Ultra Clean Reports First Quarter 2025 Financial Results

, /PRNewswire/ -- Ultra Clean Holdings, Inc. (Nasdaq: UCTT), today reported its financial results for the first quarter ended March 28, 2025. "UCT's first quarter results were impacted by softening demand late in the quarter as customers reassessed their spending in reaction to an increasingly uncertain and volatile business environment," said Clarence Granger, UCT Interim CEO. "Amid reduced industry visibility and an increasingly dynamic geopolitical landscape, we are focused on execution for our customers, while controlling our costs and maximizing our business efficiency." First Quarter 2025 GAAP Financial ResultsTotal revenue was $518.6 million. Products contributed $457.0 million and Services added $61.6 million. Total gross margin was 16.2%, operating margin was 2.5%, and net loss was $(0.5) million or $(0.11) per diluted share. This compares to total revenue of $563.3 million, gross margin of 16.3%, operating margin of 4.6%, and net income of $16.3 million or $0.36 per diluted share, in the prior quarter. First Quarter 2025 Non-GAAP Financial ResultsOn a non-GAAP basis, gross margin was 16.7%, operating margin was 5.2%, and net income was $12.7 million or $0.28 per diluted share. This compares to gross margin of 16.8%, operating margin of 7.0%, and net income of $22.9 million or $0.51 per diluted share in the prior quarter. Second Quarter 2025 OutlookThe Company expects revenue in the range of $475 million to $525 million. The Company expects GAAP diluted net loss per share to be between $(0.06) and $(0.26) and non-GAAP diluted net income per share to be between $0.17 and $0.37. Conference CallThe call will take place at 1:45 p.m. PT and can be accessed by dialing 1-800-836-8184 or 1-646-357-8785. No passcode is required. A replay of the call will be available by dialing 1-888-660-6345 or 1-646-517-4150 and entering the confirmation code 84790#. The Webcast will be available on the Investor Relations section of the Company's website at http://uct.com/investors/events/. About Ultra Clean Holdings, Inc.Ultra Clean Holdings, Inc. is a leading developer and supplier of critical subsystems, components, parts, and ultra-high purity cleaning and analytical services, primarily for the semiconductor industry. Under its Products division, UCT offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping, and high-precision manufacturing. Under its Services Division, UCT offers its customers tool chamber parts cleaning and coating, as well as micro-contamination analytical services. Ultra Clean is headquartered in Hayward, California. Additional information is available at www.uct.com. Use of Non-GAAP MeasuresIn addition to providing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America ("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. We believe 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 from GAAP results to non-GAAP results are included at the end of this press release. The Company defines non-GAAP net income as net income (loss) before amortization of intangible assets, stock-based compensation, restructuring charges, acquisition activity costs, fair value adjustments, debt refinancing costs, legal-related costs and the tax effects of the foregoing adjustments. A reconciliation of our guidance for non-GAAP net income per diluted share for the subsequent quarter is not available due to fluctuations in the geographic mix of our earnings from quarter to quarter, which impacts our tax rate and cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and we are unable to determine the probable significance of the unavailable information. Safe Harbor StatementThe foregoing information contains, or may be deemed to contain, "forward-looking statements" (as defined in the US Private Securities Litigation Reform Act of 1995) which reflect our current views with respect to future events and financial performance. We use words such as "anticipates," "projection," "outlook," "forecast," "believes," "plan," "expect," "future," "intends," "may," "will," "estimates," "see," "predicts," "should" and similar expressions to identify these forward-looking statements. Forward looking statements included in this press release include our expectations about the semiconductor capital equipment market and outlook. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, the Company's actual results may differ materially from the results predicted or implied by these forward-looking statements. These risks, uncertainties and other factors also include, among others, those identified in "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in our annual report on Form 10-K for the year ended December 27, 2024, as filed with the Securities and Exchange Commission. Ultra Clean Holdings, Inc. undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise unless required by law. Contact:Rhonda BennettoSVP Investor Relations[email protected] ULTRA CLEAN HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited; in millions, except per share data) Three Months Ended March 28, 2025 March 29, 2024 Revenues: Products $ 457.0 $ 418.5 Services 61.6 59.2 Total revenues 518.6 477.7 Cost of revenues: Products 390.3 354.0 Services 44.3 41.1 Total cost revenues 434.6 395.1 Gross margin 84.0 82.6 Operating expenses: Research and development 7.6 7.0 Sales and marketing 14.9 13.7 General and administrative 48.6 44.6 Total operating expenses 71.1 65.3 Income from operations 12.9 17.3 Interest income 1.1 1.4 Interest expense (9.9) (12.2) Other income (expense), net 0.8 (3.8) Income before provision for income taxes 4.9 2.7 Provision for income taxes 7.4 9.9 Net loss (2.5) (7.2) Less: Net income attributable to noncontrolling interests 2.5 2.2 Net loss attributable to UCT $ (5.0) $ (9.4) Net loss per share attributable to UCT common stockholders: Basic $ (0.11) $ (0.21) Diluted $ (0.11) $ (0.21) Shares used in computing net income loss per share: Basic 45.1 44.6 Diluted 45.1 44.6 ULTRA CLEAN HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited; in millions) March 28, 2025 December 27, 2024 ASSETS Current assets: Cash and cash equivalents $ 317.6 $ 313.9 Accounts receivable, net of allowance for credit losses 217.9 241.1 Inventories 374.6 381.0 Prepaid expenses and other current assets 37.7 34.1 Total current assets 947.8 970.1 Property, plant and equipment, net 328.6 325.9 Goodwill 265.3 265.3 Intangible assets, net 177.6 184.9 Deferred tax assets, net 3.5 3.1 Operating lease right-of-use assets 157.2 161.0 Other non-current assets 11.0 9.6 Total assets $ 1,891.0 $ 1,919.9 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank borrowings $ 10.0 $ 16.0 Accounts payable 207.4 212.5 Accrued compensation and related benefits 39.7 50.1 Operating lease liabilities 18.6 18.6 Other current liabilities 37.5 38.4 Total current liabilities 313.2 335.6 Bank borrowings, net of current portion 470.9 476.5 Deferred tax liabilities 16.2 16.1 Operating lease liabilities 146.9 149.2 Other liabilities 7.0 6.7 Total liabilities 954.2 984.1 Equity: UCT stockholders' equity: Common stock 0.1 0.1 Additional paid-in capital 561.3 558.4 Common shares held in treasury (45.0) (45.0) Retained earnings 365.4 370.4 Accumulated other comprehensive loss (9.8) (10.3) Total UCT stockholders' equity 872.0 873.6 Noncontrolling interests 64.8 62.2 Total equity 936.8 935.8 Total liabilities and equity $ 1,891.0 $ 1,919.9 ULTRA CLEAN HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited; in millions) Three Months Ended March 28,2025 March 29,2024 Cash flows from operating activities: Net loss $ (2.5) $ (7.2) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 11.7 11.5 Amortization of intangible assets 7.3 7.7 Stock-based compensation 2.9 3.5 Amortization of debt issuance costs 0.6 1.0 Change in the fair value of financial instruments (0.1) 1.8 Deferred income taxes (0.3) (0.7) Changes in assets and liabilities: Accounts receivable 23.1 (13.7) Inventories 6.4 (13.6) Prepaid expenses and other current assets (0.6) (0.8) Other non-current assets 0.2 0.7 Accounts payable (8.5) 25.1 Accrued compensation and related benefits (10.4) (10.6) Income taxes payable (0.7) 2.1 Operating lease assets and liabilities 1.4 (1.1) Other liabilities (2.3) 4.1 Net cash provided by operating activities 28.2 9.8 Cash flows from investing activities: Purchases of property, plant and equipment (12.4) (18.0) Proceeds from sale of equipment — 0.1 Net cash used in investing activities (12.4) (17.9) Cash flows from financing activities: Principal payments on bank borrowings (12.0) (4.5) Other financing activities (0.2) — Net cash used in financing activities (12.2) (4.5) Effect of exchange rate changes on cash and cash equivalents 0.1 (1.4) Net increase (decrease) in cash and cash equivalents 3.7 (14.0) Cash and cash equivalents at beginning of period 313.9 307.0 Cash and cash equivalents at end of period $ 317.6 $ 293.0 ULTRA CLEAN HOLDINGS, INC. REPORTABLE SEGMENTS GAAP TO NON-GAAP RECONCILIATION (Unaudited; dollars in millions) GAAP Non-GAAP Three Months Ended Three Months Ended March 28, 2025 March 28, 2025 Products Services Consolidated Products Services Consolidated Revenues $ 457.0 $ 61.6 $ 518.6 $ 457.0 $ 61.6 $ 518.6 Gross profit $ 66.7 $ 17.3 $ 84.0 $ 68.2 $ 18.3 $ 86.5 Gross margin 14.6 % 28.1 % 16.2 % 14.9 % 29.8 % 16.7 % Income from operations $ 10.1 $ 2.8 $ 12.9 $ 20.9 $ 6.2 $ 27.1 Operating margin 2.2 % 4.6 % 2.5 % 4.6 % 10.2 % 5.2 % Three Months Ended March 28, 2025 Products Services Consolidated Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions) Reported gross profit on a GAAP basis $ 66.7 $ 17.3 $ 84.0 Amortization of intangible assets (1) 1.3 1.0 2.3 Stock-based compensation expense (2) 0.2 — 0.2 Non-GAAP gross profit $ 68.2 $ 18.3 $ 86.5 Reconciliation of GAAP Gross margin to Non-GAAP Gross margin Reported gross margin on a GAAP basis 14.6 % 28.1 % 16.2 % Amortization of intangible assets (1) 0.3 % 1.7 % 0.5 % Stock-based compensation expense (2) 0.0 % — % 0.0 % Non-GAAP gross margin 14.9 % 29.8 % 16.7 % Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in millions) Reported income from operations on a GAAP basis $ 10.1 $ 2.8 $ 12.9 Amortization of intangible assets (1) 4.4 2.9 7.3 Stock-based compensation expense (2) 2.1 0.5 2.6 Restructuring charges (3) 3.6 — 3.6 Legal-related costs (4) 0.7 — 0.7 Non-GAAP income from operations $ 20.9 $ 6.2 $ 27.1 Reconciliation of GAAP Operating margin to Non-GAAP Operating margin Reported operating margin on a GAAP basis 2.2 % 4.6 % 2.5 % Amortization of intangible assets (1) 1.0 % 4.8 % 1.4 % Stock-based compensation expense (2) 0.5 % 0.8 % 0.5 % Restructuring charges (3) 0.8 % — % 0.7 % Legal-related costs (4) 0.1 % — % 0.1 % Non-GAAP operating margin 4.6 % 10.2 % 5.2 % 1 Amortization of intangible assets related to the Company's business acquisitions 2 Represents compensation expense for stock granted to employees and directors 3 Represents costs associated with employee separation, severance, retention, and other expenses related to facility closures 4 Represents estimated costs related to certain legal proceedings ULTRA CLEAN HOLDINGS, INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS Three Months Ended March 28,2025 March 29, 2024 December 27, 2024 Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (in millions) Reported net income (loss) attributable to UCT on a GAAP basis $ (5.0) $ (9.4) $ 16.3 Amortization of intangible assets (1) 7.3 7.7 7.5 Stock-based compensation expense (2) 2.6 3.9 4.7 Restructuring charges (3) 3.6 1.8 — Acquisition related costs (4) — 0.3 — Fair value related adjustments (5) (0.1) 1.3 (7.1) Debt refinancing costs expensed (6) — — 0.4 Legal-related costs (7) 0.7 — 1.1 Income tax effect of non-GAAP adjustments (8) (2.8) (3.0) (1.0) Income tax effect of valuation allowance (9) 6.4 9.5 1.0 Non-GAAP net income attributable to UCT $ 12.7 $ 12.1 $ 22.9 Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in millions) Reported income from operations on a GAAP basis $ 12.9 $ 17.3 $ 25.9 Amortization of intangible assets (1) 7.3 7.7 7.5 Stock-based compensation expense (2) 2.6 3.9 4.7 Restructuring charges (3) 3.6 1.8 — Acquisition related costs (4) — 0.3 — Legal-related costs (7) 0.7 — 1.1 Non-GAAP income from operations $ 27.1 $ 31.0 $ 39.2 Reconciliation of GAAP Operating margin to Non-GAAP Operating margin Reported operating margin on a GAAP basis 2.5 % 3.6 % 4.6 % Amortization of intangible assets (1) 1.4 % 1.6 % 1.3 % Stock-based compensation expense (2) 0.5 % 0.8 % 0.9 % Restructuring charges (3) 0.7 % 0.4 % — % Acquisition related costs (4) — % 0.1 % — % Legal-related costs (7) 0.1 % — % 0.2 % Non-GAAP operating margin 5.2 % 6.5 % 7.0 % Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions) Reported gross profit on a GAAP basis $ 84.0 $ 82.6 $ 91.8 Amortization of intangible assets (1) 2.3 2.3 2.3 Stock-based compensation expense (2) 0.2 0.6 0.4 Non-GAAP gross profit $ 86.5 $ 85.5 $ 94.5 Reconciliation of GAAP Gross margin to Non-GAAP Gross margin Reported gross margin on a GAAP basis 16.2 % 17.3 % 16.3 % Amortization of intangible assets (1) 0.5 % 0.5 % 0.4 % Stock-based compensation expense (2) 0.0 % 0.1 % 0.1 % Non-GAAP gross margin 16.7 % 17.9 % 16.8 % Reconciliation of GAAP Other income (expense), net to Non-GAAP Other income (expense), net (in millions) Reported Other income (expense), net on a GAAP basis $ 0.8 $ (3.8) $ 8.4 Fair value related adjustments (5) (0.1) 1.3 (7.1) Debt refinancing costs expensed (6) — — 0.4 Non-GAAP Other income (expense), net $ 0.7 $ (2.5) $ 1.7 Reconciliation of GAAP Income (Loss) Per Diluted Share to Non-GAAP Earnings Per Diluted Share Reported net income (loss) on a GAAP basis $ (0.11) $ (0.21) $ 0.36 Amortization of intangible assets (1) 0.16 0.17 0.17 Stock-based compensation expense (2) 0.06 0.09 0.10 Restructuring charges (3) 0.08 0.04 — Acquisition related costs (4) — 0.01 — Fair value related adjustments (5) 0.00 0.03 (0.16) Debt refinancing costs expensed (6) — — 0.01 Legal-related costs (7) 0.01 — 0.03 Income tax effect of non-GAAP adjustments (8) (0.06) (0.07) (0.02) Income tax effect of valuation allowance (9) 0.14 0.21 0.02 Non-GAAP net earnings $ 0.28 $ 0.27 $ 0.51 Weighted average number of diluted shares (in millions) on a non-GAAP basis 45.4 45.1 45.4 ULTRA CLEAN HOLDINGS, INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE Three Months Ended March 28, 2025 March 29, 2024 December 27, 2024 Provision for income taxes on a GAAP basis $ 7.4 $ 9.9 $ 4.5 Income tax effect of non-GAAP adjustments (8) 2.8 3.0 1.0 Income tax effect of valuation allowance (9) (6.4) (9.5) (1.0) Non-GAAP provision for income taxes $ 3.8 $ 3.4 $ 4.5 Income before income taxes on a GAAP basis $ 4.9 $ 2.7 $ 24.5 Amortization of intangible assets (1) 7.3 7.7 7.5 Stock-based compensation expense (2) 2.6 3.9 4.7 Restructuring charges (3) 3.6 1.8 — Acquisition related costs (4) — 0.3 — Fair value related adjustments (5) (0.1) 1.3 (7.1) Debt refinancing costs expensed (6) — — 0.4 Legal-related costs (7) 0.7 — 1.1 Non-GAAP income before income taxes $ 19.0 $ 17.7 $ 31.1 Effective income tax rate on a GAAP basis 151.0 % 366.7 % 18.4 % Non-GAAP effective income tax rate 20.0 % 19.7 % 14.5 % 1 Amortization of intangible assets related to the Company's business acquisitions 2 Represents compensation expense for stock granted to employees and directors 3 Represents costs associated with employee separation, severance, retention, and other expenses related to facility closures 4 Represents acquisition activity costs 5 Fair value adjustments related to contingent consideration 6 Represents the third party transaction costs related to the amended credit agreement and the previously capitalized costs of extinguished debt 7 Represents estimated costs related to certain legal proceedings 8 Tax effect of items (1) through (7) above based on the non-GAAP tax rate 9 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 SOURCE Ultra Clean Holdings, Inc. WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Ultra Clean Reports First Quarter 2025 Financial Results

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