Exhibit 99.1
Ultra Clean Holdings Reports Second Quarter 2004 Results
Announces 33.5% Sequential Sales Increase to Record Revenue of $54.5 million
Menlo Park, CA., July 29. – Ultra Clean Holdings, Inc. (Nasdaq: UCTT), a developer and supplier of critical subsystems for the semiconductor capital equipment industry, focusing on gas delivery systems, today announced operating results for the second quarter ended June 30, 2004. Among the highlights for the second quarter, the Company announced record sales of $54.5 million and net income of $3.1 million.
Sales for the quarter were $54.5 million, representing a 33.5% sequential increase from sales of $40.8 million for the quarter ended March 31, 2004, and a 213% year-over-year increase from sales of $17.4 during the quarter ended June 30, 2003.
The Company reported $3.1 million of net income for the quarter ended June 30, 2004 compared to net income of $1.4 million for the quarter ended March 31, 2004, and a net loss of ($0.2) million in the quarter ended June 30, 2003. On a fully-diluted basis, this equates to $0.18 of earnings per share in the second quarter of 2004, compared to $0.13 of earnings per share in the quarter ended March 31, 2004, and a loss of ($0.02) per share in the quarter ended June 30, 2003.
Clarence Granger, UCT’s President and Chief Executive Officer, commented on the second quarter results: “We are extremely pleased with UCT’s second quarter revenues and net income. Our growth rate during the quarter continued at a higher rate than that of the broader semiconductor capital equipment industry and we were able to achieve a second consecutive quarter of record revenues.”
Gross margin in the second quarter was 16.4%. This was up from the 14.9% gross margin recorded in the first quarter of 2004, and higher than the 15.2% gross margin recorded during the second quarter of 2003. Granger commented, “The gross margin improvement during the second quarter of 2004 was achieved primarily by efficiencies gained in our operations. We believe there are more opportunities to increase gross margins going forward at a more moderate rate of revenue growth.”
Operating income for the second quarter was $5.2 million, representing a 92.6% sequential increase from operating income of $2.7 million for the quarter ended March 31, 2004 and a $5.4 million year-over-year increase from an operating loss of $0.2 million in the quarter ended June 30, 2003.
Among the additional highlights of the second quarter, the Company:
- successfully shipped its first four frame assemblies to a major customer;
- gained market share within a key product business group at one of it’s major customers;
- received two quality awards from Novellus Systems;
- sold a catalytic steam generator to a second major customer;
- further penetrated a new customer account won during 2004.
Outlook
Commenting on UCT’s corporate outlook, Granger noted, “We believe that moderated growth in the current cycle will allow us to streamline our internal operations and achieve higher margins. We expect our sales in the third quarter to be essentially the same as the second quarter and for gross margin to increase incrementally. We anticipate that net income will be slightly higher than the second quarter. In just the first two quarters of this year we have exceeded our best annual performance ever, and are optimistic about improved profitability in the second half of the year.”
Safe Harbor Statement
The foregoing information contains, or may be deemed to contain, "forward-looking statements" (as defined in the U.S. Private Securities Litigation Reform Act of 1995) which reflect our current views with respect to future events and financial performance. We use words such as "anticipates," "believes," "plan," "expect," "future,"' "intends," "may," "will," "should," "estimates," "predicts," "potential," "continue" and similar expressions to identify these forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, you should not rely on forward-looking statements, as there are or will be important factors that could cause our actual results, as well as those of the markets we serve, levels of activity, performance, achievements and prospects to differ materially from the results predicted or implied by these forward-looking statements. These risks, uncertainties and other factors include, among others, those identified in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations'' and elsewhere in our S-1 registration statement and our quarterly report on Form 10-Q filed with the Securities and Exchange Commission. Ultra Clean Holdings, Inc. undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise.
About Ultra Clean Holdings, Inc.
Ultra Clean Holdings, Inc. is a developer and supplier of critical subsystems for the semiconductor capital equipment industry, focusing on gas delivery systems. Ultra Clean offers its customers a complete outsourced solution for gas delivery systems, improved design-to-delivery cycle times, component neutral design and manufacturing and component testing capabilities. Ultra Clean’s customers are primarily original equipment manufacturers of semiconductor capital equipment. The Company is headquartered in Menlo Park, California. Additional information is available atwww.uct.com.
This information will be discussed on a conference call to be held today, Thursday, July 29, 2004 at 2:00 p.m. PDT. You may access the call via live webcast, which will be available online atwww.uct.com under the Investor Relations section. We have arranged for a taped replay of this call which may be accessed by phone. This replay will take place approximately one hour after the call's conclusion today and will last for two days." Please dial 402-977-9140, passcode 21202232.
ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share amounts)
| | December 31,
2003 | | June 30,
2004 | |
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| ASSETS | | | | (Unaudited) | |
| Current assets: | | | | | | |
| Cash | $ | 6,035 | | $ | 7,476 | |
| Accounts receivable | | 11,724 | | | 21,635 | |
| Inventories | | 9,123 | | | 18,381 | |
| Deferred income taxes | | 1,802 | | | 2,563 | |
| Prepaid expenses and other | | 210 | | | 499 | |
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| Total current assets | | 28,894 | | | 50,554 | |
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| Equipment and leasehold improvements, net | | 3,573 | | | 3,738 | |
| Goodwill | | 6,617 | | | 6,617 | |
| Tradename | | 8,987 | | | 8,987 | |
| Deferred income taxes | | 1,731 | | | 1,594 | |
| Other non-current assets | | 353 | | | 367 | |
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| Total assets | $ | 50,155 | | $ | 71,857 | |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | |
| Current liabilities: | | | | | | |
| Accounts payable | $ | 9,805 | | $ | 19,721 | |
| Accrued expenses and other liabilities | | 1,413 | | | 2,199 | |
| Income taxes payable | | 46 | | | 1,243 | |
| Capital lease obligations, current portion | | 111 | | | 126 | |
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| Total current liabilities | | 11,375 | | | 23,289 | |
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| Capital lease obligations and other liabilities | | 447 | | | 464 | |
| Series A Senior Notes to related parties, net of deferred | | | | | | |
| compensation of $580 in 2003 and$0 in 2004 | | 30,013 | | | — | |
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| Total liabilities | | 41,835 | | | 23,753 | |
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| Commitments and contingencies | | | | | | |
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| Stockholders’ equity: | | | | | | |
| Common stock —$0.001 par value, 90,000,000 authorized; | | | | | | |
| 10,245,395 and 16,313,561 shares issued and outstanding, | | | | | | |
| in 2003 and 2004, respectively | | 10,377 | | | 46,019 | |
| Deferred stock-based compensation | | (316 | ) | | (676 | ) |
| Retained earnings (accumulated deficit) | | (1,741 | ) | | 2,761 | |
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| Total stockholders’ equity | | 8,320 | | | 48,104 | |
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| Total liabilities and stockholders’ equity | $ | 50,155 | | $ | 71,857 | |
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ULTRA CLEAN HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| | Three months ended June 30, | | Six months ended June 30, | |
| | 2003 | | 2004 | | 2003 | | 2004 | |
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| Sales | $ | 17,410 | | $ | 54,508 | | $ | 35,036 | | $ | 95,345 | |
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| Cost of goods sold | | 14,768 | | | 45,586 | | | 31,013 | | | 80,342 | |
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| Gross profit | | 2,642 | | | 8,922 | | | 4,023 | | | 15,003 | |
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| Operating expenses: | | | | | | | | | | | | |
| Research and development | | 268 | | | 661 | | | 527 | | | 1,213 | |
| Sales and marketing | | 553 | | | 941 | | | 1,024 | | | 1,645 | |
| General and administrative | | 1,984 | | | 2,099 | | | 2,739 | | | 3,575 | |
| Stock based compensation | | 67 | | | 52 | | | 134 | | | 656 | |
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| Total operating expenses | | 2,872 | | | 3,753 | | | 4,424 | | | 7,089 | |
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| Income (loss) from operations | | (230 | ) | | 5,169 | | | (401 | ) | | 7,914 | |
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| Other income (expense): | | | | | | | | | | | | |
| Interest expense and other, net | | (336 | ) | | (21 | ) | | (741 | ) | | (411 | ) |
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| Income (loss) before income taxes | | (566 | ) | | 5,148 | | | (1,142 | ) | | 7,503 | |
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| Income tax (provision) benefit | | 411 | | | (2,059 | ) | | 543 | | | (3,001 | ) |
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| Net income (loss) | $ | (155 | ) | $ | 3,089 | | $ | (599 | ) | $ | 4,502 | |
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| Net income (loss) per share | | | | | | | | | | | | |
| Basic | $ | (0.02 | ) | $ | 0.19 | | $ | (0.06 | ) | $ | 0.34 | |
| Diluted | $ | (0.02 | ) | $ | 0.18 | | $ | (0.06 | ) | $ | 0.32 | |
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| Shares used in computing | | | | | | | | | | | | |
| net income (loss) per share: | | | | | | | | | | | | |
| Basic | | 9,976 | | | 16,046 | | | 9,976 | | | 13,078 | |
| Diluted | | 9,976 | | | 17,204 | | | 9,976 | | | 13,996 | |
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| Contact: |
| Ultra Clean Technology |
| Clarence Granger, Chief Executive Officer |
| (650) 323-4100 |
| cgranger@uct.com |
