Axcelis(ACLS) - 2023 Q4 - Annual Report

Financial Performance - Axcelis achieved record revenue of $1,130.6 million in 2023, a 22.9% increase from$ 920.0 million in 2022[119] - Systems revenue for 2023 was $883.6 million, up from$ 692.1 million in 2022, reflecting strong demand in the mature process technology segment[119] - Gross margin for the year was 43.5%, slightly down from 43.7% in 2022, while operating profit increased to $265.8 million from$ 212.4 million[119] - Net income rose by 34.5% to $246.3 million in 2023, following an 85.6% increase in net income from 2021[119] - Revenue from the aftermarket business increased to$ 247.0 million in 2023, compared to $227.9 million in 2022[139] - Gross profit for the year ended December 31, 2023, was$ 491.3 million, an increase of $89.5 million or 22.3% compared to$ 401.8 million in 2022[141] Expenses and Investments - Total operating expenses increased to $225.5 million in 2023, up$ 36.1 million or 19.0% from $189.4 million in 2022[143] - Research and development expenses rose to$ 96.9 million in 2023, an increase of $18.6 million or 23.7% compared to$ 78.4 million in 2022[146] - Sales and marketing expenses increased to $62.8 million in 2023, up$ 9.2 million or 17.2% from $53.6 million in 2022[148] - General and administrative expenses were$ 65.8 million in 2023, an increase of $8.3 million or 14.5% compared to$ 57.5 million in 2022[150] - Cash used in investing activities was $100.9 million in 2023, with capital expenditures of$ 20.7 million[157] Cash Flow and Obligations - Cash provided by operating activities was $156.9 million in 2023, down from$ 215.6 million in 2022[156] - Total contractual obligations amount to $432.8 million, with$ 85.9 million due in 2024 and $55.3 million due beyond 2029[162] - The company believes existing cash, cash equivalents, and borrowing capacity will be sufficient to meet anticipated cash requirements[166] Customer and Market Recognition - Axcelis received nine customer satisfaction awards in 2023 and was recognized in Forbes' List of America's Best Mid-Cap Companies for 2023 and 2024[120] - The top 20 semiconductor chip manufacturers accounted for approximately 92.0% of total semiconductor capital equipment spending in 2023, up from 89.0% in 2022[122] Operational Developments - The company opened the Axcelis Logistics Center in Beverly, Massachusetts, in Q3 2023, enhancing manufacturing efficiencies[120] - Axcelis is focusing on expanding its footprint with existing and new customers, currently having eight Purion evaluation systems in key market segments[120] Financial Position and Foreign Operations - Deferred revenue at December 31, 2023, was$ 210.9 million, up from $154.8 million in 2022, primarily due to increased system prepayments[136] - Approximately 5.8% of revenue in 2023 was derived from local currencies in foreign operations, down from 9.1% in 2022[170] - Foreign operations accounted for approximately 9.4% of total assets as of December 31, 2023, with most assets denominated in currencies other than the U.S. dollar[170] Other Financial Information - Other income for 2023 was$ 12.8 million, a significant increase of $20.3 million or 271.3% from a loss of$ 7.5 million in 2022[152] - Income tax provision for 2023 was $32.3 million, an increase of$ 10.5 million or 48.3% compared to $21.8 million in 2022[153] - The company terminated a$ 40 million Senior Secured Credit Facilities Credit Agreement with Silicon Valley Bank, releasing all associated liens and obligations[165] - The company filed a shelf registration statement with the SEC for unspecified amounts of common stock and debt securities, effective until August 2026[164] - There are no significant related-party transactions requiring disclosure for the year ended December 31, 2023[167] - The company does not use derivative financial instruments to manage interest rate or foreign currency exchange risks[169][170] - Recent accounting pronouncements may have a material impact, as discussed in the consolidated financial statements[168]