Ultra Clean Holdings, Inc. reports 926% Net Income growth in 2020 and 31.2% Revenue growth
02/17/2021 • About Ultra Clean Holdings, Inc. (
$UCTT) • By InTwits
Ultra Clean Holdings, Inc. reported FY2020 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: FY2020 revenue growth was 31.2%, 5 year revenue CAGR was 24.4% at FY2020 ROIC 14.8%
- Ultra Clean Holdings, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 7.3%
- CAPEX is quite volatile: $36m in FY2020, $26m in FY2019, $26m in FY2018, $16m in FY2017, $7m in FY2016
- The company has highly profitable business model: ROIC is 14.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.6x while industry average is -1.9x
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 surged on 31.2%. Revenue growth showed small slowdown in FY20Q4 - it was 29.1% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.8 pp from 8.0% to 12.8% in FY2020.
Gross Margin increased on 2.4 pp from 18.5% to 20.9% in FY2020. SG&A as a % of Revenue decreased on 3.2 pp from 14.3% to 11.1% in FY2020.
Net Income margin increased on 6.4 pp from -0.88% to 5.5% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Ultra Clean Holdings, Inc. had CAPEX/Revenue of 2.6%. CAPEX/Revenue increased slightly on 0.86 pp from 1.7% in FY2017 to 2.6% in FY2020. It's average level of CAPEX/Revenue for the last three years was 2.5%. CAPEX as a % of Revenue stuck to a growing trend at 0.33 pp per annum in the last 5 years.
Return on investment
The company operates at good ROIC (14.8%) and ROE (16.0%). ROIC surged on 10.7 pp from 4.1% to 14.8% in FY2020. ROE surged on 18.2 pp from -2.2% to 16.0% in FY2020.
Leverage (Debt)
Debt level is 0.6x Net Debt / EBITDA and 1.7x Debt / EBITDA. Net Debt / EBITDA dropped on 1.4x from 2.0x to 0.6x in FY2020. Debt decreased on 6.7% while cash jumped on 23.3%.
Ultra Clean Holdings, Inc. has no short term refinancing risk: cash is higher than short term debt (1,048.7%).
Valuation and dividends
Ultra Clean Holdings, Inc.'s trades at EV/EBITDA 11.6x and P/E 25.4x.
Management team
James P Scholhamer "Jim" is a Ultra Clean Holdings, Inc.'s CEO. James P Scholhamer "Jim" has spent 6 years with the company. Ultra Clean Holdings, Inc.'s CFO is Sheri Savage. Sheri Savage has 4 years tenure at the company.
Financial and operational results
FY ended 12/25/2020
Ultra Clean Holdings, Inc. ($UCTT) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 563 | 924 | 1,097 | 1,066 | 1,399 | 31.2% |
| Gross Profit | 87 | 168 | 176 | 197 | 292 | 48.3% |
| SG&A | 54 | 67 | 102 | 152 | 156 | 2.2% |
| EBITDA | 34 | 100 | 82 | 85 | 179 | 110.6% |
| Net Income | 10 | 75 | 37 | -9 | 78 | |
Balance Sheet
|
|---|
| Cash | 52 | 68 | 144 | 163 | 200 | 23.3% |
| Short Term Debt | 17 | 12 | 10 | 22 | 19 | -13.2% |
| Long Term Debt | 51 | 40 | 332 | 312 | 293 | -6.2% |
Cash flow
|
|---|
| Capex | 7 | 16 | 26 | 26 | 36 | 38.4% |
Ratios
|
|---|
| Revenue growth | 20.0% | 64.3% | 18.6% | -2.8% | 31.2% | |
| EBITDA growth | 103.4% | 193.3% | -18.3% | 4.0% | 110.6% | |
|
|---|
| Gross Margin | 15.4% | 18.1% | 16.0% | 18.5% | 20.9% | 2.4% |
| EBITDA Margin | 6.1% | 10.8% | 7.5% | 8.0% | 12.8% | 4.8% |
| SG&A, % of revenue | 9.7% | 7.2% | 9.3% | 14.3% | 11.1% | -3.2% |
| Net Income Margin | 1.8% | 8.1% | 3.3% | -0.9% | 5.5% | 6.4% |
| CAPEX, % of revenue | 1.3% | 1.7% | 2.4% | 2.5% | 2.6% | 0.1% |
|
|---|
| ROIC | 7.8% | 27.5% | 10.5% | 4.1% | 14.8% | 10.7% |
| ROE | 4.8% | 29.1% | 9.9% | -2.2% | 16.0% | 18.2% |
| Net Debt/EBITDA | 0.4x | -0.2x | 2.4x | 2.0x | 0.6x | -1.4x |
Ultra Clean Holdings, Inc. ($UCTT) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 321 | 345 | 363 | 370 | | 23.4% | 29.9% | 42.8% | 29.1% |
| EBITDA | 37 | 45 | 49 | 47 | | 59.4% | 118.0% | 119.9% | 155.3% |
| Net Income | 9 | 21 | 24 | 23 | | 1,453.7% | - | 4,656.3% | - |
Balance Sheet
|
|---|
| Cash | 208 | 214 | 176 | 200 | | 34.5% | 27.5% | 11.0% | 23.3% |
| Short Term Debt | 22 | 20 | 20 | 19 | | 7.2% | 7.0% | -4.8% | -13.2% |
| Long Term Debt | 353 | 356 | 304 | 293 | | -0.6% | -0.3% | -7.4% | -6.2% |
Ratios
|
|---|
| Gross Margin | 20.5% | 21.4% | 20.5% | 21.0% | | 3.3% | 3.3% | 1.9% | 1.3% |
| EBITDA Margin | 11.6% | 13.2% | 13.6% | 12.8% | | 2.6% | 5.3% | 4.8% | 6.4% |
| Net Income Margin | 2.9% | 6.2% | 6.7% | 6.1% | | 2.7% | 6.3% | 6.5% | 9.7% |
Peers in Semiconductor Equipment
Below we provide Ultra Clean Holdings, Inc. benchmarking against other companies in Semiconductor Equipment industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | - | 44.0% | 8.7% | -31.0% | 218.5% |
| DAQO New Energy Corp. ($DQ) | - | 41.1% | -6.7% | 16.0% | 93.0% |
| Advanced Energy Industries, Inc. ($AEIS) | - | 38.7% | 7.1% | 9.7% | 79.5% |
| Ichor Holdings ($ICHR) | - | 61.7% | 25.6% | -24.6% | 47.3% |
| ACM Research, Inc. ($ACMR) | - | 33.4% | 104.5% | 44.1% | 45.7% |
| |
|---|
| Median (27 companies) | 5.0% | 24.2% | 14.0% | -0.2% | 16.3% |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | - | 64.3% | 18.6% | -2.8% | 31.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 99.8% | 98.3% | 96.7% | 97.0% | 91.2% |
| PDF Solutions, Inc. ($PDFS) | 58.6% | 53.4% | 50.1% | 60.9% | 58.2% |
| Teradyne, Inc. ($TER) | 54.7% | 57.2% | 58.1% | 58.4% | 57.2% |
| Nova Measuring Instruments Ltd. ($NVMI) | 45.9% | 59.1% | 57.8% | 54.2% | 56.8% |
| Kulicke and Soffa Industries, Inc. ($KLIC) | 45.7% | 47.2% | 46.1% | 47.1% | 47.8% |
| |
|---|
| Median (27 companies) | 40.0% | 44.0% | 41.2% | 40.5% | 42.7% |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | 15.4% | 18.1% | 16.0% | 18.5% | 20.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 47.6% | 23.4% | 34.3% | 16.4% | 40.8% |
| DAQO New Energy Corp. ($DQ) | 43.3% | 49.1% | 36.1% | 27.1% | 38.0% |
| Teradyne, Inc. ($TER) | 3.4% | 29.6% | 27.9% | 30.3% | 33.8% |
| Cabot Microelectronics Corporation ($CCMP) | 23.4% | 27.2% | 31.5% | 20.1% | 31.6% |
| Entegris, Inc. ($ENTG) | 21.7% | 25.6% | 27.1% | 24.7% | 29.3% |
| |
|---|
| Median (25 companies) | 12.1% | 16.2% | 16.6% | 12.9% | 15.9% |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | 6.1% | 10.8% | 7.5% | 8.0% | 12.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| DAQO New Energy Corp. ($DQ) | 29.5% | 19.8% | 47.4% | 79.7% | 17.5% |
| Photronics, Inc. ($PLAB) | 10.4% | 20.4% | 17.3% | 32.4% | 11.6% |
| Cabot Microelectronics Corporation ($CCMP) | 4.1% | 4.2% | 3.6% | 5.4% | 11.3% |
| Amkor Technology, Inc. ($AMKR) | 16.5% | 13.1% | 12.7% | 11.7% | 10.9% |
| ACM Research, Inc. ($ACMR) | 2.9% | 1.8% | 2.5% | 0.9% | 9.5% |
| |
|---|
| Median (24 companies) | 2.6% | 3.2% | 3.0% | 3.4% | 3.9% |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | 1.3% | 1.7% | 2.4% | 2.5% | 2.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Teradyne, Inc. ($TER) | -2.9% | 23.8% | 22.6% | 29.2% | 40.3% |
| DAQO New Energy Corp. ($DQ) | 12.7% | 23.2% | 12.2% | 5.6% | 18.5% |
| Entegris, Inc. ($ENTG) | 10.3% | 14.7% | 15.4% | 11.3% | 16.4% |
| Advanced Energy Industries, Inc. ($AEIS) | 41.2% | 45.7% | 31.3% | 6.9% | 15.5% |
| MKS Instruments, Inc. ($MKSI) | 10.1% | 20.3% | 22.7% | 8.3% | 14.1% |
| |
|---|
| Median (27 companies) | 6.9% | 12.2% | 12.1% | 5.6% | 10.2% |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | 7.8% | 27.5% | 10.5% | 4.1% | 14.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Veeco Instruments Inc. ($VECO) | - | - | - | 577.2x | 3.4x |
| Cohu, Inc. ($COHU) | -6.0x | -2.7x | - | 10.1x | 2.9x |
| Xperi Corporation ($XPER) | 4.2x | 5.0x | 2.6x | 6.1x | 2.1x |
| Cabot Microelectronics Corporation ($CCMP) | -1.3x | -1.8x | -1.9x | 3.6x | 2.0x |
| Entegris, Inc. ($ENTG) | 0.7x | 0.1x | 1.1x | 1.6x | 1.0x |
| |
|---|
| Median (23 companies) | -1.3x | -0.7x | -1.0x | -0.4x | -0.4x |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | 0.4x | -0.2x | 2.4x | 2.0x | 0.6x |
