EX-99.1 2 dp10788_ex9901.htm
Exhibit 99.1
 
Press Release
Source: Ultra Clean Holdings, Inc.

Ultra Clean Results in Line with Guidance in a Difficult Market
Monday, July 28, 2008 4:30 pm ET

Solar and Medical Device Revenue Partially Offsets Impact of Semi-Equipment Downturn
HAYWARD, Calif., July 28, 2008 /PRNewswire/ -- Ultra Clean Holdings, Inc. (Nasdaq: UCTT), a leading developer and supplier of critical subsystems for the semiconductor capital equipment, flat panel, solar, and medical device industries, today reported its financial results for the second quarter of 2008. Revenue for the second quarter of 2008 was $67.4 million, a decrease of 27% from the first quarter of 2008 and a decrease of 36% from the same period a year ago. The company recorded a net loss of $162,000 or $0.01 per diluted share, during the second quarter of 2008, compared to net income of $1.9 million or $0.09 per diluted share, for the first quarter of 2008 and net income of $5.1 million, or $0.23 per diluted share, for the same period a year ago. Gross margin for the second quarter of 2008 was 11.2%, compared to 13.1% for the first quarter of 2008, and 15.1% for the same period a year ago.

Clarence Granger, Ultra Clean’s Chairman and Chief Executive Officer commented: “We view the current challenging business environment as an opportunity to increase our market share and to realize the operational efficiencies made possible by consolidation of our Silicon Valley based assembly operations into a single facility in Hayward, CA. For the quarter, we met our guidance range for revenue and earnings per share by focusing on activities to reduce costs, while continuing to increase our non-semiconductor businesses. Solar, flat panel, and medical device revenues grew by 18% sequentially to 22% of total revenues and we received follow-on awards in the solar and flat panel markets. By streamlining our operations and continuing to increase our activity in these adjacent markets, we lessened the impact of this cyclical decline in semiconductor capital equipment demand and positioned ourselves for enhanced levels of profitability when the industry cycle returns to growth.”   

Cash at the end of the second quarter of 2008 was $32.6 million, an increase of $7.6 million from $25.0 million at the end of the first quarter of 2008, and an increase of $12.7 million from $19.9 million at the end of the second quarter of 2007. Third party debt at the end of the second quarter was $20.5 million, a decrease of $900,000 from $21.4 million at the end of the first quarter of 2008 and a decrease of $8.3 million from $28.9 million at the end of the second quarter of 2007.

Ultra Clean also announced that its Board of Directors has authorized the repurchase of up to $10 million shares of the company common stock.  The share repurchase is expected to commence at the end of July 2008.

Granger continued, “I am pleased to announce that, during the quarter, we secured significant follow-on awards from two key customers. We have been contracted to design and build a next-generation solar tool gas-abatement module. Deliveries are expected to commence in 2009. We also have been awarded the contract for production of Photon Dynamics’ (Nasdaq: PHTN) turn-key, Gen-8, flat panel display test systems. The products for both customers will be manufactured in our Shanghai, China facilities and delivered directly to the customers in Asia. Incremental revenue from these two awards is estimated to be $1 million in 2008 and $6-$8 million in 2009. These new wins reflect further progress toward our stated objectives: to grow faster than the semiconductor capital equipment industry, in part by increasing the portion of our revenue derived from the adjacent markets of the solar, flat panel and medical device industries, and to continue to expand our presence in Asia.”

Commenting on Ultra Clean’s corporate outlook, Granger noted, “While we remain very confident in our strategic direction, we remain cautious about the near term outlook, due to continued declines in semiconductor capital equipment demand, partially offset by our growth in non-semiconductor markets. We expect that revenue for the third quarter of 2008 will be in the range of $60 million to $66 million, and loss per share will be in the range of $0.03 to $0.10 per share, on a GAAP basis, inclusive
 
 
 
of an expected $0.01 per share charge for amortization of intangibles, and a $0.03 per share charge related to SFAS 123(R).”
 
 
About Ultra Clean Holdings, Inc.
 
Ultra Clean Holdings, Inc. is a developer and supplier of critical subsystems for the semiconductor capital equipment, flat panel, solar and medical device 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, solar and medical device 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 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 third 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 28 2007 and quarterly report on Form 10-Q for the quarter ended March 28, 2008, 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.
 
 
 
Ultra Clean Holdings, Inc
Condensed Consolidated Statements of Operations
(Unaudited; in thousands, except per share data)
 
   
For the three months ended
    
For the six months ended
  
   
June 27, 2008
    
June 29, 2007
    
June 27, 2008
    
June 29, 2007
  
                                 
Sales
   $ 67,364     $ 104,722     $ 159,721     $ 215,514  
                                 
Cost of goods sold
     59,842       88,906       140,139       182,941  
                                 
Gross profit
     7,522       15,816       19,582       32,573  
                                 
Operating expenses:
                                
Research and development
     606       785       1,391       1,627  
Sales and marketing
     1,327       1,336       2,960       2,759  
General and administrative
     6,252       6,182       12,882       12,779  
        Total operating expenses
     8,185       8,303       17,233       17,165  
                                 
Income (loss) from operations
     (663 )     7,513       2,349       15,408  
                                 
Interest and other income (expense), net
     (246 )     (459 )     (590 )     (990 )
                                 
Income (loss) before income taxes
     (909 )     7,054       1,759       14,418  
                                 
Income tax provision (benefit)
     (747 )     1,958       32       4,137  
                                 
Net income (loss)
   $ (162 )   $ 5,096     $ 1,727     $ 10,281  
                                 
Net income (loss) per share:
                                
Basic
   $ (0.01 )   $ 0.24     $ 0.08     $ 0.49  
Diluted
   $ (0.01 )   $ 0.23     $ 0.08     $ 0.47  
                                 
Shares used in computing
                                
net income (loss) per share:
                                
Basic
     21,643       21,236       21,604       21,188  
Diluted
     21,643       22,045       22,126       22,012  
 
 
Ultra Clean Holdings, Inc
Condensed Consolidated Balance Sheets
 (Unaudited; in thousands)
 
             
   
June 27,
    
December 28,
  
ASSETS
  
2008
    
2007
  
             
Current assets:
            
   Cash and cash equivalents
   $ 32,571     $ 33,447  
   Accounts receivable
     26,638       34,845  
   Inventory
     43,634       49,342  
   Other current assets
     8,794       7,707  
      Total current assets
     111,637       125,341  
                 
Equipment and leasehold improvements, net
     20,479       14,095  
Goodwill
     34,196       34,196  
Other intangible assets
     20,087       20,762  
Other non-current assets
     548       633  
Total assets
   $ 186,947     $ 195,027  
                 
LIABILITIES & STOCKHOLDERS' EQUITY
                
Current liabilities
                
Bank borrowings
   $ 3,400     $ 3,575  
Accounts payable
     22,559       36,817  
Other current liabilities
     3,589       4,451  
      Total current liabilities
     29,548       44,843  
                 
Bank debt and other long-term liabilities
     23,308       20,696  
      Total liabilities
     52,856       65,539  
                 
Stockholders' equity
                
Common stock
     91,968       89,092  
Retained earnings
     42,123       40,396  
Total stockholders' equity
     134,091       129,488  
Total liabilities and stockholders' equity
   $ 186,947     $ 195,027