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Ultra Clean Reports Fourth Quarter and Fiscal Year 2013 Financial Results

Company delivers 17.1% gross margin performance and EPS exceeds high-end of guidance

HAYWARD, Calif., Feb. 18, 2014 /PRNewswire/ -- Ultra Clean Holdings, Inc. (Nasdaq: UCTT), a leading developer and supplier of critical systems and subsystems for the semiconductor capital equipment, flat panel, medical, energy and research industries, today reported its financial results for the fourth quarter and fiscal year ended December 27, 2013.

Revenue for the fourth quarter of 2013 was $126.3 million, an increase of 17.8% compared to the third quarter of 2013 and an increase of 40.2% compared to the same period a year ago.  Semiconductor revenue was 93.7% of total revenue and revenue outside the U.S. accounted for 29.1% of total revenue for the fourth quarter of 2013. Gross margin for the fourth quarter of 2013 was 17.1%, compared to 14.8% for the previous quarter and 12.8% for the same period a year ago.

The Company recorded net income of $6.4 million, or $0.22 per share (basic and diluted) in the fourth quarter of 2013 compared to net income of $2.0 million, or $0.07 (basic and diluted) per share, in the previous quarter and a net loss of $1.2 million, or a loss of $0.04 (basic and diluted) per share, for the same period a year ago. The net income for the fourth quarter of 2013 includes pre-tax charges of $1.5 million for amortization costs associated with the AIT transaction. Excluding these charges the Company would have reported earnings of $0.26 per diluted share for the fourth quarter of 2013. The Company's tax rate for the fourth quarter of 2013 was 16.4%.

The financial information presented includes the operations of AIT since July 3, 2012, the date the Company acquired AIT.

For fiscal year 2013 revenue was $444.0 million, an increase of $40.6 million, or 10.1%, over fiscal year 2012. Gross margin for fiscal year 2013 was 15.2% compared to 13.8% for fiscal year 2012. The Company recorded net income of $10.4 million, or $0.36 per share (diluted) and $0.37 per share (basic) for fiscal year 2013 compared to net income of $5.2 million, or $0.20 per share (basic and diluted), for fiscal year 2012.  Net income for fiscal year 2013 includes pretax charges of $6.0 million for amortization associated with the AIT transaction. Excluding these charges the Company would have reported net income of $15.5 million, or $0.53 per share (diluted) for fiscal year 2013. Net income for fiscal year 2012 includes pretax charges of $3.8 million for amortization costs and $2.8 million of one-time transaction costs associated with the AIT transaction. Excluding these charges the Company would have reported net income of $10.2 million, or $0.39 per share (diluted) for fiscal 2012. The company's tax rate for fiscal year 2013 was 17.3% compared to 23.1% for fiscal year 2012.

Cash at the end of the fourth quarter of fiscal year 2013 was $60.4 million, a decrease of $5.5 million from the previous quarter.  Outstanding debt was $55.1 million at the end of the fourth quarter of fiscal year 2013, a decrease of $1.4 million from the previous quarter. 

Clarence Granger, Ultra Clean's Chairman and Chief Executive Officer, stated:
"Last quarter was an excellent one for UCT.  We exceeded our revenue, gross margin, and EPS guidance.  For some time now, one of our goals has been to achieve gross margins in the 15-18% range. For the fiscal year 2013 our gross margin was 15.2% and for the fourth quarter it was 17.1%.  This is the highest quarterly gross margin that UCT has achieved in our nearly ten years as a publicly traded company and has been the culmination of an extensive effort by our entire operations team."

Commenting on Ultra Clean's corporate guidance, Granger noted: "We expect revenue for the first quarter of 2014 to range between $135 million to $140 million, with earnings per share in the range of $0.25 to $0.28. Excluding amortization costs associated with the merger with AIT we expect earnings per share to be in the range of $0.28 to $0.31. We are forecasting a tax rate of 20% for the first quarter of 2014."

Ultra Clean will conduct a conference call today, Tuesday, February 18, 2014, beginning at 1:45 p.m. PDT.  The call-in number is (888) 561-5097 (domestic) and (706) 679-7569 (international).  A replay of the conference will be available for fourteen days following the call at (855) 859-2056 (domestic) and (404) 537-3406 (international).  The confirmation number for live broadcast and replay is 53904481 (all callers). 

About Ultra Clean Holdings, Inc.

Ultra Clean Holdings, Inc. is a leading developer and supplier of critical systems and subsystems for the semiconductor capital equipment, flat panel, medical, energy and research industries. Ultra Clean offers its customers an integrated outsourced solution for gas delivery systems and other subassemblies, improved design-to-delivery cycle times, component neutral design and manufacturing and component testing capabilities. Ultra Clean's customers are primarily original equipment manufacturers for the semiconductor capital equipment, flat panel, medical, energy and research industries. Ultra Clean is headquartered in Hayward, California. Additional information is available at www.uct.com

Safe Harbor Statement

The foregoing information contains, or may be deemed to contain, "forward-looking statements" (as defined in the US 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,", "projection", "forecast", "believes," "plan," "expect," "future,"' "intends," "may," "will," "estimates," "predicts,"  and similar expressions to identify these forward-looking statements. Forward looking statements included in this press release include our expectations with respect to first quarter 2014 revenue and earnings per share and our forecasted tax rate for the first quarter of fiscal 2014. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, the Company's actual results may differ materially from the results predicted or implied by these forward-looking statements. These risks, uncertainties and other factors also include, among others, those identified in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations'' and elsewhere in our annual report on Form 10-K for the year ended December 28, 2012 and our quarterly report on Form 10-Q for the quarter ended September 27, 2013, each as filed with the Securities and Exchange Commission. Additional information will also be set forth in our annual report on Form 10-K for the year ended December 27, 2013.  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 unless required by law.

Ultra Clean Holdings, Inc

Condensed Consolidated Statements of Income

(Unaudited; in thousands, except per share data)










For the three months ended


For the twelve months ended

December 27, 2013


December 28, 2012


December 27, 2013


December 28, 2012

Sales

$           126,268


$            90,067


$          444,022


$          403,430









Cost of goods sold

104,698


78,516


376,693


347,642









Gross profit 

21,570


11,551


67,329


55,788









Operating expenses:








Research and development

1,387


1,118


5,543


5,121

Sales and marketing

2,487


1,818


9,831


7,033

General and administrative

9,428


9,965


36,047


32,858

Acquisitions costs

-


368


-


2,431

        Total operating expenses

13,302


13,269


51,421


47,443









Income (loss) from operations

8,268


(1,718)


15,908


8,345









Interest and other income (expense), net

(653)


(716)


(3,309)


(1,648)









Income (loss) before income taxes

7,615


(2,434)


12,599


6,697









Income tax provision (benefit)

1,244


(1,260)


2,175


1,544







Net income (loss)

$               6,371


$            (1,174)


$            10,424


$              5,153









Net income (loss) per share:








Basic

$                 0.22


$              (0.04)


$                0.37


$                0.20

Diluted

$                 0.22


$              (0.04)


$                0.36


$                0.20









Shares used in computing net income (loss) per share:















Basic

28,582


27,854


28,346


25,698

Diluted

29,480


27,854


29,037


26,261

 

Ultra Clean Holdings, Inc

Condensed Consolidated Balance Sheets

 (Unaudited; in thousands)






December 27,


December 28,

ASSETS

2013


2012





Current assets:




   Cash and cash equivalents

$          60,415


$          54,311

   Accounts receivable

67,450


50,074

   Inventory

63,942


53,965

   Other current assets

8,652


6,769

      Total current assets

200,459


165,119





Equipment and leasehold improvements, net

8,534


9,282

Goodwill

55,918


56,662

Purchased intangibles, net

21,708


27,702

Other non-current assets

5,924


7,164

Total assets

$         292,543


$         265,929





LIABILITIES & STOCKHOLDERS' EQUITY




Current liabilities:




Bank borrowings

$          37,705


$          48,706

Accounts payable

53,962


23,485

Other current liabilities

8,377


7,045

      Total current liabilities

100,044


79,236

Bank debt and other long-term liabilities

20,570


29,913

      Total liabilities

120,614


109,149





Stockholders' equity:




Common stock

144,568


139,843

Retained Earnings

27,361


16,937

   Total stockholders' equity

171,929


156,780

Total liabilities and stockholders' equity

$         292,543


$         265,929

SOURCE Ultra Clean Technology

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