EX-99.1 2 dp11698_ex9901.htm
Exhibit 99.1
 
Press Release
Source: Ultra Clean Holdings, Inc.

Ultra Clean Results in Guidance Range with Strong Non-Semi Sales
Monday, October 27, 2008 4:30 pm ET

Combined Solar, FPD and Medical Revenues Grow 21% Sequentially
HAYWARD, Calif., October 27, 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 third quarter of 2008. Revenue for the third quarter of 2008 was $60.1 million, a decrease of 11% from the second quarter of 2008 and a decrease of 37% from the same period a year ago. Gross margin for the third quarter of 2008 was 9.1%, compared to 11.2% for the second quarter of 2008, and 14.0% for the same period a year ago. The company recorded a net loss of $1.9 million or $0.09 per share, during the third quarter of 2008, compared to a net loss of $162,000 or $0.01 per share, for the second quarter of 2008 and net income of $3.5 million, or $0.16 per diluted share, for the same period a year ago. The third quarter 2008 loss per share is inclusive of a $0.01 per share charge for amortization of intangibles, and a $0.03 per share charge related to SFAS 123(R).

Clarence Granger, Ultra Clean’s Chairman and Chief Executive Officer commented:  “We view the current challenging business environment as an opportunity to expand market share, transfer additional manufacturing to Asia, and consolidate our U.S.-based assembly operations.  For the quarter, we met our guidance range for revenue and earnings per share by maintaining our focus on reducing costs, while continuing to increase our non-semiconductor businesses. Solar, flat panel, and medical device revenues grew by 21% sequentially, to 30% of total revenues. In addition, we increased the revenue derived from our China facilities by 14% sequentially to 24% of total revenue.  By producing more in Asia, while streamlining our global operations and continuing to increase our activity in these adjacent markets, we improved our operating efficiencies, 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 third quarter of 2008 was $28.5 million, a decrease of $4.1 million from $32.6 million at the end of the second quarter of 2008, and an increase of $500,000 from $28.0 million at the end of the third quarter of 2007. Third party debt at the end of the third quarter was $19.7 million, a decrease of $800,000 from $20.5 million at the end of the second quarter of 2008 and a decrease of $9.1 million from $28.8 million at the end of the third quarter of 2007.

In the third quarter, Ultra Clean repurchased $1.2 million of the company’s common stock as part of the share buyback program announced in our last earnings call.  Program-to-date, Ultra Clean has purchased $3.3 million of the company’s common stock.  The company recently suspended the repurchase program due to the uncertain economic environment.

Granger commented further “I am pleased to announce that, during the third quarter, we secured a partnership agreement with Cascade Microtech, Inc. (NASDAQ: CSCD) to manufacture its 200mm probe stations. Qualification tools will be manufactured in the fourth quarter of 2008, with volume production planned for the first quarter of 2009.”

Granger continued, “Also last quarter we shipped significant quantities of recently awarded solar gas abatement subsystems and turnkey FPD test systems from our newest manufacturing facility in Shanghai, China .  We remain focused on our key objectives: to outperform the semiconductor equipment industry in upturns and in downturns, by expanding our market share, increasing the portion of our revenue derived from the adjacent markets of the solar, flat panel and medical device industries, and by continuing 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 fourth quarter of 2008 will be in the range of $47 million to $53 million, and loss per share will be in the range of $0.10 to $0.16 per share, on a GAAP basis, inclusive of an expected $0.01 per share charge for amortization of intangibles, and a $0.04 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 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 28 2007 and quarterly report on Form 10-Q for the quarter ended June 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 nine months ended
  
   
September 26, 2008
    
September 28, 2007
    
September 26, 2008
    
September 28, 2007
  
Sales
   $ 60,128     $ 95,535     $ 219,849     $ 311,049  
                                 
Cost of goods sold
     54,660       82,165       194,799       265,106  
                                 
Gross profit
     5,468       13,370       25,050       45,943  
                                 
Operating expenses:
                                
Research and development
     484       648       1,875       2,275  
Sales and marketing
     1,464       1,494       4,424       4,253  
General and administrative
     5,828       5,700       18,710       18,479  
        Total operating expenses
     7,776       7,842       25,009       25,007  
                                 
Income (loss) from operations
     (2,308 )     5,528       41       20,936  
                                 
Interest and other income (expense), net
     (236 )     (460 )     (826 )     (1,450 )
                                 
Income (loss) before income taxes
     (2,544 )     5,068       (785 )     19,486  
                                 
Income tax provision (benefit)
     (616 )     1,527       (584 )     5,664  
                                 
Net income (loss)
   $ (1,928 )   $ 3,541     $ (201 )   $ 13,822  
                                 
Net income (loss) per share:
                                
Basic
   $ (0.09 )   $ 0.17     $ (0.01 )   $ 0.65  
Diluted
   $ (0.09 )   $ 0.16     $ (0.01 )   $ 0.63  
                                 
Shares used in computing
                                
net income (loss) per share:
                                
Basic
     21,708       21,366       21,639       21,240  
Diluted
     21,708       22,166       21,639       22,088  
 

 

Ultra Clean Holdings, Inc
Condensed Consolidated Balance Sheets
(Unaudited; in thousands)


   
September 26,
    
December 28,
  
ASSETS
  
2008
    
2007
  
             
Current assets:
            
   Cash and cash equivalents
   $ 28,468     $ 33,447  
   Accounts receivable
     28,817       34,845  
   Inventory
     49,013       49,342  
   Other current assets
     9,747       7,707  
      Total current assets
     116,045       125,341  
                 
Equipment and leasehold improvements, net
     20,267       14,095  
Goodwill
     34,063       34,196  
Other intangible assets
     19,750       20,762  
Other non-current assets
     509       633  
Total assets
   $ 190,634     $ 195,027  
                 
LIABILITIES & STOCKHOLDERS' EQUITY
                
Current liabilities
                
Bank borrowings
   $ 3,074     $ 3,575  
Accounts payable
     28,196       36,817  
Other current liabilities
     4,682       4,451  
      Total current liabilities
     35,952       44,843  
                 
Bank debt and other long-term liabilities
     22,272       20,696  
      Total liabilities
     58,224       65,539  
                 
Stockholders' equity
                
Common stock
     92,215       89,092  
Retained earnings
     40,195       40,396  
Total stockholders' equity
     132,410       129,488  
Total liabilities and stockholders' equity
   $ 190,634     $ 195,027