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Ultra Clean Reports Fourth Quarter and Fiscal Year 2013 Financial Results

Companies mentioned in this article: Ultra Clean Technology

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                For the twelve months
                                              ended                               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