Axcelis Technologies Inc (NASDAQ:ACLS) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 08:30 am ET


Axcelis Technologies Inc (NASDAQ:ACLS) Q4 2018 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the Axcelis Technologies call to discuss the Company's results for the fourth quarter and full year of 2018. My name is Brian, and I'll be your coordinator for today. At this time, all participants are in a listen-only mode. (Operator Instructions) As a reminder, this conference call may be recorded for replay purposes.

I would now like to turn the presentation over to your host for today's call, Mary Puma, President and Chief Executive Officer of Axcelis Technologies. Please proceed, ma'am.

Mary G. Puma

Thank you, Brian. With me today is Kevin Brewer, Executive Vice President and CFO; and Doug Lawson, Executive Vice President of Corporate Marketing and Strategy. If you have not seen a copy of our press release issued last night, it is available on our website. Playback service will also be available on our website, as described in our press release.

Please note that comments made today about our expectations for future revenues, profits and other results are forward-looking statements under the SEC safe harbor provision.

These forward-looking statements are based on management's current expectations and are subject to the risks inherent in our business. These risks are described in detail in our Form 10-K annual report and other SEC filings, which we urge you to review. Our actual results may differ materially from our current expectations. We do not assume any obligation to update these forward-looking statements.

2018 was a successful year for Axcelis. One year ago, at our year-end earnings call, we set a revenue objective of $450 million. We came very close with full-year 2018 revenues of $442.6 million. Only a couple of tools short, despite a significant slowdown in memory spending for the entire second half of the year. We accomplished this as a result of hard work over the last few years and a successful execution of a few critical initiatives.

First, we expanded the Purion installed base to a large and diverse group of customers. Second, we focused on key market segments in the mature-process technology area, such as image sensors, power devices and mature foundry and logic. And finally, we developed Purion product extensions specifically for these segments and became key partners with these customers. As a result, when memory slowed, Axcelis kept growing.

All of our financial metrics improved in 2018. Revenue increased by nearly 8%, systems revenue increased by approximately 7%, market share grew to 29%, CS&I revenue increased by nearly 10%, gross margin exceeded 40% and cash increased by over 30% to nearly $185 million. All this while the memory market was experiencing a deep slowdown, which is reflected in the fourth quarter in our revenue mix by segment with a split of 68% mature foundry/logic and 32% memory. For the full year, the mix was 54% mature foundry/logic and 46% memory, highlighting the tail of the two halves.

Now let me summarize a few of our fourth quarter 2018 financial results and provide Q1 guidance. Revenues for the quarter were $105.7 million,