ACLS - Earnings call transcript Q1 2022 | Axcelis Technologies, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Axcelis Technologies call to discuss the company's results for the first quarter of 2022. My name is Sylvana I'll be your coordinator for today. At this time, all participants are in a listen-only mode.

We will be facility question-and-answer session towards the end of this conference. [Operator Instructions]. to call. presentation like host to now today's for would turn over the your I President CEO Puma, Mary and of Axcelis Technologies. Please ma'am. proceed,

Mary Puma

Sylvia. Marketing and is today and Lawson, With Executive Strategy. Vice you, Executive Corporate President Doug CFO, Kevin of President Vice and Thank Brewer, me

apologize all to in would participating any for are call remotely, advance We I technical so this like in difficulties.

Harbor our copy our These website results issued Form, yesterday, XX-K be available forward-looking in on website. the If subject press filings, service statements note release These available described our to release. forward-looking on you've risks expectations detail and it urge that today as inherent in press future and on and not in report our statements which comments SEC to other are of our in our are we are revenues, under profits, seen about you risks Safe described business. also provision. sec Playback a for will other management's Please are the annual is our made based current expectations review.

required differ us may earnings XXXX results Good demand to for ended has the with produce and chips expectations. exactly and statements. industry, to our equipment for these from them. assume first-quarter significant any for actual Our obligation We do the update you thank XXXX as morning for forward-looking current our joining not materially begun call. capital both Axcelis in

of of again with under to satisfaction dedicated satisfaction. these conditions. Axcelis once has top environment, by our product employees challenging customer Today, maintain has to customer levels I momentum and supply for team gain high solid high to level challenging base. results growing delivering large Axcelis, the adoption continues us keep like would thank logistics need shipments, remains and and and priority. Turning been across strong full our the to demand, execution the the Customer family full up allowed specifically, despite this chain these of the Purion customer

and demand first strong balance our financial was $XXX.X XX.X%, guidance. was As $X.XX, performance well the share $XXX.X cash for our million. million per the first-quarter and our execution, of margin quarter-end quarter gross a this of result above with earnings of of Revenue

business was Our and be for continued contribute $XX.X process to aftermarket as in we revenue customers with customers, mature revenue what continues to significantly QX technology growing to going The or area X% first margin. refer CS&I, million. accounting our to CS&I XX% gross logic an market quarter to DRAM with Axcelis foundry NAND XX%. and memory for to XX% of shipments strength of and mature

XX%, Taiwan orders U.S. XXXX XX%, quarter was first around good technology geographic process Japan XX%. XX%, be world the significant more world, global our XXXX market. Europe X%, with investment due system XX%, the was from Visibility the Korea for XX%, continues of shipments Our China demand the perspective, evenly in in The and mix the a booked. the mature mix rest already for significant resulting to spread of to

achieve to than in $XXX XXXX. expects revenue now Axcelis of result, a As greater million

revenue million $XX of of profit of approximately and $XXX earnings quarter, share XX%, approximately second $X. $XXX the of For operating to expect margin gross approximately we per million, million

and the and continues industry Kevin mitigate The challenges. to color be increases and gross reflects will ever a operating quarter. seen on provide same the by that expenses. guidance more are in last actions the our minutes, costs margin strongest taking factors Our to we're driven in impacting supply we've In chain cycle logistic is few discussed these

more power investment more silicon to rapidly. carbide approximately advanced should TAM both implant require extensions. billion $X devices Purion a to the are in product grow continues Power addition our has and In the market, significantly and strong silicon market, implant-intensive increased and

We to segment come. account our by years transition is expect account Axcelis that for the shipments system long-term in we XX% This should growth to approximately many for will mature benefit the our trend XXXX. between of Overall, a expect for XX% markets the XX% shipments power system XXXX. of in driven electric to and vehicle and total

revenue. system in April, revenue memory We high to current at shipped expect expect accounted evaluation XXXX in a levels at growth to a we in XXXX. These evaluation shipped segment. evaluation new application. approximately growing existing Purion XX% market, the We in the peak. Purion of it maintain Axcelis memory strong will for the fab to and largest two customer process In be memory for Purion new memory. approach last position further we seen customer. current In H mature products high shipments XX% XXXX, implant a position an the we H systems Also, H for April, a And a will in DRAM technology

and financials Kevin? like operational turn I'd update. over Now Kevin provide to to to discuss an our it

Kevin Brewer

worked execution delivered top morning. are and results, solid strategically company closely and engineering purchasing our results at manufacturing hard guidance board. supply quarter, and Thank across tackle Throughout we're these bottom-line consensus tool high shortages, higher the you, Axcelis and Pandemic-related QX. to first-quarter good continuing, tactically and issues. sales, chip very chain exceptional issues Mary, and shutdowns, and strong with drove and mix, logistics working financial the estimates beating while suppliers team performed the disruption teams a filled Favorable in gap nagging mitigate to our level. and

disruption markets and $XXX and As year Like dealing and higher be good. the our included full-year anticipated are similar and Mary into guidance million. to but on now and are revenue remains is we daily. is Axcelis, I've these QX chain to track for industry, greater challenges expect situation full-year we supply visibility mentioned, almost with costs, in another XXXX strong End others the great forecast, changing be than

to the we production in This levels. have flexibility now and noted center and our at shipped the Korea, manufacturing capacity billion we operations $X continue new Asia South last revenue model. from our As edge multiple factory call, production to support we as systems ramp began Axcelis in AOC

finished QX above QX million, revenue $XXX.X $XXX.X million to sales first finished at revenue compared guidance $XXX.X CS&I Moving to $XX.X $XX.X financial in system QX. now well million to at to our QX in QX. were in million compared $XXX.X compared results. million, QX. quarter million our

and approximately to of is the or at million. expansions finished a new XX.X% which for system sales SG&A revenue new XXXX, to spending in We million including XX.X% customers beyond customers million expect accounted be planning with Two X.XX and our of $XX.X XX.X% expect around QX are QX quarter XX% $XX.X $XX XX% XXXX QX $XXX or in of modeling with revenue top customers QX $XX remainder CS&I sales, was million QX bookings QX. bookings or $XXX.X million, compared SG&A book-to-bill ratio record QX. are per R&D QX. one to versus QX QX. above Multiple QX. at compared fabs deferred compared XX.X% Backlog XX quarter. was chart, revenue, In of to million a compared in and year. spending combined we to and compared million a in revenue. for be three million, out the R&D $XXX R&D total $XXX.X in $XX to $XX.X in million of driving X.X were of million recommend QX in in to in SG&A QX QX

guidance modeling the than margin margin XX% quarter above For higher R&D of spending more due mix was the full-year, of I our well and revenue. Gross at upgrades. gross XX.X% and a favorable SG&A in recommend QX systems and approximately was guidance. to

margin gross significantly QX. gross higher due the mix expected approximately supply QX guiding of of a is be approximately to driven by loves chain Full-year costs. to expected shipment are We compared XX% favorable XX% to margin

offset solid and We but our are to satisfaction growth top the initiatives continue priority. on that progress across-the-board fueled margin to gross improvement customer mentioned, business, increased cost-out. of extensions, product continuously core remains evaluating are make in our ways by higher-cost to CS&I Purion Outside costs,

QX model million intangible chain $XX.X reflects benefit value or and $XX.X $XX.X at to volume QX profit quality approximately labor typical million. share and operating $XX gross to $XX.X Operating extensions, a of deduction per guiding Our million continued resulting planned driven finished was profit and CS&I product income derive million higher FDII. compared engineering, a known QX. in logistics QX. improvements, environment. net We're compared favorable in margin $X.X incremental a more QX million tax foreign $X tax as a income to expansion Purion supply share supply per revenue a billion in QX $X.XX or return includes from and by from and chain

reduction, per XX% a based regarding We quarters share approximately earnings $X. of tax FDII QX of are on rate effective for forecasting future the

$XXX.X was an guidance $XXX operations, supply anticipated QX and and we Through million business in customer QX. chain significant receivables situation. evolving In an over growth higher our were ended cash at inventory our the QX for generated compared million. $XXX QX. QX to QX, were reflects issues, pandemic-related from earlier, As demand $XXX cash noted shareholders evaluation QX. million QX compared of $XX.X compared cash our Axcelis than million. $XXX.X QX, inventory to products. at subtle repurchases at a the for It's solid QX. million on remains X.X impacts million returned to from and quarter, the million $XXX repurchases. million exciting have which million $XX finished $XX accounts X.X to our in compared we stock turns $XX.X slightly to and QX of of QX payable finished tools, $XX with industry in share through excluding in time million million in

laser-focused once times. very closing Thank exceptionally throughout we a entire for to support for to you. And have team during disruption also and And level on the supply environment. customers, strong executed continuing the to the high working call our hard working for customers support I these minimize to a count us, Mary difficult I'll to to hard unusual want us very I to again, our thank on and perform commitments. We're satisfaction. thank chain that comments. and are want now back partners very pandemic well customer our execute to remain the on to turn our We

Mary Puma

Kevin. you, Thank

a earlier results and of team broad pleased competitive line, sheet, has excited to are first-quarter achieve in previously and and $XXX revenues balance the Purion expected. million a with base, strong than We diverse opportunity product employees. a year a about greater Axcelis XXXX a than customer dedicated our

the Series, Purion nature the implant and Axcelis Purion electrification sensor like intensive the benefit power device segments, product is image uniquely Power extensions from significant segment. The the well-positioned are combined automotive the position increasing with of sustainable conductor of industry. industry, rapidly mature due but The We market technology a the expanding thanks capabilities to for implant in of strength to growth. semi also overall process to

is We Axcelis achieve right industry. that in it exciting like are to Sylvia. maintaining experiencing history current for most all in chain is through the investments times during headwinds the logistics we the working high leadership that, these they are With ion challenging I'd supply to are are to times. implantation. levels customer confident of what satisfaction we committed and the and semiconductor And related making questions. open up

Operator

[Operator Stifel. from Instructions] The first question comes from Ho Patrick

Operator

from line, you're Ho Patrick go please Instructions] [Operator ahead. the on Stifel,

If muted, you Stifel. line Instructions] please from can [Operator if please is unmute yourself. line your your Patrick is muted, Ho Patrick, unmute?

Patrick Ho

Can you hear me?

Operator

ahead. We go now, please hear can

Kevin Brewer

Yes, we can.

Patrick Ho

is thanks question. everyone. this terms something of first affecting the and off again Congrats supply chain issues, [Indiscernible]. Kevin, for in taking obviously that's my the you locked-out, Maybe Great for

As impacting at the Maybe parts procurement? margin the supply June biggest much the perspective, at you Is Is of Is terms we chain it are. in issues issues? these labor a it the is qualify quarter, COVID how downs? availability? it from gross least look of that June can lock quarter what called

Kevin Brewer

It's Yes. good.

down the right that the impact out shortages of the Patrick, In of to getting and distributed in suppliers coming business, China. have have, well. There's terms on is CS&I probably throughout for China. waiting materials level been commodity out There in of the as lock-downs now, China particular been we us have side things biggest some

supply the on side So sure. there impact for chain is

with find But we getting be of several one this hardest quarter to hit issue difficult many teams more since around things for engineering quarter I has We've suppliers having started, orders, proprietary hard. working pandemic of to this them the were with been of chips. this some the cases work our through was shortages terms that in quarters, kind designs, think us probably in in were and able seemed alternatives. suppliers hit of our this

this out part something of while, that's for and quarter. So was little bit that a been that's it's there a something probably

a a to There's supply lot and across So are again, getting work the stuff is We're the issues of that quite supply in been from continuing to with moving there those. the to have We're engineering out. very for moved our chain while, that, now difficult The shortages, shortages, out chain commodity helping just board. chip and material people on. hard with mitigate out. we're team focused working logistics

impact, big where in the lot be from shift In margin with terms a you, to this QX, quarter were of a is we of QX. it mix honest in in

these As the year are up starting catch higher runs with chain us. on, supply to costs

fast. on I we've last up keeping think points we as catching even things quite year, margin, -- had good to had environment. hit throughout our it's or as you quite bottom-line But pandemic a of some we're margin up a working a know, pretty some the aren't we the improvement few difficult

into issues out thought of, important XX%. why full-year gross second was to a I see those put that us to which half, target margin plagued it is So really the continuing I there

and kind with that, we're improvement But our So there's margin people can initiatives. of where see going. a model going things on of beyond good lot still

continuing -- working got CS&I still we're convert extensions we're in are there evals are additional projects. those high-margin. business. will out there, product value the got growing We've that and We've over So engineering our on

pedaling -- let some these bike up. keep ahead trying higher going we're costs, of at the which it's point So to is to fast,

could say as you I high the it's basis impact supply XXX full-year XXX be quantify asked chain I basis is, points, think negative it negative points. to would if as basis the what a on me conservatively,

with presentation these and and us, chain quite a we also get behind on why supply towards is say an at look billion-dollar this our update there's even right down [Indiscernible] year feel pressure headwinds We move cost, as So be put operating XXX which road-maps comfortable in which expenses you lower, our our factor comfortable and feel year side higher the very of we move if now think of will we've we rate cost-out would where margins bit we models of before we the our a our with than great I seen road. billion-dollar had in model with model, at its for I that are some for million. though out continue has farther near-term this there.

points. able So about we've pull back to been that basis XXX

We little pressure favorable with helps offset So margin bit backs. And can without of a that then the a on is bottom. -- cover the there a too. tax pickup

an we're to When the think more I when -- of EPS net would models. level fine outs. everything and ins just our kind the out, So than be

Patrick Ho

helpful, That's Great. Kevin. really

As involved. projecting What's guys, business out half of for it's of rates is margins, utilization supply to guess my given accretive CS&I all I high issue follow-up it very parts, the a the you. in throw you or growth that different parties is an continues it biggest you're biggest spare is it I'll question, is and driver for the now all it are to deliver driver some for year. Is mix the products? that chip chain to right and of second makers, the upgrades,

Kevin Brewer

Yes.

comes it's all with of things. goes on off-warranty, So -- the product at spare of more there's So mean, I the point there's we with kind service that. some above. parts the certainly the that break field, to continue that as then level fix pier after the of that, and And we're type entitlement some to there's ship

Most good driving That's out The can we be big typically the upgrades control. business margin which that a and you've there's always good but competition them where and another got They have upgrades that's can results that from we're that there's develop upgrades we technology of piece third-party to. the there the having doubt capabilities to upgrades. we've of we bottom more -- with very utilization them. and that or can line if a field, is not area part lot sell design. probably new focus of a is don't -- tend parts is on to continued So tools no spare it,

engineering that's grow are things the improve we're continuously We are have in that these at continuing throughput, customers various our like part to the of work all working upgrades can yields and that of business either on teams the are on that.

in upgrades that's spare because really It's cores driving impossible. parts today it's the the that. So tools is use to almost find not trying

margins. So for us, the growth the in is which areas coming terms in good are of areas that two are those Patrick,

Patrick Ho

again thanks congrats. Great, and

Kevin Brewer

you. Thank Yes.

Operator

We no question questions Miller, Company Benchmark Mark this And our have comes [Operator at the time. Instructions]. from next

Mark Miller

again another Congrats great on quarter.

are down rate year? you to taxes projecting went of rest What for Just this trying here, last quarter. tax think for the

Kevin Brewer

would Yeah. I model is XX% Mark, --

Mark Miller

XX%?

Kevin Brewer

the the year. rest for Yes, of -- XX%.

I we've told so to a new product of I've we XX%. that's foreign our take now XX%. of kind this this keep tax That's that ship can exhausted we're paying think we've deduction. rate so into getting going you for with always and to new deduction But modeled XX%, down, advantage because NOLs really

Mark Miller

June and R&D of SG&A is being driven more R&D somewhat year. -- gone by is quarter by driven up that the more or March the quarter, CapEx is SG&A? than that for going or in rest Is also up

Kevin Brewer

bit XX% I lower up but out come on to last both, that the -- even XX%, little back at it's on where put down should if December, we're OpEx. model -- up be pick a you hang of had to was to mark it and us so, going savings the XX% the end some XXX our models that we on at look be so It's And in projecting in full-year it's though going XX%. QX, to a really little full-year we're Yes.

low so right full-year So it's we're our XX%. executed models, on we're we're our a on models

Mark Miller

Thank Great. you.

Operator

Hans comes question D.A. from from Chung next Davidson. Our

Hans Chung

to for the you just gross on taking margin. thank wanted I my Hi, follow-up question.

think the the you just color shift on the of will know second be all maybe forward, there's just in put the guidance, kind how here, big the like shift, you any dynamic mentioned full-year going And You -- mix. helpful. out we elaborate that and what but can should more I half. about

Kevin Brewer

Yes.

how between side each that on of chart different lines investor level we the high current. is of things, each difference mix there that's the the So standard contribution a actually the that medium margin product a high shows And level an presentation noticeable that's is lines. carry levels. product margin current, see the on energy, there of And can those very you bar chart on is

answer a the don't this And a will quarter, margins. can little high-energy more margin impact is side at short of it's is accretive the other is, that terms up, overall this coming the mentioned waited. puts So the the But because bit two comes We on in to quarter quarter are flat provide and a you as gross thing but system less from mix of CS&I. out, from so CS&I bottom-line CS&I, then versus that be much last is revenue how of our quarter-to-quarter CS&I it's little with There's XX%. revenues pointed I as drag. and this growth full-year

Patrick, from just we on points, have fluctuation continue the to mentioned mix to right had year XXX full quite always anywhere average basis conservatively We As basis based coming high from with because which so start. it a the chain, as margin that's quarter-to-quarter. and it the is there's that gross why and focus to really XXX I stuff, out probably way quarter-to-quarter bit as always supply try of out bigger will of on tends drag now points

Hans Chung

you. That's had. what Thank it. Got Thank you. I

Operator

a back call. make Puma, to the of now portion call This turn the concludes the closing I Q&A Mary few comments. over will who will

Mary Puma

to for event our Sylvia. upcoming joining very at you, investor Thank active all you today. hope you schedule. We us see Thank

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Operator

for you in Thank presentation. conference. your the concludes This participation today's

day. disconnect. may Good You now

Mary Puma	President and Chief Executive Officer
Kevin Brewer	Executive Vice President & Chief Financial Officer
Doug Lawson	Executive Vice President of Corporate Marketing & Strategy
Patrick Ho	Stifel Nicolaus
Mark Miller	The Benchmark Company
Hans Chung	D.A. Davidson & Co.

Axcelis (ACLS) 5 May 222022 Q1 Earnings call transcript