What changed in this filing

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Item 1. Financial Statements

2021-08-06 compared with 2021-05-06 · 75 added, 42 removed, 380 unchanged (24% of the section changed)

4 unchanged sentences

Three months ended

Six months ended

Total revenue

22 unchanged sentences

Three months ended

Other comprehensive loss:

Six months ended

Other comprehensive income (loss):

Foreign currency translation adjustments

Amortization of actuarial loss and other adjustments from pension plan, net of tax

Total other comprehensive loss

Total other comprehensive income (loss)

Comprehensive income

29 unchanged sentences

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

33,679 shares issued and outstanding at March 31, 2021;

33,657 shares issued and outstanding at June 30, 2021;

33,633 shares issued and outstanding at December 31, 2020

21 unchanged sentences

Balance at March 31, 2020

Foreign currency translation adjustments

Change in pension obligation

Exercise of stock options

Issuance of shares under Employee Stock Purchase Plan

Issuance of restricted common shares,

net of shares withheld

Stock-based compensation expense

Balance at June 30, 2020

Comprehensive

10 unchanged sentences

Balance at March 31, 2021

Foreign currency translation adjustments

Change in pension obligation

Exercise of stock options

Issuance of shares under Employee Stock Purchase Plan

Issuance of restricted common shares,

net of shares withheld

Stock-based compensation expense

Repurchase of common stock

Balance at June 30, 2021

See accompanying Notes to these Consolidated Financial Statements

2 unchanged sentences

(In thousands)

Three months ended

Six months ended

Cash flows from operating activities

37 unchanged sentences

Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for other interim periods or for the year as a whole.

The balance sheet at December 31, 2020 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

The balance sheet at December 31, 2020 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements.

For further information, refer to the consolidated financial statements and footnotes thereto included in Axcelis Technologies, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020.

6 unchanged sentences

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

The Company’s Employee Stock Purchase Plan, which was effective in June 2000 (the “2000 ESPP”), expired in June 2020.

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, 2020.

We recognized stock-based compensation expense of $ 2.4 million and $ 1.7 million for the three-month periods ended March 31, 2021 and 2020, respectively.

These amounts include compensation expense related to RSUs and non-qualified stock options.

In the three-month periods ended March 31, 2021 and 2020, we issued 0.3 million and 0.6 million shares of common stock, respectively, upon stock option exercises and vesting of RSUs.

In the three-month periods ended March 31, 2021 and 2020, we received proceeds of $ 2.5 million and $ 4.5 million, respectively, in connection with the exercise of stock options.

We recognized stock-based compensation expense of $ 3.4 million and $ 3.1 million for the three-month periods ended June 30, 2021 and 2020, respectively.

We recognized stock-based compensation expense of $ 5.8 million and $ 4.8 million for the six-month periods ended June 30, 2021 and 2020, respectively.

These amounts include compensation expense related to RSUs, non-qualified stock options and stock to be issued to participants under the 2020 ESPP and 2000 ESPP.

In the three-month periods ended June 30, 2021 and 2020, we issued 0.3 million and 0.6 million shares of common stock, respectively, upon stock option exercises, purchases under the employee stock purchase plans and vesting of RSUs.

In the three-month periods ended June 30, 2021 and 2020, we received proceeds of $ 1.1 million and $ 3.3 million, respectively, in connection with the exercise of stock options and purchases under the employee stock purchase plans.

In the six-month periods ended June 30, 2021 and 2020, we issued 0.7 million and 1.2 million shares of common stock, respectively, upon stock option exercises, purchases under the employee stock purchase plans and vesting of RSUs.

In the six-month periods ended June 30, 2021 and 2020, we received proceeds of $ 3.6 million and $ 7.8 million, respectively, in connection with the exercise of stock options and purchases under the employee stock purchase plans.

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

1 unchanged sentence

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

A lease is a contract or part of a contract that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration.

A lease is a contract or part of a contract that conveys the right to control the use of identified property, plant or equipment over a period of time in exchange for consideration.

We recognize the lease obligation on a discounted basis using the explicit or implicit discount rate stated within the agreement.

We recognize a corresponding right-of-use asset, which is initially determined based upon the net present value of the associated liability and is adjusted for deferred costs and possible impairment, if

For those lease agreements that do not indicate the applicable discount rate, we use our incremental borrowing rate.

22 unchanged sentences

Total lease liabilities

* Finance lease assets are recorded net of accumulated depreciation of $ 48.7 million and include $ 0.7 million of prepaid financing costs as of March 31, 2021.

* Finance lease assets are recorded net of accumulated depreciation of $ 48.9 million and include $ 0.7 million of prepaid financing costs as of June 30, 2021.

Finance lease assets are recorded net of accumulated depreciation of $ 48.4 million and include $ 0.7 million of prepaid financing costs as of December 31, 2020.

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 months ended March 31, 2021 and 2020 as follows:

Three months ended

Six months ended

Classification

16 unchanged sentences

Total lease cost

* Sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $ 0.4 million and $ 0.2 million for the three months ended March 31, 2021 and 2020, respectively.

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

* Sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $ 0.4 million and $ 0.9 million for the three and six months ended June 30, 2021, respectively, and includes short-term and variable lease costs of approximately $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2020, respectively.

The lease of our corporate headquarters, shown below under finance leases, had an original lease term of 22 years , beginning in January 2015.

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 March 31, 2021:

Maturity of Lease Liabilities

15 unchanged sentences

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 for the three months ending March 31, 2021 and 2020, respectively:

Three 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 for the six months ending June 30, 2021 and 2020, respectively:

Six months ended

Cash paid for amounts included in the measurement of lease liabilities

9 unchanged sentences

Three months ended

Six months ended

(in thousands)

4 unchanged sentences

Three months ended

Six months ended

(in thousands)

8 unchanged sentences

Three months ended

Six months ended

(in thousands)

7 unchanged sentences

All trade receivables are reported on the Consolidated Balance Sheets at their amortized cost adjusted for any write-offs and net of allowances for credit losses.

Axcelis maintains an allowance for credit losses, which represent an estimate of expected losses over the remaining contractual life of its receivables considering current market conditions and estimates for supportable forecasts when appropriate.

The estimate is a result of the Company’s ongoing assessments and evaluations of collectability, historical loss experience, and future expectations in estimating credit losses in its receivable portfolio.

Axcelis maintains an allowance for credit losses, which represent an estimate of expected losses over the remaining contractual life of our receivables, considering current market conditions and estimates for supportable forecasts when appropriate.

Axcelis uses historical loss experience rates and applies them to a related aging analysis while also considering customer and/or economic risk where appropriate.

1 unchanged sentence

The allowance takes into consideration numerous quantitative and qualitative factors that include receivable type, historical loss experience, loss migration, delinquency trends, collection experience, current economic conditions, estimates for supportable forecasts, when appropriate, and credit risk characteristics.

Axcelis evaluates the credit risk of the customer when extending credit based on a combination of various financial and qualitative factors that may affect its customers’ ability to pay.

Axcelis evaluates the credit risk of the customer when extending credit based on a combination of various financial and qualitative factors that may affect our customers’ ability to pay.

These factors may include the customer’s financial condition, past payment experience, and credit bureau report, as well as the value of the underlying collateral.

2 unchanged sentences

Changes to the 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 months ended March 31, 2021 and 2020, respectively:

The following table shows changes of the allowances for credit losses related to trade receivables for the three and six months ended June 30, 2021 and 2020, respectively:

Three months ended

Six months ended

(in thousands)

7 unchanged sentences

Three months ended

Six months ended

(in thousands, except per share amounts)

Net income available to common stockholders

3 unchanged sentences

Net income per share

Diluted weighted average common shares outstanding does not include 1,429 and 1,675 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended March 31, 2021 and 2020, respectively, as their effect would have been anti-dilutive.

Diluted weighted average common shares outstanding does not include 1,800 and 3,138 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended June 30, 2021 and 2020, respectively, or 1,352 and 5,006 common equivalent shares issuable with respect to outstanding equity awards for the six-month periods ending June 30, 2021 and 2020, respectively, as their effect would have been anti-dilutive.

Accumulated Other Comprehensive Income

The following table presents the changes in accumulated other comprehensive income, net of tax, by component, for the three months ended March 31, 2021:

The following table presents the changes in accumulated other comprehensive income, net of tax, by component, for the six months ended June 30, 2021:

Defined benefit

2 unchanged sentences

Other comprehensive loss and pension reclassification

Balance at March 31, 2021

Balance at June 30, 2021

Cash, cash equivalents and restricted cash

4 unchanged sentences

Total cash, cash equivalents and restricted cash

As of March 31, 2021, 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.

As of June 30, 2021, 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

17 unchanged sentences

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

Three months ended

Six months ended

(in thousands)

3 unchanged sentences

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

Balance at March 31 (end of period)

Balance at June 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:

March 31, 2021

June 30, 2021

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 $ 48.0 million as of March 31, 2021.

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 $ 47.8 million as of June 30, 2021.

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.

5 unchanged sentences

The revolving credit facility terminates on July 31, 2023.

As of March 31, 2021, 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.

We entered into a First Amendment to the Credit Agreement with Silicon Valley Bank in March 2021 to (i) align the covenants with our 2021 stock repurchase program, and (ii) establish terms to transition from a Eurodollar based interest rate option to an interest rate benchmark using a secured overnight financing rate (known as “SOFR”) published by the Federal Reserve Bank of New York.

Income tax expense was $ 1.7 million for the three months ended March 31, 2021, compared to $ 1.0 million for the three months ended March 31, 2020.

The $ 0.7 million increase was primarily due to a $ 6.0 million increase in pretax income partially offset by a tax benefit of $ 0.2 million due to the expiration of a statute of limitations on an uncertain tax

The effective tax rate for the three months ended March 31, 2021 and 2020, respectively, was less than the U.S.

As of June 30, 2021, 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 reduces the funds available for borrowing under the credit line.

We entered into a First Amendment to the Credit Agreement with Silicon Valley Bank in March 2021 to (i) align the covenants with our 2021 stock repurchase program, and (ii) established terms to transition from a Eurodollar based interest rate option to an interest rate benchmark using a secured overnight financing rate (known as “SOFR”) published by the Federal Reserve Bank of New York.

Income tax expense was $ 3.8 million for the three months ended June 30, 2021, compared to $ 2.3 million for the three months ended June 30, 2020.

The $ 1.5 million increase was primarily due to a $ 7.2 million increase in pretax income.

Income tax expense was $ 5.6 million during the six months ended June 30, 2021, compared with $ 3.3 million for the six months ended June 30, 2020.

The $ 2.3 million increase was primarily due to a $ 13.1 million increase in pretax income.

The effective tax rate for the three and six months ended June 30, 2021 and 2020, 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 $ 54.9 million and $ 57.9 million of net deferred tax assets worldwide relating to net operating loss carryforwards, tax credit carryforwards and other temporary differences, as of March 31, 2021 and December 31, 2020, respectively.

We had $ 51.4 million and $ 57.9 million of net deferred tax assets worldwide relating to net operating loss carryforwards, tax credit carryforwards and other temporary differences, as of June 30, 2021 and December 31, 2020, 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 March 31, 2021, one customer accounted for 29.6 % of total revenue.

For the three months ended March 31, 2020, four customers accounted for 20.9 %, 16.9 %, 14.6 % and 10.7 % of total revenue, respectively.

At March 31, 2021, one customer accounted for 19.8 % of accounts receivable.

For the three months ended June 30, 2021, two customers accounted for 19.7 % and 10.2 % of total revenue, respectively.

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 six months ended June 30, 2021, one customer accounted for 24.4 % of total revenue.

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

At June 30, 2021, two customers accounted for 11.7 % and 10.0 % of accounts receivable, respectively.

At December 31, 2020, two customers accounted for 23.8 % and 11.9 % of accounts receivable, respectively.

1 unchanged sentence

In December 2020, our Board of Directors approved stock repurchases of up to $ 100 million of our common stock through the end of 2021.

During the three months ended March 31, 2021, we purchased 0.3 million shares at an average cost of $ 38.41 per share.

During the six months ended June 30, 2021, we purchased 0.6 million shares at an average cost of $ 39.92 per share.

The timing and actual number of shares repurchased under this program will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions.

Shares repurchased by us are accounted for when the transaction is settled.

There were 22,160 unsettled share repurchases totaling approximately $ 0.9 million at March 31, 2021.

Shares repurchased and retired are deducted from common stock for par value and from additional paid-in capital for the excess over par value.

16 unchanged sentences

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