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Fall 2020
CORPORATE PRESENTATION
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SLIDE:
This presentation may contain forward-looking statements and management may make additional forward-looking statements in response to your questions. These statements are made under the ''safe harbor'' provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Statements that are not historical facts, including statements concerning our beliefs, forecasts, estimates and expectations, and those regarding our expected financial results are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks related to: the risk that our results of operations are cyclical and may fluctuate from period to period; the risk that we rely on a small number of customers for a significant portion of our revenue; the risk that the industries in which we participate are highly competitive and other risks outlined in our public filings with the Securities and Exchange Commission, including as set forth under “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our most recent forms filed with the Securities and Exchange Commission. The forward-looking statements made in this presentation relate only to events or information as of the date on which the statements are made in this presentation. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events
Non-GAAP
Management uses non-GAAP gross margin, non-GAAP operating margin and non-GAAP net income to evaluate the Company's operating and financial results. The Company believes the presentation of non-GAAP results is useful to investors for analyzing our core business and business trends and comparing performance to prior periods, along with enhancing investors' ability to view the Company's results from management's perspective. The presentation of this additional information should not be considered a substitute for results prepared in accordance with GAAP. Tables presenting reconciliations of non-GAAP results to U.S. GAAP results are included in the Appendix.
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Safe Harbor
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Enabling Semiconductor Technology for Nearly 30 Years
Sustainable & profitable growth solving complex problems
2002 2006 2010 2014 2018
3
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SLIDE:
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
2015 2016 2017 2018 2019
WFE
UCT Semi
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Consistently Outperforming Our Served MarketsY
/Y G
row
th R
ate
* Source: Company data, UCT estimates based on SEMI WWSEMS 2020 data
*
*
DEP/ETCH
T h i r d Q u a r t e r 2 0 2 0
~60% Of UCT Semi Sales
*
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SLIDE:
$563
$924
$1,097 $1,066
5.4%
10.3%
7.8%
6.6%
2016 2017 2018 2019
UCT Revenue Op Margin
Proven Growth Strategy Driving Exceptional Results
5
$ in Millions (FYE)
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SLIDE:
Successful Inorganic Growth
6
AUGUST, 2015Purchase price $22.8M
EV/EBITDA ~6.2
>40%Entered wet
chemistry business
FEBRUARY, 2015Purchase price $43.6M
EV/EBITDA ~11.8
>50%Maintained
attractive margins
SEPTEMBER, 2018Purchase price $342.0M
EV/EBITDA ~6.6
Added recurring service revenue
stream
APRIL, 2019Purchase price $30.0M
EV/EBITDA ~5.4
Increased leading position in weldments
Increasedrevenue
Increasedrevenue
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SLIDE:
Diversified Path To Market Expansion
FACTORYINTERFACE
GASPANEL
PROCESSCHAMBER
TRANSFERCHAMBER
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SLIDE:
DEPOSITION
ETCH
LITHOGRAPHY
PACKAGE & TEST
IMPLANT
CMP
PHOTORESIST
Supplying Many Critical Elements of the Manufacturing Process
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PREP FRONT-END PROCESSING BACK-END PROCESSING
SEMI MANUFACTURING PROCESS
CORE UCT MARKETS
ADDITIONAL UCT MARKETS
CERTAIN STEPSREPEATED20X – 30X
INGOT
SLICING
POLISHING
EPITAXIAL
ANNEAL
INSPECTION
WAFER CLEAN
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SLIDE:
Industry and Customer Footprint
9* Includes low single digit OEM service revenue
MemoryWFE
39%
Foundry & Logic WFE
38%
Other Equipment
Service19%
UCT Revenue by Segment
Lam40%
Applied28%
OtherEquipment
13%
Service*19%
UCT Revenue by Customer
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SLIDE:
Global Product & Service Footprint Strategically Close To Customers
10
CaliforniaTexas
OregonMaine
ArizonaColorado
Manufacturing
UK
Czech Republic
Israel KoreaChina PhilippinesSingaporeTaiwan
Global presence is a strategic benefit for major customers
Cleaning & Analysis
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Product & Service Market Opportunity
Company adaptation of Gartner Semiconductor Wafer Fab Equipment (Including Wafer-Level Packaging), Worldwide, Forecast 3Q20 Update, SIA Forecast (Sept 2020) & UCT estimates
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OEMs
Fabs
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SLIDE:
SPS Growth Opportunities
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Further penetration of current >10% customers
Expand presence at other major OEM’s
– Goal to add 1-2 >10% customers over next several years
Pursue smaller, specialty-device customers to support increasing 200mm demand
– Further diversify revenue; leverage new high growth device markets
(i.e. 5G, IoT, and automotive)
Opportunistic consolidation within fragmented supply chain
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SLIDE:
SSB Growth Opportunities
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Introduce proven Atomically Clean Surfaces™ to new customers
Reduce cost of ownership utilizing advanced technology– Longer part life through durable surface encapsulation
– Higher tool productivity by chemical & thermal pre-conditioning parts
Improve efficiencies by leveraging part cleaning knowledge– Create value by efficiently managing customer spare parts
– Utilize part lifecycle data to develop equipment uptime improvement
Create integrated solutions across UCT’s core competencies
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SEMICONDUCTOR SERVICES BUSINESS
Parts Cleaning & Coating
– 17 Advance Technology Cleaning
Centers close to customers
– New equipment cleaning and
ongoing service contracts
– Onsite logistics and support
Recurring revenue stream
Growth Drivers– Increase leadership in cleaning of
advanced sub-14nm process parts
– Penetrate top Tier IDM’s and OEM’s
– Advantage: total wafer starts vs
WFE capital equipment spend
Cleaning Service Offerings - QuantumClean
DIFFUSION ETCHINGCHEMICAL VAPOR DEPOSITION
PHYSICAL VAPOR DEPOSITION
ATOMIC LAYER DEPOSITION
LITHOGRAPHY IMPLANT SUBFAB
BEFORE & AFTER CLEAN
Source: Company information.
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Primary customers engage with global suppliers
Large number of regional players serve ~70% of market
– Leading position with opportunity
to grow
QuantumClean/ChemTrace Advantaged Position
Source: SSB Management estimates. * Includes top OEM sub-system suppliers
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Cleaning + Analytical Lab Services Market*
2019
Top 4 IDM 62%
Top 4 OEM* 12%
Top 2 Foundries 6%
All Other 20%
17%
6%
5%
3%
KoMiCo
Cleanpart
Pentagon
Others (~90 companies)
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SLIDE:
End Market Update
Foundry – continuing leading edge investment – 5G infrastructure buildout and handset demand are
near and mid-term drivers
Logic ramp continues– Higher server and PC demand, supporting higher
network traffic due to remote working and learning
3D NAND – continuing transition to more layers– Servers and higher content 5G handset demand
continues
– Gaming console SSD transition driving incremental demand
DRAM – node transitions continuing– Servers and handsets are near- and mid-term
demand drivers
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Expands global footprint; Supports growth plan;– Close proximity to customers and suppliers
– Ensures business continuity; share growth
State-of-the-art Facility– Leasehold improvements underway fourth quarter 2020
– Initial production expected early H2’21
– ~650 people in manufacturing, engineering, research and development,
quality management
Leasehold improvements underway fourth quarter 2020– Total capex ~$17 million
~$2.5 million Q4’20
~14.5 million H1’21
Malaysia Strategy
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FINANCIAL UPDATE
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SLIDE:
Q3’20 Key Takeaways
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Record revenue exceeded guidance
EPS high end of guidance
Improved profitability
Maximized capacity at factories
Managed suppliers - minimal disruption to customers
$ in Millions Q3’20
Total Revenue $363.3
Semi Revenue $348.0
Gross Margin 21.0%
Operating Margin 11.6%
Cash Generation $19.7
Cash Balance $176.1
EPS* $0.73
* Excluding intangible amortization expense, non-recurring costs and SBC
$ in Millions Products Services
Revenue $294.4 $68.9
Gross Margin 17.5% 36.0%
Operating Margin 10.8% 14.9%
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SLIDE:
Q4’20 Guidance
Revenue $345.0-$375.0
EPS $0.63-$0.77
Q4 Guidance
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Tax rate for 2020 expected in high teens
Wider guidance; uncertainty in COVID-19 impact to supply chain
$ in Millions
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SLIDE:
Updated Margin Model*
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* Subject to semiconductor market cycle direction, product and service mix and other macro events beyond UCT’s control
Consolidated Performance Model $0.8 - $1.0B $1.0 - $1.5B $1.5 -$2.0B
Non-GAAP Gross Margin 15% - 18% 17% - 20% 18% - 21%
Non-GAAP Operating Margin 5% - 8% 7% - 10% 9% - 12%
Business Unit Target Model SPS SSB
Non-GAAP Gross Margin 15% - 18% 33% - 36%
Non-GAAP Operating Margin 8% - 10% 12% - 15%
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Thank You
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SLIDE:
Reconciliation: GAAP Net Income (loss) to Non-GAAP Net Income
1. Amortization of intangible assets related to the Company's acquisitions of AIT, Thermal, FDS, QGT and DMS
2. Represents severance, retention and costs related to facility closures
3. Represents compensation expense for stock granted to employees and directors
4. Represents costs related to the acquisition of DMS
5. Impairment of assets classified as “held for sale” related to our 3D printing business in Singapore
6. One-time product transition payment
7. Represents the loss on disposal of the Company's 3D printing operations in Singapore
8. Fair value adjustments related to contingent consideration, purchase obligation, DMS’ sold inventories
9. Depreciation adjustments related to QGT's fixed assets
10. Tax effect of items (1) through (9) above based on the non-GAAP tax rate
11. The Company's GAAP tax expense is generally higher than the Company's non-GAAP tax expense, primarily due to losses in the U.S. with full federal and state valuation allowances. The Company's non-GAAP tax rate and resulting non-GAAP tax expense considers the tax implications as if there was no federal or state valuation allowance position in effect
23* Refer to 10k
$ in Thousands FY’16 FY’17 FY’18 FY’19 Q1’20 Q2’20 Q3’20
Net income (loss) per GAAP basis 10,051 75,085 36,596 (9,351) 9,423 21,264 24,365
Amortization of intangible assets (1) 5,757 5,438 9,580 20,090 4,951 4,949 4,949
Restructuring charges (2) 1,176 - 4,821 16,615 1,600 1,572 400
Stock based compensation expense(3) 2,752 3,104 3,284
Acquisition related costs*(4) 438 - 10,102 3,861
Impairment of “Held for Sale” Assets (5) 666 - - -
Product transition fees (6) - - 657 -
Disposal of business unit (7) - - 1,082 52
Fair value adjustments (8) - - - 7,457 2,948 1,209 200
Depreciation adjustments (9) - - - (360)
Income tax effect of non-GAAP adjustments(10) (1,664) (714) (4,501) (11,261) (2,291) (2,037) (1,352)
Income tax effect of valuation allowance (11) 4,964 469 6,355 9,461 1,663 470 (616)
Non-GAAP net income 21,388 80,278 64,692 36,564 21,046 30,531 29,878
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SLIDE:
Reconciliation: GAAP Earnings Per Diluted Share to Non-GAAP Earnings Per Diluted Share
24* Refer to 10k
1. Amortization of intangible assets related to the Company's acquisitions of AIT, Thermal, FDS, QGTand DMS
2. Represents severance, retention and costs related to facility closures
3. Represents compensation expense for stock granted to employees and directors
4. Represents costs related to the acquisition of DMS
5. Impairment of assets classified as “held for sale” related to our 3D printing business in Singapore
6. One-time product transition payment
7. Represents the loss on disposal of the Company's 3D printing operations in Singapore
8. Fair value adjustments related to contingent consideration, purchase obligation, DMS’ sold inventories
9. Depreciation adjustments related to QGT's fixed assets
10. Tax effect of items (1) through (9) above based on the non-GAAP tax rate
11. The Company's GAAP tax expense is generally higher than the Company's non-GAAP tax expense, primarily due to losses in the U.S. with full federal and state valuation allowances. The Company's non-GAAP tax rate and resulting non-GAAP tax expense considers the tax implications as if there was no federal or state valuation allowance position in effect
FY’16 FY’17 FY’18 FY’19 Q1’20 Q2’20 Q3’20
Reported GAAP net income (loss) $0.30 $2.19 $0.94 $(0.24) $0.23 $0.52 $0.59
Amortization of intangible assets (1) $0.18 $0.16 $0.25 $0.50 $0.12 $0.12 $0.12
Restructuring charges (2) $0.04 - $0.12 $0.42 $0.04 $0.04 $0.01
Stock based compensation expense (3) $0.07 $0.08 $0.08
Acquisition related costs*(4) $0.01 - $0.26 $0.10
Impairment of “Held for Sale” Assets (5) $0.02 - - -
Product transition fees (6) - - $0.02 -
Disposal of business unit (7) - - $0.03 -
Fair value adjustments (8) - - - $0.19 $0.08 $0.03 -
Depreciation adjustments (9) - - - $(0.01)
Income tax effect of non-GAAP adjustments (10) $(0.05) $(0.02) $(0.12) $(0.28) $(0.06) $(0.05) $(0.03)
Income tax effect of valuation allowance (11) $0.15 $0.01 $0.16 $0.23 $0.04 $0.01 $(0.01)
Non-GAAP net income $0.65 $2.34 $1.66 $0.91 $0.52 $0.75 $0.73
Weighted Avg. number of diluted shares (in K) 33,150 34,303 38,919 40,027 40,704 40,834 41,149
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