What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-04 · 113 added, 54 removed, 391 unchanged (30% of the section changed)

4 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

Total revenue

22 unchanged sentences

Three months ended

Six months ended

Other comprehensive (loss) income:

Nine months ended

September 30,

Other comprehensive loss:

Foreign currency translation adjustments

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

Total other comprehensive (loss) income

Amortization of actuarial net gain/(loss) and other adjustments from pension plan, net of tax

Total other comprehensive loss

Comprehensive income

3 unchanged sentences

(In thousands, except per share amounts)

September 30,

Current assets:

Cash and cash equivalents

Short-term investments

Accounts receivable, net

22 unchanged sentences

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

33,094 shares issued and outstanding at June 30, 2022;

32,937 shares issued and outstanding at September 30, 2022;

33,240 shares issued and outstanding at December 31, 2021

27 unchanged sentences

Balance at June 30, 2021

Foreign currency translation adjustments

Change in pension obligation

Exercise of stock options

Issuance of common shares on restricted stock units, net of shares withheld

Stock-based compensation expense

Repurchase of common stock

Balance at September 30, 2021

See accompanying Notes to these Consolidated Financial Statements (Unaudited)

Axcelis Technologies, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands)

Comprehensive

17 unchanged sentences

Balance at June 30, 2022

Foreign currency translation adjustments

Change in pension obligation

Exercise of stock options

Issuance of common shares on restricted stock units, net of shares withheld

Stock-based compensation expense

Repurchase of common stock

Balance at September 30, 2022

See accompanying Notes to these Consolidated Financial Statements (Unaudited)

2 unchanged sentences

(In thousands)

Six months ended

Nine months ended

September 30,

Cash flows from operating activities

13 unchanged sentences

Expenditures for property, plant and equipment and capitalized software

Purchase of short-term investments

Net cash used in investing activities

7 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash, cash equivalents and restricted cash

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

14 unchanged sentences

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, 2021.

Summary of Significant Accounting Policies

(a) Cash, Cash Equivalents and Short-term investments

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of ninety days or less.

Cash equivalents consist primarily of money market funds, U.S.

Government and Agency Securities and deposit accounts.

Cash equivalents are carried on the balance sheet at fair market value.

Short-term investments are h ighly liquid investments with original maturities of greater than 90 days but less than one year from date of purchase and are carried on the balance sheet at fair market value.

Our short-term investments consist primarily of U.S.

Government and Agency securities and are classified as held-to-maturity based on our positive intent and ability to hold the securities to maturity.

Income related to these securities is recorded in interest income in the Consolidated Statements of Operations .

Stock-Based Compensation

2 unchanged sentences

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, 2021.

We recognized stock-based compensation expense of $ 3.5 million and $ 3.4 million for the three-month periods ended June 30, 2022 and 2021, respectively.

We recognized stock-based compensation expense of $ 6.2 million and $ 5.8 million for the six-month periods ended June 30, 2022 and 2021, respectively.

We recognized stock-based compensation expense of $ 3.6 million and $ 3.2 million for the three-month periods ended September 30, 2022 and 2021, respectively.

We recognized stock-based compensation expense of $ 9.8 million and $ 9.0 million for the nine-month periods ended September 30, 2022 and 2021, respectively.

These amounts include compensation expense related to RSUs, non-qualified stock options and stock to be issued to participants under the 2020 Employee Stock Purchase Plan (the “2020 ESPP”).

In the three-month periods ended June 30, 2022 and 2021, we issued 0.2 million and 0.3 million shares of common stock, respectively, upon stock option exercises, purchases under the 2020 ESPP and vesting of RSUs.

In the three-month periods ended June 30, 2022 and 2021, we received proceeds of $ 1.0 million and $ 1.1 million, respectively, in connection with the exercise of stock options and purchases under the 2020 ESPP.

In the six-month periods ended June 30, 2022 and 2021, we issued 0.4 million and 0.7 million shares of common stock, respectively, upon stock option exercises, purchases under the 2020 ESPP and vesting of RSUs.

In the six-month periods ended June 30, 2022 and 2021, we received proceeds of $ 1.5 million and $ 3.6 million, respectively, in connection with the exercise of stock options and purchases under the 2020 ESPP.

In the three-month periods ended September 30, 2022 and 2021, we issued 38.0 thousand and 40.0 thousand shares of common stock, respectively, upon stock option exercises and vesting of RSUs.

In the three-month periods ended

September 30, 2022 and 2021, we received proceeds of $ 0.4 million and $ 0.3 million, respectively, in connection with the exercise of stock options.

In the nine-month periods ended September 30, 2022 and 2021, we issued 0.4 million and 0.7 million shares of common stock, respectively, upon stock option exercises, purchases under the 2020 ESPP and vesting of RSUs.

In the nine-month periods ended September 30, 2022 and 2021, we received proceeds of $ 1.9 million and $ 3.9 million, respectively, in connection with the exercise of stock options and purchases under the 2020 ESPP.

We have operating leases for office space, warehouse space, a manufacturing plant, computer and office equipment as well as 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 over 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.

12 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 $ 49.2 million and includes $ 0.6 million of prepaid financing costs as of June 30, 2022.

*Finance lease assets are recorded net of accumulated depreciation of $ 49.4 million and includes $ 0.6 million of prepaid financing costs as of September 30, 2022.

Finance lease assets are recorded net of accumulated depreciation of $ 48.6 million and includes $ 0.7 million of prepaid financing costs as of December 31, 2021.

1 unchanged sentence

Our Axcelis Asia Operations Center facility in South Korea brings production capability closer to our Asia-based customers.

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, 2022 and 2021 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, 2022 and 2021 as follows:

Three months ended

Six months ended

Nine months ended

September 30,

Classification

17 unchanged sentences

Total lease cost

* Sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $ 0.6 million and $ 1.0 million for the three and six months ended June 30, 2022, respectively, and includes short-term and variable lease costs of approximately $ 0.4 million and $ 0.9 million for the three and six months ended June 30, 2021, respectively.

* Product / services, sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $ 0.4 million and $ 1.4 million for the three and nine months ended September 30, 2022, respectively, and includes short-term and variable lease costs of approximately $ 0.6 million and $ 1.4 million for the three and nine months ended September 30, 2021, respectively.

The lease of our corporate headquarters, shown below under finance leases, had an original lease term of 22 years , beginning in January 2015 and expiring in January 2037, with renewal options.

All other locations are treated as operating leases, with lease terms ranging from one to ten 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, 2022:

Maturity of Lease Liabilities

5 unchanged sentences

operating lease interest calculated using estimated corporate borrowing rate.

September 30,

Lease term and discount rate

8 unchanged sentences

Our cash flows from our finance lease include both an interest component and a 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 six months ending June 30, 2022 and 2021, respectively:

Six months ended June 30,

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 nine months ending September 30, 2022 and 2021, respectively:

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)

4 unchanged sentences

Three months ended

Six months ended

Nine months ended

September 30,

(in thousands)

3 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)

11 unchanged sentences

Determination of the proper amount of allowances requires management to exercise judgment about the timing, frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, net earnings.

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.

economic conditions, trade restrictions, 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 our customers’ ability to pay.

3 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 and six months ended June 30, 2022 and 2021, respectively:

The following table shows changes of the allowances for credit losses related to trade receivables for the three and nine months ended September 30, 2022 and 2021, respectively:

Three months ended

Six months ended

Nine months ended

September 30,

(in thousands)

7 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 15,796 and 1,800 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended June 30, 2022 and 2021, respectively, or 8,255 and 1,352 common equivalent shares issuable with respect to outstanding equity awards for the six-month periods ended June 30, 2022 and 2021, respectively, as their effect would have been anti-dilutive.

Diluted weighted average common shares outstanding does not include 5,046 and 347 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended September 30, 2022 and 2021, respectively, or 6,692 and 413 common equivalent shares issuable with respect to outstanding equity awards for the nine-month periods ended September 30, 2022 and 2021, respectively, as their effect would have been anti-dilutive.

Accumulated Other Comprehensive (Loss) Income

The following table presents the changes in accumulated other comprehensive (loss) income, net of tax, by component, for the six months ended June 30, 2022:

The following table presents the changes in accumulated other comprehensive (loss) income, net of tax, by component, for the nine months ended September 30, 2022:

Defined benefit

2 unchanged sentences

Other comprehensive loss and pension reclassification

Balance at June 30, 2022

Balance at September 30, 2022

Cash, cash equivalents and restricted cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets 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, 2022, 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 September 30, 2022, 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)

15 unchanged sentences

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

15 unchanged sentences

(b) Fair Value Measurements

Our money market funds and short-term investments are included in cash and cash equivalents in the consolidated balance sheets.

Our money market funds and short-term investments with initial maturities of three months or less are included in cash and cash equivalents in the consolidated balance sheets.

Other investments have a maturity of greater than three months but less than one year are included within short-term investments in the consolidated balance sheets.

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

June 30, 2022

September 30, 2022

Fair Value Measurements

(in thousands)

Cash equivalents:

Money market funds, U.S.

Cash equivalents and other short-term investments:

Cash equivalents (money market funds, U.S.

Government Securities and Agency Investments)

Short-term investments (U.S.

Government Securities and Agency Investments)

December 31, 2021

9 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 $ 46.9 million as of June 30, 2022.

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 $ 46.7 million as of September 30, 2022.

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 June 30, 2022, we were in compliance with all covenant requirements of the Credit Agreement.

As of September 30, 2022, 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 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 $ 4.0 million for the three months ended June 30, 2022, compared to $ 3.8 million for the three months ended June 30, 2021.

The $ 0.2 million increase was primarily due to a $ 25.4 million increase in pretax income offset by the Foreign Derived Intangible Income (“FDII”) deduction on export sales.

Income tax expense was $ 8.3 million during the six months ended June 30, 2022, compared with $ 5.6 million for the six months ended June 30, 2021.

Income tax expense was $ 4.7 million for the three months ended September 30, 2022, compared to $ 6.7 million for the three months ended September 30, 2021.

The $ 2.0 million decrease was primarily due to the Foreign Derived Intangible Income (“FDII”) deduction on export sales.

Income tax expense was $ 13.0 million during the nine months ended September 30, 2022, compared with $ 12.3 million for the nine months ended September 30, 2021.

The $ 0.7 million increase was primarily due to a $ 63.9 million increase in pretax income offset by the FDII deduction on export sales.

The effective tax rate for the three and six months ended June 30, 2022 was less than the U.S.

The effective tax rate for the three and nine months ended September 30, 2022 was less than the U.S.

statutory rate of 21 % due to forecasted FDII, Federal research and development tax credits and a favorable discrete item related to equity compensation that reduces the annual tax rate.

The effective tax rate for the three and six months ended June 30, 2021 was less than the U.S.

The effective tax rate for the three and nine months ended September 30, 2021 was less than the U.S.

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

The Deferred income taxes of $ 33.7 million and $ 35.5 million as of June 30, 2022 and December 31, 2021, respectively, reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards.

The deferred income taxes of $ 28.4 million and $ 35.5 million as of September 30, 2022 and December 31, 2021, respectively, reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards.

We have recorded a $ 9.3 million valuation allowance in the U.S.

4 unchanged sentences

Concentration of Risk

For the three months ended June 30, 2022, two customers accounted for 19.3 % and 11.6 % of total revenue, respectively.

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

For the six months ended June 30, 2022, three customers accounted for 15.3 %, 10.7 % and 10.3 % of total revenue, respectively.

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

At June 30, 2022, three customers accounted for 30.5 %, 13.2 % and 10.6 % of accounts receivable, respectively.

For the three months ended September 30, 2022, one customer accounted for 13.8 % of total revenue.

For the three months ended September 30, 2021, one customer accounted for 26.7 % of total revenue.

For the nine months ended September 30, 2022, one customer accounted for 14.8 % of total revenue.

For the nine months ended September 30, 2021, two customers accounted for 18.5 % and 14.1 % of total revenue, respectively.

At September 30, 2022, one customer accounted for 13.2 % of accounts receivable.

At December 31, 2021, two customers accounted for 29.1 % and 13.6 % of accounts receivable, respectively.

1 unchanged sentence

In February 2022, our Board of Directors approved stock repurchases of up to $ 100 million of our common stock, beginning in March 2022.

During the six months ended June 30, 2022, we purchased 0.5 million shares at an average cost of $ 65.19 per share.

During the nine months ended September 30, 2022, we purchased 0.7 million shares at an average cost of $ 64.85 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.

12 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