EX-99.1 2 dp07282_8k-ex9901.htm
Press Release
Source: Ultra Clean Holdings, Inc.

Ultra Clean Technology Reports Third Quarter Revenue and Earnings in Line with Guidance
Monday, October 22, 2007 4:30 pm ET

UCT Also Announces Two New Customers
MENLO PARK, Calif., October  22, 2007 /PRNewswire/ -- Ultra Clean Holdings, Inc. (Nasdaq: UCTT), a leading developer and supplier of critical subsystems for the semiconductor capital equipment industry, today reported its financial results for the third quarter ended September 28, 2007.  Revenue for the third quarter of 2007 totaled $95.5 million, compared to $104.7 million in the second quarter ended June 29, 2007, a decrease of 8.8%, and compared to revenue of $104.1 million for the same period a year ago, an 8.2% decrease.  The company recorded net income of $3.5 million, or $0.16 per diluted share, during the third quarter of 2007, compared to $5.1 million or $0.23 per diluted share, for the second quarter of 2007 and net income of $5.6 million, or $0.25 per diluted share, for the same period a year ago.  Gross margin for the third quarter of 2007 was 14.0%, compared to 15.1% for the second quarter of 2007, and 14.8% for the same period a year ago.

Cash at the end of the third quarter of 2007 was $28.0 million, an increase of $8.1 million from $19.9 million at the end of the second quarter of 2007, and an increase of $9.1 million from $18.9 million at the end of the third quarter of 2006.  Third party debt at the end of the third quarter was also $28.0 million, a decrease of $800,000 from $28.9 million at the end of the second quarter of 2007 and a decrease of $5.4 million from $33.4 million at the end of the third quarter of 2006.

Clarence Granger, UCT’s Chairman and Chief Executive Officer commented:  “While this continues to be a challenging time for the industry, we are pleased with the company’s operating performance and cash generation in the third quarter.  We hit our guidance range for both revenue and earnings per share, despite significantly lower than expected industry demand.  We increased our cash reserves equal to that of our third party debt.  And we continued to execute on the new product awards announced in the first half of this year.”

Granger added, “In addition, we secured orders from two new strategic customers; Axcelis Technologies and Photon Dynamics.  During Q3, we began shipping gas delivery systems to Axcelis Technologies and we were awarded a process module contract from Photon Dynamics.  We expect to ship the first Photon Dynamics process module in Q1 2008 from one of our U.S. facilities and to transfer the manufacturing of this module to our Shanghai facilities in Q2 2008.  These new customer wins reflect further successes toward our stated objectives to grow faster than the overall industry and to expand our operations in Shanghai.”

Commenting on UCT’s corporate outlook, Granger noted, “We expect that revenue for the fourth quarter of 2007 will range between $87 million and $95 million, and net income per share to range between $0.08 and $0.14 per share, inclusive of an expected $0.01 per share charge for amortization of intangibles and $0.04 per share charge related to SFAS 123(R).  This projection reflects the expectation of a further decline in industry demand in the fourth quarter of 2007.  We remain confident in our strategic direction and our long term ability to grow faster than the industry.”
 
About Ultra Clean Holdings, Inc.
 
Ultra Clean Holdings, Inc. is a developer and supplier of critical subsystems for the semiconductor capital equipment industry.  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 of semiconductor capital equipment. Ultra Clean is headquartered in Menlo Park, 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 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.  Forward looking statements included in the press release include estimates made with respect to our fourth quarter revenue and diluted earnings per share.  All forward-looking statements address matters that involve risks and uncertainties. Accordingly, our actual results may 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 annual report on Form 10-K for the year ended December 29, 2006 and quarterly report on Form 10-Q for the quarter ended June 29, 2007 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.
 
 
 
 
 
 
 
   
Three months ended
    
Nine months ended
  
   
September 28, 2007
    
September 29, 2006
    
September 28, 2007
    
September 29, 2006
  
Sales
   $
95,535
     $
104,065
     $
311,049
     $
229,729
  
                                 
Cost of goods sold
    
82,165
      
88,694
      
265,106
      
195,457
  
                                 
Gross profit
    
13,370
      
15,371
      
45,943
      
34,272
  
                                 
Operating expenses:
                                
   Research and development
    
648
      
806
      
2,275
      
2,137
  
   Sales and marketing
    
1,494
      
1,231
      
4,253
      
3,311
  
   General and administrative
    
5,700
      
5,284
      
18,479
      
11,811
  
        Total operating expenses
    
7,842
      
7,321
      
25,007
      
17,259
  
                                 
Income from operations
    
5,528
      
8,050
      
20,936
      
17,013
  
                                 
Interest and other income (expense), net
     (460 )     (616 )     (1,450 )     (1,139 )
                                 
Income before income taxes
    
5,068
      
7,434
      
19,486
      
15,874
  
                                 
Income tax provision
    
1,527
      
1,874
      
5,664
      
4,226
  
                                 
Net income
   $
3,541
     $
5,560
     $
13,822
     $
11,648
  
                                 
Net income per share:
                                
   Basic
   $
0.16
     $
0.27
     $
0.65
     $
0.63
  
   Diluted
   $
0.16
     $
0.25
     $
0.63
     $
0.59
  
                                 
Shares used in computing
                                
   net income per share:
                                
   Basic
    
22,061
      
20,737
      
21,188
      
18,600
  
   Diluted
    
22,139
      
21,879
      
22,012
      
19,624
  
                                 
                                 
                                 
                                 
 
 
 
 
 
 

 
   
September 28, 2007
    
December 29, 2006
  
ASSETS
            
Current assets:
            
   Cash
   $
28,038
     $
23,321
  
   Accounts receivable
    
42,861
      
44,543
  
   Inventory
    
51,189
      
47,914
  
   Other current assets
    
8,095
      
5,489
  
      Total current assets
    
130,183
      
121,267
  
                 
Equipment and leasehold improvements, net
    
11,468
      
9,433
  
Goodwill
    
34,248
      
33,490
  
Tradename
    
21,100
      
22,112
  
Other non-current assets
    
846
      
745
  
Total assets
   $
197,845
     $
187,047
  
                 
LIABILITIES & STOCKHOLDERS' EQUITY
                
Current liabilities:
                
   Bank borrowings
   $
3,559
     $
4,206
  
   Accounts payable
    
33,566
      
37,583
  
   Other current liabilities
    
7,074
      
7,891
  
      Total current liabilities
    
44,199
      
49,680
  
                 
Capital lease obligations and other liabilities
    
27,711
      
30,199
  
      Total liabilities
    
71,910
      
79,879
  
                 
Commitments and contingencies
                
Stockholders' equity:
                
   Common stock
    
87,611
      
82,046
  
   Retained earnings
    
38,324
      
25,122
  
   Total stockholders' equity
    
125,935
      
107,168
  
Total liabilities and stockholders' equity
   $
197,845
     $
187,047