What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-06 compared with 2020-08-05 · 107 added, 63 removed, 390 unchanged (30% of the section changed)

4 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

Total revenue

12 unchanged sentences

Income before income taxes

Income tax provision

Income tax provision (benefit)

Net income per share:

7 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

Other comprehensive income (loss):

2 unchanged sentences

Total other comprehensive income (loss)

Comprehensive income

Comprehensive income (loss)

See accompanying Notes to these Consolidated Financial Statements

2 unchanged sentences

(In thousands, except per share amounts)

September 30,

Current assets:

24 unchanged sentences

Common stock, $ 0.001 par value, 75,000 shares authorized;

33,433 shares issued and outstanding at June 30, 2020;

33,491 shares issued and outstanding at September 30, 2020;

32,585 shares issued and outstanding at December 31, 2019

1 unchanged sentence

Accumulated deficit

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Total stockholders’ equity

24 unchanged sentences

Balance at June 30, 2019

Foreign currency translation adjustments

Change in pension obligation

Exercise of stock options

Issuance of restricted common shares,

net of shares withheld

Stock-based compensation expense

Balance at September 30, 2019

See accompanying Notes to these Consolidated Financial Statements

Axcelis Technologies, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands)

Comprehensive

19 unchanged sentences

Balance at June 30, 2020

Foreign currency translation adjustments

Change in pension obligation

Exercise of stock options

Issuance of restricted common shares,

net of shares withheld

Stock-based compensation expense

Balance at September 30, 2020

See accompanying Notes to these Consolidated Financial Statements

2 unchanged sentences

(In thousands)

Six months ended

Nine months ended

September 30,

Cash flows from operating activities

46 unchanged sentences

2020 Employee Stock Purchase Plan (the “2020 ESPP”), an Internal Revenue Code Section 423 plan.

The 2012 Equity Plan and the ESPP are more fully described in Note 13 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019.

We recognized stock-based compensation expense of $ 3.1 million and $ 2.3 million for the three month periods ended June 30, 2020 and 2019, respectively.

We recognized stock-based compensation expense of $ 4.8 million and $ 4.0 million for the six month periods ended June 30, 2020 and 2019, respectively.

These amounts include compensation expense related to RSUs, non-qualified stock options and stock to be issued to participants under the ESPP.

In the three month periods ended June 30, 2020 and 2019, we issued 0.6 million and 0.3 million shares of common stock, respectively, upon stock option exercises, purchases under the ESPP and vesting of RSUs.

In the three month periods ended June 30, 2020 and 2019, we received proceeds of $ 3.3 million and $ 1.0 million, respectively, in connection with the exercise of stock options and ESPP purchases.

In the six month periods ended June 30, 2020 and 2019, we issued 1.2 million and 0.6 million shares of common stock, respectively, upon stock option exercises, purchases under the ESPP and vesting of RSUs.

In the six month periods ended June 30, 2020 and 2019, we received proceeds of $ 7.8 million and $ 2.8 million, respectively, in connection with the exercise of stock options and ESPP purchases.

The 2012 Equity Plan is more fully described in Note 13 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019.

Note 13 also describes our prior Employee Stock Purchase Plan which expired on June 30, 2020 (the “Prior ESPP”).

No shares have yet been issued under the 2020 ESPP, but its terms are substantially the same as those of the Prior ESPP.

We recognized stock-based compensation expense of $ 2.9 million and $ 2.1 million for the three month periods ended September 30, 2020 and 2019, respectively.

We recognized stock-based compensation expense of $ 7.7 million and $ 6.1 million for the nine month periods ended September 30, 2020 and 2019, respectively.

These amounts include compensation expense related to RSUs, non-qualified stock options and stock issued to participants under the Prior ESPP.

In both the three month periods ended September 30, 2020 and 2019, we issued 0.1 million shares of common stock, respectively, upon stock option exercises and vesting of RSUs.

In the three month periods ended September 30, 2020 and 2019, we received proceeds of $ 0.5 million and $ 0.6 million, respectively, in connection with the exercise of stock options and Prior ESPP purchases.

In the nine month periods ended September 30, 2020 and 2019, we issued 1.3 million and 0.7 million shares of common stock, respectively, upon stock option exercises, purchases under the Prior ESPP and vesting of RSUs.

In the nine month periods ended September 30, 2020 and 2019, we received proceeds of $ 8.3 million and $ 3.4 million, respectively, in connection with the exercise of stock options and Prior ESPP purchases.

We have operating leases for office space, warehouse space, computer and office equipment and vehicles used in our business operations.

We have a finance lease as a result of the 2015 sale-leaseback of our corporate headquarters in

Beverly, Massachusetts.

We have a finance lease as a result of the 2015 sale-leaseback of our corporate headquarters in Beverly, Massachusetts.

All new agreements are reviewed to determine if they contain a lease component.

14 unchanged sentences

The amounts of operating and finance lease right-of-use assets and related lease obligations recorded within our consolidated balance sheets are as follows:

September 30,

Classification

10 unchanged sentences

Total lease liabilities

* Finance lease assets are recorded net of accumulated depreciation of $ 47.9 million and include $ 0.7 million of prepaid financing costs as of June 30, 2020.

* Finance lease assets are recorded net of accumulated depreciation of $ 48.1 million and include $ 0.7 million of prepaid financing costs as of September 30, 2020.

Finance lease assets are recorded net of accumulated depreciation of $ 47.4 million and include $ 0.7 million of prepaid financing costs as of December 31, 2019.

All of our operating lease office locations support selling and servicing functions.

Operating lease expense, and depreciation and interest expense relating to our finance lease obligation, are recognized within our consolidated statement of operations for the three and six months ended June 30, 2020 and 2019 as follows:

Operating lease expense, and depreciation and interest expense relating to our finance lease obligation, are recognized within our consolidated statement of operations for the three and nine months ended September 30, 2020 and 2019 as follows:

Three months ended

Six months ended

Nine months ended

September 30,

Classification

16 unchanged sentences

Total lease cost

* Sales and marketing, general and administrative expense includes short-term lease and variable lease costs of approximately $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2020, respectively and includes short-term lease and variable lease costs of approximately $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2019, respectively.

* Sales and marketing, general and administrative expense includes short-term lease and variable lease costs of approximately $ 0.3 million and $ 0.8 million for the three and nine months ended September 30, 2020, respectively and includes short-term lease and variable lease costs of approximately $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2019, respectively.

Our corporate headquarters, shown below under finance leases, has an original lease term of 22 years .

All other locations are treated as operating leases, with lease terms ranging from 1 to 10 years .

The tables below reflect the minimum cash outflow regarding our current lease obligations as well as the weighted-average remaining lease term and weighted-average discount rates used in our calculation of our lease obligations and right-of-use assets as of June 30, 2020:

Maturity of Lease Liabilities

5 unchanged sentences

operating lease interest calculated using estimated corporate borrowing rate.

September 30,

Lease term and discount rate

6 unchanged sentences

Our cash outflows from our operating leases include rent expense and other charges associated with these leases.

These cash flows are included within the operating section of our statement of cash flows.

These cash flows are included within the operating activities section of our statement of cash flows.

Our cash flows from our finance lease include both an interest component and payment of principal component.

The table below shows our cash outflows,

by lease type and related section of our statement of cash flows as well as the non-cash amount capitalized on our balance sheet in relation to our operating lease right-of-use assets:

Six months ended

The table below shows our cash

outflows, by lease type and related section of our statement of cash flows, as well as the non-cash amount capitalized on our balance sheet in relation to our operating lease right-of-use assets:

Nine months ended

September 30,

Cash paid for amounts included in the measurement of lease liabilities

9 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

(in thousands)

3 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

(in thousands)

2 unchanged sentences

Contract liabilities are as follows:

September 30,

(in thousands)

3 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

(in thousands)

18 unchanged sentences

allowances for credit losses are maintained through adjustments to the provision for credit losses, which are charged to current period earnings.

The following table shows changes of the allowances for credit losses related to trade receivables for the three and six months ended June 30, 2020:

The following table shows changes of the allowances for credit losses related to trade receivables for the three and nine months ended September 30, 2020:

Three months ended

Six months ended

Nine months ended

September 30,

(in thousands)

Balance at January 1 (beginning of year)

Balance, beginning of period

Provision for credit losses

Balance at June 30 (end of period)

Balance, ending of period

Computation of Net Earnings per Share

3 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

(in thousands, except per share amounts)

4 unchanged sentences

Net income per share

Diluted weighted average common shares outstanding does not include 3,138 and 239,314 common equivalent shares issuable with respect to outstanding equity awards for the three month periods ended June 30, 2020 and 2019, respectively, or 5,006 and 12,213 common equivalent shares issuable with respect to outstanding equity awards for the six month periods ending June 30, 2020 and 2019, respectively, as their effect would have been anti-dilutive.

Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component, for the six months ended June 30, 2020:

Diluted weighted average common shares outstanding does not include 848 and 847,448 common equivalent shares issuable with respect to outstanding equity awards for the three month periods ended September 30, 2020 and 2019, respectively, or 8,226 and 236,229 common equivalent shares issuable with respect to outstanding equity awards for the nine month periods ending September 30, 2020 and 2019, respectively, as their effect would have been anti-dilutive.

Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive income, net of tax, by component, for the nine months ended September 30, 2020:

Defined benefit

1 unchanged sentence

Balance at December 31, 2019

Other comprehensive loss and pension reclassification

Balance at June 30, 2020

Other comprehensive income and pension reclassification

Balance at September 30, 2020

Cash, cash equivalents and restricted cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheet to the total of the amounts shown in the statement of cash flows:

September 30,

(in thousands)

2 unchanged sentences

Total cash, cash equivalents and restricted cash

As of June 30, 2020, we had $ 6.7 million in restricted cash representing the total of (i) cash collateral for a $ 5.9 million letter of credit serving as security for the lease of our corporate headquarters in Beverly, Massachusetts, (ii) cash collateral for a $ 0.7 million letter of credit relating to workers’ compensation insurance and (iii) a $ 0.1 million deposit relating to customs activity.

As of September 30, 2020, we had $ 0.8 million in restricted cash representing the total of (i) cash collateral for a $ 0.7 million letter of credit relating to workers’ compensation insurance and (ii) a $ 0.1 million deposit relating to customs activity.

Inventories, net

The components of inventories are as follows:

September 30,

(in thousands)

12 unchanged sentences

Costs for non-standard warranty are expensed as incurred.

Factors that affect our warranty liability include the number of installed

units, historical and anticipated product failure rates, material usage and service labor costs.

Factors that affect our warranty liability include the number of installed units, historical and anticipated product failure rates, material usage and service labor costs.

We periodically assess the adequacy of our recorded liability and adjust the amount as necessary.

The changes in our standard product warranty liability are as follows:

Six months ended

Nine months ended

September 30,

(in thousands)

3 unchanged sentences

Changes in estimate of liability for pre-existing warranties during the period

Balance at June 30 (end of period)

Balance at September 30 (end of period)

Amount classified as current

17 unchanged sentences

The following table sets forth our assets by level within the fair value hierarchy:

June 30, 2020

September 30, 2020

Fair Value Measurements

14 unchanged sentences

As part of the sale, we also entered into a 22-year lease agreement of our headquarters facility.

This sale-leaseback is accounted for as a financing lease under generally accepted accounting principles and, as such, we have recorded a financing obligation of $ 48.4 million as of June 30, 2020.

This sale-leaseback is accounted for as a financing lease under generally accepted accounting principles and, as such, we have recorded a financing obligation of $ 48.3 million as of September 30, 2020.

The associated lease payments include both an interest component and payment of principal, with the remaining liability being extinguished at the end of the original lease term.

We posted a security deposit of $ 5.9 million in the form of an irrevocable letter of credit at the time of the closing.

This letter of credit is cash collateralized and the associated cash is included in long-term restricted cash.

Income tax expense was $ 2.3 million for the three months ended June 30, 2020, compared to $ 0.8 million for the three months ended June 30, 2019.

The $ 1.5 million increase was primarily due to a $ 14.2 million increase in pretax income.

The income tax provision was $ 3.3 million during the six months ended June 30, 2020, compared to $ 1.3 million for the six months ended June 30, 2019.

This letter of credit reduces our availability under our credit facility, as described in the next paragraph.

On July 31, 2020, we entered into a Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”) with Silicon Valley Bank, in its capacity as administrative agent and collateral agent for itself and as a lender, and such other banks and financial institutions or entities that from time to time join as lenders under the Credit Agreement.

The Credit Agreement provides for a revolving credit facility in an aggregate principal amount not to exceed $ 40.0 million.

Our obligations under the Credit Agreement are secured by a security interest, senior to any current and future debts and to any security interest, in all of our rights, title, and interest in, to and under substantially all of our assets, subject to limited exceptions, including permitted liens.

The revolving credit facility terminates on July 31, 2023.

As of September 30, 2020, we were in compliance with all covenant requirements of the Credit Agreement.

As of such date, no borrowings had been made under the Credit Agreement, although a letter of credit for $ 5.9 million, previously issued by Silicon Valley Bank, had been rolled under the Credit Agreement, reducing the funds available for borrowing under the credit line.

Income tax expense was $ 2.8 million for the three months ended September 30, 2020, compared to $ 0.3 million benefit for the three months ended September 30, 2019.

The $ 3.1 million increase was primarily due to a $ 13.2 million increase in pretax income.

The effective tax rate for the three and six months ended June 30, 2020 and 2019, respectively, was less than the U.S.

The income tax provision was $ 6.1 million during the nine months ended September 30, 2020, compared to $ 0.9 million for the nine months ended September 30, 2019.

The $ 5.2 million increase was primarily due to a $ 33.2 million increase in pretax income partially offset by a $ 2.0 million tax benefit relating to equity compensation.

The effective tax rate for the three and nine months ended September 30, 2020 and 2019, respectively, was less than the U.S.

statutory rate of 21 % due to favorable discrete items related to equity compensation in those periods and Federal research and development tax credits that reduce the annual tax rate.

We had $ 64.6 million and $ 68.1 million of net deferred tax assets worldwide relating to net operating loss carryforwards, tax credit carryforwards and other temporary differences, as of June 30, 2020 and December 31, 2019, respectively.

We had $ 58.2 million and $ 68.1 million of net deferred tax assets worldwide relating to net operating loss carryforwards, tax credit carryforwards and other temporary differences, as of September 30, 2020 and December 31, 2019, respectively.

These deferred tax assets are available to reduce income taxes in future years.

4 unchanged sentences

Concentration of Risk

For the three months ended June 30, 2020, three customers accounted for 22.5 %, 22.2 % and 11.6 % of total revenue, respectively.

For the three months ended June 30, 2019, four customers accounted for 15.7 %, 14.2 %, 12.7 % and 12.5 % of total revenue, respectively.

For the six months ended June 30, 2020, three customers accounted for 19.7 %, 18.5 % and 16.2 % of total revenue, respectively.

For the six months ended June 30, 2019, four customers accounted for 14.8 %, 14.4 %, 11.4 % and 11.2 % of total revenue respectively.

At June 30, 2020, two customers accounted for 30.3 % and 21.8 % of accounts receivable, respectively.

For the three months ended September 30, 2020, three customers accounted for 16.8 %, 11.2 % and 10.3 % of total revenue, respectively.

For the three months ended September 30, 2019, two customers accounted for 28.0 % and 13.2 % of total revenue, respectively.

For the nine months ended September 30, 2020, three customers accounted for 18.8 %, 15.2 % and 12.1 % of total revenue, respectively.

For the nine months ended September 30, 2019, three customers accounted for 18.7 %, 12.4 %, and 11.8 % of total revenue respectively.

At September 30, 2020, three customers accounted for 19.5 %, 12.9 % and 10.2 % of accounts receivable, respectively.

At December 31, 2019, three customers accounted for 24.9 %, 15.3 % and 11.1 % of accounts receivable, respectively.

5 unchanged sentences

Shares repurchased are accounted for when the transaction is settled.

There were no unsettled share repurchases at June 30, 2020.

There were no unsettled share repurchases at September 30, 2020.

Contingencies

13 unchanged sentences

See Note 5 above for further discussion.

Subsequent Event – Revolving Credit Agreement

On July 31, 2020, we entered into a Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”) with Silicon Valley Bank, in its capacity as administrative agent and collateral agent for itself and as a lender, and such other banks and financial institutions or entities who from time to time join as lenders under the Credit Agreement.

The Credit Agreement provides for a revolving credit facility in an aggregate principal amount not to exceed $ 40.0 million.

The revolving credit facility terminates on August 3, 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements