|Shares Out. (in M):||74||P/E||10.0||0|
|Market Cap (in $M):||295||P/FCF||0||0|
|Net Debt (in $M):||0||EBIT||0||0|
As we all know technology is one of the market’s strongest suits and semiconductors an
important player under the umbrella. Little is untouched by this theme and makes for an attractive investment area.
The semiconductor industry has reported worldwide sales of 9.6% y/y and sees that pace continuing in 2015 and 2016.
Recently we noticed a strong semi earnings report that had just reported a new hedge fund position earlier. Recalling some earlier insider purchases, we decided to revisit the company.
Mattson Technology- MTSN- 4.00- reported a strong 49% increase in sales for the year ended Dec 2014. Actual revenues of $178 million jumped $59 million from $119 million from 2013. The fourth quarter ending Dec printed $55 million compared to last years’
$41 million. Earnings of $0.14 was reported for the year, compared to a loss of $0.19. But the fourth quarter reported $.07 compared to $.01 over the same period- obviously suggesting a quickening pace of improvement.
Looking at the financial statements shows a rather solid company with no debt, adequate capital and about 75 million shares outstanding.
So what is Mattson?
It is a manufacturer and marketer of semiconductor wafer processing equipment
which finds its way into the fabrication of integrated circuits. Drilling down, they operate in three product sectors- Dry Strip, Rapid Thermal Processing and Etch- and is a global supplier of plasma and thermal processing equipment to the expanding semi market.
Driving the 49% sales growth has been the Etch sector. Etch removes material from the wafer surface and is thought to be a billion dollar market. As Mattson is making inroads in newer applications for advanced memory products (4.0) and is gaining market share and growing robustly. Dry strip, which clean wafers, is making inroads with its new higher productivity products. The third product area segment heats and cools wafers leaped to $25 million from a standing start. This product area apparently represents an important breakthrough for cooling wafers attested by the rapidly expanding sales growth.
It is reaffirming to note that MTSN has over 300 worldwide patents with applications in many market areas.
A recent quarterly conference call called for a continuation of growth with a stronger second half of 2015. Guidance for the first quarter was sales of $58 Million with an earnings estimate of $.08. At this point we are looking for revenues of $240 million up 35% with an earnings estimate of $0.40. Market cap to sales is about 1.1.
Revenues (Million $)
2014 2013 2012 2011 2010 2009
1Q 43.20 20.24 50.50 47.05 25.19 5.57
2Q 42.03 24.57 34.88 51.26 32.12 8.07
3Q 38.43 33.84 20.40 44.94 39.76 11.19
4Q 54.75 40.78 20.74 41.69 41.26 17.92
Year 178.4 119.4 126.5 185.0 138.3 42.75
Earnings per Share ($)
2014 2013 2012 2011 2010 2009
1Q 0.04 -0.16 -0.02 -0.12 -0.21 -0.55
2Q 0.03 -0.06 -0.06 -0.10 -0.17 -0.40
3Q 0.01 -0.01 -0.10 -0.04 -0.13 -0.17
4Q 0.07 0.04 -0.15 -0.07 -0.16 -0.23
Year 0.13 -0.19 -0.33 -0.32 -0.67 -1.34
Summing it up
Latest quarterly expansion in sales and eps suggest we are at an inflection point for
MTSN. Industry trends offer a strong backdrop for better numbers to come.
It would seem these thoughts were not lost on Paradigm Capital Management who established in December a new 6.3% position in the company
1.ROBUST SALES AND EARNINGS GROWTH.
2.New and renewed brokerage sponsorship.
3.Growing hedge fund interest