Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 04, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | AXCELIS TECHNOLOGIES INC | ||
Entity Central Index Key | 0001113232 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
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 | $ 640,157,087 | ||
Entity Common Stock, Shares Outstanding | 32,741,315 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | |||
Revenue | $ 442,575 | $ 410,561 | $ 266,980 |
Cost of revenue: | |||
Cost of revenue | 262,939 | 260,314 | 167,382 |
Gross profit | 179,636 | 150,247 | 99,598 |
Operating expenses: | |||
Research and development | 51,876 | 43,071 | 34,402 |
Sales and marketing | 34,608 | 28,532 | 23,839 |
General and administrative | 33,193 | 30,802 | 24,452 |
Restructuring charges | 282 | ||
Total operating expenses | 119,677 | 102,405 | 82,975 |
Income from operations | 59,959 | 47,842 | 16,623 |
Other (expense) income: | |||
Interest income | 2,328 | 714 | 238 |
Interest expense | (5,110) | (5,121) | (5,073) |
Other, net | (2,472) | 396 | (764) |
Total other expense | (5,254) | (4,011) | (5,599) |
Income before income taxes | 54,705 | 43,831 | 11,024 |
Income tax provision (benefit) | 8,820 | (83,128) | 23 |
Net income | $ 45,885 | $ 126,959 | $ 11,001 |
Net income per share: | |||
Basic (in dollars per share) | $ 1.42 | $ 4.11 | $ 0.38 |
Diluted (in dollars per share) | $ 1.35 | $ 3.80 | $ 0.36 |
Shares used in computing net income per share: | |||
Basic weighted average common shares | 32,286 | 30,866 | 29,195 |
Diluted weighted average common shares | 34,002 | 33,436 | 30,947 |
Product | |||
Revenue: | |||
Revenue | $ 415,922 | $ 387,124 | $ 244,295 |
Cost of revenue: | |||
Cost of revenue | 236,446 | 234,932 | 149,007 |
Services | |||
Revenue: | |||
Revenue | 26,653 | 23,437 | 22,685 |
Cost of revenue: | |||
Cost of revenue | $ 26,493 | $ 25,382 | $ 18,375 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Consolidated Statements of Comprehensive Income | |||
Net income | $ 45,885 | $ 126,959 | $ 11,001 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (1,794) | 4,347 | (847) |
Amortization of actuarial loss and other adjustments from pension plan | 66 | 108 | (1) |
Total other comprehensive (loss) income | (1,728) | 4,455 | (848) |
Comprehensive income | $ 44,157 | $ 131,414 | $ 10,153 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 177,993 | $ 133,407 |
Short-term restricted cash | 750 | |
Accounts receivable, net | 78,727 | 75,302 |
Inventories, net | 129,000 | 120,544 |
Prepaid expenses and other current assets | 11,051 | 9,772 |
Total current assets | 396,771 | 339,775 |
Property, plant and equipment, net | 41,149 | 36,168 |
Long-term restricted cash | 6,909 | 6,723 |
Deferred income taxes | 71,939 | 83,148 |
Other assets | 31,673 | 22,404 |
Total assets | 548,441 | 488,218 |
Current liabilities: | ||
Accounts payable | 35,955 | 32,642 |
Accrued compensation | 19,218 | 20,955 |
Warranty | 4,819 | 4,112 |
Income taxes | 462 | 273 |
Deferred revenue | 19,513 | 16,181 |
Other current liabilities | 5,030 | 5,124 |
Total current liabilities | 84,997 | 79,287 |
Sale leaseback obligation | 47,757 | 47,714 |
Long-term deferred revenue | 3,071 | 1,964 |
Other long-term liabilities | 4,279 | 5,643 |
Total liabilities | 140,104 | 134,608 |
Commitments and contingencies (Note 16) | ||
Stockholders' equity: | ||
Common stock, $0.001 par value, 75,000 shares authorized; 32,558 shares issued and outstanding at December 31, 2018; 32,048 shares issued and outstanding at December 31, 2017 | 33 | 32 |
Additional paid-in capital | 565,116 | 556,147 |
Accumulated deficit | (157,260) | (204,745) |
Accumulated other comprehensive income | 448 | 2,176 |
Total stockholders' equity | 408,337 | 353,610 |
Total liabilities and stockholders' equity | $ 548,441 | $ 488,218 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
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 | 32,558 | 32,048 |
Common stock, shares outstanding | 32,558 | 32,048 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total |
Balance (in shares) at Dec. 31, 2015 | 29,026 | |||||
Balance at Dec. 31, 2015 | $ 29 | $ 529,089 | $ (1,218) | $ (342,705) | $ (1,431) | $ 183,764 |
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 (in shares) | 392 | |||||
Exercise of stock options | $ 1 | 2,237 | 2,238 | |||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 22 | |||||
Issuance of shares under Employee Stock Purchase Plan | 325 | 325 | ||||
Issuance of restricted common shares (in shares) | 108 | |||||
Issuance of restricted common shares | (11) | (11) | ||||
Treasury shares returned to authorized (in shares) | (30) | |||||
Treasury shares returned to authorized | (1,218) | $ 1,218 | ||||
Reverse stock split issuance costs | (145) | (145) | ||||
Stock-based compensation expense | 5,131 | 5,131 | ||||
Balance (in shares) at Dec. 31, 2016 | 29,518 | |||||
Balance at Dec. 31, 2016 | $ 30 | 535,408 | (331,704) | (2,279) | 201,455 | |
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 (in shares) | 2,358 | |||||
Exercise of stock options | $ 2 | 15,512 | 15,514 | |||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 34 | |||||
Issuance of shares under Employee Stock Purchase Plan | 845 | 845 | ||||
Issuance of restricted common shares (in shares) | 138 | |||||
Issuance of restricted common shares | (1,164) | (1,164) | ||||
Stock-based compensation expense | 5,546 | 5,546 | ||||
Balance (in shares) at Dec. 31, 2017 | 32,048 | |||||
Balance at Dec. 31, 2017 | $ 32 | 556,147 | (204,745) | 2,176 | 353,610 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 45,885 | 45,885 | ||||
Foreign currency translation adjustments | (1,794) | (1,794) | ||||
Change in pension obligation | 66 | 66 | ||||
Exercise of stock options (in shares) | 273 | |||||
Exercise of stock options | $ 1 | 1,733 | 1,734 | |||
Issuance of shares under Employee Stock Purchase Plan (in shares) | 55 | |||||
Issuance of shares under Employee Stock Purchase Plan | 1,025 | 1,025 | ||||
Issuance of restricted common shares (in shares) | 182 | |||||
Issuance of restricted common shares | (1,419) | (1,419) | ||||
Stock-based compensation expense | 7,630 | 7,630 | ||||
Balance (in shares) at Dec. 31, 2018 | 32,558 | |||||
Balance at Dec. 31, 2018 | $ 33 | $ 565,116 | (157,260) | $ 448 | 408,337 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Adjustment to Retained Earnings upon ASC 606 Adoption | $ 1,600 | $ 1,600 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net income | $ 45,885 | $ 126,959 | $ 11,001 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 5,772 | 5,002 | 4,258 |
Gain on sale of equipment | (248) | ||
Deferred income taxes | 11,209 | (82,085) | 519 |
Stock-based compensation expense | 7,784 | 5,672 | 5,179 |
Provision for doubtful accounts | 106 | ||
Provision for excess and obsolete inventory | 2,205 | 8,135 | 1,051 |
Changes in operating assets & liabilities: | |||
Accounts receivable | (3,877) | (23,573) | (14,135) |
Inventories | (10,512) | (10,567) | (6,572) |
Prepaid expenses and other current assets | (1,436) | (3,866) | (1,056) |
Accounts payable and other current liabilities | (703) | 25,000 | 810 |
Deferred revenue | 6,055 | 7,079 | 2,467 |
Income taxes | 196 | 14 | 102 |
Other assets and liabilities | (15,613) | (1,486) | (12,270) |
Net cash provided by (used in) operating activities | 46,965 | 56,284 | (8,788) |
Cash flows from investing activities | |||
Proceeds from sale of equipment | 270 | ||
Expenditures for property, plant and equipment and capitalized software | (4,715) | (7,285) | (2,506) |
Net cash used in investing activities | (4,715) | (7,285) | (2,236) |
Cash flows from financing activities | |||
Net settlement on restricted stock grants | (1,419) | (1,184) | (11) |
Financing fees and other expenses | (146) | ||
Proceeds from Employee Stock Purchase Plan | 871 | 739 | 277 |
Proceeds from exercise of stock options | 1,734 | 15,515 | 2,227 |
Net cash provided by financing activities | 1,186 | 15,070 | 2,347 |
Effect of exchange rate changes on cash and cash equivalents | 586 | (844) | 507 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 44,022 | 63,225 | (8,170) |
Cash, cash equivalents and restricted cash at beginning of period | 140,880 | 77,655 | 85,825 |
Cash, cash equivalents and restricted cash at end of period | 184,902 | 140,880 | 77,655 |
Supplemental disclosure of cash flow information | |||
Income taxes | 858 | 583 | 525 |
Interest | $ 5,470 | $ 5,315 | $ 4,815 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2018 | |
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, we provide 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, 2018 | |
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. Events occurring subsequent to December 31, 2018 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, we evaluate our 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, 2018 we had $1.3 million in foreign exchange loss. For the year ended December 31, 2017 we had $1.1 million in foreign exchange gains. For the year ended December 31, 2016 we had $0.6 million in foreign exchange 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. We periodically review our inventories and make 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. We record a provision for estimated excess inventory. The provision 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, we sold our corporate headquarters facility. As part of this sale, we also entered into a 22-year lease agreement. We accounted for the sale leaseback transaction as a financing arrangement for financial reporting purposes. We retained the historical costs of the property and the related accumulated depreciation on our 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 We record 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. We did not have any indicators of impairment during the period ending December 31, 2018. We did not record an impairment charge in the years ended December 31, 2018, 2017, or 2016. 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 our relationships with significant customers. (h) Concentration of Risk and Off‑Balance Sheet Risk Financial instruments that potentially subject us to concentrations of credit risk are principally cash equivalents and accounts receivable. Our cash equivalents are principally maintained in investment grade money‑market funds, U.S. Government and Agency Securities and deposit accounts. We have no significant off‑balance‑sheet risk such as currency exchange contracts, option contracts or other hedging arrangements. Our exposure to market risk for changes in interest rates relates primarily to cash equivalents. The primary objective of our investment activities is to preserve principal without significantly increasing risk. This is accomplished by investing in marketable investment grade securities. We do not use derivative financial instruments to manage our investment portfolio and do not expect operating results or cash flows to be affected to any significant degree by any change in market interest rates. We perform ongoing credit evaluations of our customers’ financial condition and generally requires no collateral to secure accounts receivable. For selected overseas sales, we require customers to obtain letters of credit before product is shipped. We maintain an allowance for doubtful accounts based on our assessment of the collectability of accounts receivable. We review the allowance for doubtful accounts quarterly. We do not have any off‑balance sheet credit exposure related to our customers. Our customers consist of semiconductor chip manufacturers located throughout the world and net sales to our ten largest customers accounted for 76.9%, 73.3% and 70.2% of revenue in 2018, 2017 and 2016, respectively. For the year ended December 31, 2018, we had two customers representing 20.1% and 12.1% of total revenue, respectively. For the year ended December 31, 2017 we had two customers representing 24.9% and 13.1% of total revenue, respectively. For the year ended December 31, 2016, we had one customer representing 17.0% of total revenue. As of December 31, 2018, we had two customers account for 21.9% and 11.5% of consolidated accounts receivable, respectively. As of December 31, 2017, we had three customers account for 19.8%, 11.8% and 10.6% of consolidated accounts receivable, respectively. Some of the components and sub‑assemblies included in our products are obtained either from a sole source or a limited group of suppliers. Disruption to our supply source, resulting either from economic conditions or other factors, could affect our ability to deliver products to our customers. (i) Revenue Recognition Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers or (“ASC 606”), revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We measure revenue based on the consideration specified in the customer arrangement, and revenue is recognized when the performance obligations in the customer arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. The transaction price of a contract is allocated to each distinct performance obligation based upon the relative standalone selling price for each performance obligation and recognized as revenue when or as, the customer receives the benefit of the performance obligation. To account for and measure revenue, we apply the following five steps: 1) Identify the contract with the customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other available resources, and are distinct in the context of the contract, whereby the transfer of the good or service is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods and services, we must apply judgment to determine whether promised goods and services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. Systems sales consist of multiple performance obligations, including the system itself and obligations that are not delivered simultaneously with the system. These undelivered obligations might include a combination of installation services, extended warranty and support and spare parts, all of which are generally covered by a single sales price. The aftermarket business includes both products and services type arrangements. Performance obligations in these contracts consist of used tools, spare parts, equipment upgrades, maintenance services and customer training. Customers who purchase new systems are provided an assurance-type warranty for one year after acceptance of the tool. For aftermarket transactions, we provide customers an assurance-type warranty for 90 days. Customers can choose to purchase extended warranty terms with enhanced support similar to a service-type warranty ranging from one to three years. In accordance with ASC 606, assurance-type warranties are not considered a performance obligation, whereas service-type warranties are. 3) Determine the transaction price The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods and services to the customer. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period for any changes. In applying this guidance, Companies must also consider whether any significant financing components exist. The transaction price for all transactions is based on the price reflected in the individual customer’s purchase order. Variable consideration has not been identified as a significant component of the transaction price for any of our transactions. For those transactions where all performance obligations will be satisfied within one year or less, we apply the practical expedient outlined in ASC 606-10-32-18. This practical expedient allows us not to adjust promised consideration for the effects of a significant financing component if we expect at contract inception that the period between when we transfer the promised good or service to a customer and when the customer pays for that good or service will be one year or less. For those transactions that are expected to be completed after one year, we have assessed that there are no significant financing components because any difference between the promised consideration and the cash selling price of the good or service is for reasons other than the provision of financing. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. Where required, we determine standalone selling price (SSP) for each obligation based on consideration of both market and Company specific factors, including the selling price and profit margin for similar products, the cost to produce, and the anticipated margin. For those contracts that contain multiple performance obligations (primarily systems sales, as well as some aftermarket contracts requiring both time and material inputs), we must determine the SSP. We use a cost plus margin approach in determining the SSP for any materials related performance obligations (such as upgrades, spare parts, systems). To determine the SSP for labor related performance obligations (such as the labor component of installation), we use directly observable inputs based on the standalone sale prices for these services. 5) Recognize revenue when or as we have satisfied a performance obligation We satisfy performance obligations either over time or at a point in time. Revenue is recognized over time if either 1) the customer simultaneously receives and consumes the benefits provided by the entity’s performance, 2) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or 3) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. If the entity does not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer. Examples of control are using the asset to produce goods or services, enhance the value of other assets or settle liabilities, and holding or selling the asset. For over time recognition, ASC 606 requires us to select a single revenue recognition method for the performance obligation that faithfully depicts our performance in transferring control of the goods and services. The guidance allows entities to choose between two methods to measure progress toward complete satisfaction of a performance obligation: Output methods - recognize revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract (e.g. surveys of performance completed to date, appraisals of results achieved, milestones reached, time elapsed, and units produced or units delivered); and Input methods - recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation. We have the right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date (i.e. certain aftermarket contracts), as such we have elected a practical expedient to recognize revenue in the amount to which the entity has a right to invoice for such services. Product related revenues (whether for systems or aftermarket business) are recognized at a point in time, when they are shipped or delivered, depending on shipping terms. For installation services, revenue is recognized at a point in time, once the installation of the tool is complete. The nature of the installation services are such that the customer does not simultaneously receive and consume the benefits provided by the entity’s performance, nor does performance of installation services create or enhance an asset that the customer controls. Installation services do not create an asset with an alternative use to the entity, and the entity does not have an enforceable right to payment for performance completed to date. Contract liabilities are reflected as deferred revenue on the consolidated balance sheet. Contract liabilities relate to payments invoiced or received in advance of completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations. Service-type warranties for any product are recognized over time, as these represent a stand ready obligation to service the product during the warranty period. Progress in the satisfaction of these performance obligations will be measured using an input method of time elapsed. Maintenance and service contracts are recognized over time. Progress in the satisfaction of these performance obligations will be measured using an input method of either time elapsed in the case of fixed period contracts, or labor hours expended, in the case of project based contracts. (j) Recognizing Assets related to Recoverable Customer Contract Costs We recognize an asset related to incremental costs incurred by us to obtain a contract with a customer if we expect to recover those costs. We will recognize an asset from costs incurred to fulfill a contract only if such costs relate directly to a contract with an entity that we can specifically identify, the costs incurred will generate or enhance resources that will be used in satisfying performance obligations in the future, and the costs are expected to be recovered. Any assets recognized related to costs to obtain or fulfill a contract are amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. In substantially all of our business transactions, we incur incremental costs to obtain contracts with customers, in the form of sales commissions. We maintain a commission program which awards our employees for System sales, aftermarket activity and other individual goals. Under ASC 606, an asset is amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. However, ASC 606 provides a practical expedient to allow for the recognition of commission expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Based on the nature of our commission agreements, all commissions are expensed as incurred based upon the expectation that the amortization period would be one year or less. (k) Shipping and Handling Costs Shipping and handling costs are included in cost of revenue. (l) Stock‑Based Compensation We generally recognize 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. For stock option awards, we use 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 our 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 13 for additional information relating to stock‑based compensation. (m) Income Taxes We record 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. Our 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. We establish 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 our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against those net deferred tax assets. We evaluate 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. We recognize accrued interest related to unrecognized tax benefits as interest expense and penalties within operating expense in the consolidated statements of operations. (n) 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, 2018 2017 2016 (in thousands, except per share data) Net income available to common stockholders $ 45,885 $ 126,959 $ 11,001 Weighted average common shares outstanding used in computing basic income per share 32,286 30,866 29,195 Incremental options and RSUs 1,716 2,570 1,752 Weighted average common shares used in computing diluted net income per share 34,002 33,436 30,947 Net income per share Basic $ 1.42 $ 4.11 $ 0.38 Diluted $ 1.35 $ 3.80 $ 0.36 Diluted weighted average common shares outstanding does not include options and restricted stock units outstanding to purchase 0.9 million common equivalent shares for the periods ended December 31, 2016, as their effect would have been anti-dilutive. (o) 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, 2018: Foreign Defined benefit currency pension plan Total (in thousands) Balance at December 31, 2017 $ 2,756 $ (580) $ 2,176 Other comprehensive income and pension reclassification (1,794) 66 (1,728) Balance at December 31, 2018 $ 962 $ (514) $ 448 (p) Recent Accounting Guidance i. Accounting Standard Codification 606 on Revenue Recognition Adopted January 1, 2018 Effective January 1, 2018, we adopted FASB ASC Topic 606, Revenue from Contracts with Customers , or ASC 606. In accordance with ASC 606, we changed certain characteristics of our revenue recognition accounting policy as described below. On adoption, ASC 606 was applied only to open contracts using the modified retrospective method, where the cumulative effect of the initial application is recognized as an adjustment to opening retained earnings at January 1, 2018. Therefore, comparative prior periods have not been adjusted and continue to be reported under FASB ASC Topic 605, Revenue Recognition , or ASC 605. The impact of adoption on our consolidated statement of operations for the twelve months ended December 31, 2018 and consolidated balance sheet as of December 31, 2018 was as follows (in thousands): Twelve months ended December 31, 2018 Consolidated Statement of Operations As Reported ASC 606 Pro Forma Under ASC 605 Revenue: Product $ 415,922 $ (1,023) $ 414,899 Total revenue 442,575 (1,023) 441,552 Gross profit 179,636 (1,023) 178,613 Income from operations 59,959 (1,023) 58,936 Income before income taxes 54,705 (1,023) 53,682 Income tax provision 8,820 (165) 8,655 Net income $ 45,885 $ (858) $ 45,027 Net income per share: Basic $ 1.42 $ (0.03) $ 1.39 Diluted $ 1.35 $ (0.03) $ 1.32 December 31, 2018 Consolidated Balance Sheet As Reported ASC 606 Pro Forma Under ASC 605 Deferred income taxes $ 71,939 $ 165 $ 72,104 Total assets $ 548,441 $ 165 $ 548,606 Deferred revenue $ 22,584 $ 2,623 $ 25,207 Total current liabilities 84,997 2,623 87,620 Total liabilities 140,104 2,623 142,727 Accumulated deficit (157,260) (2,458) (159,718) Total stockholders' equity 408,337 (2,458) 405,879 Total liabilities and stockholders' equity $ 548,441 $ 165 $ 548,606 The impact of the adoption of ASC 606 on consolidated statements of comprehensive income and cash flows for the twelve months ended December 31, 2018 was not material. Upon adoption of ASC 606, we changed our accounting policy for the installation performance obligation included in all system sales. Previously under ASC 605, we deferred revenue for the greater of the fair value of the installation or the portion of contract consideration for which collection was contingent upon installation completion (the “retention”). The concept of contingent consideration is no longer relevant under ASC 606 and therefore we will only defer the portion of the transaction price allocated to the installation performance obligation. As a result of this change, we recorded a cumulative effect adjustment to increase retained earnings and decrease deferred revenue on January 1, 2018 by $1.6 million. Since the adoption, all new contracts are accounted for under ASC 606. Our revenue recognition policies addressing the nature, amount and timing of revenue and cash flows arising from contracts with customers are included in section (i) of Note 2, Summary of Significant Accounting Policies. ii. Accounting Standard Update 2016-15 on Cash Receipts Adopted January 1, 2018 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 relating to specific cash flow 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, and is to be applied retrospectively for each period presented. Adoption of ASU 2016-15 had no material effect on our consolidated financial statements and disclosures. iii. Accounting Standard Update 2017-07 on Retirement Benefits Adopted January 1, 2018 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. Adoption of ASU 2017-07 had no material effect on the consolidated financial statements and disclosures. iv. Accounting Standard Update 2016-02 on Leases to be Effective January 1, 2019 In February 2016, the FASB issued ASU No. 2016-02 “Leases.” 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. In July 2018, the FASB issued ASU No. 2018-11 “Leases (Topic 842)” , that provides targeted improvements relating to the transition method options with which to adopt the new standard. Under this additional and optional transition method, an entity initially applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. An entity that elects this transition method must provide the required Topic 840 disclosures for all periods that continue to be in accordance with Topic 840. We will elect the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. We will make an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will use the transition method allowed under ASU 2018-11. We are currently finalizing our implementation of procedures regarding reporting and disclosure controls. We anticipate adopting the new standard on January 1, 2019 using the modified retrospective approach under the ASU 2018-11 transition method with the primary effect to be the recognition of additional right-of-use assets and corresponding li |
Correction of Accounting Error
Correction of Accounting Error in Prior Period | 12 Months Ended |
Dec. 31, 2018 | |
Correction of Accounting Error in Prior Period | |
Correction of Accounting Error in Prior Period | Note 3. Correction of an Accounting Error in a Prior Period Subsequent to the filing of our 2017 Annual Report on Form 10-K, in April 2018, an error was discovered in the consolidated statement of cash flow for the year ended December 31, 2017. The error had no impact upon our consolidated statement of operations or consolidated balance sheet. This error resulted in presenting the provision for excess and obsolete inventory as a cash outflow, rather than a cash inflow, with a corresponding and offsetting error in the disclosed effect on cash for the change in inventories. The following financial statement line items reported in our consolidated statement of cash flow for the year ended December 31, 2017 were affected by the correction of this error: As Reported As Adjusted Total Adjustment (in thousands) December 31, 2017 December 31, 2017 December 31, 2017 Provision for excess and obsolete inventory $ (8,135) $ 8,135 $ 16,270 Change in inventories $ 5,703 $ (10,567) $ (16,270) Net cash provided by (used in) operating activities $ 56,284 $ 56,284 $ - |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Revenue | Note 4. Revenue We design, manufacture and service ion implantation and other processing equipment used in the fabrication of semiconductor chips and sell our products to leading semiconductor chip manufacturers worldwide. We offer a complete line of high energy, high current and medium current implanters for all application requirements. In addition, we provide extensive aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance service and customer training. Our revenue recognition policies are set forth in Section (i) of Note 2, Summary of Significant Accounting Policies. (a) Alternative Operational Revenue Categories used by Management To reflect the organization of our business operations, management reviews revenue in two categories: revenue from sales of new systems and revenue arising from the sale of used systems, parts and labor to customers who own systems, which we refer to as “aftermarket.” Below are the revenues by categories used by management for the periods covered in this report: Year ended December 31, 2018* 2017 2016 (in thousands) Systems $ $ $ Aftermarket 162,187 147,873 127,696 $ $ $ *The impact upon adoption of ASC 606 was an increase to systems revenue of $1.0 million twelve month period ended December 31, 2018. Please refer to Note 2 for additional discussion of ASC 606 adoption impact on revenue amounts and comparable revenue figures. The increase in revenue in the twelve month period ended December 31, 2018, in comparison to the twelve month period ended December 31, 2017, is attributable to an increase in sales of our Purion products and aftermarket business. (b) Economic Factors Affecting our Revenue: Geographic Breakdown of Revenue Global economic conditions have a direct impact on our revenue. We are substantially dependent on sales of our products and services to customers outside the United States. Adverse economic conditions, political instability, potential adverse tax consequences and volatility in exchange rates pose a risk that our clients may reduce, postpone or cancel spending for our products and services, which would impact our revenue. Revenue by geographic markets is determined based upon the location to which our products are shipped and where our services are performed. Revenue in our principal geographic markets is as follows: Year ended December 31, 2018* 2017 2016 (in thousands) North America $ $ $ Asia Pacific Europe $ $ $ * The impact upon adoption of ASC 606 for the twelve months ended December 31, 2018 was primarily an increase in revenue to Asia of $1.3 million, partially offset by a decline to North America of $0.2 million. Please refer to Note 2 for additional discussion of ASC 606 adoption impact on revenue amounts and comparable revenue figures. (c) Recognition of Deferred Revenue from Contract Liabilities Contract assets and contract liabilities are as follows: December 31, December 31, 2018 2017 (in thousands) Contract assets $ — $ — Contract liabilities $ 22,584 $ 18,145 Year ended December 31, 2018 2017 Revenue recognized in the period from: Amounts included in contract liability at the beginning of the period $ 12,845 $ 9,522 Performance obligations satisfied in previous periods $ — $ — Contract liabilities are reflected as deferred revenue on the consolidated balance sheet. Contract liabilities relate to payments invoiced or received in advance of completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations. The increase in contract liabilities of $4.4 million from December 31, 2017 to December 31, 2018 is primarily due to the timing of system acceptances, offset by the reclassification of $1.6 million relating to our adoption of ASC 606 into retained earnings. The majority of our system transactions have payment terms that are 90% due upon shipment of the tool and 10% due upon installation. Aftermarket transaction payment terms are such that payment is due either within 30 or 60 days of service provided or delivery of parts. As of December 31, 2018, we had deferred revenue of $22.6 million. This represents the portion of the transaction price for contracts with customers allocated to the performance obligations that remain unsatisfied or partially unsatisfied. Short-term deferred revenue of $19.5 million represents performance obligations that will be satisfied within the next 12 months. This amount relates primarily to installation and non-standard warranty performance obligations for system sales. Long-term deferred revenue of $3.1 million relates primarily to unsatisfied extended warranty performance obligations that we expect to be satisfied within the next 24 months. |
Cash, cash equivalents and rest
Cash, cash equivalents and restricted cash | 12 Months Ended |
Dec. 31, 2018 | |
Cash, cash equivalents and restricted cash | |
Cash, cash equivalents and restricted cash | Note 5. Cash, cash equivalents and restricted cash December 31, 2018 2017 (in thousands) Cash and cash equivalents $ $ Short-term and long-term restricted cash Total cash, cash equivalents and restricted cash $ $ As of December 31, 2018, we had $6.9 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 $0.1 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, 2018 | |
Accounts Receivable, net | |
Accounts Receivable, net | Note 6. Accounts Receivable, net The components of accounts receivable are as follows: December 31, 2018 2017 (in thousands) Trade receivables $ 78,727 $ 75,302 Allowance for doubtful accounts — — Trade receivables, net $ 78,727 $ 75,302 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 allowance may be necessary. |
Inventories, net
Inventories, net | 12 Months Ended |
Dec. 31, 2018 | |
Inventories, net | |
Inventories, net | Note 7. Inventories, net The components of inventories are as follows: December 31, 2018 2017 (in thousands) Raw materials $ 91,875 $ 82,313 Work in process 23,857 31,651 Finished goods (completed systems) 13,268 6,580 Inventories, net $ 129,000 $ 120,544 When recorded, inventory reserves are intended to reduce the carrying value of inventories to their net realizable value. We establish 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 our products or market conditions. We regularly evaluate 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 2018, we recorded a net decrease of $0.3 million in inventory reserves. As of December 31, 2018 and 2017, inventories are stated net of inventory reserves of $13.9 million and $14.2 million respectively. During each of the years ended 2018, 2017 and 2016, we recorded charges to cost of sales of $2.2 million, $8.1 million and $0.8 million to reflect the lower of cost or net realizable value. We have inventory on consignment at customer locations as of December 31, 2018 and 2017, of $4.6 million and $3.6 million, respectively. |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment, net | |
Property, Plant and Equipment, net | Note 8. Property, Plant and Equipment, net The components of property, plant and equipment are as follows: December 31, 2018 2017 (in thousands) Land and buildings $ 75,904 $ 76,260 Machinery and equipment 19,982 11,477 Construction in process 6,366 6,982 Total cost 102,252 94,719 Accumulated depreciation (61,103) (58,551) Property, plant and equipment, net $ 41,149 $ 36,168 Depreciation expense was $3.2 million, $2.2 million and $1.8 million for the years ended December 31, 2018, 2017 and 2016, respectively. |
Assets Manufactured for Interna
Assets Manufactured for Internal Use, net | 12 Months Ended |
Dec. 31, 2018 | |
Assets Manufactured for Internal Use, net | |
Assets Manufactured for Internal Use, net | Note 9. Assets Manufactured for Internal Use, net Assets manufactured for internal use, included in other assets, are depreciated using the straight-line method over their 10 year estimated useful life. Their components are as follows: December 31, 2018 2017 (in thousands) Internal use assets $ 47,509 $ 40,366 Construction in process 1,609 301 Total cost 49,118 40,667 Accumulated depreciation (19,285) (20,035) Assets manufactured for internal use, net $ 29,833 $ 20,632 These products are used for research and development, training, and customer demonstration purposes. Depreciation expense was $2.6 million, $2.8 million and $2.4 million for the years ended December 31, 2018, 2017 and 2016, respectively. |
Product Warranty
Product Warranty | 12 Months Ended |
Dec. 31, 2018 | |
Product Warranty | |
Product Warranty | Note 10. Product Warranty We generally offer a one year warranty for all of our systems, the terms and conditions of which vary depending upon the product sold. For all systems sold, we accrue a liability for the estimated cost of standard warranty at the time of system shipment and defer 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 our warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs. We periodically assess the adequacy of our recorded liability and adjusts the amount as necessary. The changes in our product warranty liability are as follows: Year ended December 31, 2018 2017 2016 (in thousands) Balance at January 1 (beginning of year) $ 4,502 $ 2,666 $ 3,555 Warranties issued during the period 5,421 5,671 3,125 Settlements made during the period (5,903) (2,603) (4,249) Changes in estimate of liability for pre-existing warranties during the period 1,071 (1,232) 235 Balance at December 31 (end of period) $ 5,091 $ 4,502 $ 2,666 Amount classified as current $ 4,819 $ 4,112 $ 2,426 Amount classified as long-term 272 390 240 Total warranty liability $ 5,091 $ 4,502 $ 2,666 |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Dec. 31, 2018 | |
Financing Arrangements | |
Financing Arrangements | Note 11. Financing Arrangements Sale Leaseback Obligation On January 30, 2015, we sold our corporate headquarters facility for the sale price of $48.9 million. As part of the sale, we 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, we recorded a financing obligation of $47.8 million as of December 31, 2018. 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. We 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, 2018 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 12. Employee Benefit Plans (a) Defined Contribution Plan We maintain the Axcelis Long-Term Investment Plan, a defined contribution plan. Eligible employees 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, we 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, we 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, we increased the matching contribution to 50% of employees’ pre-tax contributions on the first 6% of eligible compensation contributed to the plan. Total related matching contribution expense was $1.6 million, $1.2 million and $0.5 million, for 2018, 2017 and 2016, respectively. (b) Other Compensation Plans We operate 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. We have recorded an unfunded liability of $4.3 million and $4.6 million at December 31, 2018 and 2017, 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, 2018 2017 (in thousands) Current: Accrued compensation $ 973 $ 967 Total current liabilities $ 973 $ 967 Long-term: Other long-term liabilities 3,327 3,583 Total liabilities $ 4,300 $ 4,550 The expense recorded in connection with these plans was $1.3 million, $1.0 million and $0.8 million during the years ended December 31, 2018, 2017 and 2016, respectively. |
Stock Award Plans and Stock Bas
Stock Award Plans and Stock Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Stock Award Plans and Stock Based Compensation | |
Stock Award Plans and Stock Based Compensation | Note 13. Stock Award Plans and Stock Based Compensation (a) Equity Incentive Plans We maintain 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. The 2012 Equity Plan includes shares specifically approved by the stockholders of the Company. Shares that are not issued under an award (because such award expires, is terminated unexercised or is forfeited) revert back to the Plan. The reserve under the Plan is also increased by expirations and forfeitures of awards outstanding under the 2000 Stock Plan as of 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 2018 had both service-based vesting provisions and performance-based vesting provisions. Restricted stock units granted to employees generally vest over a service period of four years, while restricted stock units granted to non‑employee members of the Company’s Board of Directors generally vest over a service period of six months. We have granted restricted stock units to executive officers and other senior employees with performance vesting conditions, which may be subject to further service-based vesting terms. Unvested restricted stock unit awards expire upon termination of service to the Company. We settle 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, 2018. As of December 31, 2018, there were 0.6 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, 2018, there were 2.3 million options outstanding under the 2012 Equity Plan and the 2000 Stock Plan, collectively, and 0.8 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 our 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 price 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 $0.2 million for the year ended December 31, 2018 and approximately $0.1 million for each of the years ended December 31, 2017 and 2016. As of December 31, 2018, there were a total of 0.2 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, 2018, 2017 and 2016. The Purchase Plan will expire in June 2020, unless re-approved by the Board of Directors, with approval of stockholders within twelve months thereafter. (c) Valuation of Stock Options and Restricted Stock Units For the purpose of valuing stock options with service conditions, we use 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, 2018* 2017* 2016 Weighted-average expected volatility N/A N/A 49.3% — 56.7% Weighted-average expected term N/A N/A 4.7 years Risk-free interest rate N/A N/A 1.1% — 2.0% Expected dividend yield N/A N/A 0% *No stock option awards were granted in 2018 and 2017. Expected volatility—We consider a number of factors when estimating volatility for stock options granted. Our method of estimating expected volatility relies on a combination of historical and implied volatility. We believe 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—We 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, we used the simplified method for estimating the expected life of “plain vanilla” options because we did not have sufficient exercise history to use a lattice model. We expect that we 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 we do not pay dividends and have no current plans to do so in the future. In limited circumstances, we also issue 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 We use 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. We estimate 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, 2018, 2017 and 2016. For the year ended December 31, 2018, we recognized stock-based compensation expense of $7.8 million. Stock-based compensation expense was $5.7 million and $5.2 million for the years ended December 31, 2017 and 2016, respectively. We present the expenses related to stock-based compensation in the same expense line items as cash compensation paid to our employees. For the years ended December 31, 2018, 2017 and 2016, we used restricted stock units in our 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 $4.1 million for the year ended December 31, 2018 which resulted in a tax benefit of $0.9 million. Because we did not recognize the benefit of tax deductions in excess of recognized compensation cost due to our cumulative net operating loss position, this had no impact on our consolidated statement of cash flows as of and for the years ended December 31, 2018, 2017 and 2016. (e) Stock Option Awards The following table summarizes the stock option activity for the year ended December 31, 2018: Weighted Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Price Term Value (in thousands) (years) (in thousands) Outstanding at December 31, 2017 2,576 $ 7.91 Granted — — Exercised (273) Canceled (5) Expired (13) Outstanding at December 31, 2018 2,285 $ $ 22,128 Exercisable at December 31, 2018 2,116 $ $ 21,174 Options Vested or Expected to Vest at December 31, 2018(1) 2,282 $ $ 22,109 (1) In addition to the vested options, we expect 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, 2018, 2017 and 2016 was $4.1 million, $39.7 million and $2.5 million, respectively. The total fair value of stock options vested during the years ended December 31, 2018, 2017 and 2016 was $1.9 million, $3.1 million and $3.9 million respectively. The weighted average grant-date fair value of options granted for the year ended December 31, 2016 was $5.75. As of December 31, 2018, there was $0.7 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 0.7 years. (f) Restricted Stock Units and Restricted Stock Restricted stock units 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 Award Agreement issued under the 2012 Equity Incentive Plan. Restricted stock unit awards granted in 2018 included time vested share awards and awards with performance vesting conditions. No restricted stock was granted, or vested, during the years ended December 31, 2018, 2017 and 2016. The fair value of a restricted stock unit and restricted stock award is charged to expense ratably over the applicable service period. 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. Changes in the Company’s non‑vested restricted stock units for the year ended December 31, 2018 is as follows: Weighted-Average Grant Date Fair Shares/units Value per Share (in thousands) Outstanding at December 31, 2017 617 $ 14.93 Granted 459 22.41 Vested (245) 15.90 Forfeited (11) 17.78 Outstanding at December 31, 2018 820 $ 18.76 The weighted average grant-date fair value of restricted stock units granted for the years ended December 31, 2018, 2017 and 2016 was $22.41, $20.72 and $9.73, respectively. Most restricted stock units provide for net share settlement to cover the employee’s personal income tax withholding obligations on vesting of the employee’s restricted stock units. Vesting activity above reflects shares vested before net share settlement. As of December 31, 2018, there was $11.7 million of total forfeiture‑adjusted unrecognized compensation cost related to non‑vested restricted stock units granted under the 2012 Equity Incentive Plan. That cost is expected to be recognized over a weighted‑average period of 2.7 years. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | Note 14. Stockholders’ Equity We may issue up to 75 million shares of common stock without additional shareholder approval. As of December 31, 2018 and 2017, there were 32.6 million and 32.0 million outstanding shares of common stock. On January 12, 2019 we announced that our Board of Directors authorized a one year share repurchase program of up to $35 million of the Company's common stock. These shares may be purchased in the open market or through privately negotiated transactions. We have no obligation to repurchase shares under the authorization, and the timing and actual number and value of shares which are repurchased will depend on a number of factors, including the price of the Company's common stock, general business and market conditions, and alternative investment opportunities. We may suspend or discontinue the repurchase program at any time. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | Note 15. 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 Our money market funds and short-term investments are included in cash and cash equivalents in the consolidated balance sheets. 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, 2018 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 $ 138,510 $ 21,700 $ — $ 160,210 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 (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, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 16. Commitments and Contingencies (a) Lease Commitments We lease manufacturing and office facilities and certain equipment under operating and capital leases that expire through 2037. Rental expense was $4.6 million, $3.9 million and $3.8 million under operating leases for the years ended December 31, 2018, 2017 and 2016, respectively. Future minimum lease commitments on non‑cancelable operating leases for the year ended December 31, 2018 are as follows: Operating Leases (in thousands) 2019 $ 3,244 2020 2,022 2021 719 2022 73 2023 37 Thereafter 1 $ 6,096 (b) Sale Leaseback Financing Obligation In addition to the lease commitments as described above, in 2015 we 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, 2018: Lease Obligation (in thousands) 2019 $ 5,594 2020 5,720 2021 5,848 2022 5,980 2023 6,114 Thereafter 85,905 Total lease payments $ 115,161 Less interest portion (67,404) Sale leaseback obligation $ 47,757 (c) Purchase Commitments We have contracts and purchase orders for inventory and other expenditures of $61.6 million at December 31, 2018. (d) Litigation We are not presently a party to any litigation that we believe might have a material adverse effect on our business operations. We are, from time to time, a party to litigation that arises in the normal course of our business operations. (e) Indemnifications Our system sales agreements typically include provisions under which we agree to take certain actions, provide certain remedies and defend our 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. We have not incurred any material costs as a result of such indemnifications and have 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, 2018 | |
Business Segment and Geographic Region Information | |
Business Segment and Geographic Region Information | Note 17. Business Segment and Geographic Region Information We operate 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 us to our customers located in the United States, Europe and Asia Pacific. Our ion implantation systems product line includes high current, medium current and high energy implanters. Other products include curing systems, and thermal processing systems. In addition to new equipment, we provide 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, 2018 2017 2016 (in thousands) Ion implantation systems and services $ 421,747 $ 391,051 $ 248,885 Other systems and services 20,828 19,510 18,095 Total revenue $ 442,575 $ 410,561 $ 266,980 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) 2018 United States $ 342,802 $ 66,089 Europe 29,417 — Asia Pacific 70,356 4,893 $ 442,575 $ 70,982 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 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 $388.3 million (87.7% of total revenue), $348.5 million (84.9% of total revenue) and $213.8 million (80.0% of total revenue) in 2018, 2017 and 2016, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 18. Income Taxes Income before income taxes is as follows: Year ended December 31, 2018 2017 2016 (in thousands) United States $ 52,172 $ 40,752 $ 8,880 Foreign 2,533 3,079 2,144 Income before income taxes $ 54,705 $ 43,831 $ 11,024 Provision for income taxes is as follows: Year ended December 31, 2018 2017 2016 (in thousands) Current: United States Federal $ 41 $ 430 $ — State 112 32 49 Foreign 323 230 (217) Total current 476 692 (168) Deferred: Federal 8,108 (82,048) — State 425 (1,698) — Foreign (189) (74) 191 Total deferred 8,344 (83,820) 191 Income tax provision (benefit) $ 8,820 $ (83,128) $ 23 Reconciliation of income taxes at the United States Federal statutory rate to the effective income tax rate is as follows: Year ended December 31, 2018 2017 2016 (in thousands) Income taxes at the United States statutory rate $ 11,488 $ 15,341 $ 3,859 State income taxes 299 203 32 Unrecognized tax benefits (345) (285) (615) Effect of change in valuation allowance (441) (115,831) (7,765) Foreign income tax rate differentials 73 (312) 233 Unremitted earnings of foreign subsidiaries — (8,933) 305 Stock options (715) (10,342) 264 Credit expirations — — 3,565 Repatriation of foreign earnings — 4,556 — Recognition of equity NOL's — (1,165) — Rate change 160 42,531 — Credit generation (3,530) (8,778) — Discrete items, net 972 31 — Other, net 859 (144) 145 Income tax provision (benefit) $ 8,820 $ (83,128) $ 23 Significant components of long‑term deferred income taxes are as follows: Year ended December 31, 2018 2017 (in thousands) Federal net operating loss carryforwards $ 42,397 $ 56,646 State net operating loss carryforwards 1,387 1,586 Foreign net operating loss carryforwards 641 758 Federal tax credit carryforwards 16,200 14,312 State tax credit carryforwards 6,489 6,908 Unremitted earnings of foreign subsidiaries — (21) Intangible assets (29) 116 Property, plant and equipment 5,924 5,838 Accrued compensation 97 45 Inventories 3,713 3,798 Stock compensation 2,760 2,351 Warranty 1,090 980 Deferred revenue 1,004 187 Other (2,899) (3,220) Deferred taxes, gross 78,774 90,284 Valuation allowance (6,835) (7,136) Deferred taxes, net $ 71,939 $ 83,148 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%. During 2018, the provisional amount for the Toll tax was updated from $4.6 million in 2017 to $3.6 million in 2018 due to refinement of earnings and profits during 2018. We consider our accounting regarding the Transition Toll Tax to be complete. We accrued income tax liabilities of $0.3 million after utilization of foreign tax 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. 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 (“GILTI”). The tax related to GILTI was $0.4 million for the year ended December 31, 2018. We are treating GILTI as a period cost. At December 31, 2018, we had $71.9 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. We have continued to maintain a $6.8 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, 2018, we have federal and state net operating loss carryforwards of $226.3 million and foreign net operating loss carryforwards of $2.5 million expiring principally between 2019 and 2034. We have research and development and other tax credit carryforwards of $22.7 million at December 31, 2018 that can be used to reduce future federal and state income tax liabilities. These tax credit carryforwards expire principally between 2019 and 2038. We consider the undistributed earnings of our foreign subsidiaries as of December 31, 2018, to be indefinitely reinvested and, accordingly, no U.S. income taxes have been provided thereon. As of December 31, 2018, the amount of cash associated with indefinitely reinvested foreign earnings was approximately $4.9 million. We have not, nor do we anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements. We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. We and most foreign subsidiaries are subject to income tax examinations by tax authorities for all years dating back to 2011. Our policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. We believe that we have appropriate support for the income tax positions taken and to be taken on our tax returns and that our 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, 2018, we had unrecognized tax benefits related to uncertain tax positions of approximately $9.1 million, of which approximately $8.4 million reduced the Company’s deferred tax assets and the offsetting valuation allowance and $0.7 million was recorded in other long-term liabilities. During the second quarter of 2018, the statute of limitations associated with a tax position 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, 2018. We recognized a benefit of $0.3 million in interest and penalties related to unrecognized tax benefits for the year-ended December 31, 2018. A reconciliation of the beginning and ending balance of unrecognized tax benefits are as follows: Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 9,105 $ 6,844 $ 7,671 (Decrease) / increase in unrecognized tax benefits as a result of tax positions taken during a prior period (132) 81 76 Decreases in unrecognized tax benefits related to settlements with tax authorities — — — Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitation (543) (511) (903) Increases in unrecognized tax benefits as a result of tax positions taken during the current period 697 2,691 — Balance at end of year $ 9,127 $ 9,105 $ 6,844 Recorded as other long-term liability $ 676 $ 1,109 $ 1,462 Recorded as a decrease in deferred tax assets and offsetting valuation allowance 8,451 7,996 5,382 Balance at end of year $ 9,127 $ 9,105 $ 6,844 As of December 31, 2018 we had $0.7 million of unrecognized tax benefits which, if recognized would reduce the effective tax rate. |
Quarterly Results of Operations
Quarterly Results of Operations (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Results of Operations (unaudited) | |
Quarterly Results of Operations (unaudited) | Note 19. Quarterly Results of Operations (unaudited) Dec. 31, Sept. 30, June 30, March 31, Dec. 31, Sept. 30, June 30, March 31, 2018 2018 2018 2018 2017(1) 2017 2017 2017 (in thousands, except per share data) Revenue $ 105,683 $ 95,374 $ 119,333 $ 122,185 $ 116,396 $ 104,482 $ 102,790 $ 86,893 Gross profit 43,567 39,913 49,000 47,156 36,720 39,751 39,062 34,714 Net income 8,463 8,838 14,669 13,915 91,680 11,841 13,932 9,506 Net income per basic share $ 0.26 $ 0.27 $ 0.46 $ 0.43 $ 2.88 $ 0.38 $ 0.46 $ 0.32 Net income per diluted share $ 0.25 $ 0.26 $ 0.43 $ 0.41 $ 2.68 $ 0.35 $ 0.42 $ 0.29 (1) For the quarter ending December 31, 2017, gross profit and net income includes a $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, 2018 | |
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 Period Year ended December 31, 2018 Allowance for doubtful accounts and returns $ — $ — $ — $ — Deferred tax valuation allowance 7,136 (441) (140) 6,835 Year ended December 31, 2017 Allowance for doubtful accounts and returns $ 77 $ — $ 77 $ — Deferred tax valuation allowance 122,966 (115,831) (1) 7,136 Year ended December 31, 2016 Allowance for doubtful accounts and returns $ — $ 106 $ 29 $ 77 Deferred tax valuation allowance 132,263 (7,765) 1,532 122,966 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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. Events occurring subsequent to December 31, 2018 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, we evaluate our 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, 2018 we had $1.3 million in foreign exchange loss. For the year ended December 31, 2017 we had $1.1 million in foreign exchange gains. For the year ended December 31, 2016 we had $0.6 million in foreign exchange 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. We periodically review our inventories and make 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. We record a provision for estimated excess inventory. The provision 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, we sold our corporate headquarters facility. As part of this sale, we also entered into a 22-year lease agreement. We accounted for the sale leaseback transaction as a financing arrangement for financial reporting purposes. We retained the historical costs of the property and the related accumulated depreciation on our 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 We record 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. We did not have any indicators of impairment during the period ending December 31, 2018. We did not record an impairment charge in the years ended December 31, 2018, 2017, or 2016. 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 our 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 us to concentrations of credit risk are principally cash equivalents and accounts receivable. Our cash equivalents are principally maintained in investment grade money‑market funds, U.S. Government and Agency Securities and deposit accounts. We have no significant off‑balance‑sheet risk such as currency exchange contracts, option contracts or other hedging arrangements. Our exposure to market risk for changes in interest rates relates primarily to cash equivalents. The primary objective of our investment activities is to preserve principal without significantly increasing risk. This is accomplished by investing in marketable investment grade securities. We do not use derivative financial instruments to manage our investment portfolio and do not expect operating results or cash flows to be affected to any significant degree by any change in market interest rates. We perform ongoing credit evaluations of our customers’ financial condition and generally requires no collateral to secure accounts receivable. For selected overseas sales, we require customers to obtain letters of credit before product is shipped. We maintain an allowance for doubtful accounts based on our assessment of the collectability of accounts receivable. We review the allowance for doubtful accounts quarterly. We do not have any off‑balance sheet credit exposure related to our customers. Our customers consist of semiconductor chip manufacturers located throughout the world and net sales to our ten largest customers accounted for 76.9%, 73.3% and 70.2% of revenue in 2018, 2017 and 2016, respectively. For the year ended December 31, 2018, we had two customers representing 20.1% and 12.1% of total revenue, respectively. For the year ended December 31, 2017 we had two customers representing 24.9% and 13.1% of total revenue, respectively. For the year ended December 31, 2016, we had one customer representing 17.0% of total revenue. As of December 31, 2018, we had two customers account for 21.9% and 11.5% of consolidated accounts receivable, respectively. As of December 31, 2017, we had three customers account for 19.8%, 11.8% and 10.6% of consolidated accounts receivable, respectively. Some of the components and sub‑assemblies included in our products are obtained either from a sole source or a limited group of suppliers. Disruption to our supply source, resulting either from economic conditions or other factors, could affect our ability to deliver products to our customers. |
Revenue Recognition | (i) Revenue Recognition Under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers or (“ASC 606”), revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We measure revenue based on the consideration specified in the customer arrangement, and revenue is recognized when the performance obligations in the customer arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct product or service to the customer. The transaction price of a contract is allocated to each distinct performance obligation based upon the relative standalone selling price for each performance obligation and recognized as revenue when or as, the customer receives the benefit of the performance obligation. To account for and measure revenue, we apply the following five steps: 1) Identify the contract with the customer A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the goods and services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other available resources, and are distinct in the context of the contract, whereby the transfer of the good or service is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods and services, we must apply judgment to determine whether promised goods and services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation. Systems sales consist of multiple performance obligations, including the system itself and obligations that are not delivered simultaneously with the system. These undelivered obligations might include a combination of installation services, extended warranty and support and spare parts, all of which are generally covered by a single sales price. The aftermarket business includes both products and services type arrangements. Performance obligations in these contracts consist of used tools, spare parts, equipment upgrades, maintenance services and customer training. Customers who purchase new systems are provided an assurance-type warranty for one year after acceptance of the tool. For aftermarket transactions, we provide customers an assurance-type warranty for 90 days. Customers can choose to purchase extended warranty terms with enhanced support similar to a service-type warranty ranging from one to three years. In accordance with ASC 606, assurance-type warranties are not considered a performance obligation, whereas service-type warranties are. 3) Determine the transaction price The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods and services to the customer. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing either the expected value method or the most likely amount method depending on the nature of the variable consideration. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Any estimates, including the effect of the constraint on variable consideration, are evaluated at each reporting period for any changes. In applying this guidance, Companies must also consider whether any significant financing components exist. The transaction price for all transactions is based on the price reflected in the individual customer’s purchase order. Variable consideration has not been identified as a significant component of the transaction price for any of our transactions. For those transactions where all performance obligations will be satisfied within one year or less, we apply the practical expedient outlined in ASC 606-10-32-18. This practical expedient allows us not to adjust promised consideration for the effects of a significant financing component if we expect at contract inception that the period between when we transfer the promised good or service to a customer and when the customer pays for that good or service will be one year or less. For those transactions that are expected to be completed after one year, we have assessed that there are no significant financing components because any difference between the promised consideration and the cash selling price of the good or service is for reasons other than the provision of financing. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation on a relative standalone selling price basis unless the transaction price is variable and meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single performance obligation. Where required, we determine standalone selling price (SSP) for each obligation based on consideration of both market and Company specific factors, including the selling price and profit margin for similar products, the cost to produce, and the anticipated margin. For those contracts that contain multiple performance obligations (primarily systems sales, as well as some aftermarket contracts requiring both time and material inputs), we must determine the SSP. We use a cost plus margin approach in determining the SSP for any materials related performance obligations (such as upgrades, spare parts, systems). To determine the SSP for labor related performance obligations (such as the labor component of installation), we use directly observable inputs based on the standalone sale prices for these services. 5) Recognize revenue when or as we have satisfied a performance obligation We satisfy performance obligations either over time or at a point in time. Revenue is recognized over time if either 1) the customer simultaneously receives and consumes the benefits provided by the entity’s performance, 2) the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or 3) the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date. If the entity does not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer. Examples of control are using the asset to produce goods or services, enhance the value of other assets or settle liabilities, and holding or selling the asset. For over time recognition, ASC 606 requires us to select a single revenue recognition method for the performance obligation that faithfully depicts our performance in transferring control of the goods and services. The guidance allows entities to choose between two methods to measure progress toward complete satisfaction of a performance obligation: Output methods - recognize revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract (e.g. surveys of performance completed to date, appraisals of results achieved, milestones reached, time elapsed, and units produced or units delivered); and Input methods - recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total expected inputs to the satisfaction of that performance obligation. We have the right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date (i.e. certain aftermarket contracts), as such we have elected a practical expedient to recognize revenue in the amount to which the entity has a right to invoice for such services. Product related revenues (whether for systems or aftermarket business) are recognized at a point in time, when they are shipped or delivered, depending on shipping terms. For installation services, revenue is recognized at a point in time, once the installation of the tool is complete. The nature of the installation services are such that the customer does not simultaneously receive and consume the benefits provided by the entity’s performance, nor does performance of installation services create or enhance an asset that the customer controls. Installation services do not create an asset with an alternative use to the entity, and the entity does not have an enforceable right to payment for performance completed to date. Contract liabilities are reflected as deferred revenue on the consolidated balance sheet. Contract liabilities relate to payments invoiced or received in advance of completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations. Service-type warranties for any product are recognized over time, as these represent a stand ready obligation to service the product during the warranty period. Progress in the satisfaction of these performance obligations will be measured using an input method of time elapsed. Maintenance and service contracts are recognized over time. Progress in the satisfaction of these performance obligations will be measured using an input method of either time elapsed in the case of fixed period contracts, or labor hours expended, in the case of project based contracts. |
Recognizing Assets related to Recoverable Customer Contract Costs | (j) Recognizing Assets related to Recoverable Customer Contract Costs We recognize an asset related to incremental costs incurred by us to obtain a contract with a customer if we expect to recover those costs. We will recognize an asset from costs incurred to fulfill a contract only if such costs relate directly to a contract with an entity that we can specifically identify, the costs incurred will generate or enhance resources that will be used in satisfying performance obligations in the future, and the costs are expected to be recovered. Any assets recognized related to costs to obtain or fulfill a contract are amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. In substantially all of our business transactions, we incur incremental costs to obtain contracts with customers, in the form of sales commissions. We maintain a commission program which awards our employees for System sales, aftermarket activity and other individual goals. Under ASC 606, an asset is amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. However, ASC 606 provides a practical expedient to allow for the recognition of commission expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Based on the nature of our commission agreements, all commissions are expensed as incurred based upon the expectation that the amortization period would be one year or less. |
Shipping and Handling Costs | (k) Shipping and Handling Costs Shipping and handling costs are included in cost of revenue. |
Stock-Based Compensation | (l) Stock‑Based Compensation We generally recognize 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. For stock option awards, we use 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 our 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 13 for additional information relating to stock‑based compensation. |
Income Taxes | (m) Income Taxes We record 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. Our 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. We establish 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 our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against those net deferred tax assets. We evaluate 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. We recognize accrued interest related to unrecognized tax benefits as interest expense and penalties within operating expense in the consolidated statements of operations. |
Computation of Net Income per Share | (n) 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, 2018 2017 2016 (in thousands, except per share data) Net income available to common stockholders $ 45,885 $ 126,959 $ 11,001 Weighted average common shares outstanding used in computing basic income per share 32,286 30,866 29,195 Incremental options and RSUs 1,716 2,570 1,752 Weighted average common shares used in computing diluted net income per share 34,002 33,436 30,947 Net income per share Basic $ 1.42 $ 4.11 $ 0.38 Diluted $ 1.35 $ 3.80 $ 0.36 Diluted weighted average common shares outstanding does not include options and restricted stock units outstanding to purchase 0.9 million common equivalent shares for the periods ended December 31, 2016, as their effect would have been anti-dilutive. |
Accumulated Other Comprehensive Income | (o) 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, 2018: Foreign Defined benefit currency pension plan Total (in thousands) Balance at December 31, 2017 $ 2,756 $ (580) $ 2,176 Other comprehensive income and pension reclassification (1,794) 66 (1,728) Balance at December 31, 2018 $ 962 $ (514) $ 448 |
Recent Accounting Guidance | (p) Recent Accounting Guidance i. Accounting Standard Codification 606 on Revenue Recognition Adopted January 1, 2018 Effective January 1, 2018, we adopted FASB ASC Topic 606, Revenue from Contracts with Customers , or ASC 606. In accordance with ASC 606, we changed certain characteristics of our revenue recognition accounting policy as described below. On adoption, ASC 606 was applied only to open contracts using the modified retrospective method, where the cumulative effect of the initial application is recognized as an adjustment to opening retained earnings at January 1, 2018. Therefore, comparative prior periods have not been adjusted and continue to be reported under FASB ASC Topic 605, Revenue Recognition , or ASC 605. The impact of adoption on our consolidated statement of operations for the twelve months ended December 31, 2018 and consolidated balance sheet as of December 31, 2018 was as follows (in thousands): Twelve months ended December 31, 2018 Consolidated Statement of Operations As Reported ASC 606 Pro Forma Under ASC 605 Revenue: Product $ 415,922 $ (1,023) $ 414,899 Total revenue 442,575 (1,023) 441,552 Gross profit 179,636 (1,023) 178,613 Income from operations 59,959 (1,023) 58,936 Income before income taxes 54,705 (1,023) 53,682 Income tax provision 8,820 (165) 8,655 Net income $ 45,885 $ (858) $ 45,027 Net income per share: Basic $ 1.42 $ (0.03) $ 1.39 Diluted $ 1.35 $ (0.03) $ 1.32 December 31, 2018 Consolidated Balance Sheet As Reported ASC 606 Pro Forma Under ASC 605 Deferred income taxes $ 71,939 $ 165 $ 72,104 Total assets $ 548,441 $ 165 $ 548,606 Deferred revenue $ 22,584 $ 2,623 $ 25,207 Total current liabilities 84,997 2,623 87,620 Total liabilities 140,104 2,623 142,727 Accumulated deficit (157,260) (2,458) (159,718) Total stockholders' equity 408,337 (2,458) 405,879 Total liabilities and stockholders' equity $ 548,441 $ 165 $ 548,606 The impact of the adoption of ASC 606 on consolidated statements of comprehensive income and cash flows for the twelve months ended December 31, 2018 was not material. Upon adoption of ASC 606, we changed our accounting policy for the installation performance obligation included in all system sales. Previously under ASC 605, we deferred revenue for the greater of the fair value of the installation or the portion of contract consideration for which collection was contingent upon installation completion (the “retention”). The concept of contingent consideration is no longer relevant under ASC 606 and therefore we will only defer the portion of the transaction price allocated to the installation performance obligation. As a result of this change, we recorded a cumulative effect adjustment to increase retained earnings and decrease deferred revenue on January 1, 2018 by $1.6 million. Since the adoption, all new contracts are accounted for under ASC 606. Our revenue recognition policies addressing the nature, amount and timing of revenue and cash flows arising from contracts with customers are included in section (i) of Note 2, Summary of Significant Accounting Policies. ii. Accounting Standard Update 2016-15 on Cash Receipts Adopted January 1, 2018 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 relating to specific cash flow 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, and is to be applied retrospectively for each period presented. Adoption of ASU 2016-15 had no material effect on our consolidated financial statements and disclosures. iii. Accounting Standard Update 2017-07 on Retirement Benefits Adopted January 1, 2018 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. Adoption of ASU 2017-07 had no material effect on the consolidated financial statements and disclosures. iv. Accounting Standard Update 2016-02 on Leases to be Effective January 1, 2019 In February 2016, the FASB issued ASU No. 2016-02 “Leases.” 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. In July 2018, the FASB issued ASU No. 2018-11 “Leases (Topic 842)” , that provides targeted improvements relating to the transition method options with which to adopt the new standard. Under this additional and optional transition method, an entity initially applies the new lease standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. An entity that elects this transition method must provide the required Topic 840 disclosures for all periods that continue to be in accordance with Topic 840. We will elect the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allows us to carryforward the historical lease classification. We will make an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet. We will use the transition method allowed under ASU 2018-11. We are currently finalizing our implementation of procedures regarding reporting and disclosure controls. We anticipate adopting the new standard on January 1, 2019 using the modified retrospective approach under the ASU 2018-11 transition method with the primary effect to be the recognition of additional right-of-use assets and corresponding liabilities related to operating leases. We expect to recognize approximately $6.1 million of right-of-use assets and related liabilities regarding our operating leases for office space, computer and office equipment, as well as vehicles used in our business. We will recognize the lease payments in the Consolidated Statement of Operations on a straight-line basis over the respective lease term. The adoption of this standard is not expected to have a material impact on our results of operations and cash flows. v. Accounting Standard Update 2018-13 on Fair Value Measurements to be Effective January 1, 2020 In August 2018, the FASB issued ASU No. 2018-13 “Fair Value Measurement (Topic 820).” The amendments in ASU No. 2018-13 modify the disclosure requirements on fair value measurements in Topic 820, removing disclosure requirements for transfers between Level 1 and Level 2 within the fair value hierarchy, as well as modifying the disclosure requirement relating to the timing of liquidation for investments calculated on net asset value. The ASU also requires the disclosure of unrealized gains and losses for the period included in other comprehensive income for Level 3 instruments. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2019. The amendments on changes for unrealized gains and losses should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. Early adoption is permitted. We are currently evaluating the impact of ASU 2018-13 on the consolidated financial statements and disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2017 2016 (in thousands, except per share data) Net income available to common stockholders $ 45,885 $ 126,959 $ 11,001 Weighted average common shares outstanding used in computing basic income per share 32,286 30,866 29,195 Incremental options and RSUs 1,716 2,570 1,752 Weighted average common shares used in computing diluted net income per share 34,002 33,436 30,947 Net income per share Basic $ 1.42 $ 4.11 $ 0.38 Diluted $ 1.35 $ 3.80 $ 0.36 |
Schedule of changes in accumulated other comprehensive income, net of tax | Foreign Defined benefit currency pension plan Total (in thousands) Balance at December 31, 2017 $ 2,756 $ (580) $ 2,176 Other comprehensive income and pension reclassification (1,794) 66 (1,728) Balance at December 31, 2018 $ 962 $ (514) $ 448 |
ASU 2014-09 | |
Schedule of new accounting pronouncements and changes in accounting principles | The impact of adoption on our consolidated statement of operations for the twelve months ended December 31, 2018 and consolidated balance sheet as of December 31, 2018 was as follows (in thousands): Twelve months ended December 31, 2018 Consolidated Statement of Operations As Reported ASC 606 Pro Forma Under ASC 605 Revenue: Product $ 415,922 $ (1,023) $ 414,899 Total revenue 442,575 (1,023) 441,552 Gross profit 179,636 (1,023) 178,613 Income from operations 59,959 (1,023) 58,936 Income before income taxes 54,705 (1,023) 53,682 Income tax provision 8,820 (165) 8,655 Net income $ 45,885 $ (858) $ 45,027 Net income per share: Basic $ 1.42 $ (0.03) $ 1.39 Diluted $ 1.35 $ (0.03) $ 1.32 December 31, 2018 Consolidated Balance Sheet As Reported ASC 606 Pro Forma Under ASC 605 Deferred income taxes $ 71,939 $ 165 $ 72,104 Total assets $ 548,441 $ 165 $ 548,606 Deferred revenue $ 22,584 $ 2,623 $ 25,207 Total current liabilities 84,997 2,623 87,620 Total liabilities 140,104 2,623 142,727 Accumulated deficit (157,260) (2,458) (159,718) Total stockholders' equity 408,337 (2,458) 405,879 Total liabilities and stockholders' equity $ 548,441 $ 165 $ 548,606 |
Correction of Accounting Erro_2
Correction of Accounting Error in Prior Period (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Correction of Accounting Error in Prior Period | |
Schedule of Effect of Error Corrections and Prior Period Adjustments | As Reported As Adjusted Total Adjustment (in thousands) December 31, 2017 December 31, 2017 December 31, 2017 Provision for excess and obsolete inventory $ (8,135) $ 8,135 $ 16,270 Change in inventories $ 5,703 $ (10,567) $ (16,270) Net cash provided by (used in) operating activities $ 56,284 $ 56,284 $ - |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue | |
Schedule of revenue by discipline | Year ended December 31, 2018* 2017 2016 (in thousands) Systems $ $ $ Aftermarket 162,187 147,873 127,696 $ $ $ |
Schedule of revenue by geographic markets | Year ended December 31, 2018* 2017 2016 (in thousands) North America $ $ $ Asia Pacific Europe $ $ $ |
Schedule of contract assets and contract liabilities | December 31, December 31, 2018 2017 (in thousands) Contract assets $ — $ — Contract liabilities $ 22,584 $ 18,145 Year ended December 31, 2018 2017 Revenue recognized in the period from: Amounts included in contract liability at the beginning of the period $ 12,845 $ 9,522 Performance obligations satisfied in previous periods $ — $ — |
Cash, cash equivalents and re_2
Cash, cash equivalents and restricted cash (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash, cash equivalents and restricted cash | |
Schedule of reconciliation of cash, cash equivalents and restricted cash | December 31, 2018 2017 (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, 2018 | |
Accounts Receivable, net | |
Schedule of components of accounts receivable | December 31, 2018 2017 (in thousands) Trade receivables $ 78,727 $ 75,302 Allowance for doubtful accounts — — Trade receivables, net $ 78,727 $ 75,302 |
Inventories, net (Tables)
Inventories, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventories, net | |
Schedule of components of inventories | December 31, 2018 2017 (in thousands) Raw materials $ 91,875 $ 82,313 Work in process 23,857 31,651 Finished goods (completed systems) 13,268 6,580 Inventories, net $ 129,000 $ 120,544 |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment, net | |
Schedule of components of property, plant and equipment | December 31, 2018 2017 (in thousands) Land and buildings $ 75,904 $ 76,260 Machinery and equipment 19,982 11,477 Construction in process 6,366 6,982 Total cost 102,252 94,719 Accumulated depreciation (61,103) (58,551) Property, plant and equipment, net $ 41,149 $ 36,168 |
Assets Manufactured for Inter_2
Assets Manufactured for Internal Use, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Assets Manufactured for Internal Use, net | |
Schedule of components of assets manufactured for internal use | December 31, 2018 2017 (in thousands) Internal use assets $ 47,509 $ 40,366 Construction in process 1,609 301 Total cost 49,118 40,667 Accumulated depreciation (19,285) (20,035) Assets manufactured for internal use, net $ 29,833 $ 20,632 |
Product Warranty (Tables)
Product Warranty (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Product Warranty | |
Schedule of product warranty liability | Year ended December 31, 2018 2017 2016 (in thousands) Balance at January 1 (beginning of year) $ 4,502 $ 2,666 $ 3,555 Warranties issued during the period 5,421 5,671 3,125 Settlements made during the period (5,903) (2,603) (4,249) Changes in estimate of liability for pre-existing warranties during the period 1,071 (1,232) 235 Balance at December 31 (end of period) $ 5,091 $ 4,502 $ 2,666 Amount classified as current $ 4,819 $ 4,112 $ 2,426 Amount classified as long-term 272 390 240 Total warranty liability $ 5,091 $ 4,502 $ 2,666 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefit Plans | |
Schedule of classification of liabilities in Consolidated Balance Sheets | Year ended December 31, 2018 2017 (in thousands) Current: Accrued compensation $ 973 $ 967 Total current liabilities $ 973 $ 967 Long-term: Other long-term liabilities 3,327 3,583 Total liabilities $ 4,300 $ 4,550 |
Stock Award Plans and Stock B_2
Stock Award Plans and Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018* 2017* 2016 Weighted-average expected volatility N/A N/A 49.3% — 56.7% Weighted-average expected term N/A N/A 4.7 years Risk-free interest rate N/A N/A 1.1% — 2.0% Expected dividend yield N/A N/A 0% *No stock option awards were granted in 2018 and 2017. |
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, 2017 2,576 $ 7.91 Granted — — Exercised (273) Canceled (5) Expired (13) Outstanding at December 31, 2018 2,285 $ $ 22,128 Exercisable at December 31, 2018 2,116 $ $ 21,174 Options Vested or Expected to Vest at December 31, 2018(1) 2,282 $ $ 22,109 (1) In addition to the vested options, we expect 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, 2017 617 $ 14.93 Granted 459 22.41 Vested (245) 15.90 Forfeited (11) 17.78 Outstanding at December 31, 2018 820 $ 18.76 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Schedule of Company's assets and liabilities by level within the fair value hierarchy | December 31, 2018 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 $ 138,510 $ 21,700 $ — $ 160,210 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 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 are as follows: Operating Leases (in thousands) 2019 $ 3,244 2020 2,022 2021 719 2022 73 2023 37 Thereafter 1 $ 6,096 |
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, 2018: Lease Obligation (in thousands) 2019 $ 5,594 2020 5,720 2021 5,848 2022 5,980 2023 6,114 Thereafter 85,905 Total lease payments $ 115,161 Less interest portion (67,404) Sale leaseback obligation $ 47,757 |
Business Segment and Geograph_2
Business Segment and Geographic Region Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Segment and Geographic Region Information | |
Schedule of revenue by product lines | Year ended December 31, 2018 2017 2016 (in thousands) Ion implantation systems and services $ 421,747 $ 391,051 $ 248,885 Other systems and services 20,828 19,510 18,095 Total revenue $ 442,575 $ 410,561 $ 266,980 |
Schedule of revenue and long-lived assets by geographic region | Long-Lived Revenue Assets (in thousands) 2018 United States $ 342,802 $ 66,089 Europe 29,417 — Asia Pacific 70,356 4,893 $ 442,575 $ 70,982 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 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of income before income taxes | Year ended December 31, 2018 2017 2016 (in thousands) United States $ 52,172 $ 40,752 $ 8,880 Foreign 2,533 3,079 2,144 Income before income taxes $ 54,705 $ 43,831 $ 11,024 |
Schedule of provision for income taxes | Year ended December 31, 2018 2017 2016 (in thousands) Current: United States Federal $ 41 $ 430 $ — State 112 32 49 Foreign 323 230 (217) Total current 476 692 (168) Deferred: Federal 8,108 (82,048) — State 425 (1,698) — Foreign (189) (74) 191 Total deferred 8,344 (83,820) 191 Income tax provision (benefit) $ 8,820 $ (83,128) $ 23 |
Schedule of reconciliation of income taxes at the United States Federal statutory rate to the effective income tax rate | Year ended December 31, 2018 2017 2016 (in thousands) Income taxes at the United States statutory rate $ 11,488 $ 15,341 $ 3,859 State income taxes 299 203 32 Unrecognized tax benefits (345) (285) (615) Effect of change in valuation allowance (441) (115,831) (7,765) Foreign income tax rate differentials 73 (312) 233 Unremitted earnings of foreign subsidiaries — (8,933) 305 Stock options (715) (10,342) 264 Credit expirations — — 3,565 Repatriation of foreign earnings — 4,556 — Recognition of equity NOL's — (1,165) — Rate change 160 42,531 — Credit generation (3,530) (8,778) — Discrete items, net 972 31 — Other, net 859 (144) 145 Income tax provision (benefit) $ 8,820 $ (83,128) $ 23 |
Schedule of significant components of current and long-term deferred income taxes | Year ended December 31, 2018 2017 (in thousands) Federal net operating loss carryforwards $ 42,397 $ 56,646 State net operating loss carryforwards 1,387 1,586 Foreign net operating loss carryforwards 641 758 Federal tax credit carryforwards 16,200 14,312 State tax credit carryforwards 6,489 6,908 Unremitted earnings of foreign subsidiaries — (21) Intangible assets (29) 116 Property, plant and equipment 5,924 5,838 Accrued compensation 97 45 Inventories 3,713 3,798 Stock compensation 2,760 2,351 Warranty 1,090 980 Deferred revenue 1,004 187 Other (2,899) (3,220) Deferred taxes, gross 78,774 90,284 Valuation allowance (6,835) (7,136) Deferred taxes, net $ 71,939 $ 83,148 |
Schedule of reconciliation of the beginning and ending balance of unrecognized tax benefits | Year ended December 31, 2018 2017 2016 (in thousands) Balance at beginning of year $ 9,105 $ 6,844 $ 7,671 (Decrease) / increase in unrecognized tax benefits as a result of tax positions taken during a prior period (132) 81 76 Decreases in unrecognized tax benefits related to settlements with tax authorities — — — Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitation (543) (511) (903) Increases in unrecognized tax benefits as a result of tax positions taken during the current period 697 2,691 — Balance at end of year $ 9,127 $ 9,105 $ 6,844 Recorded as other long-term liability $ 676 $ 1,109 $ 1,462 Recorded as a decrease in deferred tax assets and offsetting valuation allowance 8,451 7,996 5,382 Balance at end of year $ 9,127 $ 9,105 $ 6,844 |
Quarterly Results of Operatio_2
Quarterly Results of Operations (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 2018 2018 2018 2017(1) 2017 2017 2017 (in thousands, except per share data) Revenue $ 105,683 $ 95,374 $ 119,333 $ 122,185 $ 116,396 $ 104,482 $ 102,790 $ 86,893 Gross profit 43,567 39,913 49,000 47,156 36,720 39,751 39,062 34,714 Net income 8,463 8,838 14,669 13,915 91,680 11,841 13,932 9,506 Net income per basic share $ 0.26 $ 0.27 $ 0.46 $ 0.43 $ 2.88 $ 0.38 $ 0.46 $ 0.32 Net income per diluted share $ 0.25 $ 0.26 $ 0.43 $ 0.41 $ 2.68 $ 0.35 $ 0.42 $ 0.29 (1) For the quarter ending December 31, 2017, gross profit and net income includes a $6.2 million charge to inventory reserves. Net income also includes an $81.6 million tax benefit relating to the reversal of a valuation allowance on deferred tax assets. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Foreign Currency (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |||
Foreign exchange losses (gains) realized | $ 1.3 | $ (1.1) | $ 0.6 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Jan. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
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 Accoun_6
Summary of Significant Accounting Policies - Concentration of Risk (Details) - customer | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | Customer concentration risk | |||
Concentration of Risk | |||
Number of customers | 2 | 2 | 1 |
Revenue | Customer concentration risk | Ten largest customers | |||
Concentration of Risk | |||
Number of customers | 10 | 10 | 10 |
Percentage of concentration risk | 76.90% | 73.30% | 70.20% |
Revenue | Customer concentration risk | First customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 20.10% | 24.90% | 17.00% |
Revenue | Customer concentration risk | Second customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 12.10% | 13.10% | |
Consolidated accounts receivable | Credit concentration risk | |||
Concentration of Risk | |||
Number of customers | 2 | 3 | |
Consolidated accounts receivable | Credit concentration risk | First customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 21.90% | 19.80% | |
Consolidated accounts receivable | Credit concentration risk | Second customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 11.50% | 11.80% | |
Consolidated accounts receivable | Credit concentration risk | Third customer | |||
Concentration of Risk | |||
Percentage of concentration risk | 10.60% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Revenue Recognition (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Product warranty period | 1 year |
Systems | |
Payment upon delivery of parts, period | 90 days |
Minimum | Aftermarket | |
Product warranty period | 1 year |
Minimum | Systems | |
Payment upon delivery of parts, period | 30 days |
Maximum | Aftermarket | |
Product warranty period | 3 years |
Maximum | Systems | |
Payment upon delivery of parts, period | 60 days |
Summary of Significant Accoun_8
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, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Anti-dilutive common equivalent shares excluded from calculation | 900 | ||||||||||
Net income per share: | |||||||||||
Net income available to common stockholders | $ 8,463 | $ 8,838 | $ 14,669 | $ 13,915 | $ 91,680 | $ 11,841 | $ 13,932 | $ 9,506 | $ 45,885 | $ 126,959 | $ 11,001 |
Weighted average common shares outstanding used in computing basic income per share | 32,286 | 30,866 | 29,195 | ||||||||
Weighted average common shares used in computing diluted net income per share | 34,002 | 33,436 | 30,947 | ||||||||
Net income per share | |||||||||||
Basic | $ 0.26 | $ 0.27 | $ 0.46 | $ 0.43 | $ 2.88 | $ 0.38 | $ 0.46 | $ 0.32 | $ 1.42 | $ 4.11 | $ 0.38 |
Diluted | $ 0.25 | $ 0.26 | $ 0.43 | $ 0.41 | $ 2.68 | $ 0.35 | $ 0.42 | $ 0.29 | $ 1.35 | $ 3.80 | $ 0.36 |
Restricted Stock | |||||||||||
Net income per share: | |||||||||||
Incremental options and RSUs | 1,716 | 2,570 | 1,752 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Accumulated Other Comprehensive Income (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Changes in accumulated other comprehensive income, net of tax | |
Balance at December 31, 2017 | $ 2,176 |
Other comprehensive income and pension reclassification | (1,728) |
Balance at December 31, 2018 | 448 |
Foreign currency | |
Changes in accumulated other comprehensive income, net of tax | |
Balance at December 31, 2017 | 2,756 |
Other comprehensive income and pension reclassification | (1,794) |
Balance at December 31, 2018 | 962 |
Defined benefit pension plan | |
Changes in accumulated other comprehensive income, net of tax | |
Balance at December 31, 2017 | (580) |
Other comprehensive income and pension reclassification | 66 |
Balance at December 31, 2018 | $ (514) |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Recent Accounting Guidance (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2019 | Dec. 31, 2015 | |
Revenue: | |||||||||||||
Revenue | $ 442,575 | $ 410,561 | $ 266,980 | ||||||||||
Gross profit | $ 43,567 | $ 39,913 | $ 49,000 | $ 47,156 | $ 36,720 | $ 39,751 | $ 39,062 | $ 34,714 | 179,636 | 150,247 | 99,598 | ||
Income from operations | 59,959 | 47,842 | 16,623 | ||||||||||
Income before income taxes | 54,705 | 43,831 | 11,024 | ||||||||||
Income tax provision | 8,820 | (83,128) | 23 | ||||||||||
Net income | $ 8,463 | $ 8,838 | $ 14,669 | $ 13,915 | $ 91,680 | $ 11,841 | $ 13,932 | $ 9,506 | $ 45,885 | $ 126,959 | $ 11,001 | ||
Net income per share: | |||||||||||||
Basic (in dollars per share) | $ 0.26 | $ 0.27 | $ 0.46 | $ 0.43 | $ 2.88 | $ 0.38 | $ 0.46 | $ 0.32 | $ 1.42 | $ 4.11 | $ 0.38 | ||
Diluted (in dollars per share) | $ 0.25 | $ 0.26 | $ 0.43 | $ 0.41 | $ 2.68 | $ 0.35 | $ 0.42 | $ 0.29 | $ 1.35 | $ 3.80 | $ 0.36 | ||
Consolidated Balance Sheet | |||||||||||||
Deferred income taxes | $ 71,939 | $ 83,148 | $ 71,939 | $ 83,148 | |||||||||
Total assets | 548,441 | 488,218 | 548,441 | 488,218 | |||||||||
Deferred revenue | 22,584 | 18,145 | 22,584 | 18,145 | |||||||||
Total current liabilities | 84,997 | 79,287 | 84,997 | 79,287 | |||||||||
Total liabilities | 140,104 | 134,608 | 140,104 | 134,608 | |||||||||
Accumulated deficit | (157,260) | (204,745) | (157,260) | (204,745) | |||||||||
Total stockholders' equity | 408,337 | 353,610 | 408,337 | 353,610 | $ 201,455 | $ 183,764 | |||||||
Total liabilities and stockholders' equity | 548,441 | $ 488,218 | 548,441 | 488,218 | |||||||||
Cumulative adjustment increase in retained earnings | 1,600 | 1,600 | |||||||||||
Product | |||||||||||||
Revenue: | |||||||||||||
Revenue | 415,922 | ||||||||||||
ASU 2018-11 | Total Adjustment | |||||||||||||
Consolidated Balance Sheet | |||||||||||||
Operating leases | $ 6,100 | ||||||||||||
ASC 606 Adjustments | |||||||||||||
Revenue: | |||||||||||||
Revenue | (1,023) | ||||||||||||
Gross profit | (1,023) | ||||||||||||
Income from operations | (1,023) | ||||||||||||
Income before income taxes | (1,023) | ||||||||||||
Income tax provision | (165) | ||||||||||||
Net income | $ (858) | ||||||||||||
Net income per share: | |||||||||||||
Basic (in dollars per share) | $ (0.03) | ||||||||||||
Diluted (in dollars per share) | $ (0.03) | ||||||||||||
Consolidated Balance Sheet | |||||||||||||
Deferred income taxes | 165 | $ 165 | |||||||||||
Total assets | 165 | 165 | |||||||||||
Deferred revenue | 2,623 | 2,623 | |||||||||||
Total current liabilities | 2,623 | 2,623 | |||||||||||
Total liabilities | 2,623 | 2,623 | |||||||||||
Accumulated deficit | (2,458) | (2,458) | |||||||||||
Total stockholders' equity | (2,458) | (2,458) | |||||||||||
Total liabilities and stockholders' equity | 165 | 165 | |||||||||||
ASC 606 Adjustments | Product | |||||||||||||
Revenue: | |||||||||||||
Revenue | (1,023) | ||||||||||||
ASC 606 Adjustments | ASU 2014-09 | |||||||||||||
Consolidated Balance Sheet | |||||||||||||
Gross Reclassification Decrease In Contract With Customer Liability Due To New ASU Adoption | 1,600 | 1,600 | |||||||||||
Cumulative adjustment increase in retained earnings | 1,600 | 1,600 | |||||||||||
Pro Forma Under ASC 605 | |||||||||||||
Revenue: | |||||||||||||
Revenue | 441,552 | $ 410,561 | $ 266,980 | ||||||||||
Gross profit | 178,613 | ||||||||||||
Income from operations | 58,936 | ||||||||||||
Income before income taxes | 53,682 | ||||||||||||
Income tax provision | 8,655 | ||||||||||||
Net income | $ 45,027 | ||||||||||||
Net income per share: | |||||||||||||
Basic (in dollars per share) | $ 1.39 | ||||||||||||
Diluted (in dollars per share) | $ 1.32 | ||||||||||||
Consolidated Balance Sheet | |||||||||||||
Deferred income taxes | 72,104 | $ 72,104 | |||||||||||
Total assets | 548,606 | 548,606 | |||||||||||
Deferred revenue | 25,207 | 25,207 | |||||||||||
Total current liabilities | 87,620 | 87,620 | |||||||||||
Total liabilities | 142,727 | 142,727 | |||||||||||
Accumulated deficit | (159,718) | (159,718) | |||||||||||
Total stockholders' equity | 405,879 | 405,879 | |||||||||||
Total liabilities and stockholders' equity | $ 548,606 | 548,606 | |||||||||||
Pro Forma Under ASC 605 | Product | |||||||||||||
Revenue: | |||||||||||||
Revenue | $ 414,899 |
Correction of Accounting Erro_3
Correction of Accounting Error in Prior Period - (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Error Corrections and Prior Period Adjustments Restatement | |||
Provision for excess and obsolete inventory | $ 2,205 | $ 8,135 | $ 1,051 |
Change in inventories | 10,512 | 10,567 | 6,572 |
Net cash provided by (used in) operating activities | $ 46,965 | 56,284 | $ (8,788) |
Previously Reported | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Provision for excess and obsolete inventory | (8,135) | ||
Change in inventories | 5,703 | ||
Net cash provided by (used in) operating activities | 56,284 | ||
Adjusted | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Provision for excess and obsolete inventory | 8,135 | ||
Change in inventories | (10,567) | ||
Net cash provided by (used in) operating activities | 56,284 | ||
Total Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement | |||
Provision for excess and obsolete inventory | 16,270 | ||
Change in inventories | $ (16,270) |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue | ||
Product warranty period | 1 year | |
Extended warranty period | 1 year | |
Change in contract liabilities | $ 4,400 | |
Contract liabilities | 22,584 | $ 18,145 |
Deferred revenue | 19,513 | 16,181 |
Long-term deferred revenue | 3,071 | $ 1,964 |
ASC 606 Adjustments | ||
Disaggregation of Revenue | ||
Contract liabilities | 2,623 | |
ASC 606 Adjustments | ASU 2014-09 | ||
Disaggregation of Revenue | ||
Reclassification gross decrease in customer contract liabilities | $ 1,600 | |
ASC 606 Adjustments | Maximum | ||
Disaggregation of Revenue | ||
Unsatisfied extended warranty performance obligations, period | 24 months | |
Systems | ||
Disaggregation of Revenue | ||
Payment upon shipment of tool, as a percent | 90.00% | |
Payment upon installation, as a percent | 10.00% | |
Payment upon delivery of parts, period | 90 days | |
Systems | Minimum | ||
Disaggregation of Revenue | ||
Payment upon delivery of parts, period | 30 days | |
Systems | Maximum | ||
Disaggregation of Revenue | ||
Payment upon delivery of parts, period | 60 days | |
Systems | ASC 606 Adjustments | ||
Disaggregation of Revenue | ||
Increase in revenue | $ 1,000 | |
Aftermarket | Minimum | ||
Disaggregation of Revenue | ||
Extended warranty period | 1 year | |
Aftermarket | Maximum | ||
Disaggregation of Revenue | ||
Extended warranty period | 3 years |
Revenue - Revenue by discipline
Revenue - Revenue by discipline & geographical areas (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disaggregation of Revenue | |||
Revenue | $ 442,575 | $ 410,561 | $ 266,980 |
North America | |||
Disaggregation of Revenue | |||
Revenue | 54,790 | ||
Asia Pacific | |||
Disaggregation of Revenue | |||
Revenue | 326,191 | ||
Europe | |||
Disaggregation of Revenue | |||
Revenue | 61,594 | ||
Systems | |||
Disaggregation of Revenue | |||
Revenue | 280,388 | 262,688 | 139,284 |
Aftermarket | |||
Disaggregation of Revenue | |||
Revenue | 162,187 | 147,873 | 127,696 |
Pro Forma Under ASC 605 | |||
Disaggregation of Revenue | |||
Revenue | 441,552 | 410,561 | 266,980 |
Pro Forma Under ASC 605 | North America | |||
Disaggregation of Revenue | |||
Revenue | 59,825 | 49,864 | |
Pro Forma Under ASC 605 | Asia Pacific | |||
Disaggregation of Revenue | |||
Revenue | 296,481 | 166,203 | |
Pro Forma Under ASC 605 | Europe | |||
Disaggregation of Revenue | |||
Revenue | $ 54,255 | $ 50,913 | |
ASC 606 Adjustments | |||
Disaggregation of Revenue | |||
Revenue | (1,023) | ||
ASC 606 Adjustments | North America | |||
Disaggregation of Revenue | |||
Revenue | 200 | ||
ASC 606 Adjustments | Asia Pacific | |||
Disaggregation of Revenue | |||
Revenue | $ 1,300 |
Revenue - Contract assets and l
Revenue - Contract assets and liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | |
Revenue | |||
Contract liabilities | $ 18,145 | $ 22,584 | |
Revenue recognized in the period from: | |||
Amounts included in contract liability at the beginning of the period | $ 12,845 | $ 9,522 |
Cash, cash equivalents and re_3
Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and cash equivalents | $ 177,993 | $ 133,407 | ||
Short-term and long-term restricted cash | 6,909 | 7,473 | ||
Total cash, cash equivalents and long-term restricted cash | 184,902 | $ 140,880 | $ 77,655 | $ 85,825 |
Letter of credit related to workers' compensation insurance | 800 | |||
Letter of credit associated with a bank guarantee | 100 | |||
Deposit related to customs activity | 100 | |||
Revolving credit facility | ||||
Restricted cash which relates to support of outstanding letters of credit | 6,900 | |||
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, 2018 | Dec. 31, 2017 |
Accounts Receivable, net | ||
Trade receivables | $ 78,727 | $ 75,302 |
Trade receivable, net | $ 78,727 | $ 75,302 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventories, net | ||
Raw materials | $ 91,875 | $ 82,313 |
Work in process | 23,857 | 31,651 |
Finished goods (completed systems) | 13,268 | 6,580 |
Inventories, net | $ 129,000 | $ 120,544 |
Inventories, net - Additional I
Inventories, net - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Inventories, net additional information | |||
Charges to cost of sales due to lower of cost or market value | $ 2.2 | $ 8.1 | $ 0.8 |
Inventory on consignment at customer locations | 4.6 | 3.6 | |
Inventory reserves | |||
Inventories, net additional information | |||
Increase in inventory reserves | 0.3 | ||
Inventory reserves | $ 13.9 | $ 14.2 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, plant and equipment | |||
Gross | $ 102,252 | $ 94,719 | |
Accumulated depreciation | (61,103) | (58,551) | |
Net | 41,149 | 36,168 | |
Depreciation expense | 3,200 | 2,200 | $ 1,800 |
Land and buildings | |||
Property, plant and equipment | |||
Gross | 75,904 | 76,260 | |
Machinery and equipment | |||
Property, plant and equipment | |||
Gross | 19,982 | 11,477 | |
Construction in process | |||
Property, plant and equipment | |||
Gross | $ 6,366 | $ 6,982 |
Assets Manufactured for Inter_3
Assets Manufactured for Internal Use, net - Components (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Assets manufactured for internal use | ||||
Cost | $ 102,252 | $ 94,719 | ||
Accumulated depreciation | (61,103) | (58,551) | ||
Net | 41,149 | 36,168 | ||
Depreciation expense | $ 3,200 | 2,200 | $ 1,800 | |
Assets Manufactured for Internal Use | ||||
Assets manufactured for internal use | ||||
Useful life | 10 years | |||
Cost | $ 49,118 | 40,667 | ||
Accumulated depreciation | (19,285) | (20,035) | ||
Net | 29,833 | 20,632 | ||
Depreciation expense | 2,600 | 2,800 | $ 2,400 | |
Assets Manufactured for Internal Use | Internal use assets | ||||
Assets manufactured for internal use | ||||
Cost | 47,509 | 40,366 | ||
Assets Manufactured for Internal Use | Construction in process. | ||||
Assets manufactured for internal use | ||||
Cost | $ 1,609 | $ 301 |
Product Warranty (Details)
Product Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Product Warranty | ||||||
Product warranty period | 1 year | |||||
Changes in standard product warranty liability | ||||||
Balance at January 1 (beginning of year) | $ 4,502 | $ 2,666 | $ 3,555 | |||
Warranties issued during the period | 5,421 | 5,671 | 3,125 | |||
Settlements made during the period | (5,903) | (2,603) | (4,249) | |||
Changes in estimate of liability for pre-existing warranties during the period | 1,071 | (1,232) | 235 | |||
Balance at December 31 (end of period) | 5,091 | 4,502 | 2,666 | |||
Product warranty classification | ||||||
Amount classified as current | $ 4,819 | $ 4,112 | $ 2,426 | |||
Amount classified as long-term | 272 | 390 | 240 | |||
Total warranty liability | $ 4,502 | $ 2,666 | $ 3,555 | $ 5,091 | $ 4,502 | $ 2,666 |
Financing Arrangements (Details
Financing Arrangements (Details) - USD ($) $ in Thousands | Jun. 30, 2015 | Jan. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 |
Financing Arrangements | ||||
Sale leaseback obligation | $ 47,757 | $ 47,714 | ||
Beverly Property Owner LLC | Sale leaseback obligation | Land and buildings | ||||
Financing Arrangements | ||||
Sale price | $ 48,900 | |||
Lease term | 22 years | |||
Sale leaseback obligation | 47,800 | |||
Security deposit | $ 5,900 |
Employee Benefit Plans - Define
Employee Benefit Plans - Defined Contribution Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Contribution Plan | ||||
Employer contributed by eligible participants | 50.00% | 50.00% | 50.00% | |
Pre-tax compensation contributed | 6.00% | |||
Defined contribution plan expenses | $ 1,600 | $ 1,200 | $ 500 | |
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, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Classification of liabilities in the Consolidated Balance Sheets | |||
Current liabilities | $ 973 | $ 967 | |
Other long-term liabilities | 3,327 | 3,583 | |
Total liabilities | 4,300 | 4,550 | |
Plan expenses | 1,300 | 1,000 | $ 800 |
Accrued compensation | |||
Classification of liabilities in the Consolidated Balance Sheets | |||
Current liabilities | $ 973 | $ 967 |
Stock Award Plans and Stock B_3
Stock Award Plans and Stock Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | 80 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | 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 | $ 7,800 | $ 5,700 | $ 5,200 | ||
Tax deductions in excess of recognized compensation cost | 4,100 | ||||
Tax benefit | $ 900 | ||||
Options | |||||
Granted (in shares) | 0 | 0 | |||
Shares/units | |||||
Outstanding at the beginning of the period (in shares) | 617 | ||||
Granted (in shares) | 459 | ||||
Vested (in shares) | (245) | ||||
Forfeited (in shares) | (11) | ||||
Outstanding at the end of the period (in shares) | 820 | 617 | 820 | ||
Weighted-Average Grant Date Fair Value per Share | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 14.93 | ||||
Granted (in dollars per share) | 22.41 | ||||
Vested (in dollars per share) | 15.90 | ||||
Forfeited (in dollars per share) | 17.78 | ||||
Outstanding at the end of the period (in dollars per share) | $ 18.76 | $ 14.93 | $ 18.76 | ||
Common Stock | |||||
Employee Stock Purchase Plan | |||||
Number of shares purchased under the plan | 55 | 34 | 22 | ||
Options | |||||
Exercised (in shares) | (273) | (2,358) | (392) | ||
Employee stock purchase plan | |||||
Stock-Based Compensation | |||||
Number of shares of common stock available for future grant | 200,000 | 200,000 | |||
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 | $ 200 | $ 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 Units and Restricted Stock | |||||
Weighted-Average Grant Date Fair Value per Share | |||||
Granted (in dollars per share) | $ 20.72 | $ 9.73 | |||
Restricted Stock Units and Restricted Stock | Employees | |||||
Stock-Based Compensation | |||||
Vesting period | 4 years | ||||
Restricted Stock Units and Restricted Stock | Non-employee members of Board of Directors | |||||
Stock-Based Compensation | |||||
Vesting period | 6 months | ||||
Stock Options | |||||
Options | |||||
Outstanding at the beginning of the period (in shares) | 2,576,000 | ||||
Exercised (in shares) | (273,000) | ||||
Canceled (in shares) | (5,000) | ||||
Expired (in shares) | (13,000) | ||||
Outstanding at the end of the period (in shares) | 2,285,000 | 2,576,000 | 2,285,000 | ||
Exercisable (in shares) | 2,116,000 | 2,116,000 | |||
Options Vested or Expected to Vest at the end of the period (in shares) | 2,282,000 | 2,282,000 | |||
Weighted Average Exercise Price | |||||
Outstanding at the beginning of the period (in dollars per share) | $ 7.91 | ||||
Exercised (in dollars per share) | 6.34 | ||||
Canceled (in dollars per share) | 10.04 | ||||
Expired (in dollars per share) | 2.46 | ||||
Outstanding at the end of the period (in dollars per share) | 8.12 | $ 7.91 | $ 8.12 | ||
Exercisable at the end of the period (in dollars per share) | 7.79 | 7.79 | |||
Options Vested or Expected to Vest at the end of the period (in dollars per share) | $ 8.11 | $ 8.11 | |||
Weighted Average Remaining Contractual Term | |||||
Outstanding at the end of the period | 2 years 3 months 26 days | ||||
Exercisable at the end of the period | 2 years 2 months 16 days | ||||
Options Vested or Expected to Vest at the end of the period | 2 years 4 months 6 days | ||||
Aggregate Intrinsic Value | |||||
Outstanding at the end of the period (in dollars) | $ 22,128 | $ 22,128 | |||
Exercisable at the end of the period (in dollars) | 21,174 | 21,174 | |||
Options Vested or Expected to Vest at the end of the period (in dollars) | 22,109 | 22,109 | |||
Additional disclosure | |||||
Total intrinsic value of options exercised (in dollars) | 4,100 | $ 39,700 | $ 2,500 | ||
Total fair value of stock options vested (in dollars) | 1,900 | $ 3,100 | $ 3,900 | ||
Weighted average grant fair value of options granted (in dollars per share) | $ 5.75 | ||||
Total forfeiture adjusted unrecognized compensation cost (in dollars) | $ 700 | $ 700 | |||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 8 months 12 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% | ||||
Risk-free interest rate, maximum (as a percent) | 2.00% | ||||
Expected dividend yield (as a percent) | 0.00% | ||||
Stock Options and Restricted Stock Units | Minimum | |||||
Estimated weighted-average assumptions | |||||
Weighted-average expected volatility (as a percent) | 49.30% | ||||
Stock Options and Restricted Stock Units | Maximum | |||||
Estimated weighted-average assumptions | |||||
Weighted-average expected volatility (as a percent) | 56.70% | ||||
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 | 600,000 | 600,000 | |||
2012 Equity Incentive Plan | Restricted Stock Units and Restricted Stock | |||||
Additional disclosure | |||||
Total forfeiture adjusted unrecognized compensation cost (in dollars) | $ 11,700 | $ 11,700 | |||
Weighted-average period over which unrecognized compensation cost is expected to be recognized | 2 years 8 months 12 days | ||||
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) - USD ($) shares in Thousands, $ in Millions | Jan. 01, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Stockholders' Equity | |||
Number of common stock authorized | 75,000 | 75,000 | |
Number of common stock outstanding | 32,558 | 32,048 | |
Share repurchase program expiration period | 1 year | ||
Maximum | |||
Stockholders' Equity | |||
Share repurchase program common stock authorized amount | $ 35 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Money market funds, US Government Securities and Agency Investments - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Total | ||
Fair Value Measurements | ||
Money market funds, U.S. Government Securities and Agency Investments | $ 160,210 | $ 116,433 |
Level 1 | ||
Fair Value Measurements | ||
Money market funds, U.S. Government Securities and Agency Investments | 138,510 | $ 116,433 |
Recurring | Level 2 | ||
Fair Value Measurements | ||
Money market funds, U.S. Government Securities and Agency Investments | $ 21,700 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Jan. 30, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Lease Commitments | ||||
Rental expense under operating leases | $ 4,600 | $ 3,900 | $ 3,800 | |
Future minimum lease commitments on non-cancelable operating leases | ||||
2019 | 3,244 | |||
2020 | 2,022 | |||
2021 | 719 | |||
2022 | 73 | |||
2023 | 37 | |||
Thereafter | 1 | |||
Total | 6,096 | |||
Cash payment schedule associated with lease obligation | ||||
2019 | 5,594 | |||
2020 | 5,720 | |||
2021 | 5,848 | |||
2022 | 5,980 | |||
2023 | 6,114 | |||
Thereafter | 85,905 | |||
Total lease payments | 115,161 | |||
Less interest portion | (67,404) | |||
Sales leaseback obligation | 47,757 | $ 47,714 | ||
Purchase Commitments | ||||
Contracts and purchase orders for inventory and other expenditures | 61,600 | |||
Land and buildings | Sale leaseback obligation | Beverly Property Owner LLC | ||||
Cash payment schedule associated with lease obligation | ||||
Sales leaseback obligation | $ 47,800 | |||
Purchase Commitments | ||||
Lease term | 22 years |
Business Segment and Geograph_3
Business Segment and Geographic Region Information - Number of Segments (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Business Segment and Geographic Region Information | |
Number of business segments | 1 |
Business Segment and Geograph_4
Business Segment and Geographic Region Information - Revenue by Product Line (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue by product lines | ||||||||||||
Revenue | $ 105,683 | $ 95,374 | $ 119,333 | $ 122,185 | $ 116,396 | $ 104,482 | $ 102,790 | $ 86,893 | $ 442,575 | $ 410,561 | $ 266,980 | $ 266,980 |
Ion implantation systems and services | ||||||||||||
Revenue by product lines | ||||||||||||
Revenue | 421,747 | 391,051 | 248,885 | |||||||||
Other systems and services | ||||||||||||
Revenue by product lines | ||||||||||||
Revenue | $ 20,828 | $ 19,510 | $ 18,095 |
Business Segment and Geograph_5
Business Segment and Geographic Region Information - Revenue and Long-Lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue and long-lived assets by geographic region | ||||||||||||
Revenue | $ 105,683 | $ 95,374 | $ 119,333 | $ 122,185 | $ 116,396 | $ 104,482 | $ 102,790 | $ 86,893 | $ 442,575 | $ 410,561 | $ 266,980 | $ 266,980 |
Long-Lived Assets | 70,982 | 56,796 | 70,982 | 56,796 | 52,523 | |||||||
United States. | ||||||||||||
Revenue and long-lived assets by geographic region | ||||||||||||
Revenue | 342,802 | 313,916 | 191,261 | |||||||||
Long-Lived Assets | 66,089 | 56,089 | 66,089 | 56,089 | 52,006 | |||||||
Europe | ||||||||||||
Revenue and long-lived assets by geographic region | ||||||||||||
Revenue | 29,417 | 26,936 | 25,436 | |||||||||
Asia Pacific | ||||||||||||
Revenue and long-lived assets by geographic region | ||||||||||||
Revenue | 70,356 | 69,709 | 50,283 | |||||||||
Long-Lived Assets | $ 4,893 | $ 707 | 4,893 | 707 | 517 | |||||||
International | Revenue | Geographic concentration risk | ||||||||||||
Revenue and long-lived assets by geographic region | ||||||||||||
Revenue | $ 388,300 | $ 348,500 | $ 213,800 | |||||||||
Percentage of revenue | 87.70% | 84.90% | 80.00% |
Income Taxes - Tax Effects (Det
Income Taxes - Tax Effects (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income (loss) before income taxes | |||
United States | $ 52,172 | $ 40,752 | $ 8,880 |
Foreign | 2,533 | 3,079 | 2,144 |
Income before income taxes | 54,705 | 43,831 | 11,024 |
Current: | |||
Federal | 41 | 430 | |
State | 112 | 32 | 49 |
Foreign | 323 | 230 | (217) |
Total current | 476 | 692 | (168) |
Deferred: | |||
Federal | 8,108 | (82,048) | |
State | 425 | (1,698) | |
Foreign | (189) | (74) | 191 |
Total deferred | 8,344 | (83,820) | 191 |
Income tax provision (benefit) | 8,820 | (83,128) | 23 |
Reconciliation of income taxes at the United States Federal statutory rate to the effective income tax rate | |||
Income taxes at the United States statutory rate | 11,488 | 15,341 | 3,859 |
State income taxes | 299 | 203 | 32 |
Unrecognized tax benefits | (345) | (285) | (615) |
Effect of change in valuation allowance | (441) | (115,831) | (7,765) |
Foreign income tax rate differentials | 73 | (312) | 233 |
Unremitted earnings of foreign subsidiaries | (8,933) | 305 | |
Stock options | (715) | (10,342) | 264 |
Credit expirations | 3,565 | ||
Repatriation of foreign earnings | 4,556 | ||
Recognition of equity NOL's | (1,165) | ||
Rate change | 160 | 42,531 | |
Credit generation | (3,530) | (8,778) | |
Discrete items, net | 972 | 31 | |
Other, net | 859 | (144) | 145 |
Income tax provision (benefit) | 8,820 | (83,128) | $ 23 |
Significant components of long-term deferred income taxes | |||
Federal net operating loss carryforwards | 42,397 | 56,646 | |
State net operating loss carryforwards | 1,387 | 1,586 | |
Foreign net operating loss carryforwards | 641 | 758 | |
Federal tax credit carryforwards | 16,200 | 14,312 | |
State tax credit carryforwards | 6,489 | 6,908 | |
Unremitted earnings of foreign subsidiaries | (21) | ||
Intangible assets | (29) | 116 | |
Property, plant and equipment | 5,924 | 5,838 | |
Accrued compensation | 97 | 45 | |
Inventories | 3,713 | 3,798 | |
Stock compensation | 2,760 | 2,351 | |
Warranty | 1,090 | 980 | |
Deferred revenue | 1,004 | 187 | |
Other | (2,899) | (3,220) | |
Deferred taxes, gross | 78,774 | 90,284 | |
Valuation allowance | (6,835) | (7,136) | |
Deferred taxes, net | $ 71,939 | $ 83,148 |
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 | |
Income Taxes | ||
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% | |
Provisional Toll tax | $ 3,600 | $ 4,600 |
Accrued income tax liabilities | $ 300 | |
Transition toll tax, period | 8 years | |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 35.00% |
Tax related to GILTI | $ 400 | |
Valuation allowance | (6,835) | $ (7,136) |
Deferred taxes, net | $ 71,939 | $ 83,148 |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforwards (Details) $ in Millions | Dec. 31, 2018USD ($) |
Federal and state | |
Operating loss carryforwards | |
Net operating loss carryforwards | $ 226.3 |
Foreign | |
Operating loss carryforwards | |
Net operating loss carryforwards | $ 2.5 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Tax Credit Carryforward [Line Items] | ||||
Cash associated with indefinitely reinvested foreign earnings | $ 4,900 | |||
Unrecognized tax benefits related to uncertain tax positions | 9,127 | $ 9,105 | $ 6,844 | $ 7,671 |
Recorded as a decrease in deferred tax assets and offsetting valuation allowance | 8,451 | 7,996 | 5,382 | |
Unrecognized Tax Benefits Recorded as Other Long Term Liability | 676 | 1,109 | 1,462 | |
Reversal of tax reserve | 543 | $ 511 | $ 903 | |
Interest and penalty expense recognized related to unrecognized tax benefits | 300 | |||
Unrecognized tax benefits | 700 | |||
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 | $ 22,700 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of the beginning and ending balance of unrecognized tax benefits | ||||||
Balance at beginning of year | $ 9,105 | $ 6,844 | $ 7,671 | |||
(Decrease) / increase in unrecognized tax benefits as a result of tax positions taken during a prior period | 81 | 76 | ||||
(Decrease) / increase in unrecognized tax benefits as a result of tax positions taken during a prior period | (132) | |||||
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations | (543) | (511) | (903) | |||
Increases in unrecognized tax benefits as a result of tax positions taken during the current period | 697 | 2,691 | ||||
Balance at end of year | 9,127 | 9,105 | 6,844 | |||
Recorded as other long-term liability | $ 676 | $ 1,109 | $ 1,462 | |||
Recorded as a decrease in deferred tax assets and offsetting valuation allowance | 8,451 | 7,996 | 5,382 | |||
Unrecognized tax benefits | $ 9,105 | $ 6,844 | $ 7,671 | $ 9,127 | $ 9,105 | $ 6,844 |
Quarterly Results of Operatio_3
Quarterly Results of Operations (unaudited) - Results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Results of Operations (unaudited) | ||||||||||||
Revenue | $ 105,683 | $ 95,374 | $ 119,333 | $ 122,185 | $ 116,396 | $ 104,482 | $ 102,790 | $ 86,893 | $ 442,575 | $ 410,561 | $ 266,980 | $ 266,980 |
Gross profit | 43,567 | 39,913 | 49,000 | 47,156 | 36,720 | 39,751 | 39,062 | 34,714 | 179,636 | 150,247 | 99,598 | |
Net income | $ 8,463 | $ 8,838 | $ 14,669 | $ 13,915 | $ 91,680 | $ 11,841 | $ 13,932 | $ 9,506 | $ 45,885 | $ 126,959 | $ 11,001 | |
Net income per basic share (in dollars per share) | $ 0.26 | $ 0.27 | $ 0.46 | $ 0.43 | $ 2.88 | $ 0.38 | $ 0.46 | $ 0.32 | $ 1.42 | $ 4.11 | $ 0.38 | |
Net income per diluted share (in dollars per share) | $ 0.25 | $ 0.26 | $ 0.43 | $ 0.41 | $ 2.68 | $ 0.35 | $ 0.42 | $ 0.29 | $ 1.35 | $ 3.80 | $ 0.36 |
Quarterly Results of Operatio_4
Quarterly Results of Operations (unaudited) - Additional Information (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Quarterly Results of Operations (unaudited) | |
Inventory Write-down | $ 6.2 |
Tax benefit relating to reversal of a valuation allowance on deferred tax assets | $ 81.6 |
Schedule II Valuation and Qua_2
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for doubtful accounts and returns | |||
Changes in Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | $ 77 | ||
Charged to Costs and Expenses | $ 106 | ||
Deductions | 77 | 29 | |
Balance at End of Period | 77 | ||
Deferred tax valuation allowance | |||
Changes in Valuation and Qualifying Accounts | |||
Balance at Beginning of Period | $ 7,136 | 122,966 | 132,263 |
Charged to Costs and Expenses | (441) | (115,831) | (7,765) |
Deductions | (140) | (1) | 1,532 |
Balance at End of Period | $ 6,835 | $ 7,136 | $ 122,966 |