Ultra Clean Holdings, Inc. Debt jumped on 553% while EBITDA dropped on 18.3%
02/21/2019 • About Ultra Clean Holdings, Inc. (
$UCTT) • By InTwits
Ultra Clean Holdings, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Ultra Clean Holdings, Inc. is a fast growth stock: FY2018 revenue growth was 18.6%, 5 year revenue CAGR was 19.8% at FY2018 ROIC 10.5%
- EBITDA Margin is quite volatile: 7.5% in FY2018, 10.8% in FY2017, 6.1% in FY2016, 3.6% in FY2015, 5.1% in FY2014
- Ultra Clean Holdings, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's a lot of higher than industry average of 7.4%.
- CAPEX is quite volatile: $26m in FY2018, $16m in FY2017, $7m in FY2016, $10m in FY2015, $5m in FY2014
- The company has business model with average profitability: ROIC is 10.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.4x while industry average is -1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Ultra Clean Holdings, Inc.'s Revenue jumped on 18.6%. Revenue growth showed slowdown in FY18Q4 - it was 3.4% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 11.7 pp from -13.8% to -2.1% in 2018.
Gross Margin decreased on 2.1 pp from 18.1% to 16.0% in FY2018. During FY2014-FY2018 Gross Margin topped in FY2017 at 18.1%. SG&A as a % of Revenue increased on 2.1 pp from 7.2% to 9.3% in FY2018.
Net Income margin decreased on 4.8 pp from 8.1% to 3.3% in FY2018.
Investments (CAPEX, working capital and M&A)
Ultra Clean Holdings, Inc.'s CAPEX/Revenue was 2.4% in FY2018. The company showed almost no change in CAPEX/Revenue from FY2015 to FY2018. Average CAPEX/Revenue for the last three years was 1.8%.
Return on investment
The company operates at low ROIC (10.5%) and ROE (9.9%). ROIC dropped on 17.0 pp from 27.5% to 10.5% in FY2018. ROE dropped on 19.1 pp from 29.1% to 9.9% in FY2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.4x and Debt / EBITDA is 4.2x. Net Debt / EBITDA surged on 2.6x from -0.2x to 2.4x in FY2018. Debt jumped on 553% while cash surged on 111%.
Ultra Clean Holdings, Inc. has no short term refinancing risk: cash is higher than short term debt (1,490.5%).
Valuation and dividends
Ultra Clean Holdings, Inc.'s trades at EV/EBITDA 7.5x and P/E 11.3x.
Management team
Ultra Clean Holdings, Inc.'s CEO James P Scholhamer "Jim" is a founder and has spent 4 years with the company. The company's CFO Sheri Savage has spent 2 years with the company.
Financial and operational results
FY ended 12/28/2018
Ultra Clean Holdings, Inc. ($UCTT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 514 | 469 | 563 | 924 | 1,097 | 18.6% |
| Gross Profit | 73 | 71 | 87 | 168 | 176 | 4.9% |
| SG&A | 48 | 56 | 54 | 67 | 102 | 53.0% |
| EBITDA | 26 | 17 | 34 | 100 | 82 | -18.3% |
| Net Income | 11 | -11 | 10 | 75 | 37 | -51.3% |
Balance Sheet
|
|---|
| Cash | 79 | 50 | 52 | 68 | 144 | 111.0% |
| Short Term Debt | 10 | 13 | 17 | 12 | 10 | -21.9% |
| Long Term Debt | 39 | 63 | 51 | 40 | 332 | 731.1% |
Cash flow
|
|---|
| Capex | 5 | 10 | 7 | 16 | 26 | 61.9% |
Ratios
|
|---|
| Revenue growth | 15.8% | -8.7% | 20.0% | 64.3% | 18.6% | |
| EBITDA growth | 4.2% | -35.6% | 103.4% | 193.3% | -18.3% | |
|
|---|
| Gross Margin | 14.2% | 15.1% | 15.4% | 18.1% | 16.0% | -2.1% |
| EBITDA Margin | 5.1% | 3.6% | 6.1% | 10.8% | 7.5% | -3.4% |
| SG&A, % of revenue | 9.3% | 11.9% | 9.7% | 7.2% | 9.3% | 2.1% |
| Net Income Margin | 2.2% | -2.3% | 1.8% | 8.1% | 3.3% | -4.8% |
| CAPEX, % of revenue | 1.0% | 2.2% | 1.3% | 1.7% | 2.4% | 0.6% |
|
|---|
| ROIC | 8.0% | 2.3% | 7.8% | 27.5% | 10.5% | -17.0% |
| ROE | 6.3% | -5.5% | 4.8% | 29.1% | 9.9% | -19.1% |
| Net Debt/EBITDA | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x | 2.6x |
Ultra Clean Holdings, Inc. ($UCTT) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 315 | 290 | 234 | 257 | | 53.9% | 27.1% | -3.5% | 3.4% |
| EBITDA | 29 | 25 | 6 | 21 | | 32.0% | -6.1% | -75.9% | -16.6% |
| Net Income | 25 | 19 | -6 | -1 | | 72.5% | -6.0% | -130.4% | -105.3% |
Balance Sheet
|
|---|
| Cash | 162 | 141 | 160 | 144 | | 195.6% | 137.3% | 143.2% | 111.0% |
| Short Term Debt | 55 | 55 | 43 | 10 | | 240.1% | 240.2% | 175.9% | -21.9% |
| Long Term Debt | 0 | 0 | 331 | 332 | | -100.0% | -100.0% | 691.6% | 731.1% |
Ratios
|
|---|
| Gross Margin | 15.5% | 15.9% | 15.0% | 17.9% | | -2.8% | -3.1% | -2.6% | 0.2% |
| EBITDA Margin | 9.3% | 8.7% | 2.7% | 8.1% | | -1.5% | -3.1% | -8.0% | -2.0% |
| Net Income Margin | 7.9% | 6.5% | -2.6% | -0.4% | | 0.8% | -2.3% | -10.7% | -8.8% |
Peers in Semiconductor Equipment
Below you can find Ultra Clean Holdings, Inc. benchmarking vs. other companies in Semiconductor Equipment industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Atomera Incorporated ($ATOM) | | | | | 123.6% |
| ACM Research, Inc. ($ACMR) | | | -12.3% | 33.4% | 104.5% |
| SCI Engineered Materials Inc ($SCIA) | | -13.0% | -32.1% | 24.4% | 67.0% |
| Aehr Test Systems ($AEHR) | | -49.1% | 44.7% | 30.3% | 56.4% |
| SolarEdge Technologies, Inc. ($SEDG) | | 144.0% | 50.7% | 23.9% | 54.4% |
| |
|---|
| Median (37 companies) | | -0.5% | 6.5% | 24.2% | 14.0% |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | | -8.7% | 20.0% | 64.3% | 18.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% |
| KLA-Tencor Corporation ($KLAC) | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% |
| Teradyne, Inc. ($TER) | 53.3% | 55.8% | 54.7% | 57.2% | 58.1% |
| Nova Measuring Instruments Ltd. ($NVMI) | 52.7% | 51.9% | 45.9% | 59.1% | 57.8% |
| Nanometrics Incorporated ($NANO) | 47.2% | 47.9% | 51.6% | 52.9% | 56.7% |
| |
|---|
| Median (38 companies) | 34.6% | 38.9% | 40.0% | 44.0% | 41.2% |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | 14.2% | 15.1% | 15.4% | 18.1% | 16.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 29.2% | 26.4% | 34.4% | 38.3% | 39.6% |
| DAQO New Energy Corp. ($DQ) | 32.9% | 31.6% | 43.3% | 49.1% | 36.1% |
| Xperi Corporation ($XPER) | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% |
| Lam Research Corporation ($LRCX) | 21.1% | 20.3% | 23.2% | 27.6% | 32.0% |
| Cabot Microelectronics Corporation ($CCMP) | 21.6% | 22.6% | 23.4% | 27.2% | 31.5% |
| |
|---|
| Median (37 companies) | 7.0% | 10.3% | 12.1% | 16.2% | 16.6% |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | 5.1% | 3.6% | 6.1% | 10.8% | 7.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rubicon Technology, Inc. ($RBCN) | 15.0% | 4.0% | 3.6% | 0.0% | 58.8% |
| DAQO New Energy Corp. ($DQ) | 42.2% | 44.7% | 29.5% | 19.8% | 47.4% |
| AXT Inc ($AXTI) | 2.4% | 5.4% | 3.4% | 21.6% | 39.6% |
| STR Holdings Inc ($STRI) | 7.9% | 8.1% | 1.6% | 9.0% | 36.6% |
| Photronics, Inc. ($PLAB) | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% |
| |
|---|
| Median (37 companies) | 2.3% | 2.9% | 2.6% | 3.2% | 3.0% |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | 1.0% | 2.2% | 1.3% | 1.7% | 2.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 17.9% | 16.5% | 27.2% | 34.0% | 39.9% |
| Lam Research Corporation ($LRCX) | 10.7% | 10.9% | 11.8% | 18.7% | 33.9% |
| Versum Materials, Inc. ($VSM) | | 26.2% | 32.4% | 30.0% | 32.1% |
| Advanced Energy Industries, Inc. ($AEIS) | 8.8% | 30.2% | 41.2% | 45.7% | 31.3% |
| SolarEdge Technologies, Inc. ($SEDG) | -815.6% | 33.6% | 31.2% | 26.5% | 28.6% |
| |
|---|
| Median (39 companies) | 3.4% | 6.0% | 6.9% | 12.2% | 12.1% |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | 8.0% | 2.3% | 7.8% | 27.5% | 10.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Xperi Corporation ($XPER) | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x |
| Ichor Holdings ($ICHR) | 3.1x | 1.7x | -0.4x | 2.0x | 1.8x |
| Versum Materials, Inc. ($VSM) | -0.2x | -0.1x | 2.7x | 2.1x | 1.4x |
| DAQO New Energy Corp. ($DQ) | 4.6x | 4.3x | 2.3x | 0.9x | 1.2x |
| Entegris, Inc. ($ENTG) | 3.6x | 1.4x | 0.7x | 0.1x | 1.1x |
| |
|---|
| Median (31 companies) | -1.2x | -1.3x | -1.3x | -0.7x | -1.0x |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x |
