What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-11-07 compared with 2024-08-01 · 103 added, 65 removed, 418 unchanged (29% 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:

Nine months ended

September 30,

Other comprehensive income (loss):

Foreign currency translation adjustments

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

Total other comprehensive loss

Total other comprehensive income (loss)

Comprehensive income

3 unchanged sentences

(In thousands, except per share amounts)

September 30,

Current assets:

26 unchanged sentences

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

32,617 shares issued and outstanding at June 30, 2024;

32,504 shares issued and outstanding at September 30, 2024;

32,685 shares issued and outstanding at December 31, 2023

23 unchanged sentences

Balance at June 30, 2023

Foreign currency translation adjustments

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

Stock-based compensation expense

Repurchase of common stock

Balance at September 30, 2023

See accompanying Notes to these Consolidated Financial Statements (Unaudited)

Axcelis Technologies, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands)

Comprehensive

14 unchanged sentences

Balance at June 30, 2024

Foreign currency translation adjustments

Change in pension obligation

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

Stock-based compensation expense

Repurchase of common stock

Balance at September 30, 2024

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

6 unchanged sentences

Accretion of discounts and premiums on marketable securities

Currency loss on foreign denominated transactions

Unrealized currency (gain) loss on foreign denominated transactions

Mark-to-market adjustment on forward exchange contracts

Changes in operating assets and liabilities:

34 unchanged sentences

The balance sheet at December 31, 2023 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.

As of June 30, 2024, there have been no material changes in the Company’s significant accounting policies, other than with respect to the Company’s accounting policy for derivative financial instruments, which it had not held in prior periods, as described in Note 2 below.

As of September 30, 2024, there have been no material changes in the Company’s significant accounting policies, other than with respect to the Company’s accounting policy for derivative financial instruments, which it had not held in prior periods, as described in Note 2 below.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2024, as amended by Amendment No.

5 unchanged sentences

These contracts have month-to-month settlement dates.

As of June 30, 2024, we had open contracts with a notional value of $ 111 million.

As of September 30, 2024, we had open contracts with a notional value of $ 104 million.

We measure these instruments at fair value and recognize assets or liabilities associated with the intrinsic value on these open contracts on the Consolidated Balance Sheets at the end of each reporting period.

At June 30, 2024, the recognized unrealized loss on these forward exchange contracts was approximately $ 323 thousand.

At September 30, 2024, the recognized unrealized loss on these forward exchange contracts was approximately $ 0.6 million.

Unrealized gains and losses are shown in our cash flows from operating activities within our Consolidated Statement of Cash Flows.

We have not designated these forward exchange contracts as hedging instruments and we record changes in the fair values at each measurement date in Other, net on the Consolidated Statements of Operations.

For the three and six months ended June 30, 2024, we recorded $ 2.3 million and $ 3.8 million of gain on forward currency exchange contracts, respectively.

For the three and nine months ended September 30, 2024, we recorded $ 3.3 million of loss and $ 0.5 million of gain on forward currency exchange contracts, respectively.

We do not offset fair value amounts of derivative instruments.

4 unchanged sentences

The 2012 Equity Plan is more fully described in Note 13 to the consolidated financial statements in our 2023 Form 10-K.

We recognized stock-based compensation expense of $ 5.5 million and $ 4.7 million for the three-month periods ended June 30, 2024 and 2023, respectively.

We recognized stock-based compensation expense of $ 10.2 million and $ 7.9 million for the six-month periods ended June 30, 2024 and 2023, 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, 2024 and 2023, respectively, we issued 0.2 million shares of common stock upon vesting of RSUs granted under the 2012 Equity Plan and purchases under the 2020 ESPP.

In the three-month period ended June 30, 2024 and 2023, we received proceeds of $ 1.2 million and $ 1.0 million, respectively, from purchases under the 2020 ESPP.

In the six-month period ended June 30, 2024 and 2023, we issued 0.2 million and 0.3 million shares of common stock, respectively, upon vesting of RSUs granted under the 2012 Equity Plan and purchases under the 2020 ESPP.

In the six-month period ended June 30, 2024 and 2023, we received proceeds of $ 1.2 million and $ 1.0 million, respectively, in connection with purchases under the 2020 ESPP.

We recognized stock-based compensation expense of $ 5.4 million and $ 5.1 million for the three-month periods ended September 30, 2024 and 2023, respectively.

We recognized stock-based compensation expense of $ 15.6 million and $ 13.0 million for the nine-month periods ended September 30, 2024 and 2023, respectively.

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

In the three-month periods ended September 30, 2024 and 2023, we issued 5,023 and 7,320 shares of common stock, respectively, upon vesting of RSUs granted under the 2012 Equity Plan and purchases under the 2020 ESPP.

In the three-month periods ended September 30, 2024 and 2023, we received no proceeds from purchases under the 2020 ESPP.

In the nine-month periods ended September 30, 2024 and 2023, we issued 0.2 million and 0.3 million shares of common stock, respectively, upon vesting of RSUs granted under the 2012 Equity Plan and purchases under the 2020 ESPP.

In the nine-month periods ended September 30, 2024 and 2023, we received proceeds of $ 1.2 million and $ 1.0 million, respectively, in connection with purchases under the 2020 ESPP.

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

17 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 $ 46.9 million and include $ 0.6 million of prepaid financing costs as of June 30, 2024.

*Finance lease assets are recorded net of accumulated depreciation of $ 47.2 million and include $ 0.5 million of prepaid financing costs as of September 30, 2024.

Finance lease assets are recorded net of accumulated depreciation of $ 46.4 million and include $ 0.6 million of prepaid financing costs as of December 31, 2023.

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

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

Our state-of-the-art 101,800 square foot logistics and flex manufacturing center was built to our specifications in Beverly, Massachusetts.

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, 2024 and 2023 as follows:

Our operating lease office locations support local selling and servicing functions.

Our Axcelis Asia Operations Center facility in South Korea is used to manufacture our products for Asia-based customers.

We lease a logistics and flex manufacturing center in Beverly, Massachusetts to support our principal product manufacturing operations at our corporate headquarters.

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, 2024 and 2023 as follows:

Three months ended

Six months ended

Nine months ended

September 30,

Classification

17 unchanged sentences

Total lease cost

* Product / services, sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $ 0.7 million and $ 1.3 million for the three and six months ended June 30, 2024, respectively, and includes short-term lease and variable lease costs of approximately $ 0.5 million and $ 1.0 million for the three and six months ended June 30, 2023, respectively.

* Product / services, sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $ 0.3 million and $ 1.6 million for the three and nine months ended September 30, 2024, respectively, and includes short-term lease and variable lease costs of approximately $ 0.6 million and $ 1.6 million for the three and nine months ended September 30, 2023, 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 16 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, 2024:

Maturity of Lease Liabilities

6 unchanged sentences

The table above does not include options to renew lease terms that are not reasonably certain of being exercised.

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 ended June 30, 2024 and 2023, 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 ended September 30, 2024 and 2023, 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)

3 unchanged sentences

Balance, end of the period

* Amount is net of a reclassification of $ 4.7 million from deferred revenue to refund liability for the three and six months ended June 30, 2024.

* Amount is net of a reclassification of $ 4.7 million from deferred revenue to refund liability for the nine months ended September 30, 2024.

The majority of our system transactions have either (1) payment terms of 90 % due upon shipment of the system and 10 % due upon acceptance or (2) a pre-shipment deposit ranging from 20 % to 60 %, with the remainder due upon shipment, less 10 % due at acceptance.

12 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.

We did no t incur any credit losses or recoveries for the three month period ended June 30, 2024.

We recorded $ 0.5 million of recovery of bad debt expense for the six-month period ended June 30, 2024.

We did no t have any allowance or incur any credit losses or recoveries for the six-month period ended June 30, 2023.

As of both June 30, 2024 and 2023, we had no provision for credit losses.

We recorded $ 3.4 million of bad debt expense for the three month period ended September 30, 2024 associated with a European customer that filed for bankruptcy.

We recorded $ 0.5 million of recovery of bad debt expense and $ 3.4 million of bad debt expense for the nine-month period ended September 30, 2024.

We recorded $ 0.7 million of bad debt expense for the three and nine-month periods ended September 30, 2023.

As of both September 30, 2024 and September 30, 2023, we had no provision for credit losses.

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 shares of common stock outstanding does not include 22,983 and 770 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended June 30, 2024 and 2023, respectively, or 20,639 and 387 common equivalent shares issuable with respect to outstanding equity awards for the six-month periods ended June 30, 2024 and 2023, respectively, as their effect would have been anti-dilutive.

Diluted weighted average shares of common stock outstanding does not include 109,266 and 734 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended September 30, 2024 and 2023, respectively, or 21,477 and 2,598 common equivalent shares issuable with respect to outstanding equity awards for the nine-month periods ended September 30, 2024 and 2023, 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, 2024:

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component, for the nine months ended September 30, 2024:

Defined benefit

2 unchanged sentences

Other comprehensive loss and pension reclassification

Balance at June 30, 2024

Balance at September 30, 2024

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, 2024, we had $ 6.7 million in restricted cash representing the total of (i) a $ 5.9 million cash collateral relating to our lease for our headquarters in Beverly, Massachusetts, (ii) a $ 0.7 million letter of credit relating to workers’ compensation insurance and (iii) a $ 0.1 million deposit relating to customs activity.

See Note 13 for further discussion on the $ 5.9 million cash collateral.

As of September 30, 2024, we had $ 6.7 million in restricted cash representing the total of (i) a $ 5.9 million cash collateralized letter of credit serving as a security deposit for our headquarters lease in Beverly, Massachusetts, (ii) a $ 0.7 million cash collateralized letter of credit relating to workers’ compensation insurance and (iii) a $ 0.1 million deposit relating to customs activity.

See Note 13 for further discussion on the $ 5.9 million cash collateralized letter of credit.

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

17 unchanged sentences

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

June 30, 2024

September 30, 2024

Fair Value Measurements

19 unchanged sentences

These contracts have month-to-month settlement dates.

Any gains or losses on these contracts are reported within Other, net within our Consolidated Statement of Operations.

Any open contracts at period end that have settlement dates within one month after the reported period end and any mark-to-market valuation adjustments related to these open contracts are recorded within the current asset or current liability account and any unrealized gain or loss recognized is recorded within Other, net within our Consolidated Statement of Operations.

Any gains or losses on these contracts are reported within Other, net in our Consolidated Statement of Operations.

Any open contracts at period end that have settlement dates within one month after the reported period end and any mark-to-market valuation adjustments related to these open contracts are recorded in the current asset or current liability account and any unrealized gain or loss recognized is recorded within Other, net in our Consolidated Statement of Operations.

These contracts are measured at fair value using observable market inputs such as forward currency exchange rates and our counterparties’ credit risks.

Based on these inputs, the derivative instruments are classified within Level 2 of the valuation hierarchy.

At June 30, 2024, the recognized unrealized loss on these forward exchange contracts was approximately $ 323 thousand.

At September 30, 2024, the recognized unrealized loss on these forward exchange contracts was approximately $ 0.6 million.

Based on our continued ability to trade and enter into forward contracts, we consider the markets for our fair value instruments to be active.

We evaluated the credit risk associated with the counterparties to these derivative instruments and determined that as of June 30, 2024, such credit risks have not had an adverse impact on the fair value of these instruments.

We evaluated the credit risk associated with the counterparties to these derivative instruments and determined that as of September 30, 2024, such credit risks have not had an adverse impact on the fair value of these instruments.

Financing Arrangements

1 unchanged sentence

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 $ 44.5 million as of June 30, 2024.

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 $ 44.1 million as of September 30, 2024.

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.

As of June 30, 2024, we had a security deposit of $ 5.9 million related to this lease in the form of a cash collateralized letter of credit issued with UBS Bank USA, which is classified as long-term restricted cash on our balance sheet at June 30, 2024.

Income tax expense was $ 6.4 million for the three months ended June 30, 2024, compared to $ 3.0 million for the three months ended June 30, 2023.

The $ 3.4 million increase was primarily due to a decrease in stock compensation deduction.

Income tax expense was $ 13.8 million for the six months ended June 30, 2024, compared to $ 8.2 million for the six months ended June 30, 2023.

The increase was primarily due to a decrease in stock compensation deduction.

The effective tax rate for the three and six months ended June 30, 2024 was less than the U.S.

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

The deferred income taxes of $ 55.4 million and $ 53.4 million as of June 30, 2024 and December 31, 2023, 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.

As of June 30, 2024, we have recorded a $ 11.3 million valuation allowance in the U.S.

As of September 30, 2024, we had a security deposit of $ 5.9 million related to this lease in the form of a cash collateralized letter of credit issued with UBS Bank USA, which is classified as long-term restricted cash on our balance sheet at September 30, 2024.

Income tax expense was $ 6.8 million for the three months ended September 30, 2024, compared to $ 7.7 million for the three months ended September 30, 2023.

The $ 0.9 million decrease was primarily due to a decrease in pre-tax income.

Income tax expense was $ 20.6 million for the nine months ended September 30, 2024, compared to $ 16.0 million for the nine months ended September 30, 2023.

The increase was primarily due to a decrease in in the benefit received from share-based compensation.

The effective tax rate for the three and nine months ended September 30, 2024 was less than the U.S.

statutory rate of 21 % primarily attributable to the Foreign Derived Intangible Income deduction, Federal research and development tax credits and excess tax benefits from share-based compensation.

The deferred income taxes of $ 58.9 million and $ 53.4 million as of September 30, 2024 and December 31, 2023, 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.

As of September 30, 2024, we have recorded a $ 12.1 million valuation allowance in the U.S.

against certain tax credits due to the uncertainty of their realization.

3 unchanged sentences

Concentration of Risk

For the three months ended June 30, 2024, one customer accounted for 11.5 % of total revenue.

For the three months ended June 30, 2023, no individual customer accounted for greater than ten percent of total revenue.

For the six months ended June 30, 2024, no individual customer accounted for greater than ten percent of total revenue.

For the six months ended June 30, 2023, two customers accounted for 11.6 % and 11.1 % of total revenue, respectively.

At June 30, 2024, one customer accounted for 11.3 % of accounts receivable.

For the three months ended September 30, 2024, one customer accounted for 11.9 % of total revenue.

For the three months ended September 30, 2023, no individual customer accounted for greater than ten percent of total revenue.

For the nine months ended September 30, 2024, no individual customer accounted for greater than ten percent of total revenue.

For the nine months ended September 30, 2023, one customer accounted for 10.7 % of total revenue.

At September 30, 2024, one customer accounted for 11.7 % of accounts receivable.

At December 31, 2023, one customer accounted for 12.2 % of accounts receivable.

2 unchanged sentences

In August 2023, our Board of Directors approved additional funding of $ 200 million for our stock repurchase program, to be available on full utilization of the $ 100 million repurchase funding approved in February 2022.

During the six months ended June 30, 2024, we repurchased 0.3 million shares at an average cost of $ 114.07 per share.

During the nine months ended September 30, 2024, we repurchased 0.4 million shares at an average cost of $ 118.02 per share.

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

28 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