit carryforwards 14,312 12,778 State tax credit carryforwards 6,908 2,566 Unremitted earnings of foreign subsidiaries (21) (8,913) Intangible assets 116 229 Property, plant and equipment 5,838 9,774 Accrued compensation 45 97 Inventories 3,798 5,230 Stock compensation 2,351 6,687 Warranty 980 930 Deferred revenue 187 — Other (3,220) (5,578) Deferred taxes, gross 90,284 124,026 Valuation allowance (7,136) (122,966) Deferred taxes, net $ 83,148 $ 1,060 Changes in tax rates and tax laws are accounted for in the period of enactment. Our deferred tax assets and liabilities are measured at the enacted tax rate expected to apply when these temporary differences are expected to be realized or settled. On December 22, 2017, the Tax Cuts and Jobs Act (“2017 Tax Act”) was signed into law and has resulted in significant changes to the U.S. corporate income tax system. The 2017 Tax Act eliminates the deferral of U.S. income tax on the historical un-repatriated earnings by imposing the Transition Toll Tax, which is a one-time mandatory deemed repatriation tax on undistributed foreign earnings. The Transition Toll Tax is assessed on the U.S. shareholder's share of the foreign corporation's accumulated foreign earnings that have not previously been taxed. Earnings in the form of cash and cash equivalents will be taxed at a rate of 15.5% and all other earnings will be taxed at a rate of 8.0%. As of December 31, 2017, we have accrued income tax liabilities of $0.4 million under the Transition Toll Tax after utilization of foreign tax credits and research and development credits. The Transition Toll Tax will be paid over an eight-year period, starting in 2018, and will not accrue interest. Our preliminary estimate of the Transition Toll Tax and the remeasurement of our deferred tax assets and liabilities is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the 2017 Tax Act, changes to certain estimates and amounts related to the earnings and profits of certain subsidiaries and the filing of our tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the 2017 Tax Act may require further adjustments and changes in our estimates. The final determination of the Transition Toll Tax and the remeasurement of our deferred assets and liabilities will be completed as additional information becomes available, but no later than one year from the enactment of the 2017 Tax Act. The 2017 Tax Act includes a federal statutory rate reduction from 35% to 21%, the elimination or reduction of certain domestic deductions and credits and limitations on the deductibility of interest expense and executive compensation. The 2017 Tax Act also transitions international taxation from a worldwide system to a modified territorial system and includes base erosion prevention measures on non-U.S. earnings, which has the effect of subjecting certain earnings of our foreign subsidiaries to U.S. taxation as global intangible low-taxed income. These changes are effective beginning in 2018. At December 31, 2017, the Company had $90.3 million of deferred tax assets worldwide relating to net operating loss carryforwards, tax credit carryforwards and other temporary differences, which are available to reduce income taxes in future years. Management has considered the weight of all available evidence in determining whether a valuation allowance remains to be required against its deferred tax assets at December 31, 2017. After consideration of both positive and negative evidence, management has concluded that it is more likely than not that a substantial portion of its deferred tax assets will be realized. The positive evidence considered was three year U.S. historical cumulative profitability, projected future taxable income and length of carry-forward periods of net operating losses and tax credits. The primary negative evidence to be considered is the volatile semiconductor industry that the Company operates in. The Company has continued to maintain a $7.1 million valuation allowance in the U.S. against certain tax credits and state net operating losses due to the uncertainty of their realization based on long-term Company forecasts and the expiration dates on these attributes. If future operating results of the U.S. or these foreign jurisdictions significantly exceed expectations it is reasonably possible that there could be a further reduction in the valuation allowance in the future. Further reduction of the valuation allowance, in whole or in part, would result in a non-cash income tax benefit during the period of reduction. At December 31, 2017, the Company has federal and state net operating loss carryforwards of $298.9 million and foreign net operating loss carryforwards of $2.9 million expiring principally between 2018 and 2034. The Company has research and development and other tax credit carryforwards of $21.2 million at December 31, 2017 that can be used to reduce future federal and state income tax liabilities. These tax credit carryforwards expire principally between 2017 and 2037. It is Company policy to provide taxes for the total anticipated tax impact of the undistributed earnings of our wholly-owned foreign subsidiaries, as such earnings are not expected to be reinvested indefinitely. The Company anticipates that certain state taxes resulting from remitting such earnings will be offset by net operating loss or credit carryforwards to the extent available. In addition, the Company does not anticipate incurring a foreign withholding tax on remitting such earnings since it does not intend to remit the earnings as dividends. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company and most foreign subsidiaries are subject to income tax examinations by tax authorities for all years dating back to 2011. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter. At December 31, 2017, the Company had unrecognized tax benefits related to uncertain tax positions of approximately $9.1 million, of which approximately $8.0 million reduced the Company’s deferred tax assets and the offsetting valuation allowance and $1.1 million was recorded in other long-term liabilities. During the first quarter of 2017, the statute of limitations associated with two tax positions previously taken by the Company expired. The related tax reserve of $0.3 million and accrued interest of $0.2 million that had been recorded were reversed during the twelve months ended December 31, 2017. The Company recognized a benefit of $0.1 million in interest and penalties related to unrecognized tax benefits for the year-ended December 31, 2017. A reconciliation of the beginning and ending balance of unrecognized tax benefits are as follows: 2017 2016 2015 (in thousands) Balance at beginning of year $ 6,844 $ 7,671 $ 7,960 Increase in unrecognized tax benefits as a result of tax positions taken during a prior period 81 76 (78) Decreases in unrecognized tax benefits related to settlements with tax authorities — — (211) Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitation (511) (903) — Increases in unrecognized tax benefits as a result of tax positions taken during the current period 2,691 — — Balance at end of year $ 9,105 $ 6,844 $ 7,671 Recorded as other long-term liability $ 1,109 $ 1,462 $ 2,142 Recorded as a decrease in deferred tax assets and offsetting valuation allowance 7,996 5,382 5,529 Balance at end of year $ 9,105 $ 6,844 $ 7,671 |
Quarterly Results of Operations
Quarterly Results of Operations (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Results of Operations (unaudited) | |
Quarterly Results of Operations (unaudited) | Note 17. Quarterly Results of Operations (unaudited) Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, 2017(1) 2017 2017 2017 2016 2016 2016 2016 (in thousands, except per share data) Revenue $ 116,396 $ 104,482 $ 102,790 $ 86,893 $ 69,358 $ 65,650 $ 64,451 $ 67,521 Gross profit 36,720 39,751 39,062 34,714 26,947 24,104 25,131 23,415 Net income 91,680 11,841 13,932 9,506 3,965 2,151 2,937 1,948 Net income per basic share $ 2.88 $ 0.38 $ 0.46 $ 0.32 $ 0.13 $ 0.07 $ 0.10 $ 0.07 Net income per diluted share $ 2.68 $ 0.35 $ 0.42 $ 0.29 $ 0.13 $ 0.07 $ 0.10 $ 0.06 (1) Gross profit includes $6.2 million charge to inventory reserves. Net income also includes an $81.6 million tax benefit relating to the reversal of a valuation allowance on deferred tax assets . |
Schedule II-Valuation and Quali
Schedule II-Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Schedule II-Valuation and Qualifying Accounts | |
Schedule II-Valuation and Qualifying Accounts | Schedule II—Valuation and Qualifying Accounts Axcelis Technologies, Inc. (In thousands) Balance at Charged to Balance at Beginning of Costs and End of Period Expenses Deductions Other(*) Period Year ended December 31, 2017 Allowance for doubtful accounts and returns(**) $ 77 $ — $ (77) $ — $ — Reserve for excess and obsolete inventory(***) 8,135 (2,820) — 14,212 Year ended December 31, 2016 Allowance for doubtful accounts and returns(**) $ — $ 106 $ (29) $ — $ 77 Reserve for excess and obsolete inventory(***) 1,051 (2,619) — 8,897 Year ended December 31, 2015 Allowance for doubtful accounts and returns(**) $ 390 $ — $ (390) $ — $ — Reserve for excess and obsolete inventory(***) 1,721 (14,898) — 10,465 (*) Represents foreign currency translation adjustments. (**) Deductions include the write-off of accounts receivable. (***) Deductions include the disposal and sale of fully reserved inventory |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | (a) Basis of Presentation The accompanying consolidated financial statements include the consolidated accounts of the Company and its wholly‑owned, controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to prior years' financial statements to conform to the current year’s presentation. Events occurring subsequent to December 31, 2017 have been evaluated for potential recognition or disclosure in the consolidated financial statements. |
Use of Estimates | (b) Use of Estimates The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, the Company evaluates its estimates and judgments, including those related to revenue recognition, the realizable value of inventories, valuing stock-based compensation instruments and reserves relating to tax assets and liabilities. Actual amounts could differ from these estimates. Changes in estimates are recorded in the period in which they become known. |
Foreign Currency | (c) Foreign Currency The functional currency for substantially all operations outside the United States is the local currency. Financial statements for these operations are translated into United States dollars at year‑end rates as to assets and liabilities and average exchange rates during the year as to revenue and expenses. The resulting translation adjustments are recorded in stockholders’ equity as an element of accumulated other comprehensive income (loss). Foreign currency transaction gains and losses are included in other income (expense) in the Consolidated Statements of Operations. For the year ended December 31, 2017 the Company had $1.1 million in foreign exchange gains. For the year ended December 31, 2016 the Company had $0.6 million in foreign exchange losses. For the year ended December 31, 2015 the Company did not have any material foreign exchange gains or losses. |
Cash and Cash Equivalents | (d) Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of ninety days or less. Cash equivalents consist primarily of money market funds, U.S Government and Agency Securities and deposit accounts. Cash equivalents are carried on the balance sheet at fair market value. |
Inventories | (e) Inventories Inventories are carried at lower of cost or net realizable value, determined using the first‑in, first‑out (“FIFO”) method, or market. The Company periodically reviews its inventories and makes provisions as necessary for estimated obsolescence or damaged goods to ensure values approximate lower of cost or net realizable value. The amount of such markdowns is equal to the difference between cost of inventory and the estimated market value based upon assumptions about future demands, selling prices, and market conditions. The Company records an allowance for estimated excess inventory. The allowance is determined using management’s assumptions of materials usage, based on estimates of demand and market conditions. If actual market conditions become less favorable than those projected by management, additional inventory write‑downs may be required. |
Property, Plant and Equipment | (f) Property, Plant and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are recorded using the straight‑line method over the estimated useful lives of the related assets as follows: Asset Classification Estimated Useful Life Land and buildings (under lease) Lesser of the lease term or estimated useful life of the asset Machinery and equipment 7 to 10 years On January 30, 2015, the Company sold its corporate headquarters facility. As part of this sale, the Company also entered into a 22-year lease agreement. The Company accounted for the sale leaseback transaction as a financing arrangement for financial reporting purposes. The Company retained the historical costs of the property and the related accumulated depreciation on its financial books within property, plant and equipment and will continue to depreciate the property for financial reporting purposes over the lesser of its remaining useful life or its initial lease term of 22 years. Repairs and maintenance costs are expensed as incurred. Expenditures for renewals and betterments are capitalized. |
Impairment of Long-Lived Assets | (g) Impairment of Long‑Lived Assets The Company records impairment losses on long-lived assets when events and circumstances indicate that these assets might not be recoverable. Recoverability is measured by a comparison of the assets’ carrying amount to their expected future undiscounted net cash flows. If such assets are considered to be impaired, the impairment is measured based on the amount by which the carrying value exceeds its fair value. The Company did not have any indicators of impairment during the period ending December 31, 2017. The Company did not record an impairment charge in the years ended December 31, 2017, 2016, or 2015. Actual performance could be materially different from our current forecasts, which could impact estimates of undiscounted cash flows and may result in the impairment of the carrying amount of the long-lived assets in the future. This could be caused by strategic decisions made in response to economic and competitive conditions, the impact of the economic environment on our customer base, or a material adverse change in the Company’s relationships with significant customers. |
Concentration of Risk and Off-Balance Sheet Risk | (h) Concentration of Risk and Off‑Balance Sheet Risk Financial instruments that potentially subject the Company to concentrations of credit risk are principally cash equivalents and accounts receivable. The Company’s cash equivalents are principally maintained in investment grade money‑market funds, U.S. Government and Agency Securities and deposit accounts. The Company has no significant off‑balance‑sheet risk such as currency exchange contracts, option contracts or other hedging arrangements. The Company’s exposure to market risk for changes in interest rates relates primarily to cash equivalents. The primary objective of the Company’s investment activities is to preserve principal without significantly increasing risk. This is accomplished by investing in marketable high investment grade securities. The Company does not use derivative financial instruments to manage its investment portfolio and does not expect operating results or cash flows to be affected to any significant degree by any change in market interest rates. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral to secure accounts receivable. For selected overseas sales, the Company requires customers to obtain letters of credit before product is shipped. The Company maintains an allowance for doubtful accounts based on its assessment of the collectability of accounts receivable. The Company reviews the allowance for doubtful accounts quarterly. The Company does not have any off‑balance sheet credit exposure related to its customers. The Company’s customers consist of semiconductor chip manufacturers located throughout the world and net sales to its ten largest customers accounted for 73.3%, 70.2% and 76.8% of revenue in 2017, 2016 and 2015, respectively. For the year ended December 31, 2017 the Company had two customers representing 24.9% and 13.1% of total revenue, respectively. For the year ended December 31, 2016, the Company had one customer representing 17.0% of total revenue. For the year ended December 31, 2015, the Company had two customers representing 29.3% and 10.5% of total revenue, respectively. As of December 31, 2017, the Company had three customers account for 19.8%, 11.8% and 10.6% of consolidated accounts receivable, respectively. As of December 31, 2016, the Company had four customers account for 22.0%, 12.3%, 12.0% and 10.6% of consolidated accounts receivable, respectively. Some of the components and sub‑assemblies included in the Company’s products are obtained either from a sole source or a limited group of suppliers. Disruption to the Company’s supply source, resulting either from economic conditions or other factors, could affect its ability to deliver products to its customers. |
Revenue Recognition | (i) Revenue Recognition The Company’s revenue recognition policy involves significant judgment by management. The Company considers a broad array of facts and circumstances in determining when to recognize revenue, including contractual obligations to the customer, the complexity of the customer’s post‑delivery acceptance provisions, payment history, customer creditworthiness and the installation process. The Company’s system sales transactions are made up of multiple elements, including the system itself and elements that are not delivered simultaneously with the system. These undelivered elements might include a combination of installation services, extended warranty and support and spare parts, all of which are covered generally by a single sales price. The Company’s system revenue arrangements with multiple elements are divided into separate units of accounting if specified criteria are met, including whether the delivered element has stand‑alone value to the customer. If the criteria are met, then the consideration received is allocated among the separate units based on their relative selling price, and the revenue is recognized separately for each of the separate units. The Company determines selling price for each unit of accounting (element) using vendor specific objective evidence (VSOE) or third‑party evidence (TPE), if they exist, otherwise, the Company uses best estimated selling price (BESP). The Company generally expects that it will not be able to establish TPE due to the nature of its products, and, as such, the Company typically will determine selling price using VSOE or BESP. Where required, the Company determines BESP for an individual element based on consideration of both market and Company‑specific factors, including the selling price and profit margin for similar products, the cost to produce the deliverable and the anticipated margin on that deliverable and the characteristics of the markets in which the deliverable is sold. Systems are not sold separately and VSOE or TPE is not available for the systems element. Therefore the selling price associated with systems is based on BESP. The allocated value for installation in the arrangement includes either (i) the relative selling price of the installation or (ii) the portion of the sales price that will not be received until the installation is completed (the “retention”). The selling price of elements such as extended warranty for support, spare parts and support labor is also based on BESP. For the majority of regions, the selling price of installation is based upon the fair value of the service performed, including labor, which is based upon the estimated time to complete the installation at hourly rates, and material components, both of which are sold separately, or VSOE. In regions where VSOE does not exist the Company uses BESP. Product revenue for products which have demonstrated market acceptance, is generally recognized upon shipment provided title and risk of loss has passed to the customer, evidence of an arrangement exists, prices are contractually fixed or determinable, collectability is reasonably assured through historical collection results and regular credit evaluations, and there are no uncertainties regarding customer acceptance. Revenue from installation services is recognized at the time acceptance has occurred, as defined in the sales documentation or, for certain customers, when both acceptance has occurred and retention payment has been received. Revenue for other elements is recognized at the time products are shipped or the related services are performed. The Company generally recognizes revenue for systems which have demonstrated market acceptance at the time of shipment because the customer’s post‑delivery acceptance provisions and installation process have been established to be routine, commercially inconsequential and perfunctory. The Company believes the risk of failure to complete a system installation is remote. For initial shipments of systems with new technologies or in the small number of instances where the Company is unsure of meeting the customer’s specifications or obtaining customer acceptance upon shipment of the system, it will defer the recognition of systems revenue and related costs until written customer acceptance of the system is obtained. This deferral period is generally within twelve months of shipment. Revenue related to maintenance and service contracts is recognized ratably over the duration of the contracts, or based on parts usage, where appropriate. Revenue related to service hours is recognized when the services are performed. Product revenue includes revenue from system sales, sales of spare parts, the spare parts component of maintenance and service contracts and product upgrades. Services revenue includes the labor component of maintenance and service contract amounts charged for on‑site service personnel. Axcelis reports revenue net of any taxes collected from customers and remitted to governmental authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. |
Shipping and Handling Costs | (j) Shipping and Handling Costs Shipping and handling costs are included in cost of revenue. |
Stock-Based Compensation | (k) Stock‑Based Compensation The Company generally recognizes compensation expense for all stock-based payments to employees and directors, including grants of stock options and restricted stock units, based on the grant‑date fair value of those stock‑based payments using the Black‑Scholes option pricing model, adjusted for expected forfeitures. Other valuation models may be utilized in the limited circumstances where awards with market-based vesting considerations, such as the price of the Company’s common stock, or performance based awards, are granted. Stock‑based compensation expense is recognized ratably over the requisite service period. For each stock option or restricted stock unit grant with vesting based on a combination of time, market or performance conditions, where vesting will occur if either condition is met, the related compensation costs are recognized over the shorter of the explicit service period or the derived service period. See Note 11 for additional information relating to stock‑based compensation. |
Income Taxes | (l) Income Taxes The Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax basis, and operating loss and tax credit carryforwards. The Company’s consolidated financial statements contain certain deferred tax assets which have arisen primarily as a result of operating losses, as well as other temporary differences between financial and tax accounting. The Company establishes a valuation allowance if the likelihood of realization of the deferred tax assets is reduced based on an evaluation of objective verifiable evidence. Significant management judgment is required in determining the Company’s provision for income taxes, the Company’s deferred tax assets and liabilities and any valuation allowance recorded against those net deferred tax assets. The Company evaluates the weight of all available evidence to determine whether it is more likely than not that some portion or all of the net deferred income tax assets will not be realized. Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the expiration of statutes of limitations for particular tax positions, or obtaining new information on particular tax positions may cause a change to the effective tax rate. The Company recognizes accrued interest related to unrecognized tax benefits as interest expense and penalties as operating expense in the consolidated statements of operations. |
Computation of Net Income per Share | (m) Computation of Net Income per Share Basic earnings per share is computed by dividing income available to common stockholders (the numerator) by the weighted‑average number of common shares outstanding (the denominator) for the period. The computation of diluted earnings per share is similar to basic earnings per share, except that the denominator is increased 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 income per share are as follows: Year ended December 31, 2017 2016 2015 (in thousands, except per share data) Net income available to common stockholders $ 126,959 $ 11,001 $ 14,678 Weighted average common shares outstanding used in computing basic income per share 30,866 29,195 28,595 Incremental options and RSUs 2,570 1,752 1,634 Weighted average common shares used in computing diluted net income per share 33,436 30,947 30,229 Net income per share Basic $ 4.11 $ 0.38 $ 0.51 Diluted $ 3.80 $ 0.36 $ 0.49 Diluted weighted average common shares outstanding does not include options and restricted stock units outstanding to purchase 0.9 million and 0.9 million common equivalent shares for the periods ended December 31, 2016 and 2015, respectively, as their effect would have been anti-dilutive. |
Accumulated Other Comprehensive Income | (n) Accumulated Other Comprehensive Income The following table presents the changes in accumulated other comprehensive income, net of tax, by component for the year ended December 31, 2017: Foreign Defined benefit currency pension plan Total (in thousands) Balance at December 31, 2016 $ (1,591) $ (688) $ (2,279) Other comprehensive income and pension reclassification 4,347 108 4,455 Balance at December 31, 2017 $ 2,756 $ (580) $ 2,176 |
Recent Accounting Guidance | (o) Recent Accounting Guidance Accounting Standards or Updates Recently Adopted In July 2015, the FASB issued Accounting Standards Update (ASU) No. 2015-11, “Simplifying the Measurement of Inventory,” which changes the inventory measurement principles for entities using the first-in, first-out (FIFO) or average cost methods. For entities utilizing one of these methods, the inventory measurement principle changes from lower of cost or market to the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the reasonably predictable costs of completion, disposal and transportation. The Company adopted this ASU prospectively in the first quarter of 2017, which did not have a material impact on our financial statements and disclosures. In March 2016, the FASB issued ASU No. 2016-09 “Compensation — Stock Compensation,” which changes the accounting for stock-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amended guidance eliminates the requirement to record excess tax benefits as a reduction in current taxes payable and an increase to additional paid-in capital. The Company adopted this ASU in the first quarter of 2017, in part prospectively and in part retrospectively, as permitted by the ASU. The Company prospectively adopted the provisions of ASU No. 2016-09 relating to the accounting for excess tax benefits. Axcelis had tax deductions in excess of recognized compensation cost of $29.5 million for the year ended December 31, 2017 which resulted in a tax benefit of $10.3 million. The Company retrospectively adopted the provisions of ASU 2016-09 related to the presentation of employee taxes. These provide that when an employer withholds shares for taxes on vesting of equity compensation, the value withheld is presented as a financing activity on the statement of cash flows. This resulted in a $1.2 million, eleven thousand and an eight thousand dollar reduction in net cash provided by financing activities for the years ended December 31, 2017, 2016 and 2015, respectively. Prior to adoption, these amounts were reflected within cash flows from operating activities. The Company has also elected to continue to estimate a forfeiture rate associated with our stock-based awards and related expense. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 203): Restricted Cash (a consensus of the FASB Emerging Issues Task Force).” This ASU requires the statement of cash flows to explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents are to be included with cash and cash equivalents when reconciling the beginning of period and end of period amounts shown on the statement of cash flows. On January 1, 2017, the Company early adopted this ASU retrospectively, resulting in $6.9 million of restricted cash being included in the beginning balances of cash, cash equivalents and restricted cash balances on the statement of cash flows for the periods presented. Please see Note 3 for additional information. Accounting Standards or Updates Not Yet Effective In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which provides guidance for revenue recognition. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers” (Topic 606 ): Identifying Performance Obligations and Licensing , which further clarifies performance obligations in a contract with a customer. In May 2016, the FASB issued ASU 2016-12, “ Revenue from Contracts with Customers” (Topic 606): Narrow-Scope Improvements and Practical Expedients , which provides a more narrow interpretation of ASU No. 2014-09. In July, 2017, the FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) , which clarifies the transition periods related to public and private business entities . These ASUs (collectively referred to as “Topic 606”) are effective for annual reporting periods beginning after December 15, 2017 and interim periods within those annual periods. The Company has substantially completed the implementation of Topic 606 and has identified the necessary changes to its policies, processes, systems, and controls. The Company will adopt Topic 606, effective January 1, 2018, using the modified retrospective approach. The cumulative effect of adopting Topic 606 will be a $1.6 million increase to retained earnings on January 1, 2018. We have completed our assessment of the effect of adoption. Based on our assessment, under ASC 606 we will no longer value any installation performance obligation as the greater of the standalone selling price or retention, but rather only value installation at the standalone selling price. In February 2016, the FASB issued ASU No. 2016-02 “Leases.” In July, 2017, the FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) , which clarifies the transition periods related to public and private business entities . The ASU requires lessees to recognize the rights and obligations created by most leases as assets and liabilities on their balance sheet and continue to recognize expenses on their income statement over the lease term. It will also require disclosures designed to give financial statement users information on the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. We are currently evaluating the impact of ASU 2016-02 on the consolidated financial statements and disclosures. In August 2016, the FASB issued ASU No. 2016-15 “Classification of Certain Cash Receipts and Cash Payments.” The ASU is intended to add or clarify guidance on the classification of certain receipts and payments in the statement of cash flows and to eliminate the diversity in practice related to such classifications. The guidance in ASU 2016-15 is required for annual reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact of ASU 2016-15 on the consolidated financial statements and disclosures. In March 2017, the FASB issued ASU No. 2017-07 “Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The ASU is intended to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The amendment applies to all entities offering a defined benefit pension plan, other postretirement benefit plans, or other types of benefits accounted for under Topic 715. The amendments in the ASU require an employer to report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. The amendments in this ASU are effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within the annual period. The amendments in this ASU should be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the income statement and prospectively, on and after the effective date, for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. We are currently evaluating the impact of ASU 2017-07 on the consolidated financial statements and disclosures. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful lives of the related assets | Asset Classification Estimated Useful Life Land and buildings (under lease) Lesser of the lease term or estimated useful life of the asset Machinery and equipment 7 to 10 years |
Schedule of components of net income per share | Year ended December 31, 2017 2016 2015 (in thousands, except per share data) Net income available to common stockholders $ 126,959 $ 11,001 $ 14,678 Weighted average common shares outstanding used in computing basic income per share 30,866 29,195 28,595 Incremental options and RSUs 2,570 1,752 1,634 Weighted average common shares used in computing diluted net income per share 33,436 30,947 30,229 Net income per share Basic $ 4.11 $ 0.38 $ 0.51 Diluted $ 3.80 $ 0.36 $ 0.49 |
Schedule of changes in accumulated other comprehensive income, net of tax | Foreign Defined benefit currency pension plan Total (in thousands) Balance at December 31, 2016 $ (1,591) $ (688) $ (2,279) Other comprehensive income and pension reclassification 4,347 108 4,455 Balance at December 31, 2017 $ 2,756 $ (580) $ 2,176 |
Cash, cash equivalents and re28
Cash, cash equivalents and restricted cash (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Cash, cash equivalents and restricted cash | |
Schedule of reconciliation of cash, cash equivalents and restricted cash | December 31, 2017 2016 (dollars in thousands) Cash and cash equivalents $ $ Short-term and long-term restricted cash Total cash, cash equivalents and restricted cash $ $ |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable, net | |
Schedule of components of accounts receivable | December 31, 2017 2016 (in thousands) Trade receivables $ 75,302 $ 50,650 Allowance for doubtful accounts — (77) Trade receivables, net $ 75,302 $ 50,573 |
Inventories, net (Tables)
Inventories, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventories, net | |
Schedule of components of inventories | December 31, 2017 2016 (in thousands) Raw materials $ 82,313 $ 80,503 Work in process 31,651 14,117 Finished goods (completed systems) 6,580 19,233 Inventories, net $ 120,544 $ 113,853 |
Property, Plant and Equipment31
Property, Plant and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment, net. | |
Schedule of components of property, plant and equipment | December 31, 2017 2016 (in thousands) Land and buildings $ 76,260 $ 75,792 Machinery and equipment 11,477 9,472 Construction in process 6,982 1,704 Total cost 94,719 86,968 Accumulated depreciation (58,551) (56,128) Property, plant and equipment, net $ 36,168 $ 30,840 |
Assets Manufactured for Inter32
Assets Manufactured for Internal Use, net (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Assets Manufactured for Internal Use, net | |
Schedule of components of assets manufactured for internal use | December 31, 2017 2016 (in thousands) Internal use assets $ 40,366 $ 42,776 Construction in process 301 1,745 Total cost 40,667 44,521 Accumulated depreciation (20,035) (22,838) Assets manufactured for internal use, net $ 20,632 $ 21,683 |
Product Warranty (Tables)
Product Warranty (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Product Warranty | |
Schedule of product warranty liability | Year ended December 31, 2017 2016 2015 (in thousands) Balance at January 1 (beginning of year) $ 2,666 $ 3,555 $ 1,526 Warranties issued during the period 5,671 3,125 4,305 Settlements made during the period (2,603) (4,249) (2,672) Changes in estimate of liability for pre-existing warranties during the period (1,232) 235 396 Balance at December 31 (end of period) $ 4,502 $ 2,666 $ 3,555 Amount classified as current $ 4,112 $ 2,426 $ 3,363 Amount classified as long-term 390 240 192 Total warranty liability $ 4,502 $ 2,666 $ 3,555 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Employee Benefit Plans | |
Schedule of classification of liabilities in Consolidated Balance Sheets | Year ended December 31, 2017 2016 (in thousands) Current: Accrued compensation $ 967 $ 902 Total current liabilities $ 967 $ 902 Long-term: Other long-term liabilities 3,583 3,057 Total liabilities $ 4,550 $ 3,959 |
Stock Award Plans and Stock B35
Stock Award Plans and Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stock Award Plans and Stock Based Compensation | |
Schedule of estimated weighted-average assumptions used in calculation of fair value of options granted | Year ended December 31, 2017 2016 2015 Weighted-average expected volatility N/A 49.3% — 56.7% 56.2% — 64.7% Weighted-average expected term N/A 4.7 years 4.6 — 4.7 years Risk-free interest rate N/A 1.1% — 2.0% 1.3% — 1.6% Expected dividend yield N/A 0% 0% |
Summary of stock option activity | Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term Value (in thousands) (years) (in thousands) Outstanding at December 31, 2016 4,951 $ 7.29 Granted — — Exercised (2,358) Canceled (15) Expired (2) Outstanding at December 31, 2017 2,576 $ $ 53,571 Exercisable at December 31, 2017 2,008 $ $ 43,236 Options Vested or Expected to Vest at December 31, 2017(1) 2,555 $ $ 53,189 (1) In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest is calculated by applying an estimated forfeiture rate to the unvested options. |
Schedule of changes in the Company's non-vested restricted stock units | Weighted-Average Grant Date Fair Shares/units Value per Share (in thousands) Outstanding at December 31, 2016 548 $ 9.85 Granted 320 20.72 Vested (196) 11.32 Forfeited (55) 10.36 Outstanding at December 31, 2017 617 $ 14.93 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Schedule of Company's assets and liabilities by level within the fair value hierarchy | December 31, 2017 Fair Value Measurements Level 1 Level 2 Level 3 Total (in thousands) Assets Cash equivalents: Money market funds, U.S. Government Securities and Agency Investments $ 116,433 $ — $ — $ 116,433 December 31, 2016 Fair Value Measurements Level 1 Level 2 Level 3 Total (in thousands) Assets Cash equivalents: Money market funds $ 54,170 $ — $ — $ 54,170 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Schedule of future minimum lease commitments on non-cancelable operating leases | Future minimum lease commitments on non‑cancelable operating leases for the year ended December 31, 2017 are as follows: Operating Leases (in thousands) 2018 $ 2,915 2019 1,836 2020 894 2021 420 2022 202 Thereafter 39 $ 6,306 |
Cash payment schedule associated with lease obligation | The following table relates to the cash payment schedule associated with this lease obligation as of December 31, 2017: Lease Obligation (in thousands) 2018 $ 5,471 2019 5,594 2020 5,719 2021 5,848 2022 5,980 Thereafter 92,020 Total lease payments $ 120,632 Less interest portion (72,918) Sale leaseback obligation $ 47,714 |
Business Segment and Geograph38
Business Segment and Geographic Region Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Segment and Geographic Region Information | |
Schedule of revenue by product lines | Year ended December 31, 2017 2016 2015 (in thousands) Ion implantation systems and services $ 391,051 $ 248,885 $ 282,624 Other systems and services 19,510 18,095 18,871 Total revenue $ 410,561 $ 266,980 $ 301,495 |
Schedule of revenue and long-lived assets by geographic region | Long-Lived Revenue Assets (in thousands) 2017 United States $ 313,916 $ 56,089 Europe 26,936 — Asia Pacific 69,709 707 $ 410,561 $ 56,796 2016 United States $ 191,261 $ 52,006 Europe 25,436 — Asia Pacific 50,283 517 $ 266,980 $ 52,523 2015 United States $ 226,890 $ 41,729 Europe 24,209 — Asia Pacific 50,396 334 $ 301,495 $ 42,063 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Schedule of loss before income taxes | Year ended December 31, 2017 2016 2015 (in thousands) United States $ 40,752 $ 8,880 $ 12,708 Foreign 3,079 2,144 2,497 Income before income taxes $ 43,831 $ 11,024 $ 15,205 |
Schedule of provision for income taxes | Year ended December 31, 2017 2016 2015 (in thousands) Current: United States Federal $ 430 $ — $ — State 32 49 (33) Foreign 230 (217) 374 Total current 692 (168) 341 Deferred: Federal (82,048) — — State (1,698) — — Foreign (74) 191 186 Total deferred (83,820) 191 186 Income tax provision $ (83,128) $ 23 $ 527 |
Schedule of reconciliations of income taxes at the United States Federal statutory rate to the effective income tax rate | Year ended December 31, 2017 2016 2015 (in thousands) Income tax benefit at the United States statutory rate $ 15,341 $ 3,859 $ 5,322 State income taxes 203 32 (22) Unrecognized tax benefits (285) (615) (174) Effect of change in valuation allowance (115,831) (7,765) (5,676) Foreign income tax rate differentials (312) 233 600 Unremitted earnings of foreign subsidiaries (8,933) 305 (102) Stock options (10,342) 264 379 Credit expirations — 3,565 — Repatriation of foreign earnings 4,556 — — Recognition of equity NOL's (1,165) — — Rate change 42,531 — — Credit generation (8,778) — — Discrete items, net 31 — (540) Other, net (144) 145 740 Income tax provision $ (83,128) $ 23 $ 527 |
Schedule of significant components of current and long-term deferred income taxes | Year ended December 31, 2017 2016 Federal net operating loss carryforwards $ 56,646 $ 98,007 State net operating loss carryforwards 1,586 1,546 Foreign net operating loss carryforwards 758 673 Federal tax credit carryforwards 14,312 12,778 State tax credit carryforwards 6,908 2,566 Unremitted earnings of foreign subsidiaries (21) (8,913) Intangible assets 116 229 Property, plant and equipment 5,838 9,774 Accrued compensation 45 97 Inventories 3,798 5,230 Stock compensation 2,351 6,687 Warranty 980 930 Deferred revenue 187 — Other (3,220) (5,578) Deferred taxes, gross 90,284 124,026 Valuation allowance (7,136) (122,966) Deferred taxes, net $ 83,148 $ 1,060 |
Schedule of reconciliation of the beginning and ending balance of unrecognized tax benefits | 2017 2016 2015 (in thousands) Balance at beginning of year $ 6,844 $ 7,671 $ 7,960 Increase in unrecognized tax benefits as a result of tax positions taken during a prior period 81 76 (78) Decreases in unrecognized tax benefits related to settlements with tax authorities — — (211) Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitation (511) (903) — Increases in unrecognized tax benefits as a result of tax positions taken during the current period 2,691 — — Balance at end of year $ 9,105 $ 6,844 $ 7,671 Recorded as other long-term liability $ 1,109 $ 1,462 $ 2,142 Recorded as a decrease in deferred tax assets and offsetting valuation allowance 7,996 5,382 5,529 Balance at end of year $ 9,105 $ 6,844 $ 7,671 |
Quarterly Results of Operatio40
Quarterly Results of Operations (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Results of Operations (unaudited) | |
Schedule of quarterly results of operations | Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, 2017(1) 2017 2017 2017 2016 2016 2016 2016 (in thousands, except per share data) Revenue $ 116,396 $ 104,482 $ 102,790 $ 86,893 $ 69,358 $ 65,650 $ 64,451 $ 67,521 Gross profit 36,720 39,751 39,062 34,714 26,947 24,104 25,131 23,415 Net income 91,680 11,841 13,932 9,506 3,965 2,151 2,937 1,948 Net income per basic share $ 2.88 $ 0.38 $ 0.46 $ 0.32 $ 0.13 $ 0.07 $ 0.10 $ 0.07 Net income per diluted share $ 2.68 $ 0.35 $ 0.42 $ 0.29 $ 0.13 $ 0.07 $ 0.10 $ 0.06 (1) Gross profit includes $6.2 million charge to inventory reserves. Net income also includes an $81.6 million tax benefit relating to the reversal of a valuation allowance on deferred tax assets . |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Foreign Currency (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Foreign Currency | |||
Foreign exchange losses (gains) realized | $ 1.1 | $ (0.6) | $ 0 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Jan. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Impairment of Long-Lived Assets | ||||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 | |
Machinery and equipment | Minimum | ||||
Property, plant and equipment | ||||
Useful life | 7 years | |||
Machinery and equipment | Maximum | ||||
Property, plant and equipment | ||||
Useful life | 10 years | |||
Beverly Property Owner LLC | Sale leaseback obligation | Land and buildings | ||||
Property, plant and equipment | ||||
Lease term | 22 years |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Concentration of Risk (Details) - customer | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | Customer concentration risk | |||
Concentration of risk | |||
Number of customers | 2 | 1 | 2 |
Revenue | Customer concentration risk | Ten largest customers | |||
Concentration of risk | |||
Number of customers | 10 | 10 | 10 |
Percentage of concentration risk | 73.30% | 70.20% | 76.80% |
Revenue | Customer concentration risk | One customer | |||
Concentration of risk | |||
Percentage of concentration risk | 24.90% | 17.00% | 29.30% |
Revenue | Customer concentration risk | Second customer | |||
Concentration of risk | |||
Percentage of concentration risk | 13.10% | 10.50% | |
Consolidated accounts receivable | Credit concentration risk | |||
Concentration of risk | |||
Number of customers | 3 | 4 | |
Consolidated accounts receivable | Credit concentration risk | One customer | |||
Concentration of risk | |||
Percentage of concentration risk | 19.80% | 22.00% | |
Consolidated accounts receivable | Credit concentration risk | Second customer | |||
Concentration of risk | |||
Percentage of concentration risk | 11.80% | 12.30% | |
Consolidated accounts receivable | Credit concentration risk | Third customer | |||
Concentration of risk | |||
Percentage of concentration risk | 10.60% | 12.00% | |
Consolidated accounts receivable | Credit concentration risk | Fourth customer | |||
Concentration of risk | |||
Percentage of concentration risk | 10.60% |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue recognition | |||||||||||
Maximum deferral period from shipment for recognition of systems revenue and related costs | 12 months | ||||||||||
Anti-dilutive common equivalent shares excluded from calculation | 900 | 900 | |||||||||
Net income per share: | |||||||||||
Net income available to common stockholders | $ 91,680 | $ 11,841 | $ 13,932 | $ 9,506 | $ 3,965 | $ 2,151 | $ 2,937 | $ 1,948 | $ 126,959 | $ 11,001 | $ 14,678 |
Weighted average common shares outstanding used in computing basic income per share | 30,866 | 29,195 | 28,595 | ||||||||
Weighted average common shares used in computing diluted net income per share | 33,436 | 30,947 | 30,229 | ||||||||
Net income per share | |||||||||||
Basic | $ 2.88 | $ 0.38 | $ 0.46 | $ 0.32 | $ 0.13 | $ 0.07 | $ 0.10 | $ 0.07 | $ 4.11 | $ 0.38 | $ 0.51 |
Diluted | $ 2.68 | $ 0.35 | $ 0.42 | $ 0.29 | $ 0.13 | $ 0.07 | $ 0.10 | $ 0.06 | $ 3.80 | $ 0.36 | $ 0.49 |
Restricted Stock | |||||||||||
Net income per share: | |||||||||||
Incremental options and RSUs | 2,570 | 1,752 | 1,634 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Accumulated Other Comprehensive Income (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Changes in accumulated other comprehensive income, net of tax | |
Balance at December 31, 2016 | $ (2,279) |
Other comprehensive income and pension reclassification | 4,455 |
Balance at December 31, 2017 | 2,176 |
Foreign currency | |
Changes in accumulated other comprehensive income, net of tax | |
Balance at December 31, 2016 | (1,591) |
Other comprehensive income and pension reclassification | 4,347 |
Balance at December 31, 2017 | 2,756 |
Defined benefit pension plan | |
Changes in accumulated other comprehensive income, net of tax | |
Balance at December 31, 2016 | (688) |
Other comprehensive income and pension reclassification | 108 |
Balance at December 31, 2017 | $ (580) |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Recent Accounting Guidance (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 01, 2017 | |
Recent Accounting Guidance | ||||
Tax deductions in excess of recognized compensation cost | $ 29,500 | |||
Cash, cash equivalents and restricted cash balances | 7,473 | $ 6,864 | ||
Effect of Change | ||||
Recent Accounting Guidance | ||||
Increase to retained earnings | 1,600 | |||
ASU No. 2016-09 | ||||
Recent Accounting Guidance | ||||
Tax deductions in excess of recognized compensation cost | 29,500 | |||
Excess tax benefits of deferred tax assets | 10,300 | |||
Reduction in net cash provided by financing activities | $ 1,200 | $ 11 | $ 8 | |
ASU No. 2016-18 | ||||
Recent Accounting Guidance | ||||
Cash, cash equivalents and restricted cash balances | $ 6,900 |
Cash, cash equivalents and re47
Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Cash and cash equivalents | $ 133,407 | $ 70,791 | ||
Short-term and long-term restricted cash | 7,473 | 6,864 | ||
Total cash, cash equivalents and restricted cash | 140,880 | $ 77,655 | $ 85,825 | $ 31,578 |
Letter of credit related to workers' compensation insurance | 800 | |||
Letter of credit associated with a bank guarantee | 700 | |||
Deposit related to customs activity | 100 | |||
Revolving credit facility | ||||
Restricted cash which relates to support of outstanding letters of credit | 7,500 | |||
Revolving credit facility | Sale leaseback obligation | ||||
Letter of credit associated with security deposit for leaseback transaction | $ 5,900 |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts Receivable, net | ||
Trade receivables | $ 75,302 | $ 50,650 |
Allowance for doubtful accounts | (77) | |
Trade receivable, net | $ 75,302 | $ 50,573 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventories, net | ||
Raw materials | $ 82,313 | $ 80,503 |
Work in process | 31,651 | 14,117 |
Finished goods (completed systems) | 6,580 | 19,233 |
Inventories, net | $ 120,544 | $ 113,853 |
Inventories, net - Additional I
Inventories, net - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Inventories, net additional information | ||||
Inventory Write-down | $ 6.2 | $ 6.2 | ||
Charges to cost of sales due to lower of cost or market value | 8.1 | $ 0.8 | $ 0.5 | |
Inventory on consignment at customer locations | 3.6 | 3.6 | 3.4 | |
Inventory reserves | ||||
Inventories, net additional information | ||||
Increase in inventory reserves | 5.3 | |||
Inventory reserves | $ 14.2 | $ 14.2 | $ 8.8 |
Property, Plant and Equipment51
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, plant and equipment | |||
Gross | $ 94,719 | $ 86,968 | |
Accumulated depreciation | (58,551) | (56,128) | |
Net | 36,168 | 30,840 | |
Depreciation expense | 2,200 | 1,800 | $ 2,400 |
Land and buildings | |||
Property, plant and equipment | |||
Gross | 76,260 | 75,792 | |
Machinery and equipment | |||
Property, plant and equipment | |||
Gross | 11,477 | 9,472 | |
Construction in process | |||
Property, plant and equipment | |||
Gross | $ 6,982 | $ 1,704 |
Assets Manufactured for Inter52
Assets Manufactured for Internal Use, net - Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Assets manufactured for internal use | |||
Cost | $ 94,719 | $ 86,968 | |
Accumulated depreciation | (58,551) | (56,128) | |
Net | 36,168 | 30,840 | |
Depreciation expense | 2,200 | 1,800 | $ 2,400 |
Assets Manufactured for Internal Use | |||
Assets manufactured for internal use | |||
Cost | 40,667 | 44,521 | |
Accumulated depreciation | (20,035) | (22,838) | |
Net | 20,632 | 21,683 | |
Depreciation expense | 2,800 | 2,400 | $ 2,500 |
Assets Manufactured for Internal Use | Internal use assets | |||
Assets manufactured for internal use | |||
Cost | 40,366 | 42,776 | |
Assets Manufactured for Internal Use | Construction in process. | |||
Assets manufactured for internal use | |||
Cost | $ 301 | $ 1,745 |
Product Warranty (Details)
Product Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Product Warranty | ||||||
Product warranty period | 1 year | |||||
Changes in standard product warranty liability | ||||||
Balance at January 1 (beginning of year) | $ 2,666 | $ 3,555 | $ 1,526 | |||
Warranties issued during the period | 5,671 | 3,125 | 4,305 | |||
Settlements made during the period | (2,603) | (4,249) | (2,672) | |||
Changes in estimate of liability for pre-existing warranties during the period | (1,232) | 235 | 396 | |||
Balance at December 31 (end of period) | 4,502 | 2,666 | 3,555 | |||
Product warranty classification | ||||||
Amount classified as current | $ 4,112 | $ 2,426 | $ 3,363 | |||
Amount classified as long-term | 390 | 240 | 192 | |||
Total warranty liability | $ 2,666 | $ 3,555 | $ 1,526 | $ 4,502 | $ 2,666 | $ 3,555 |
Financing Arrangements (Details
Financing Arrangements (Details) - USD ($) $ in Thousands | Jan. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Arrangements | |||
Sale leaseback obligation | $ 47,714 | $ 47,586 | |
Beverly Property Owner LLC | Sale leaseback obligation | Land and buildings | |||
Financing Arrangements | |||
Purchase price | $ 48,900 | ||
Lease term | 22 years | ||
Sale leaseback obligation | $ 47,700 | ||
Security deposit | $ 5,900 |
Employee Benefit Plans - Define
Employee Benefit Plans - Defined Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan | |||
Employer contributed by eligible participants | 50.00% | 50.00% | |
Pre-tax compensation contributed | 6.00% | ||
Defined contribution plan expenses | $ 500 | $ 400 | $ 400 |
Maximum | |||
Defined Contribution Plan | |||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 1,200 | $ 1 | |
Regular employees | |||
Defined Contribution Plan | |||
Maximum contribution per employee under the Axcelis Long-Term Investment Plan (as a percent) | 35.00% | ||
Highly compensated employees | |||
Defined Contribution Plan | |||
Maximum contribution per employee under the Axcelis Long-Term Investment Plan (as a percent) | 16.00% |
Employee Benefit Plans - Other
Employee Benefit Plans - Other Compensation Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Classification of liabilities in the Consolidated Balance Sheets | |||
Current liabilities | $ 967 | $ 902 | |
Total liabilities | 4,550 | 3,959 | |
Plan expenses | 1,000 | 800 | $ 700 |
Accrued compensation | |||
Classification of liabilities in the Consolidated Balance Sheets | |||
Current liabilities | 967 | 902 | |
Other long-term liabilities | |||
Classification of liabilities in the Consolidated Balance Sheets | |||
Long-term liabilities | $ 3,583 | $ 3,057 |
Stock Award Plans and Stock B57
Stock Award Plans and Stock Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | 68 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | May 02, 2012 | |
Stock-based compensation | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||
Stock-Based Compensation Expense | |||||
Forfeiture rate (as a percent) | 5.00% | 5.00% | 5.00% | ||
Stock-based compensation expense | $ 5,700 | $ 5,200 | $ 5,600 | ||
Tax deductions in excess of recognized compensation cost | 29,500 | ||||
Tax benefit | $ 10,300 | ||||
Employee stock purchase plan | |||||
Stock-based compensation | |||||
Number of shares of common stock available for future grant | 300,000 | 300,000 | |||
Employee Stock Purchase Plan | |||||
Purchase price as a percentage of the market value of a common stock on the day the stock is purchased | 85.00% | ||||
Offering period over which compensation expense is amortized | 6 months | ||||
Stock-Based Compensation Expense | |||||
Stock-based compensation expense | $ 100 | $ 100 | $ 100 | ||
Employee stock purchase plan | Maximum | |||||
Employee Stock Purchase Plan | |||||
Payroll deductions as a percentage of employee's salary | 10.00% | ||||
Number of shares purchased under the plan | 100,000 | 100,000 | 100,000 | ||
Restricted stock and restricted stock units | |||||
Shares/units | |||||
Outstanding at the beginning of the period (in shares) | 548,000 | ||||
Granted (in shares) | 320,000 | ||||
Vested (in shares) | (196,000) | ||||
Forfeited (in shares) | (55,000) | ||||
Outstanding at the end of the period (in shares) | 617,000 | 548,000 | 617,000 | ||
Weighted-Average Grant Date Fair Value per Share | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 9.85 | ||||
Granted (in dollars per share) | 20.72 | $ 9.73 | $ 12.12 | ||
Vested (in dollars per share) | 11.32 | ||||
Forfeited (in dollars per share) | 10.36 | ||||
Outstanding at the end of the period (in dollars per share) | $ 14.93 | $ 9.85 | $ 14.93 | ||
Stock Options | |||||
Options | |||||
Outstanding at the beginning of the period (in shares) | 4,951,000 | ||||
Exercised (in shares) | (2,358,000) | ||||
Canceled (in shares) | (15,000) | ||||
Expired (in shares) | (2,000) | ||||
Outstanding at the end of the period (in shares) | 2,576,000 | 4,951,000 | 2,576,000 | ||
Exercisable (in shares) | 2,008,000 | 2,008,000 | |||
Options Vested or Expected to Vest at the end of the period (in shares) | 2,555,000 | 2,555,000 | |||
Weighted Average Exercise Price | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 7.29 | ||||
Exercised (in dollars per share) | 6.58 | ||||
Canceled (in dollars per share) | 10.24 | ||||
Expired (in dollars per share) | 21.32 | ||||
Outstanding at the end of the period (in dollars per share) | 7.91 | $ 7.29 | $ 7.91 | ||
Exercisable at the end of the period (in dollars per share) | 7.16 | 7.16 | |||
Options Vested or Expected to Vest at the end of the period (in dollars per share) | $ 7.88 | $ 7.88 | |||
Weighted Average Remaining Contractual Term | |||||
Outstanding at the end of the period | 3 years 2 months 16 days | ||||
Exercisable at the end of the period | 2 years 11 months 1 day | ||||
Options Vested or Expected to Vest at the end of the period | 3 years 3 months | ||||
Aggregate Intrinsic Value | |||||
Outstanding at the end of the period (in dollars) | $ 53,571 | $ 53,571 | |||
Exercisable at the end of the period (in dollars) | 43,236 | 43,236 | |||
Options Vested or Expected to Vest at the end of the period (in dollars) | 53,189 | 53,189 | |||
Additional disclosure | |||||
Total intrinsic value of options exercised (in dollars) | 39,700 | $ 2,500 | $ 5,300 | ||
Total fair value of stock options vested (in dollars) | 3,100 | $ 3,900 | $ 5,400 | ||
Weighted average grant fair value of options granted (in dollars per share) | $ 5.75 | $ 5.05 | |||
Total forfeiture adjusted unrecognized compensation cost (in dollars) | $ 2,300 | $ 2,300 | |||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 1 year 4 months 24 days | ||||
Stock Options | Employees | |||||
Stock-based compensation | |||||
Vesting period | 4 years | ||||
Period after termination to exercise awards that were vested | 90 days | ||||
Period after termination to retiring employees to exercise vested awards | 1 year | ||||
Stock Options | Non-employee members of Board of Directors | |||||
Stock-based compensation | |||||
Vesting period | 6 months | ||||
Restricted Stock | |||||
Shares/units | |||||
Granted (in shares) | 0 | 0 | 0 | ||
Vested (in shares) | 0 | 0 | 0 | ||
Stock Options and Restricted Stock Units | |||||
Estimated weighted-average assumptions | |||||
Weighted-average expected term | 4 years 8 months 12 days | ||||
Risk-free interest rate, minimum (as a percent) | 1.10% | 1.30% | |||
Risk-free interest rate, maximum (as a percent) | 2.00% | 1.60% | |||
Expected dividend yield (as a percent) | 0.00% | 0.00% | |||
Stock Options and Restricted Stock Units | Minimum | |||||
Estimated weighted-average assumptions | |||||
Weighted-average expected volatility (as a percent) | 49.30% | 56.20% | |||
Weighted-average expected term | 4 years 7 months 6 days | ||||
Stock Options and Restricted Stock Units | Maximum | |||||
Estimated weighted-average assumptions | |||||
Weighted-average expected volatility (as a percent) | 56.70% | 64.70% | |||
Weighted-average expected term | 4 years 8 months 12 days | ||||
2000 Stock Plan | |||||
Stock-based compensation | |||||
Awards granted (in shares) | 0 | ||||
Number of shares of common stock available for future grant | 0 | 0 | |||
2000 Stock Plan | Stock Options | |||||
Stock-based compensation | |||||
Expiration period | 10 years | ||||
2012 Equity Incentive Plan | |||||
Stock-based compensation | |||||
Number of shares of common stock originally reserved for future grant | 6,500,000 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Number of shares of common stock available for future grant | 1,300,000 | 1,300,000 | |||
2012 Equity Incentive Plan | Stock Options | |||||
Stock-based compensation | |||||
Expiration period | 7 years | ||||
2012 Equity Incentive Plan | Restricted Stock | |||||
Shares/units | |||||
Granted (in shares) | 0 | 0 | 0 | ||
2012 Equity Incentive Plan | Stock Options and Restricted Stock Units | |||||
Estimated weighted-average assumptions | |||||
Weighted-average expected term | 7 years |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - shares shares in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Stockholders' Equity | ||
Number of common stock authorized | 75,000 | 75,000 |
Number of common stock outstanding | 32,048 | 29,518 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Money market funds | Total | ||
Fair Value Measurements | ||
Money market funds | $ 54,170 | |
Money market funds, US Government Securities and Agency Investments | Total | ||
Fair Value Measurements | ||
Money market funds | $ 116,433 | |
Level 1 | Money market funds | ||
Fair Value Measurements | ||
Money market funds | $ 54,170 | |
Level 1 | Money market funds, US Government Securities and Agency Investments | ||
Fair Value Measurements | ||
Money market funds | $ 116,433 |
Commitments and Contingencies60
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Jan. 30, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Lease Commitments | ||||
Rental expense under operating leases | $ 3,900 | $ 3,800 | $ 3,800 | |
Future minimum lease commitments on non-cancelable operating leases | ||||
2,018 | 2,915 | |||
2,019 | 1,836 | |||
2,020 | 894 | |||
2,021 | 420 | |||
2,022 | 202 | |||
Thereafter | 39 | |||
Total | 6,306 | |||
Cash payment schedule associated with lease obligation | ||||
2,018 | 5,471 | |||
2,019 | 5,594 | |||
2,020 | 5,719 | |||
2,021 | 5,848 | |||
2,022 | 5,980 | |||
Thereafter | 92,020 | |||
Total lease payments | 120,632 | |||
Less interest portion | (72,918) | |||
Sales leaseback obligation | 47,714 | $ 47,586 | ||
Purchase Commitments | ||||
Non-cancelable contracts and purchase orders for inventory | 83,500 | |||
Sale leaseback obligation | Land and buildings | Beverly Property Owner LLC | ||||
Cash payment schedule associated with lease obligation | ||||
Sales leaseback obligation | $ 47,700 | |||
Purchase Commitments | ||||
Lease term | 22 years |
Business Segment and Geograph61
Business Segment and Geographic Region Information - Number of Segments (Details) | 12 Months Ended |
Dec. 31, 2017segment | |
Business Segment and Geographic Region Information | |
Number of business segments | 1 |
Business Segment and Geograph62
Business Segment and Geographic Region Information - Revenue by Product Line (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue by product lines | |||||||||||
Revenue | $ 116,396 | $ 104,482 | $ 102,790 | $ 86,893 | $ 69,358 | $ 65,650 | $ 64,451 | $ 67,521 | $ 410,561 | $ 266,980 | $ 301,495 |
Ion implantation systems services | |||||||||||
Revenue by product lines | |||||||||||
Revenue | 391,051 | 248,885 | 282,624 | ||||||||
Other systems and services | |||||||||||
Revenue by product lines | |||||||||||
Revenue | $ 19,510 | $ 18,095 | $ 18,871 |
Business Segment and Geograph63
Business Segment and Geographic Region Information - Revenue and Long-Lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue and long-lived assets by geographic region | |||||||||||
Revenue | $ 116,396 | $ 104,482 | $ 102,790 | $ 86,893 | $ 69,358 | $ 65,650 | $ 64,451 | $ 67,521 | $ 410,561 | $ 266,980 | $ 301,495 |
Long-Lived Assets | 56,796 | 52,523 | 56,796 | 52,523 | 42,063 | ||||||
United States. | |||||||||||
Revenue and long-lived assets by geographic region | |||||||||||
Revenue | 313,916 | 191,261 | 226,890 | ||||||||
Long-Lived Assets | 56,089 | 52,006 | 56,089 | 52,006 | 41,729 | ||||||
Europe | |||||||||||
Revenue and long-lived assets by geographic region | |||||||||||
Revenue | 26,936 | 25,436 | 24,209 | ||||||||
Asia Pacific | |||||||||||
Revenue and long-lived assets by geographic region | |||||||||||
Revenue | 69,709 | 50,283 | 50,396 | ||||||||
Long-Lived Assets | $ 707 | $ 517 | 707 | 517 | 334 | ||||||
International | Revenue | Geographic concentration risk | |||||||||||
Revenue and long-lived assets by geographic region | |||||||||||
Revenue | $ 348,500 | $ 213,800 | $ 256,500 | ||||||||
Percentage of revenue | 84.90% | 80.00% | 85.10% |
Income Taxes - Tax Effects (Det
Income Taxes - Tax Effects (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income (loss) before income taxes | |||
United States | $ 40,752 | $ 8,880 | $ 12,708 |
Foreign | 3,079 | 2,144 | 2,497 |
Income before income taxes | 43,831 | 11,024 | 15,205 |
Current: | |||
Federal | 430 | ||
State | 32 | 49 | (33) |
Foreign | 230 | (217) | 374 |
Total current | 692 | (168) | 341 |
Deferred: | |||
Federal | (82,048) | ||
State | (1,698) | ||
Foreign | (74) | 191 | 186 |
Total deferred | (83,820) | 191 | 186 |
Income tax provision | (83,128) | 23 | 527 |
Reconciliations of income taxes at the United States Federal statutory rate to the effective income tax rate | |||
Income tax benefit at the United States statutory rate | 15,341 | 3,859 | 5,322 |
State income taxes | 203 | 32 | (22) |
Unrecognized tax benefits | (285) | (615) | (174) |
Effect of change in valuation allowance | (115,831) | (7,765) | (5,676) |
Foreign income tax rate differentials | (312) | 233 | 600 |
Unremitted earnings of foreign subsidiaries | (8,933) | 305 | (102) |
Stock options | (10,342) | 264 | 379 |
Credit expirations | 3,565 | ||
Repatriation of foreign earnings | 4,556 | ||
Recognition of equity NOL's | (1,165) | ||
Rate change | 42,531 | ||
Credit generation | (8,778) | ||
Discrete items, net | 31 | (540) | |
Other, net | (144) | 145 | 740 |
Income tax provision | (83,128) | 23 | $ 527 |
Significant components of long-term deferred income taxes | |||
Federal net operating loss carryforwards | 56,646 | 98,007 | |
State net operating loss carryforwards | 1,586 | 1,546 | |
Foreign net operating loss carryforwards | 758 | 673 | |
Federal tax credit carryforwards | 14,312 | 12,778 | |
State tax credit carryforwards | 6,908 | 2,566 | |
Unremitted earnings of foreign subsidiaries | (21) | (8,913) | |
Intangible assets | 116 | 229 | |
Property, plant and equipment | 5,838 | 9,774 | |
Accrued compensation | 45 | 97 | |
Inventories | 3,798 | 5,230 | |
Stock compensation | 2,351 | 6,687 | |
Warranty | 980 | 930 | |
Deferred revenue | 187 | ||
Other | (3,220) | (5,578) | |
Deferred taxes, gross | 90,284 | 124,026 | |
Valuation allowance | (7,136) | (122,966) | |
Deferred taxes, net | $ 83,148 | $ 1,060 |
Income Taxes - Tax Cuts and Job
Income Taxes - Tax Cuts and Jobs Act (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Percentage of tax on earnings in the form of cash and cash equivalents | 15.50% | ||
Percentage of tax on earnings other than in the form of cash and cash equivalents | 8.00% | ||
Accrued income tax liabilities under the transition toll tax | $ 400 | ||
Transition toll tax, period | 8 years | ||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | ||
Deferred taxes, net | $ 83,148 | $ 1,060 | |
Forecast | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforwards (Details) $ in Millions | Dec. 31, 2017USD ($) |
Federal and state | |
Operating loss carryforwards | |
Net operating loss carryforwards | $ 298.9 |
Foreign | |
Operating loss carryforwards | |
Net operating loss carryforwards | $ 2.9 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Tax Credit Carryforward [Line Items] | ||
Reversal of tax reserve | $ 511 | $ 903 |
Interest and penalty expense recognized related to unrecognized tax benefits | 100 | |
Tax Reserve Member | ||
Tax Credit Carryforward [Line Items] | ||
Reversal of tax reserve | 300 | |
Unrecognized Tax Benefits Reserve Accrued Interest Member | ||
Tax Credit Carryforward [Line Items] | ||
Reversal of tax reserve | 200 | |
Research and development and other tax credit carryforwards | ||
Tax Credit Carryforward [Line Items] | ||
Tax credit carryforwards | $ 21,200 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of the beginning and ending balance of unrecognized tax benefits | ||||||
Balance at beginning of year | $ 6,844 | $ 7,671 | $ 7,960 | |||
Increase in unrecognized tax benefits as a result of tax positions taken during a prior period | 81 | 76 | ||||
Increase in unrecognized tax benefits as a result of tax positions taken during a prior period | (78) | |||||
Decreases in unrecognized tax benefits related to settlements with tax authorities | (211) | |||||
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations | (511) | (903) | ||||
Increases in unrecognized tax benefits as a result of tax positions taken during the current period | 2,691 | |||||
Balance at end of year | 9,105 | 6,844 | 7,671 | |||
Recorded as other long-term liability | $ 1,109 | $ 1,462 | $ 2,142 | |||
Recorded as a decrease in deferred tax assets and offsetting valuation allowance | 7,996 | 5,382 | 5,529 | |||
Unrecognized tax benefits | $ 6,844 | $ 7,671 | $ 7,960 | $ 9,105 | $ 6,844 | $ 7,671 |
Quarterly Results of Operatio69
Quarterly Results of Operations (unaudited) - Results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Results of Operations (unaudited) | |||||||||||
Revenue | $ 116,396 | $ 104,482 | $ 102,790 | $ 86,893 | $ 69,358 | $ 65,650 | $ 64,451 | $ 67,521 | $ 410,561 | $ 266,980 | $ 301,495 |
Gross profit | 36,720 | 39,751 | 39,062 | 34,714 | 26,947 | 24,104 | 25,131 | 23,415 | 150,247 | 99,598 | 101,706 |
Net income | $ 91,680 | $ 11,841 | $ 13,932 | $ 9,506 | $ 3,965 | $ 2,151 | $ 2,937 | $ 1,948 | $ 126,959 | $ 11,001 | $ 14,678 |
Net income per basic share (in dollars per share) | $ 2.88 | $ 0.38 | $ 0.46 | $ 0.32 | $ 0.13 | $ 0.07 | $ 0.10 | $ 0.07 | $ 4.11 | $ 0.38 | $ 0.51 |
Net income per diluted share (in dollars per share) | $ 2.68 | $ 0.35 | $ 0.42 | $ 0.29 | $ 0.13 | $ 0.07 | $ 0.10 | $ 0.06 | $ 3.80 | $ 0.36 | $ 0.49 |
Quarterly Results of Operatio70
Quarterly Results of Operations (unaudited) - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2017 | |
Quarterly Results of Operations (unaudited) | ||
Inventory Write-down | $ 6.2 | $ 6.2 |
Tax benefit relating to reversal of a valuation allowance on deferred tax assets | $ 81.6 |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for doubtful accounts and returns | |||
Changes in Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | $ 77 | $ 390 | |
Charged to Costs and Expenses | $ 106 | ||
Deductions | (77) | (29) | (390) |
Balance at End of Period | 77 | ||
Inventory reserves | |||
Changes in Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | 8,897 | 10,465 | 23,642 |
Charged to Costs and Expenses | 8,135 | 1,051 | 1,721 |
Deductions | (2,820) | (2,619) | (14,898) |
Balance at End of Period | $ 14,212 | $ 8,897 | $ 10,465 |