Axcelis Annual Report 2021

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FY2021 Annual Report · Axcelis

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)
☒

☐

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the fiscal year ended December 31, 2021

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the transition period from to

Commission file number 000-30941
AXCELIS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation or organization)

34-1818596
(IRS Employer Identification No.)

108 Cherry Hill Drive
Beverly, Massachusetts 01915
(Address of principal executive offices) (zip code)

(978) 787-4000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $.001 par value

Trading symbol
ACLS

Name of each exchange on which registered
Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  No 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  No 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes  No 

Indicate by checkmark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated

Accelerated filer 

Non-accelerated filer 

filer 

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No 

Aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2021: $1,333,886,152

Number of shares outstanding of the registrant’s Common Stock, $0.001 par value, as of February 23, 2022: 33,251,279

Documents incorporated by reference:

Portions of the definitive Proxy Statement for Axcelis Technologies, Inc.’s Annual Meeting of Stockholders to be held on May 10, 2022 are

incorporated by reference into Part III of this Form 10-K.

Item 1. Business.

Overview of Our Business

PART I

Axcelis Technologies, Inc. (“Axcelis,” the “Company,” “we,” “us,” or “our”) designs, manufactures and services

ion implantation and other processing equipment used in the fabrication of semiconductor chips. We believe that our Purion
family of products offers the most innovative implanters available on the market today. We sell to leading semiconductor
chip manufacturers worldwide. The ion implantation business represented 97.4% of our revenue in 2021, with the
remaining 2.6% of revenue derived from aftermarket sales associated with other legacy processing systems. In addition to
equipment, we provide extensive aftermarket lifecycle products and services, including used tools, spare parts, equipment
upgrades, maintenance services and customer training.

Axcelis’ business commenced in 1978 and its current corporate entity was incorporated in Delaware in 1995. We
are headquartered in Beverly, Massachusetts and maintain an internet site at www.axcelis.com. On or through our website,
investors may access, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as
soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange
Commission. Our website and the information contained therein or connected thereto shall not be deemed to be
incorporated into this Form 10-K.

2021 was an exceptional year for Axcelis despite logistical challenges brought on by the geo-political environment

and the COVID-19 pandemic. As a result of the strength of the overall electronics market and the continued growth of the
Purion product family in 2021, we delivered record full year revenue, operating profit and gross margin since becoming an
independent public company in 2001. Revenue for 2021 was $662.4 million, an increase of 39.6% from 2020 revenue of
$474.6 million. Systems revenue for 2021 was $454.6 million, compared to $293.6 million in 2020. Operating profit was
$127.3 million in 2021, compared to $58.0 million in 2020. Gross margin for the year was 43.2% compared to 41.8% in
2020. Net income for the year was $98.7 million, an increase of 97.4% following a 39.6% increase in revenue from the
prior year.

The Company is in a strong competitive position as we participate in a period of extended industry growth. A

focused strategy on ion implant, combined with the hard work and dedication of our employees and the encouragement and
support of our customers and suppliers, enabled us to achieve numerous critical milestones in our drive to market
leadership. We were able to rapidly grow our manufacturing and supply chain capabilities through smart capacity planning
and execution, including the opening of our new Axcelis Asia Operations Center in South Korea and the expansion of clean
manufacturing in Beverly. In 2021, we continued to expand the Purion installed base, growing our large and diverse group
of customers, mainly in the mature process technology segment. We continued our focus on the mature process technology
segment in 2021, launching new Purion product extensions, including the Purion H200™ high current implanter, targeted
for the production of power devices, and the Purion XEmax™ used to manufacture image sensors. Through the
introduction of these new products and continuous cost reduction measures, we increased our gross margin year over year,
making this the fourth consecutive year with gross margin greater than 40 percent.

We continue to work diligently to ensure that manufacturing and operating expense levels remain well aligned to

business conditions. We believe that the most fundamental interest of our stockholders is consistent, profitable, financial
performance, which we expect to continue to deliver in 2022. Our performance is subject to risks and uncertainties
discussed below under Item 1A, Risk Factors.

Industry Overview

Semiconductor chips, also known as integrated circuits, are used in a continuously evolving range of consumer
and industrial products, including for example, personal computers, mobile devices, automobiles, sensors and controllers
for the “internet of things” and data storage servers. Types of semiconductor chips include dynamic random-access memory
(“DRAM”) and “Not AND” (“NAND”) Flash memory; logic devices to process information; and “system on chip” devices
(which have both logic and memory features). The increased number of devices providing information to and receiving

information from the Internet, sometimes referred to as the “Connected World,” is increasing demand for chips. These
chips are used in data input, such as image sensors, which are often manufactured using mature processing technologies, as
well as for memory to support the storage of data, internet streaming and “cloud computing” data analytics.

Most semiconductor chips are built on silicon wafers of either 200mm (8 inches) or 300mm (12 inches) in

diameter. Each semiconductor chip is made up of millions of tiny transistors or “switches” to control the functions of the
device. Transistors are created in the silicon wafer by introducing various precisely placed impurities into the silicon in
specific patterns.

Semiconductor chip manufacturers own or manage wafer fabrication facilities (often referred to as “fabs”), which

utilize many different types of equipment in the making of integrated circuits. Over 300 process steps utilizing over 50
different types of process tools are required to make a single device like a microprocessor. Semiconductor chip
manufacturers seek device performance benefits through new products and technology enhancements and productivity
improvements through increased throughput, equipment utilization and higher manufacturing yields. Capacity is added by
increasing the amount of manufacturing equipment in existing fabrication facilities and by constructing new fabrication
facilities.

We have different types of customers, which impacts the timing of purchases and technology requirements. Some

customers are integrated electronics manufacturers, making semiconductor chips for their own devices. These same
companies may also act as foundries, manufacturing chips for other electronic manufacturers or chip design companies.
Some customers only function as foundries. A few companies design and manufacture branded chips that are sold to
device manufacturers. In addition, some customers have partnerships or joint ventures with two or more semiconductor
chip manufacturers to share the technology development and capital investment. The timing of purchases by foundry
customers will depend on their success in securing manufacturing contracts. Also, foundry customers will look for
equipment that can deliver the broadest capabilities in order to be prepared to manufacture all chip types, while integrated
electronics manufacturers may invest in processing equipment dedicated to a specific application they require for their
products.

The semiconductor capital equipment industry has historically been cyclical as global chip production capacities

successively exceed, then lag behind, global chip demand. When chip demand is high, and inventories are low, chip
manufacturers add capacity through capital equipment purchases. Given the difficulties of forecasting and calibrating chip
demand and production capacity, the industry periodically experiences excess chip inventories and softening chip prices.
Device manufacturers react with muted capital spending, lowering the demand for capital equipment. Changes in consumer
and business demand for products in which chips are used also affect the industry. A successful semiconductor capital
equipment manufacturer must not only provide some of the most technically complex products manufactured in the world
but also must manage its business to thrive during low points in the cycle.

Axcelis’ Strategy

Axcelis’ 2022 strategic goals are to:

• Achieve our $850M revenue model run rate in 2022, positioning us to achieve our $1 billion revenue model in

future years

o Continue to grow the Purion footprint with our existing customer base as well as at new accounts in

targeted market segments and geographies

 Capitalize on continued spending at mature process technology customers
 Capture memory business as customers increase spending during the year
 Continue working to penetrate leading edge logic and foundry customers

o Drive Customer Satisfaction & Innovation (CS&I) revenues by delivering excellent customer satisfaction

and innovative, high value products and services

o Continue to drive gross margin improvements

• Execute a capital strategy that funds appropriate investments in the business and enables the potential for return of

cash to shareholders

• Prepare for a post-COVID-19 business environment

We continue to invest in research and development to ensure our products meet the needs of our customers. We

take pride in our scientists and engineers who are adding to our portfolio of patents and unpatented proprietary technology
to ensure that our investment in technology leadership translates into unique product advantages. We strive for operational
excellence by focusing on ways to lower our product, manufacturing and design costs and to improve our delivery times to
our customers. Global customer teams and a focused account management structure maintain and strengthen our customer
relationships and increase customer satisfaction. Finally, we endeavor to maintain a strong cash balance to ensure sufficient
capital to fund business growth.

Ion Implantation Systems

Ion implantation is a principal step in the transistor formation cycle of the semiconductor chip manufacturing

process. Ion implantation is also used to change the material characteristics of the silicon for reasons other than electrical
doping, a process known as “material modification.” An ion implanter is a large, technically advanced system that injects
dopants such as arsenic, boron or phosphorus into a wafer. These dopants are ionized and therefore have an electrical
charge state. This electric charge state allows the dopants to be accelerated, focused and filtered with electric and magnetic
fields. Ion implanters use these fields to create a beam of ions with a precisely defined energy level (ranging between
several hundred and eight million electron-volts) and with a precisely defined beam current level (ranging from microamps
to milliamps). Certain areas of the silicon wafer are blocked off by a polymer material known as photoresist, which acts as a
“stencil” to pattern devices so that the dopants will only enter the wafer where needed. Typical process flows require
twenty implant steps, with the most advanced processes requiring thirty or more steps. Each implant step is characterized
by four key parameters: dopant type, dose (amount of dopant), energy (depth into the silicon) and tilt/twist (angle of wafer
relative to the ion beam).

In order to efficiently cover the wide range of implant steps, three different types of implanters have been

developed, each targeted at a specific range of applications, primarily defined by dose and energy. The three traditional
implanter types are referred to as high current, high energy and medium current:

• High current implanters were the second type of implanter to emerge, having low energy capability and high

dose range.

• High energy implanters emerged to address the need for deeper implants with a high energy range and low

dose.

• Medium current implanters are the original model of ion implanter, with mid to low-range energy and dose

capability.

The Purion Platform and Family of Ion Implanters

Axcelis offers a complete line of high energy, high current and medium current implanters for all application
requirements. Our Purion flagship systems are all based on a common platform which enables a unique combination of
implant purity, precision and productivity. Combining a state-of-the-art single wafer end station, with advanced spot beam
architectures (that ensures all points across the wafer see the same beam condition at the same beam angle), Purion products
enable exceptional process control to optimize device performance and yield, at high productivity.

• High Current Implant. Our Purion H, Purion Dragon and Purion H200 spot beam, high current systems

cover all traditional high current requirements as well as those associated with emerging and future devices.
Our Purion high current capabilities extend beyond traditional high current energy and dose ranges, in order to
cover new device fabrication requirements as well as to maximize capital utilization and flexibility. In
addition, Axcelis’ Purion systems provide advantages for material modification applications, including those
requiring hot and cold implant capabilities.

• High Energy Implant. Our Purion XE and other Purion high energy systems combine Axcelis’

production-proven RF Linac high energy, spot beam technology with the Purion platform wafer handling
system. Axcelis has been a market leader in high energy ion implanters for many years and continues to offer
legacy high energy systems, as well as a range of new Purion systems which have differentiated capabilities
for specialty applications.

• Medium Current Implant. Our Purion M Si and SiC medium current system offers higher productivity and
lower electrical energy consumption compared to competitive offerings, in addition to other advantages. Our
Purion M systems also offer differentiated capabilities for specialty applications.

We believe our ion implant products will continue to meet customer demand for advantages in productivity,

process performance and technical extendibility.

Aftermarket Support and Services

Through our CS&I business, we offer our customers extensive aftermarket service and support throughout the

lifecycle of the equipment we manufacture. We believe that approximately 2,900 of our products are in use in 28 countries
worldwide. The service and support that we provide includes used tools, spare parts, equipment upgrades, and maintenance
services. We offer varying levels of sales, service and application support out of our field offices. Revenue generated
through our CS&I business represented 31.4%, 38.1% and 40.9% of revenue in 2021, 2020 and 2019, respectively.

To support our aftermarket business, we have sales and marketing personnel, field service engineers, and spare

parts and applications engineers, as well as employees located at our manufacturing facilities who work with our customers
to provide customer training and documentation, and product, process and applications support.

Most of our customers maintain spare parts inventories for our machines. In addition to our web-based spare parts

management and replenishment tracking program, we offer a number of Business-to-Business options to support our
customers’ parts management requirements. Our Axcelis Managed Inventory service offering provides the customer with
full spares support through a parts consignment arrangement in which Axcelis retains responsibility for the complete supply
chain. These services provide ease of use alternatives that reduce order fulfillment costs and improve cycle time, resulting
in an expanded customer base for this service offering.

Sales and Marketing

We primarily sell our equipment and services through our direct sales force. We conduct sales and marketing

activities from our sales offices located in the United States, Taiwan, South Korea, China, Singapore, Japan, Germany and
Italy.

International revenue, including export sales from our U.S. manufacturing facilities to foreign customers and sales

by foreign subsidiaries and branches, accounted for 92.6%, 89.3% and 89.4% of total revenue in 2021, 2020 and 2019,

respectively. In 2021, 78.4% of our sales were denominated in U.S. dollars. See Note 17 to our Consolidated Financial
Statements contained in Item 15 of this Form 10-K for a breakdown of our revenue and long-lived assets in the United
States, Europe and Asia. See also Item 1A, “Risk Factors,” for information about risks attendant to our foreign operations.

Customers

In 2021, according to Gartner Inc., the top 20 semiconductor chip manufacturers accounted for approximately

92.0% of total semiconductor capital equipment spending, which increased from 90.4% in 2020. These manufacturers are
from the largest semiconductor chip manufacturing regions in the world: the United States, Asia Pacific (Taiwan, South
Korea, Singapore, Japan and China) and Europe.

Information on net sales to unaffiliated customers is included in Note 2 of Notes to Consolidated Financial

Statements. For the year ended December 31, 2021, revenues from Samsung Electronics Co, Ltd. and Semiconductor
Manufacturing International Corporation represented 10% or more of consolidated revenues. The loss of either of these
customers would have a material adverse effect on our business.

Research and Development

Our industry continues to experience rapid technological change, requiring us to frequently introduce new

products and enhancements. Our Beverly, Massachusetts Advanced Technology Center houses a process development
laboratory with a 12,500 square feet class 10/100/1000 clean room for product demonstrations and process development
and a 34,000 square feet customer training center. The Advanced Technology Center provides infrastructure and process
capabilities that allow customers to test their unique process steps on our systems under conditions that substantially
replicate the customers’ production environments. This facility also provides significant capability for our research and
development efforts.

We devote a significant portion of our personnel and financial resources to research and development programs

and seek to maintain close relationships with our customers to remain responsive to their product needs. We have also
sought to reduce the development cycle for new products through a collaborative process whereby our engineering,
manufacturing and marketing personnel work closely together with one another and with our customers at an earlier stage
in the process. We use 3D, computer-aided design, finite element analysis and other computer-based modeling methods to
test new designs.

Our expenses for research and development were $65.4 million, $61.8 million and $53.9 million in 2021, 2020 and

2019, respectively, or 9.9%, 13.0% and 15.7% of revenue, respectively.

Manufacturing

We manufacture products at our 417,000 square feet ISO 9001:2015 and ISO 14001:2015 certified plant in

Beverly, Massachusetts. Our facilities employ best in class manufacturing techniques, including lean manufacturing, six
sigma controls and advanced inventory management, purchasing and quality systems.

We expanded our manufacturing capabilities in November 2021, with the opening of our new Axcelis Asia

Operations Center in South Korea. This facility has 38,000 square feet and is designed to bring production closer to our
Asia-based customers, driving customer satisfaction and operating efficiencies.

Our clean manufacturing process uses class 1,000/10,000 space to facilitate most of our manufacturing

requirements.

Our core competency in manufacturing and supply chain management is built around system assembly and testing,

which remains an in-house capability due to the high degree of expertise and intellectual property associated with the
process and design. Non-core work is sourced to global partners and includes items such as vacuum systems, wafer
handling and commodity-level components. We continuously pursue outsourcing opportunities where the economics are
justified, with a goal of enabling quality and margin improvement. Our supply chain team is globally focused and is located

in Beverly and Singapore. Customized and commercially available software solutions drive our planning, purchasing and
inventory tracking process.

Our products are designed to be assembled and tested in a modular fashion, which facilitates our

industry-recognized “ship-from-cell” process. Specially developed test stands, software and tooling provide the framework
for this accelerated delivery process. Customers that choose the “ship-from-cell” process substantially improve their
delivery times while receiving the same high level of quality provided by more traditional, longer cycle integration
techniques. Product margins and inventory turns also improve as a result of shorter factory cycle times and increased labor
productivity.

Installation of our equipment is provided by factory and field teams. The process includes assembling the

equipment at our installation site, and after it has been connected, recalibrating it to factory specifications.

Competition

The semiconductor equipment industry is highly competitive and is characterized by a small number of
participants ranging in size. Significant competitive factors in the semiconductor capital equipment market include price,
cost of ownership, equipment performance, customer support, capabilities and breadth of product line.

In ion implantation, we mainly compete against Applied Materials, Inc. Axcelis and Applied Materials are the only

ion implant manufacturers with a full range of implant products, as well as service and support infrastructures able to
service our customers globally. Other non-U.S. players we compete with include Sumitomo Heavy Industries Ion
Technology Co. Ltd. and Nissin Ion Equipment Co., Ltd in Japan, Advanced Ion Beam Technology, Inc. in Taiwan, as well
as CETC Electronics Equipment Group Co., Ltd. in the People’s Republic of China. Non-U.S. suppliers may have an
advantage over U.S. suppliers established U.S. export controls regulation for shipments to China.

Intellectual Property

We rely on patent, copyright, trademark and trade secret protection in the United States and in other countries, as

well as contractual restrictions, to protect our proprietary rights in our products and our business. As of December 31, 2021,
we had 214 active patents issued in the United States and 438 active patents granted in other countries, as well as 226
patent applications (25 in the United States and 201 in other countries) on file with various patent agencies worldwide.
Patents are generally in effect for up to 20 years from the filing of the application.

We intend to file additional patent applications and grow our intellectual property portfolio as appropriate.
Although patents are important to our business, we do not believe that we are substantially dependent on any single patent
or any group of patents.

We have trademarks, both registered and unregistered, that are maintained to provide customer recognition for our

products in the marketplace. Trademark registrations generally remain in effect as long as the trademarks are in use. From
time to time, we enter into license agreements with third parties under which we obtain or grant rights to patented or
proprietary technology. We do not believe that any of our licenses are currently material to us.

Backlog

Systems backlog, including deferred systems revenue, was $460.6 million and $116.2 million as of December 31,

2021 and 2020, respectively. We believe it is meaningful to investors to include deferred systems revenue as part of our
backlog. Deferred systems revenue represents revenue that will be recognized in future periods based on prior shipments or
customer prepayments. Our policy is to include in backlog only those system orders for which we have accepted purchase
orders. All orders are subject to cancellations or rescheduling by customers with limited or no penalties.

Backlog does not include orders received and fulfilled within a quarter. Our backlog at the beginning of a quarter
typically does not include all orders required to achieve our sales objectives for that quarter. Backlog is not necessarily an
indicator of future business trends because orders for services or parts received during the quarter are generally performed
or shipped within the same quarter.

Bookings in the quarter ended December 31, 2021 were $194.0 million compared to $131.5 million in the quarter

ended December 31, 2020.

Human Capital

As of December 31, 2021, we had 1,122 employees and 73 temporary staff worldwide, of which 831 work in

North America, 301 in Asia and 63 in Europe. During 2021, our headcount increased by approximately 14% to support our
increased business during the year. While the majority of our headcount is based in the U.S. at our main manufacturing
facility in Beverly, MA, our business requires our presence where our customers are located around the world, resulting in
Axcelis employees working in 28 different countries.

Our future success largely depends upon our continued ability to attract and retain highly skilled employees. We
provide competitive compensation and benefits programs. In addition to salaries, these programs (which vary by country
and region) include cash incentive programs and recognition bonuses, equity awards, an Employee Stock Purchase Plan, a
401(k) plan with a competitive employer match, healthcare and insurance benefits, health savings and flexible spending
accounts, paid time off, family leave, family care resources, flexible work schedules, employee assistance programs, and
tuition assistance. These programs all contribute to both attracting and retaining a highly skilled employee base, including
those with critical leadership and industry skills and experience.

During 2021, our voluntary turnover rate for employees was 8.1%, or 6.9% without retirements, well below the

worldwide technology industry (all reported) average of 18.2% reported in the Aon 2021 Salary Increase and Turnover
Study — Second Edition, September 2021.

The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are

committed to the health, safety and wellness of our employees. We provide our employees and their families with access to
health and wellness insurance and programs that offer choice where possible so they can customize their benefits to meet
their needs and the needs of their families. In response to the ongoing COVID-19 pandemic, we have implemented
significant changes that we determined were in the best interest of our employees, as well as the communities in which we
operate, and which comply with government regulations. This includes having those employees that could productively
work from home continue to do so, while implementing additional safety measures for employees continuing critical on-
site work.

Axcelis is dedicated to building a diverse workforce, fostering a culture built on the principle of inclusion, and
maintaining a workplace free from discrimination. We strongly believe that a diversity of experience, perspectives and
backgrounds will lead to a better environment for our employees and better products for our customers. Axcelis’
commitment to diversity extends to our Board of Directors, our leadership team and all teams and functions across our
global locations.

We encourage you to review the “Focus on Diversity” report (located in the “Investors” and “About Us” sections

of our Axcelis.com website) for more detailed information regarding diversity and inclusion at Axcelis. Nothing on our
website, including our Focus on Diversity Report or sections thereof, shall be deemed incorporated by reference into this
Annual Report.

Environmental

We are subject to environmental laws and regulations in the countries in which we operate that regulate, among

other things: air emissions; water discharges; and the generation, use, storage, transportation, handling and disposal of solid
and hazardous wastes produced by our manufacturing, research and development and sales activities. As with other
companies engaged in like businesses, the nature of our operations exposes us to the risk of environmental liabilities,
claims, penalties and orders.

We are proud of our commitment to improving our environment. We believe that our operations are in compliance
with applicable environmental laws and regulations and that there are no pending environmental matters that would have a
material impact on our business. We are ISO 9001:2015 and ISO 14001:2015 certified at our Beverly, MA facility.

Information about our Executive Officers

Mary G. Puma, 64, has been our President and Chief Executive Officer since January 2002, having served as

Chairman from 2005 to 2015. From May 2000 until January 2002, Ms. Puma was our President and Chief Operating
Officer. In 1998, she became General Manager and Vice President of the Implant Systems Division of Eaton Corporation, a
global diversified industrial manufacturer. In May 1996, she joined Eaton as General Manager of the Commercial Controls
Division. Prior to joining Eaton, Ms. Puma spent 15 years in various marketing and general management positions for
General Electric Company. Ms. Puma is a director of Nordson Corporation and Semiconductor Equipment and Materials
International (SEMI).

Kevin J. Brewer, 63, became our Executive Vice President and Chief Financial Officer in September 2013, having

served as interim Chief Financial Officer beginning in June 2013. Mr. Brewer also manages our Global Operations.
Mr. Brewer had previously been our Executive Vice President, Global Operations since 2008 and our Senior Vice
President, Manufacturing Operations since May 2005, prior to which he had been Vice President of Manufacturing
Operations since October 2002 and Director of Operations from 1999 to 2002. Prior to joining Axcelis in 1999, Mr. Brewer
was Director of Operations, Business Jets at Raytheon Aircraft Company, a leading manufacturer of business and special
mission aircraft owned by Raytheon Company, a manufacturer of defense, government and commercial electronics, as well
as aircraft. Prior to that, Mr. Brewer held various management positions in operations and strategic planning in Raytheon
Company’s Electronic Systems and Missile Systems groups.

Russell J. Low, Ph.D., 51, became our Executive Vice President, Global Customer and Engineering Operations

effective January 1, 2021, having served as Executive Vice President, Engineering since joining Axcelis in October 2016.
Prior to joining the Company, Dr. Low held the position of Vice President of Engineering, MOCVD Business Unit at
Veeco Instruments since 2013, prior to which he was Veeco’s Senior Director of Engineering, Molecular Beam Epitaxy
Business Unit beginning in 2012. From 2003 to 2012, Dr. Low held a number of positions at Varian Semiconductor
Equipment Associates, most recently as Director of Technology. Prior to that, Dr. Low held engineering positions in the
thermal processing and ion implant divisions of Applied Materials, Inc. from 1997 to 2003.

William Bintz, 65, is our Executive Vice President, Product Development since November 2016. From 2011 until
November 2016, Mr. Bintz served as Executive Vice President, Product Development, Engineering and Marketing. Prior to
that, he served as Senior Vice President, Marketing beginning in September 2007, after joining Axcelis in early 2006 as
Director of Marketing for curing and cleaning products and shortly thereafter becoming Vice President of Product
Marketing. Prior to joining Axcelis, from 2002 Mr. Bintz was Product Director for Medium Current and High Energy Ion
Implant System at Varian Semiconductor Equipment Associates, Inc. Before that, he was General Manager of the Materials
Delivery Products Group at MKS Instruments, beginning in 1999, and General Manager of the Thermal Processing
Systems Division at Eaton Corporation (now Axcelis) beginning in 1995.

Lynnette C. Fallon, 62, is our Executive Vice President, Human Resources/Legal and General Counsel, a position

she has held since May 2005. Prior to that, Ms. Fallon was Senior Vice President HR/Legal and General Counsel since
2002, and Senior Vice President and General Counsel since 2001. Ms. Fallon has also been our corporate Secretary since
2001. Before joining Axcelis, Ms. Fallon was a partner in the Boston law firm of Palmer & Dodge LLP since 1992, where
she was head of the Business Law Department from 1997 to 2001. Ms. Fallon is a director of ClearPoint Neuro, Inc.

Douglas A. Lawson, 61, has been our Executive Vice President, Corporate Marketing and Strategy since

November 2013, having joined Axcelis as Vice President Business Development in 2010, and holding the position of
Senior Vice President of Strategic Initiatives beginning in 2011. Mr. Lawson also manages our Information Technology
function. Prior to joining the Company in 2010, he held the position of General Manager of Luminus Devices from 2009 to
2010. He has over 30 years of experience in the technology industry and has held numerous executive and technical
positions at BTU International, PRI Automation, Digital Equipment and Intel.

Item 1A. Risk Factors.

Risks Related to Our Business and Industry

Set forth below and elsewhere in this Form 10-K and in other documents we file with the SEC are risks and
uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking
statements contained in this Form 10-K. It is not possible to predict or identify all such risk factors. Consequently, the
following is not a complete discussion of all potential risks or uncertainties.

If semiconductor chip manufacturers do not make sufficient capital expenditures, our sales and profitability will be
harmed.

New systems orders and used tool sales depend upon demand from semiconductor chip manufacturers who build

or expand fabrication facilities. When the rate of construction or expansion of fabrication facilities declines, demand for our
systems will decline, reducing our revenue. In addition, all or a portion of the demand for increased capacity may be
satisfied by a semiconductor chip manufacturer’s ability to reconfigure and re-use equipment they already own. Revenue
decline also hurts our profitability because our established cost structure and our continued investments in engineering,
research and development and marketing necessary to develop new products and to maintain extensive customer service
and support capabilities limit our ability to reduce expenses in proportion to declining sales.

If we fail to develop and introduce reliable new or enhanced products and services that meet the needs of semiconductor
chip manufacturers, our results will suffer.

Rapid technological changes in semiconductor chip manufacturing processes require us to respond quickly to
changing customer requirements. Our future success will depend in part upon our ability to develop, manufacture and
successfully introduce new systems and product lines with improved capabilities. This will depend upon a variety of
factors, including new product selection, timely and efficient completion of product design and development as well as
manufacturing and assembly processes, product performance in the field and effective sales and marketing. In particular:

• We must continue to develop competitive technical specifications for new systems, or enhancements to our
existing systems, and manufacture and ship these systems or enhancements in volume in a timely manner.

• We will need to accurately predict the schedule on which our customers will be ready to transition to new

products, in order to accurately forecast demand for new products while managing the transition from older
products.

• We will need to effectively manage product reliability or quality problems that often exist with new systems,
in order to avoid higher manufacturing costs, delays in acceptance and payment and additional service and
warranty expenses, and ultimately, a lack of repeat orders.

• Our new products must be accepted in the marketplace.

Our failure to meet any of these requirements will have a material adverse effect on our operating results and

profitability.

Axcelis is subject to the risks of operating internationally: we derive a substantial portion of our revenue from outside
the United States, especially from Asia.

We are substantially dependent on sales of our products and services to customers outside the United States.

International sales, including export sales from our U.S. manufacturing facilities to non-U.S. customers and sales by our
non-U.S. subsidiaries, accounted for 92.6% of total revenue in 2021. Customers based in Asia dominates our international
sales. Ion implanter system shipments to customers in Asia represented 83.9% of total system revenue in 2021. We
anticipate that international sales will continue to account for a significant portion of our revenue. In particular, we expect
that sales to Chinese customers (both global and domestic Chinese chip manufacturers) will continue to increase in coming
years, creating both risk and opportunity. Sales to Chinese customers represent a higher risk than some other international

locations because of trade tensions between the United States government and the Chinese government, and other
challenges reflecting China’s stage of development, including public health concerns and rapid growth. For example, in
2020, the United States Commerce Department placed one of our major Chinese customers on the U.S. export controls
Entity List. As a result, we are currently required to obtain export controls licenses for all shipments from the U.S. to this
customer. This situation temporarily delayed shipments and resulted in the risk that this customer (and potentially other
Chinese customers) would change suppliers to non-US vendors, such as Advanced Ion Beam Technology, Inc., Nissin Ion
Equipment Co., Ltd. and Sumitomo Heavy Industries Ion Technology Co., Ltd. In addition, a Chinese entity, known as
CETC Electronics Equipment Group Co., Ltd., is developing ion implanters for the Chinese domestic market. The loss of a
significant customer or any reduction or delays in our ability to ship to any significant customer will adversely affect us.

We source a substantial portion of our materials from outside of the United States. Because of our dependence

upon international sales and our global supply chain, our results and prospects may be adversely affected by a number of
factors, including:

•

•
•
•

•
•
•
•
•

changes in laws or regulations resulting in more burdensome governmental controls, tariffs, restrictions,
embargoes or export license requirements;
volatility in currency exchange rates;
political and economic instability;
global health emergencies, such as the COVID-19 pandemic, which have the potential to disrupt our
manufacturing operations and those of our supply chain, as well as cause our customers to delay or cancel
shipments;
difficulties in accounts receivable collections;
extended payment terms beyond those customarily offered in the United States;
difficulties in managing suppliers, service providers or representatives outside of the United States;
difficulties in staffing and managing foreign subsidiary operations; and
potential adverse tax consequences.

Our dependence upon suppliers for many components and sub-assemblies could result in increased costs or delays in
the manufacture and sale of our products.

We rely to a substantial extent on outside vendors to manufacture many of the components and sub-assemblies of

our products. We obtain many of these components and sub-assemblies from a limited group of suppliers. Accordingly,
based on situations outside of our control, we may be unable to obtain an adequate supply of required components on a
timely basis, on price and other terms acceptable to us, or at all. In addition, we often quote prices to our customers and
accept customer orders for our products before purchasing components and sub-assemblies from our suppliers. If our
suppliers increase the cost of components or sub-assemblies, we may not have alternative sources of supply and may not be
able to raise the price of our products to cover all or part of the increased cost of components, negatively impacting our
gross margin.

The manufacture of some of these components and sub-assemblies is an extremely complex process and requires

long lead times. As a result, we could experience delays or shortages. If we are unable to obtain adequate and timely
deliveries of our required components or sub-assemblies, we may have to seek alternative sources of supply or manufacture
these components internally. This could delay our ability to manufacture or to ship our systems on a timely basis, causing
us to lose sales, incur additional costs, delay new product introductions and suffer harm to our reputation.

Moreover, if actual demand for Axcelis’ products is different than expected, Axcelis may purchase more or fewer
parts than necessary or incur costs for canceling, postponing or expediting delivery of parts. If Axcelis purchases inventory
in anticipation of customer demand that does not materialize, or if customers reduce or delay orders, Axcelis may incur
excess inventory charges.

A significant portion of our revenue depends on customers electing to buy aftermarket products and services from
Axcelis.

Historically, a significant portion of our product revenue and all of our service revenue relates to our sale of

“aftermarket” products and services, which include parts, consumables, upgrades, service contracts, and time and materials
billings. Some of our customers purchase fewer aftermarket products and services, often training their own staff to maintain
and service semiconductor capital equipment rather than relying on the equipment manufacturer for these services. In
addition, we compete against third-party parts suppliers for the sale of parts and consumables that are not protected by
patents or otherwise proprietary. To the extent our customers purchase parts and services from other vendors or provide
their own system maintenance labor, our revenue and profitability will be reduced.

If we fail to compete successfully in the highly competitive semiconductor capital equipment industry, our sales and
profitability will decline.

The ion implant segment is highly competitive and includes one company with substantially greater financial,

engineering, manufacturing, marketing and customer service and support resources that may better position it to compete
successfully than we can, as well as several smaller companies that could provide innovative systems with technology that
may have performance advantages. We expect our competitors to continue to improve the design and performance of their
existing products and processes and to introduce new products and processes with improved price and performance
characteristics. If we are unable to improve or introduce competing products when demanded by the markets, our business
will be harmed. Finally, if we must lower prices to remain competitive without commensurate cost of goods savings, our
gross margin and profitability will be adversely affected.

We are dependent on sales to a limited number of large customers; the loss of a significant customer or any reduction in
orders from them could materially affect our sales.

Historically, we have sold a significant portion of our products and services to a limited number of semiconductor

chip manufacturers. In 2021, our top ten customers accounted for 69.5% of our net sales, in comparison to 74.0% and
74.1% in 2020 and 2019, respectively. None of our customers have entered into a long-term agreement requiring it to
purchase our products. Although the composition of the group comprising our largest customers has varied from year to
year, the loss of a significant customer or any reduction or delays in orders from any significant customer will adversely
affect us. Consolidation of semiconductor chip manufacturers may result in the loss of a customer.

Our international operations involve currency risk.

Substantially all of our sales are billed in U.S. dollars, thereby reducing the impact of fluctuations in foreign
exchange rates on our results. We also pay almost all non-U.S. vendors providing materials, components and subassemblies
to our U.S. factory in U.S. dollars. However, the aftermarket revenues of our non-U.S. subsidiaries, and most of the
operating expenses of these non-U.S. subsidiaries, are received and incurred in local currencies. The translation of these
operating results into U.S. dollars in our Consolidated Statement of Operations can result in other income (expense).
Similarly, the translation of long-term asset and liability values to U.S. dollars are recorded in stockholders’ equity as an
element of accumulated other comprehensive income (loss). Accordingly, fluctuations in exchange rates can impact
reported revenues, expense, and profitability and asset values in our Consolidated Financial Statements. During the year
ended December 31, 2021, approximately 21.6% of our revenue was derived in local currencies from foreign operations
with this inherent risk. In addition, at December 31, 2021, our operations outside of the United States accounted for
approximately 12.6% of our total assets, the majority of which was denominated in currencies other than the U.S. dollar.

We may not be able to maintain and expand our business if we are not able to hire, retain and integrate qualified
personnel.

Our business depends on our ability to attract and retain qualified, experienced employees. There is substantial

competition for experienced engineering, technical, financial, sales and marketing personnel in our industry. In particular,
we must attract and retain highly skilled design and process engineers. Competition for such personnel is intense,
particularly in the Boston metropolitan area, as well as in other locations around the world. If we are unable to retain our

existing key personnel, or attract and retain additional qualified personnel, we may from time to time experience
insufficient levels of staffing to fully develop, manufacture and market our products and perform services for our
customers. As a result, our growth could be limited or we could fail to meet our delivery commitments or experience
deterioration in service levels or decreased customer satisfaction, all of which could adversely affect our financial results.

Our financial results may fluctuate significantly.

We derive our new systems revenue from the sale of a small number of expensive products to a relatively small

number of customers. The selling prices on our ion implant and other legacy processing systems range from approximately
$2.0 million to $8.0 million. We also sell used equipment in our aftermarket business. Each sale, or failure to make a sale,
may have a significant effect on us in a particular quarter. In a given quarter, a number of factors can adversely affect our
revenue and results, including changes in our product mix, increased fixed expenses per unit due to reductions in the
number of products manufactured, and higher fixed costs due to increased levels of research and development and
expansion of our worldwide sales and marketing organization. Our financial results also fluctuate based on gross profit
realized on sales. A variety of factors may cause gross profit as a percentage of revenue to vary, including the mix and
average selling prices of products sold, costs to manufacture and customize systems, warranty costs and impact of changes
to inventory reserves. New product introductions may also affect our gross margin. Fluctuations in our financial results may
have an adverse effect on the price of our common stock.

Our financial results may fall short of anticipated levels because forecasting revenue and profitability is complex and
may be inaccurate.

Management may from time to time provide financial forecasts to investors. These forecasts are based on

assumptions, which are believed to be reasonable when made, of the timing of system orders, system shipments, system
acceptance and aftermarket revenue. Any of these assumptions can prove erroneous and the level of revenue recognizable
in a particular quarter may vary from the forecast. Our lengthy sales cycle, coupled with customers’ competing capital
budget considerations, make revenue difficult to predict. In addition, our backlog at the beginning of a quarter typically
does not include all orders required to achieve our sales objectives for that quarter and is not a reliable indicator of our
future sales. As a result, our revenue and operating results for a quarter depend on our shipping systems on previous orders
as scheduled during that quarter, receiving customer acceptance of previously shipped products, and obtaining new orders
for products and services to be provided within that same quarter. Any delay in, or cancellation of, scheduled shipments and
customer acceptances or in revenue from new orders, including aftermarket revenue, could materially affect our financial
results.

Accounting rules addressing revenue recognition add more complexity in forecasting quarterly revenue and

profitability. Orders for our products usually contain multiple performance obligations that result in revenue deferral under
generally accepted accounting principles. Due to the foregoing factors, investors should understand that our actual financial
results for a quarter may vary significantly from our forecasts of financial performance for that quarter. Failure to meet
forecasted financial performance may have an adverse effect on the price of our common stock.

The semiconductor equipment industry is cyclical and we expect that demand for our products will increase and
decrease, making it difficult to manage the business and potentially causing harm to our sales and profitability.

The semiconductor industry is cyclical, experiencing upturns when the demand for our products is high and

downturns when our customers are not investing in new or expanded fabrication facilities. From time to time, inventory
buildups in the semiconductor device industry produce an oversupply of semiconductors. This can cause a reduced demand
for capital equipment such as our products, negatively impacting our sales and level of profitability. Our revenue can vary
significantly from one point in the cycle to another, making it difficult to manage the business, both when revenue is
increasing and when it is decreasing. In addition, a substantial portion of our operating expenses do not fluctuate with
changes in volume. Significant decreases in revenue can therefore have a disproportionate effect on profitability. In
addition, reduced demand for our products and services may require Axcelis to implement cost reduction efforts, including
restructuring activities, which may adversely affect Axcelis’ ability to capitalize on opportunities that arise in the future.

Axcelis is exposed to risks related to cybersecurity threats and incidents.

In the conduct of our business, Axcelis collects, uses, transmits and stores data on information technology systems.

This data includes confidential information belonging to Axcelis, our employees or our customers or other business
partners, some of which is personally-identifiable information of individuals. As reported in the 2021 Verizon Data Breach
Investigation Report, cyber-attacks in the manufacturing industries are largely financially motivated, although business
espionage is the objective in a strong majority of the incidents. Axcelis has been and expects to continue to be subject to
cybersecurity threats and incidents, including employee error or misuse; individual attempts to gain unauthorized access to
information systems; and sophisticated and targeted measures known as advanced persistent threats, none of which have
had a material impact on the Company to date. Axcelis devotes significant resources to network security, data encryption,
employee training and other measures to protect our systems and data from unauthorized access or misuse. However,
depending on their nature and scope, cybersecurity incidents could result in business disruption; the misappropriation,
corruption or loss of confidential information and critical data (Axcelis’ and that of third parties); reputational damage;
unnecessary expense; litigation with third parties; diminution in the value of Axcelis’ investment in research, development
and engineering; data privacy issues; and increased cybersecurity protection and remediation costs. These adverse outcomes
could negatively impact our revenues, expenses, profitability and asset values.

Axcelis is subject to risks associated with environmental, health and safety regulations.

Axcelis is subject to environmental, health and safety regulations in connection with its global business operations,

including but not limited to: regulations related to the development, manufacture, shipping and use of its products;
handling, discharge, recycling and disposal of hazardous materials used in its products or in producing its products; the
operation of its facilities; and the use of its real property. The failure or inability to comply with existing or future
environmental and safety regulations could result in: significant remediation or other legal liabilities; the imposition of
penalties and fines; restrictions on the development, manufacture, sale, shipment or use of certain of its
products; limitations on the operation of its facilities or ability to use its real property; and a decrease in the value of its real
property. Axcelis could be required to alter its manufacturing and operations and incur substantial expense in order to
comply with environmental, health and safety regulations. Any failure to comply with these regulations could subject
Axcelis to significant costs and liabilities that could adversely affect Axcelis’ business, financial condition and results of
operations.

Our financial condition and results of operations could be adversely affected by global pandemics.

Global pandemics, such as COVID-19, cause disruptions and restrictions on our operations and ability to travel,

and similar disruptions and restrictions impacting our suppliers or customers could adversely affect our sales and operating
results. Axcelis’ products rely on an extensive global supply chain, and shortages of certain parts could impact our ability
to meet customers’ shipment expectations, negatively affecting our revenues. Such pandemics may drive changes in the
demand for certain of our customers’ products, resulting in their delay or cancelation of purchases from us. The extent to
which pandemics may impact our results will depend on future developments, which are highly uncertain and cannot be
predicted, including the severity of COVID-19 and the duration of the current pandemic.

Our proprietary technology may be vulnerable to efforts by competitors to challenge or design around, potentially
reducing our market share.

We rely on a combination of patents, copyrights, trademark and trade secret laws, non-disclosure agreements and

other intellectual property protection methods to protect our proprietary technology. Despite our efforts to protect our
intellectual property, our competitors may be able to challenge, design around or legitimately use the proprietary
technology embedded in our systems or other technology or information used in our business. If this occurs, the value of
our proprietary technology will be diminished. Our means of protecting our proprietary rights may not be adequate and our
patents may not be sufficient to prevent others from using technology that is similar to or the same as our technology.
Patents issued to us may be challenged and might be invalidated or circumvented and any rights granted under our patents
may not provide adequate protection to us. Our competitors may independently develop similar technology, duplicate
features of our products or design around patents that may be issued to us. As a result of these threats to our proprietary
technology, we may have to resort to costly litigation to enforce or defend our intellectual property rights. Finally, all
patents expire after a period of time (in the U.S., patents expire 20 years from the date of filing of the patent application).

Our market share could be negatively impacted by the invalidation or expiration of a patent which had created a barrier for
our competitors.

Axcelis also has agreements with third parties for licensing of patented or proprietary technology with Axcelis as
the licensor or the licensee. Termination of license agreements or claims of infringement with respect to such technology
could have an adverse impact on our financial performance or ability to ship products with existing configurations.

We (or customers that we indemnify) might face intellectual property infringement claims or patent disputes that may be
costly to resolve and, if resolved against us, could be very costly to us and prevent us from making and selling our
systems.

From time to time, claims and proceedings may be asserted against us relative to patent validity or infringement

matters. We typically agree to indemnify our customers from liability to third parties for intellectual property infringement
arising from the use of our products in their intended manner. Therefore, we may receive notification from customers who
believe that we owe them indemnification or other obligations related to infringement claims made against the customers by
third parties. Our involvement in any patent dispute or other intellectual property dispute or action to protect trade secrets,
even if the claims are without merit, could be very expensive and could divert the attention of our management. Adverse
determinations in any litigation could subject us to significant liabilities to third parties, require us to remove certain
features from our products or seek costly licenses from third parties or prevent us from manufacturing and selling our
systems. In addition, infringement indemnification clauses in system sale agreements may require us to take other actions
or require us to provide certain remedies to customers who are exposed to indemnified liabilities. Any of these situations
could have a material adverse effect on our business results.

If operations were to be disrupted at Axcelis’ manufacturing facilities, it would have a negative impact on our business.

Our primary manufacturing facility is located in Massachusetts, with a smaller facility located in South Korea. Our

operations could be subject to disruption for a variety of reasons, including, but not limited to severe weather events,
natural disasters, work stoppages, operational facility constraints and terrorism. Such disruption could cause delays in
shipments of products to our customers and could result in cancellation of orders or loss of customers, which could
seriously harm our business.

If we do not have access to capital on favorable terms, on the timeline we anticipate, or at all, our financial condition
and results of operations could be materially adversely affected.

We require a substantial amount of capital to meet our operating requirements and remain competitive. We
routinely incur significant costs to purchase inventory to meet expected system sales, to develop and introduce new
products, and to place evaluation systems at new customer sites. There can be no assurance that we will realize a return on
the capital expended. Although our current cash levels and borrowing capacity are expected to be adequate for our
foreseeable cash requirements, if our operating results falter, or our cash flow or capital resources prove inadequate, we
may incur debt to fund these requirements. Significant volatility or disruption in the global financial markets may result in
us not being able to obtain additional financing on favorable terms, on the timeline we anticipate, or at all, and we may not
be able to refinance, if necessary, any outstanding debt when due, all of which could have a material adverse effect on our
financial condition. Any inability to obtain financing on favorable terms, on the timeline we anticipate, or at all, may cause
us to curtail our operations significantly, reduce planned capital expenditures and research and development, or obtain
funds through arrangements that management does not currently anticipate, including disposing of our assets and
relinquishing rights to certain technologies, the occurrence of any of which may significantly impair our ability to remain
competitive, and materially and adversely affect our results of operations and financial condition.

The market price of our common stock may be volatile, which could result in substantial losses for investors.

The stock markets in general, and the markets for semiconductor equipment stocks in particular, have experienced

extreme volatility that has often been unrelated to the operating performance of particular companies. These broad market
fluctuations may adversely affect the trading price of our common stock. The market price of the common stock may also
fluctuate significantly in response to the following factors, among others, some of which are beyond our control:

•
•
•
•
•

•
•
•

variations in our quarterly results;
the issuance or repurchase of shares of our common stock;
changes in securities analysts’ estimates of our financial performance;
changes in market valuations of similar companies;
announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint
ventures, capital commitments, new products or product enhancements;
loss of a major customer or failure to complete significant transactions;
additions or departures of key personnel; and
new positions adopted by investor stewardship groups and proxy advisory firms regarding desired environmental,
social and governance disclosures, policies, ranking systems and other initiatives.

The trading price of our common stock in the past has been significantly volatile, and we cannot accurately predict

every potential risk that may materially and adversely affect our stock price.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

We lease our principal facility in Beverly, Massachusetts, which comprises 417,000 square feet. The facility is

principally used for manufacturing, research and development, sales/marketing, customer support, advanced process
development, product demonstration, customer-training center and corporate headquarters. In addition, we expanded our
manufacturing capabilities with the opening of our new Axcelis Asia Operations Center in South Korea, which comprises
38,000 square feet.

We believe that our manufacturing facilities and equipment generally are well maintained, in good operating

condition, suitable for our purposes, and adequate for our present operations.

We own 23 acres of undeveloped property in Beverly, Massachusetts, adjacent to our headquarters.

As of December 31, 2021, we also leased 38 other properties, of which 10 are located in the United States and the

remainder are located in Asia and Europe, including offices in Taiwan, Singapore, South Korea, China, Japan, Italy and
Germany. These properties are used for sales and service offices and warehousing.

Our Beverly, Massachusetts facility is ISO 9001:2015 and ISO 14001:2015 certified and our European office is

ISO 9001:2015 certified.

Item 3. Legal Proceedings.

We are not presently a party to any litigation that we believe might have a material adverse effect on our business

operations. We are, from time to time, a party to litigation that arises in the normal course of our business operations.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities.

Our common stock trades on the Nasdaq Global Select Market under the symbol ACLS. As of February 23, 2022,

we had approximately 788 stockholders of record.

The following table summarizes the stock repurchase activity for the 12 months ended December 31, 2021

pursuant to our stock repurchase program, the authorization for which ended at December 31, 2021:

Total Number of
Shares Purchased

Total Number of
Shares Purchased as
Part of Publicly
Announced Program
(in thousands except per share amounts)

Average Price
Paid per Share

Approximate Dollar
Value of Shares that May
Yet Be Purchased Under
the Program

January 1, 2021 through January 31, 2021
February 1, 2021 through February 28, 2021
March 1, 2021 through March 31, 2021
April 1, 2021 through April 30, 2021
May 1, 2021 through May 31, 2021
June 1, 2021 through June 30, 2021
July 1, 2021 through July 31, 2021
August 1, 2021 through August 31, 2021
September 1, 2021 through September 30, 2021
October 1, 2021 through October 31, 2021
November 1, 2021 through November 30, 2021
December 1, 2021 through December 31, 2021
Total

—
—
303
117
100
106
95
110
86
95
105
24
1,141

N/A
N/A
$38.41
$43.35
$39.74
$40.74
$37.23
$43.16
$49.12
$48.66
$60.50
$63.38

—
—
303
117
100
106
95
110
86
95
105
24
1,141

100,000
100,000
88,362
83,290
79,316
74,997
71,461
66,713
62,489
57,863
51,508
-

We currently maintain one equity compensation plan, the 2012 Equity Incentive Plan (the “2012 Equity Plan”).

The number of shares issuable upon exercise of outstanding options and unvested restricted stock units granted to
employees and non-employee directors, as well as the number of shares remaining available for future issuance, under our
equity compensation plans as of December 31, 2021 are summarized in the following table:

Plan category

Equity compensation plans approved by
stockholders
Equity compensation plans not approved by
stockholders

Total

Weighted average exercise price of
outstanding options at December 31, 2021
Weighted average remaining term of
outstanding options at December 31, 2021

(A)
Number of shares to be issued
upon exercise of outstanding
options, warrants and rights
(1)

(B)
Weighted‑average
exercise price of
outstanding options,
warrants and rights (2)

(C)
Number of shares remaining available for
future issuance under equity compensation
plans (excluding shares reflected in column
(A)) (3)

1,013,367

—

1,013,367

$13.51

0.73 years

$ 1.48

2,427,867

(1) Represents, as of December 31, 2021: (A) 111,249 shares issuable on exercise of outstanding options under the 2012 Equity Plan, plus (B) 902,118
shares issuable on vesting of outstanding RSUs under the 2012 Equity Plan (some of which will be withheld in respect of tax withholding obligations).
(2) For the purposes of this table, the weighted-average exercise price of outstanding options, warrants and rights includes RSUs as if they had a $0
exercise price. The weighted-average exercise price of outstanding options alone at December 31, 2021 was $13.51.
(3) Represents the total shares available for issuance under our 2012 Equity Plan and our Employee Stock Purchase Plan, as of December 31, 2021, as
follows:

1,473,477 shares were available for future issuance under the 2012 Equity Plan. Such amount represents the total number of shares reserved
for issuance under the 2012 Equity Plan ((7,762,500 shares approved by the shareholders, plus 1,777,029 shares added in accordance with
the terms of the 2012 Equity Plan as a result of the expiration or forfeiture of awards granted under our prior equity grant plan that were
outstanding at the time of the adoption of the 2012 Equity Plan), less the shares issuable on options and restricted stock units (counted at 1.5
shares each) outstanding under the 2012 Equity Plan included in column (A)) and the shares issued prior to such date on exercise of options
and vesting of restricted stock units granted under the 2012 Equity Plan. This plan is generally used for grants to employees and directors
and was approved by our stockholders at our 2012 annual meeting.
954,390 shares were available under our 2021 Employee Stock Purchase Plan, which represents the total number of shares reserved for
issuance under the plan (1,000,000) less the shares purchased through December 31, 2021.

(A)

(B)

Item 6. [RESERVED]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Certain statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

are forward-looking statements that involve risks and uncertainties. Words such as may, will, should, would, anticipates,
expects, intends, plans, believes, seeks, estimates and similar expressions identify such forward-looking statements. The
forward-looking statements contained herein are based on current expectations and entail various risks and uncertainties
that could cause actual results to differ materially from those expressed in such forward-looking statements. Factors that
might cause such a difference include, among other things, those set forth under “Liquidity and Capital Resources” and
“Risk Factors” and others discussed elsewhere in this Form 10-K. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management’s analysis only as of the date hereof. We assume no obligation
to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting
forward-looking statements, except as may be required by law.

Overview

The semiconductor capital equipment industry is subject to cyclical swings in capital spending by semiconductor

chip manufacturers. Capital spending is influenced by demand for semiconductors and the products using them, the
utilization rate and capacity of existing semiconductor chip manufacturing facilities and changes in semiconductor
technology, all of which are outside of our control. As a result, our revenue may fluctuate from year to year and period to
period. Our established cost structure does not vary significantly with changes in volume. We may also experience
fluctuations in operating results and cash flows depending on our revenue level.

2021 was an exceptional year for Axcelis despite logistical challenges brought on by the geo-political environment

The Company is in a strong competitive position as we participate in a period of extended industry growth. A

focused strategy on ion implant, combined with the hard work and dedication of our employees and the encouragement and
support of our customers and suppliers, enabled us to achieve numerous critical milestones in our drive to market
leadership. We were able to rapidly grow our manufacturing and supply chain capabilities through smart capacity planning
and execution, including the opening of our new Axcelis Asia Operations Center in South Korea and the expansion of clean
manufacturing in Beverly. In 2021, we continued to expand the Purion installed base, growing our large and diverse group
of customers mainly in the mature process technology segment. We continued our focus on the mature process technology
segment in 2021, launching new Purion product extensions including the Purion H200™ high current implanter, targeted
for the production of power devices, and the Purion XEmax™ used to manufacture image sensors. Through the
introduction of these new products and continuous cost reduction measures, we increased our gross margin year over year,
making this the fourth consecutive year with gross margin greater than 40 percent.

We continue to work diligently to ensure that manufacturing and operating expense levels remain well aligned to

business conditions.

The market for our systems and aftermarket products and services is represented by a relatively small number of

companies. In 2021, the top 20 semiconductor chip manufacturers accounted for approximately 92.0% of total
semiconductor capital equipment spending, up from 90.4% in 2020. Our net revenue from our ten largest customers
accounted for 69.5% of total revenue for the year ended December 31, 2021 compared to 74.0% and 74.1% of revenue for
the years ended December 31, 2020 and 2019, respectively. For the year ended December 31, 2021, we had two customers
representing 17.8% and 15.4% of total revenue, respectively.

Critical Accounting Estimates

Management’s discussion and analysis of our financial condition and results of operations are based upon Axcelis’
consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in
the United States. The preparation of these financial statements requires management to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates and assumptions. Management’s estimates are based on
historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following accounting policies are critical in the portrayal of our financial condition and results of

operations and require management’s most significant judgments and estimates in the preparation of our consolidated
financial statements. For additional accounting policies, see Note 2 to the consolidated financial statements for the year
ended December 31, 2021 included in this Annual Report on Form 10-K.

Revenue Recognition

Our accounting policies relating to the recognition of revenue require management to make estimates,

determinations and judgments based on historical experience and on various other assumptions, which include (i) the
existence of a contract with the customer, (ii) the identification of the performance obligations in the contract, (iii) the value
of any variable consideration in the contract, (iv) the standalone selling price of multiple obligations in the contract, for the
purpose of allocating the consideration in the contract, and (v) determining when a performance obligation has been met.
Our revenue recognition policies are set forth in section (i) of Note 2, Summary of Significant Accounting Policies, to the
consolidated financial statements for the year ended December 31, 2021 included in this Annual Report on Form 10-K.
Recognition of revenue based on incorrect judgments, including an erroneous allocation of the estimated sales price
between the units of accounting, could result in inappropriate recognition of revenue, or incorrect timing of revenue
recognition, which could have a material effect on our financial condition and results of operations.

Inventory—Provision for Excess and Obsolescence and Lower of Cost or Net Realizable Value

We record a provision for estimated excess and obsolete inventory and lower of cost or net realizable value. The

provision is determined using management’s assumptions of materials usage, based on estimates of forecasted and
historical demand and market conditions. Specifically, our assumptions of forecasted system sales and the size and
utilization of the installed base of systems may have a significant effect on estimated materials usage. If actual market
conditions become less favorable than those projected by management, additional inventory write-downs may be required.

Although we make every effort to ensure the accuracy of our forecasts or product demand and pricing
assumptions, any significant unanticipated changes in demand, pricing, or technical developments would significantly
impact the value of our inventory and our reported operating results. In the future, if we determine that inventory needs to
be written down, we will recognize such costs in our cost of revenue at the time of such determination. If we subsequently
sell product that has previously been written down, our gross margin in that period will be favorably impacted.

Product Warranty

We generally offer a one-year warranty for all of our systems, the terms and conditions of which vary depending
upon the product sold. For all systems sold, we accrue a liability for the estimated cost of standard warranty at the time of
system shipment and defer the portion of systems revenue attributable to the relative fair value of non-standard warranty.
Costs for non-standard warranty are expensed as incurred. Factors that affect our warranty liability include the number of
installed units, historical and anticipated product failure rates, material usage and service labor costs. We periodically assess
the adequacy of our recorded liability and adjust the amount as necessary.

Income Taxes

We record income taxes using the asset and liability method. Deferred income tax assets and liabilities are
recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective income tax basis, and net operating loss and tax credit carryforwards.

Our consolidated financial statements contain certain deferred tax assets which have arisen primarily as a result of

operating losses, as well as other temporary differences between financial and income tax accounting.

We establish a valuation allowance when it is more likely than not that some portion or all of the deferred tax

assets will not be realized. Significant management judgment is required in determining our provision for income taxes, the
deferred tax assets and liabilities and any valuation allowance recorded against those net deferred tax assets.

We evaluate the weight of all available evidence such as historical losses, the expected timing of the reversals of

existing temporary differences and projected future taxable income to determine whether it is more likely than not that
some portion or all of the net deferred income tax assets will not be realized.

Our income tax expense includes the largest amount of tax benefit for an uncertain tax position that is more likely

than not to be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the
expiration of statutes of limitations for particular tax positions, or obtaining new information on particular tax positions
may cause a change to the effective tax rate. We recognize accrued interest related to unrecognized tax benefits as interest
expense and penalties as operating expense.

Results of Operations

The following year-to-year comparative statements include the 2021 and 2020 year periods. For comparative

statements for 2020 and 2019 periods, please refer to our 2020 Annual Report on Form 10-K, filed with the Securities and
Exchange Commission on February 26, 2021.

The following table sets forth our results of operations as a percentage of total revenue:

Revenue:

Product
Services

Total revenue

Cost of revenue:
Product
Services

Total cost of revenue

Gross profit
Operating expenses:

Research and development
Sales and marketing
General and administrative
Total operating expenses

Income from operations
Other (expense) income:

Interest income
Interest expense
Other, net

Total other expense
Income before income taxes
Income tax provision
Net income

Revenue

The following table sets forth our revenue:

Revenue:

Product

Percentage of revenue

Services

Percentage of revenue
Total revenue

Product

Year ended
December 31,

2021

2020

95.8 %
4.2
100.0

94.8 %
5.2
100.0

52.8
4.0
56.8
43.2

9.9
7.1
7.0
24.0
19.2

—
(0.7)
(0.3)
(1.0)
18.2
3.3
14.9 %

53.2
5.0
58.2
41.8

13.0
8.2
8.4
29.6
12.2

0.2
(1.1)
0.5
(0.4)
11.8
1.2
10.6 %

Year ended
December 31,

2021

Period-to-Period

Change
$
(dollars in thousands)

2020

$ 634,445

$ 449,903

$ 184,542 41.0 %

95.8 %

94.8 %

27,983

24,657

3,326 13.5 %

4.2 %

5.2 %

$ 662,428

$ 474,560

$ 187,868 39.6 %

Product revenue, which includes new system sales, sales of spare parts, product upgrades and used system sales

was $634.4 million or 95.8% of revenue in 2021, compared with $449.9 million or 94.8% of revenue in 2020. The increase
in product revenue in 2021 was primarily driven by an increase in the number of Purion systems sold.

A portion of our revenue from system sales is deferred until installation and other services related to future

deliverables are performed. The total amount of deferred revenue at December 31, 2021 and 2020 was $68.4 million and
$23.1 million, respectively. The increase was primarily due to an increase in system prepayments in the current year and the
number of systems sold.

Services

Services revenue, which includes the labor component of maintenance and service contracts and fees for service

hours provided by on-site service personnel, was $28.0 million, or 4.2% of revenue for 2021, compared with $24.7 million,
or 5.2% of revenue for 2020. Although services revenue should increase with the expansion of the installed base of
systems, it can fluctuate from period to period based on capacity utilization at customers’ manufacturing facilities, which
affects the need for equipment service.

Revenue Categories used by Management

In addition to the line item revenue categories discussed above, management also uses revenue categorizations

which break down revenue into other groupings. Management regularly disaggregates revenue in the following categories,
which it finds relevant and useful:

• Systems and Customer Satisfaction and Innovation (also known as “aftermarket”) revenue, in which

“CS&I” or “Aftermarket” revenue is

A. The portion of Product revenue relating to spare parts, product upgrades and used systems

combined with;

B. Service revenue, which is the labor component of aftermarket revenues

Aftermarket revenue reflect current fab utilization as opposed to System revenue, which reflects capital
investment decisions by our customers, which have differing economic drivers;

• Revenue by geographic regions, since economic factors impacting customer purchasing decisions may

vary by geographic region; and

• Revenue by our customers’ end markets, since they tend to be subject to different economic environments
at different periods of time, impacting a customer’s likelihood of purchasing capital equipment during
any particular period; currently, management uses three end market categories: Memory, mature process
technology and leading edge foundry and logic.

The CS&I/aftermarket revenue categories for the twelve month periods ended December 31, 2021 and 2020 are

discussed below.

CS&I/Aftermarket

Revenue from our aftermarket business was $207.8 million in 2021, compared to $180.9 million for 2020.
Aftermarket revenue generally increases with the expansion of the installed base of systems but can fluctuate from period to
period based on capacity utilization at customers’ manufacturing facilities which affects the sale of spare parts and demand
for equipment service.

Gross Profit / Gross Margin

The following table sets forth our gross profit (dollars in thousands):

Year ended
December 31,

2021

2020
(dollars in thousands)

Period-to-Period
Change

Gross Profit:
Product

284,887

197,513

87,374

44.2 %

Product gross margin

44.9 %

43.9 %

Services

Services gross margin
Total gross profit
Gross margin

Product

1,558

286,445

5.6 %
$
43.2 %

1,071

198,584

4.3 %
$
41.8 %

487

45.5 %

87,861

44.2 %

Gross margin from product revenue was 44.9% for the twelve months ended December 31, 2021, compared to

43.9% for the twelve months ended December 31, 2020. The increase in gross margin resulted from improved margins on
Purion systems.

Services

Gross margin from services revenue was 5.6% for the twelve months ended December 31, 2021, compared to

4.3% for the twelve months ended December 31, 2020. The increase in gross margin is attributable to changes in the mix of
service contracts.

Operating Expenses

The following table sets forth our operating expenses:

Research and development
Percentage of revenue

Sales and marketing

Percentage of revenue
General and administrative
Percentage of revenue

Total operating expenses

Percentage of revenue

Year ended
December 31,

2021

65,431 $
9.9 %

47,548

7.1 %

46,141

7.0 %

2020

$
(dollars in thousands)
61,833 $
13.0 %

38,746

8.2 %

39,964

8.4 %

Period-to-Period
Change

3,598

8,802

6,177

159,120

140,543

18,577

24.0 %

29.6 %

5.8 %

22.7 %

15.5 %

13.2 %

Our operating expenses consist primarily of personnel costs, including salaries, commissions, bonuses, stock-
based compensation and related benefits and taxes; project material costs related to the design and development of new
products and enhancement of existing products; and professional fees, travel and depreciation expenses. Personnel costs are
our largest expense, representing $100.3 million, or 63.1% of our total operating expenses, for the year ended December 31,
2021; and $90.1 million, or 64.1% of our total operating expenses for the year ended December 31, 2020.

Research and Development

Research and development
Percentage of revenue

Year ended
December 31,

2021

65,431 $
9.9 %

2020
(dollars in thousands)
61,833
13.0 %

Period-to-Period
Change

3,598

5.8 %

Our ability to remain competitive depends largely on continuously developing innovative technology, with new

and enhanced features and systems and introducing them at competitive prices on a timely basis. Accordingly, based on our
strategic plan, we establish annual research and development budgets to fund programs that we expect will drive
competitive advantages.

Research and development expense was $65.4 million in 2021, an increase of $3.6 million, or 5.8%, compared

with $61.8 million in 2020. The increase was primarily due to higher payroll related costs due to increased headcount and
incentive based pay as well as increased material and supplies expense and depreciation associated with capital additions to
support ongoing projects.

Sales and Marketing

Sales and marketing

Percentage of revenue

Year ended
December 31,

Period-to-Period
Change

2021

47,548 $
7.1 %

2020
$
(dollars in thousands)
38,746 $
8.2 %

8,802

22.7 %

Our sales and marketing expenses result primarily from the sale of our equipment and services through our direct

sales force.

Sales and marketing expense was $47.5 million in 2021, an increase of $8.8 million, or 22.7%, compared with

$38.7 million in 2020. The increase was primarily due to higher payroll related costs due to increased headcount and
incentive based pay as well as increased freight and project materials expense.

General and Administrative

General and administrative
Percentage of revenue

Year ended
December 31,

Period-to-Period
Change

2021

46,141 $
7.0 %

2020
$
(dollars in thousands)
39,964 $
8.4 %

6,177

15.5 %

Our general and administrative expenses result primarily from the costs associated with our executive, finance,

information technology, legal and human resource functions.

General and administrative expense was $46.1 million in 2021, an increase of $6.2 million, or 15.5% compared

with $40.0 million in 2020. The increase was primarily due to higher payroll related costs due to increased headcount and
incentive based pay as well as increases in various other expenses to support growth.

Other (Expense) Income

Other (expense) income consists primarily of interest expense relating to the lease obligation we incurred in
connection with the 2015 sale of our headquarters facility (“sale leaseback”) and other financing obligations, foreign
exchange gains and losses attributable to fluctuations of the U.S. dollar against the local currencies of certain of the
countries in which we operate, as well as interest earned on our invested cash balances.

Other expense

Percentage of revenue

Year ended
December 31,

Period-to-period
change

2021

2020
(dollars in thousands)

(6,897) $
(1.0)%

(2,155) $
(0.4)%

(4,742)

220.0 %

Other expense for the year ended December 31, 2021 was $6.9 million, which includes $5.1 million of interest
expense related to our sale leaseback obligation and $2.5 million of foreign currency translation losses, slightly offset by
other miscellaneous income of $0.3 million, a reversal of interest expense of $0.2 million relating to a tax position for
which the statute of limitations expired and interest income of $0.2 million. Other expense for the year ended December 31,
2020 was $2.2 million, which includes $5.2 million of interest expense related to our sale leaseback obligation, offset
partially by $1.4 million of foreign currency translation gains, other miscellaneous income of $0.9 million and interest
income of $0.7 million.

Income Taxes

Year ended
December 31,

Period-to-period
change

2021

$
2020
(dollars in thousands)

Income tax provision

Percentage of revenue

21,778

3.3 %

5,904 $
1.2 %

15,874

268.9 %

Income tax expense was $21.8 million for the year ended December 31, 2021 compared to $5.9 million in the
previous year. The effective tax rate for the year ended December 31, 2021 was 18.1% compared to 10.6% for year the
ended December 31, 2020. The increase in the effective tax rate is primarily due to a previously unrecognized tax benefit
of $4.3 million in the prior year. We have significant net operating loss carryforwards in the United States and certain
European jurisdictions, and as a result, we do not currently pay significant income taxes in those jurisdictions.

At December 31, 2021, we had $35.5 million of net deferred tax assets worldwide relating to net operating loss

carryforwards, tax credit carryforwards and other temporary differences, which are available to reduce income taxes in
future years. We have recorded a $7.7 million valuation allowance against certain tax credits and state net operating losses
due to the uncertainty of their realization. Realization of our net deferred tax assets is dependent on future taxable income.
We believe it is more likely than not that such assets will be realized; however, ultimate realization could be impacted by
market conditions and other variables not known or anticipated at this time.

Liquidity and Capital Resources

Our liquidity is affected by many factors. Some of these relate specifically to the operations of our business. For
example, our sales and other factors are influenced by the uncertainties of global economies, including the availability of
credit and the condition of the overall semiconductor capital equipment industry. Our established cost structure does not
vary significantly with changes in volume. We experience fluctuations in operating results and cash flows depending on
fluctuations in our revenue level.

In 2021, $150.2 million of cash was provided by operating activities. This compares to $69.7 million of cash

provided by operations in 2020. Cash and cash equivalents at December 31, 2021 was $294.9 million, compared to
$203.5 million at December 31, 2020. Approximately $32.6 million of cash was located in foreign jurisdictions as of
December 31, 2021. In addition to the cash and cash equivalent balance at December 31, 2021, we had $0.8 million in
restricted cash which relates to a $0.7 million letter of credit relating to workers’ compensation insurance and a $0.1 million
deposit relating to customs activity. Working capital at December 31, 2021 was $469.1 million. At December 31, 2021, we
had no bank debt.

Capital expenditures were $8.7 million for the year ended December 31, 2021. Capital expenditures were
$7.4 million for the year ended December 31, 2020. Total capital expenditures for 2022 are projected to be approximately

$13.0 million. Future capital expenditures beyond 2022 will depend on a number of factors, including the timing and rate of
expansion of our business and our ability to generate cash to fund them.

Cash used in financing activities for the year ended December 31, 2021 was $52.4 million, which consisted of

$50.0 million related to our stock repurchase program, $6.6 million related to net settlement of restricted stock issuances
and $0.8 million related to principal reduction on our financing lease. These amounts were partially offset by $3.7 million
in proceeds of stock option exercises and $1.2 million in proceeds from our employee stock purchase plan. Cash used in
financing activities was $2.4 million for the year ended December 31, 2020, which consisted of $7.5 million related to our
stock repurchase program, $3.9 million related to net settlement of restricted stock issuances, and $0.4 million of principal
payment on our finance lease obligation. These uses of cash were partially offset by $8.4 million in proceeds of stock
option exercises and $1.0 million in proceeds from our employee stock purchase plan.

We have outstanding letters of credit, surety bonds and deposits in the amount of $14.4 million to cover the

security deposit under the lease of our headquarters, our workers’ compensation insurance program, customs and bank
deposits and certain value added tax claims in Europe.

The following represents our commercial commitments as of December 31, 2021 (in thousands):

Other Commercial Commitments
Surety bonds
Standby letters of credit and deposits
Total

Amount of
Commitment
Expiration by Period
2023

Total
$ 7,707 $
6,647

2022
4,322 $
6,575

$ 14,354 $ 10,897 $

2024

893 $ 2,492
72
893 $ 2,564

—

The following represents our contractual obligations as of December 31, 2021 (in thousands):

Payments Due by Period

Contractual Obligations
Sale leaseback obligation
Purchase order commitments
Operating leases
Total

$ 97,999 $ 5,980 $ 12,366 $ 11,938 $

Total

2022

226,448
9,760

223,922
4,939

2023-2024 2025-2026 2027 - Beyond
67,715
66
73
67,854

19
1,236

2,441
3,512

$ 334,207 $ 234,841 $ 18,319 $ 13,193 $

We have no off-balance sheet arrangements as of December 31, 2021.

We have net operating loss and tax credit carryforwards, the tax effect of which aggregate $33.7 million at

December 31, 2021. These carryforwards, which expire principally between 2022 and 2034, are available to reduce future
income tax liabilities in the United States and certain foreign jurisdictions.

We consider the undistributed earnings of our foreign subsidiaries as of December 31, 2021, to be indefinitely

reinvested and, accordingly, no U.S. income taxes have been provided thereon. As of December 31, 2021, the amount of
cash associated with indefinitely reinvested foreign earnings was approximately $10.4 million. We have not, nor do we
anticipate the need to, repatriate funds to the United States to satisfy domestic liquidity needs arising in the ordinary course
of business, including liquidity needs associated with any domestic debt service requirements. Upon repatriation of those
earnings, in the form of dividends or otherwise, we could be subject to withholding taxes payable to the various foreign tax
jurisdictions.

Under the rules of the U.S. Securities and Exchange Commission (the “SEC”), we qualify as a “well-known
seasoned issuer,” which allows us to file shelf registration statements to register an unspecified amount of securities that are
effective upon filing. On May 29, 2020, we filed such a shelf registration statement with the SEC for the issuance of an
unspecified amount of common stock, preferred stock, various series of debt securities and/or warrants to purchase any of
such securities, either individually or in units, from time to time at prices and on terms to be determined at the time of any
such offering. This registration statement was effective upon filing and will remain in effect for up to three years from

filing, prior to which time we may file another shelf registration statement to maintain the availability of this financing
option.

On July 31, 2020, we entered into a Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”)
with Silicon Valley Bank. The Credit Agreement provides for a revolving credit facility in an aggregate principal amount
not to exceed $40.0 million. Our obligations under the Credit Agreement are secured by a security interest, senior to any
current and future debts and to any security interest, in all of our rights, title, and interest in, to and under substantially all of
our assets, subject to limited exceptions, including permitted liens. The revolving credit facility terminates on July 31,
2023. As of December 31, 2021, we were in compliance with all covenant requirements of the Credit Agreement. As of
such date, no borrowings had been made under the Credit Agreement, although a letter of credit for $5.9 million reduces the
funds available for borrowing under the credit line. We have no immediate plans to borrow under the Credit Agreement, but
we will use the facility for letters of credit, for ongoing working capital needs and to fund general corporate purposes, as
desired. We entered into a First Amendment to the Credit Agreement with Silicon Valley Bank in March 2021 to (i) align
the covenants with our 2021 stock repurchase program, and (ii) establish terms to transition from a Eurodollar based
interest rate option to an interest rate benchmark using a secured overnight financing rate (known as “SOFR”) published by
the Federal Reserve Bank of New York.

We believe that based on our current market, revenue, expense and cash flow forecasts, our existing cash, cash

equivalents and borrowing capacity will be sufficient to satisfy our anticipated cash requirements for the short and
long-term.

Related-Party Transactions

There are no significant related-party transactions that require disclosure in the consolidated financial statements

for the year ended December 31, 2021, or in this Annual Report on Form 10-K.

Recent Accounting Pronouncements

A discussion of recent accounting pronouncements, the impact of some of which may be material, is included in
Note 2 to the consolidated financial statements for the year ended December 31, 2021 included in this Annual Report on
Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Interest Rate Sensitivity

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio, which
consists entirely of cash equivalents at December 31, 2021. The primary objective of our investment activities is to preserve
principal. This is accomplished by investing in marketable investment grade securities. We do not use derivative financial
instruments in managing our investment portfolio. Due to the nature of our investments, we do not expect our operating
results or cash flows to be affected to any significant degree by any change in market interest rates.

Foreign Currency Exchange Risk

Substantially all of our sales are billed in U.S. dollars, thereby reducing the impact of fluctuations in foreign

exchange rates on our results. Operating margins of certain foreign operations can fluctuate with changes in foreign
exchange rates to the extent revenue is billed in U.S. dollars and operating expenses are incurred in the local currency.
During the years ended December 31, 2021 and 2020, approximately 21.6% and 26.0% of our revenue, respectively, were
derived in local currencies from foreign operations with this inherent risk. In addition, at both December 31, 2021 and
2020, our operations outside of the United States accounted for approximately 12.6% and 13.7% of our total assets,
respectively, the majority of which was denominated in currencies other than the U.S. dollar. We currently do not use
derivative financial instruments in managing our foreign currency exchange risk.

Item 8. Financial Statements and Supplementary Data.

Response to this Item is submitted as a separate section of this report immediately following Item 15.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our principal executive officer and principal financial officer, has

evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this annual report (the
“Evaluation Date”). Based on this evaluation, our principal executive officer and principal financial officer concluded that,
as of the Evaluation Date, these disclosure controls and procedures are effective.

Internal Control over Financial Reporting

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as

such term is defined in Rule 13a-15(f) under the Exchange Act. Because of its inherent limitations, internal control over
financial reporting may not prevent or detect all misstatements. A control system, no matter how well designed and
operated, can provide only reasonable assurance with respect to financial statement preparation and presentation.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021.

In making this assessment, management used the criteria set forth in the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) Internal Control—2013 Integrated Framework.

Based on this assessment, management has concluded that, as of December 31, 2021, our internal control over

financial reporting is effective based on those criteria.

The independent registered public accounting firm of Ernst & Young LLP, as auditors of our consolidated

financial statements, has issued an attestation report on its assessment of our internal control over financial reporting.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Axcelis Technologies, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Axcelis Technologies, Inc.’s internal control over financial reporting as of December 31, 2021,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Axcelis Technologies,
Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31,
2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the 2021 consolidated financial statements of the Company and our report dated February 25, 2022
expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on
the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Boston, Massachusetts
February 25, 2022

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the

Exchange Act) identified in connection with the evaluation of our internal control that occurred during our fourth quarter
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

None.

Item 9C. Disclosure regarding Foreign Jurisdictions that Prevent Inspections.

None.

Item 10. Directors, Executive Officers and Corporate Governance.

PART III

A portion of the information required by Item 10 of Form 10-K is incorporated by reference from the information
responsive thereto contained in the sections in Axcelis Proxy Statement for the Annual Meeting of Stockholders to be held
May 10, 2022 (the “Proxy Statement”) captioned:

•

“Proposal 1: Election of Directors,”

“Board of Directors,”

“Board Committees,” and

“Corporate Governance.”

The remainder of such information is set forth under the heading “Information about Our Executive Officers” at

the end of Item 1 in Part I of this report and is incorporated herein by reference.

Item 11. Executive Compensation.

The information required by Item 11 of Form 10-K is incorporated by reference from the information responsive

thereto contained in the sections in the Proxy Statement captioned:

•

“Executive Compensation,” and

“Board Committees—Compensation Committee Interlocks and Insider Participation.”

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The information required by Item 12 of Form 10-K is incorporated by reference from the information responsive

thereto contained in the sections in the Proxy Statement captioned:

•

“Share Ownership of 5% Stockholders,” and

“Share Ownership of Directors and Executive Officers.”

Item 13. Certain Relationships and Related Transactions and Director Independence.

The information required by Item 13 of Form 10-K is incorporated by reference from the information responsive

thereto contained in the sections in the Proxy Statement captioned:

•

“Executive Compensation,”

“Board of Directors,” and

“Corporate Governance—Certain Relationships and Related Transactions.”

Item 14. Principal Accountant Fees and Services

The information required by Item 14 of Form 10-K is incorporated by reference from the information responsive

thereto contained in the section captioned “Proposal 2: Ratification of the Appointment of our Independent Registered
Public Accounting Firm” in the Proxy Statement.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a)

The following documents are filed as part of this Report:

Financial Statements:

Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)
Consolidated Statements of Operations — For the years ended December 31, 2021, 2020 and

2019

Consolidated Statements of Comprehensive Income — For the years ended December 31,

2021, 2020 and 2019

Consolidated Balance Sheets — December 31, 2021 and 2020
Consolidated Statements of Stockholders’ Equity — For the years ended December 31, 2021,

2020 and 2019

Consolidated Statements of Cash Flows — For the years ended December 31, 2021, 2020 and

2019

Notes to Consolidated Financial Statements

Financial Statement Schedules:

37
38

40
41

Schedule II—Valuation and Qualifying Accounts for the years ended December 31, 2021, 2020 and
2019.

Exhibits

The exhibits filed as part of this Form 10-K are listed on the Exhibit Index immediately preceding the
signature page, which Exhibit Index is incorporated herein by reference.

All other schedules for which provision is made in the applicable regulation of the Securities and
Exchange Commission are not required under the related instructions or are inapplicable, and therefore
have been omitted.

Item 16. Form 10-K Summary.

Not applicable.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Axcelis Technologies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Axcelis Technologies, Inc. (the Company) as of
December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, stockholders’ equity
and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement
schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion,
the consolidated financial statements present fairly, in all material respects, the financial position of the Company at
December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period
ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in
Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework), and our report dated February 25, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures
included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex
judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial
statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions
on the critical audit matters or on the accounts or disclosures to which they relate.

Systems Revenue recognition

Description of the
Matter

As discussed in Note 2 and Note 3 to the consolidated financial statements, the Company generates
revenue from the sale of ion implantation and other processing equipment used in the manufacture of
semiconductor chips (“systems revenue”). The Company’s revenue contracts for systems have multiple
performance obligations, including the systems themselves and obligations that are not delivered
simultaneously with the systems. Systems revenue accounted for $454.6 million of the Company’s total
revenue of $662.4 million in 2021.

Auditing the Company’s determination of the distinct performance obligations related to its systems
revenue contracts involved extensive audit effort to identify all of the promised products and services
in an arrangement and assess distinct performance obligations. These determinations have a significant

effect on the pattern of revenue recognition.

How We
Addressed the
Matter in Our
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls
over the Company’s systems revenue recognition process. For example, we tested management’s
controls over the identification of distinct performance obligations in systems revenue contracts.

To test systems revenue recognition, our procedures included, among others, independently identifying
promises and determining the interdependence of the performance obligations. For example, we
selected and read a sample of arrangements to evaluate the completeness of the promised products and
services. We also confirmed directly with certain of the Company’s customers the terms of the selected
system revenue arrangement.

Estimate of Excess Inventory

Description of the
Matter

The Company’s inventories totaled $195.0 million, net, as of December 31, 2021. As described in Note
2 and Note 6 to the consolidated financial statements, the Company records a provision for estimated
excess inventory. Management determines the provision using its assumptions of future materials usage,
based on estimates of demand and market conditions.

Auditing the Company’s provision for excess inventory is complex due to the highly judgmental nature
of the factors used to estimate demand and market conditions. Specifically, the Company’s estimated
materials usage may be significantly affected by management’s assumptions of forecasted system sales
and the size and utilization of the installed base of systems. Management’s identification and
measurement of these factors are forward looking and could be affected by future economic and market
conditions that could have a significant effect on the excess inventory reserve.

How We
Addressed the
Matter in Our
Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal
controls, including management review controls, over the Company’s excess inventory reserve
estimation process. This included management’s assessment of the assumptions and data underlying
the excess inventory provision. For example, we tested controls over management’s review of its
systems sales forecasts, as well as management’s review of the assumptions relating to the market size
and utilization of installed systems. We also tested management’s controls over the completeness and
accuracy of the data used in the estimation model.

Our substantive audit procedures included, among others, evaluating the significant assumptions stated
above and testing the accuracy and completeness of the underlying data used by management to
compute the value of excess inventory. For example, we compared the quantities of on-hand inventories
to historical and forecasted materials usage and evaluated adjustments to forecasts for specific product
considerations, such as technological changes or alternative uses. We also assessed the historical
accuracy of management’s estimates and performed sensitivity analyses over the significant
assumptions to evaluate the changes in the excess inventory estimates that would result from changes
in the underlying assumptions.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 1999.

Boston, Massachusetts
February 25, 2022

Axcelis Technologies, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)

Revenue:

Product
Services

Total revenue

Cost of revenue:

Product
Services

Total cost of revenue

Gross profit
Operating expenses:

Research and development
Sales and marketing
General and administrative
Total operating expenses

Income from operations
Other (expense) income:

Interest income
Interest expense
Other, net

Total other expense
Income before income taxes
Income tax provision
Net income
Net income per share:

Basic
Diluted

Shares used in computing net income per share:
Basic weighted average common shares
Diluted weighted average common shares

$
$

2021

634,445
27,983
662,428

349,558
26,425
375,983
286,445

65,431
47,548
46,141
159,120
127,325

209
(4,835)
(2,271)
(6,897)
120,428
21,778
98,650

2.94
2.88

33,555
34,268

Twelve months ended
December 31,
2020

$
$

449,903
24,657
474,560

252,390
23,586
275,976
198,584

61,833
38,746
39,964
140,543
58,041

738
(5,211)
2,318
(2,155)
55,886
5,904
49,982

1.50
1.46

33,257
34,128

2019

319,505
23,453
342,958

175,732
23,074
198,806
144,152

53,931
34,290
31,726
119,947
24,205

2,955
(5,155)
(1,083)
(3,283)
20,922
3,888
17,034

0.52
0.50

32,559
33,828

See accompanying Notes to these Consolidated Financial Statements

Axcelis Technologies, Inc.
Consolidated Statements of Comprehensive Income
(In thousands)

Net income
Other comprehensive (loss) income:

Twelve months ended
December 31,
2020
$ 98,650 $ 49,982 $ 17,034

2021

2019

Foreign currency translation adjustments
Amortization of actuarial gain (loss) and other adjustments from pension plan, net
of tax
Total other comprehensive (loss) income

Comprehensive income

(1,881)

3,427

(444)

211
(1,670)

(262)
(706)
$ 96,980 $ 53,675 $ 16,328

266
3,693

See accompanying Notes to these Consolidated Financial Statements

Axcelis Technologies, Inc.
Consolidated Balance Sheets
(In thousands, except per share amounts)

ASSETS

Current assets:

Cash and cash equivalents
Accounts receivable, net
Inventories, net
Prepaid expenses and other current assets

Total current assets

Property, plant and equipment, net
Operating lease assets
Finance lease assets, net
Long-term restricted cash
Deferred income taxes
Other assets

Total assets

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable
Accrued compensation
Warranty
Income taxes
Deferred revenue
Current portion of finance lease obligation
Other current liabilities
Total current liabilities

Long-term finance lease obligation
Long-term deferred revenue
Other long-term liabilities
Total liabilities

Commitments and contingencies (Note 16)
Stockholders’ equity:

December 31, December 31,

2021

2020

294,923 $
104,410
194,984
24,929
619,246
34,972
9,242
19,238
757
35,454
34,331
753,240 $

203,479
86,865
161,076
19,371
470,791
29,840
4,542
20,544
753
57,851
40,303
624,624

38,025 $
30,732
6,424
887
60,454
979
12,639
150,140
46,415
7,982
9,744
214,281

24,013
24,562
4,280
654
21,221
756
8,945
84,431
47,393
1,837
9,361
143,022

Common stock, $0.001 par value, 75,000 shares authorized; 33,240 shares issued and
outstanding at December 31, 2021; 33,633 shares issued and outstanding at December
31, 2020
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income

Total stockholders’ equity
Total liabilities and stockholders’ equity

33
559,883
(22,722)
1,765
538,959
753,240 $

34
570,102
(91,969)
3,435
481,602
624,624

See accompanying Notes to these Consolidated Financial Statements

Axcelis Technologies, Inc.
Consolidated Statements of Stockholders’ Equity
(In thousands)

Accumulated

Additional
Paid-in
Common Stock
Shares Amount Capital

Other
Accumulated Comprehensive Stockholders’
Income (Loss)

Equity

Deficit

Total

Balance at December 31, 2018
Net income
Foreign currency translation adjustments
Change in pension obligation, net of tax
Exercise of stock options
Issuance of shares under Employee Stock Purchase
Plan
Issuance of restricted common shares
Stock-based compensation expense
Repurchase of common stock
Balance at December 31, 2019
Net income
Foreign currency translation adjustments
Change in pension obligation, net of tax
Exercise of stock options
Issuance of shares under Employee Stock Purchase
Plan
Issuance of restricted common shares
Stock-based compensation expense
Repurchase of common stock
Balance at December 31, 2020
Net income
Foreign currency translation adjustments
Change in pension obligation, net of tax
Exercise of stock options
Issuance of shares under Employee Stock Purchase
Plan
Issuance of restricted common shares
Stock-based compensation expense
Repurchase of common stock
Balance at December 31, 2021

32,558 $ 33 $ 565,116 $ (157,260) $

—
—
—
775

54
250
—
(1,052)
32,585
—
—
—
1,001

41
364
—
(358)
33,633
—
—
—
396

26
326
—
(1,141)

—
—
—
1

—
—
—
(1)
33
—
—
—
1

—
—
—
—
34
—
—
—
—

—
—
—
(1)

—
—
—
5,104

17,034
—
—
—

1,016
(1,633)
8,018
(17,743)
559,878
—
—
—
8,418

1,011
(3,915)
10,485
(5,775)
570,102
—
—
—
3,687

1,179
(6,564)
12,067
(20,588)

—
—
—
—
(140,226)
49,982
—
—
—

—
—
—
(1,725)
(91,969)
98,650
—
—
—

—
—
—
(29,403)

33,240 $ 33 $ 559,883 $ (22,722) $

448 $ 408,337
17,034
(444)
(262)
5,105

—
(444)
(262)
—

—
—
—
—
(258)
—
3,427
266
—

—
—
—
—
3,435
—
(1,881)
211
—

1,016
(1,633)
8,018
(17,744)
419,427
49,982
3,427
266
8,419

1,011
(3,915)
10,485
(7,500)
481,602
98,650
(1,881)
211
3,687

—
—
—
—

1,179
(6,564)
12,067
(49,992)
1,765 $ 538,959

See accompanying Notes to these Consolidated Financial Statements

Axcelis Technologies, Inc.
Consolidated Statements of Cash Flows
(In thousands)

Cash flows from operating activities

Net income
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:

Depreciation and amortization
Gain on sale of equipment
Deferred income taxes
Stock-based compensation expense
Provision for doubtful accounts
Provision for excess and obsolete inventory
Changes in operating assets and liabilities:

Accounts receivable
Inventories
Prepaid expenses and other current assets
Accounts payable and other current liabilities
Deferred revenue
Income taxes
Other assets and liabilities

Net cash provided by (used in) operating activities

Twelve months ended
December 31,
2020

2021

2019

$ 98,650 $ 49,982 $ 17,034

10,818
—
20,257
12,067
—
3,755

(18,146)
(39,023)
(3,955)
22,046
45,385
253
(1,917)
150,190

9,939
(168)
4,685
10,485
—
3,696

(1,393)
(17,652)
(7,322)
18,062
(6,215)
332
5,272
69,703

7,880
—
3,304
8,173
818
2,794

(6,002)
(17,953)
(104)
(19,150)
6,672
(162)
(16,898)
(13,594)

Cash flows from investing activities
Proceeds from sale of equipment
Expenditures for property, plant and equipment and capitalized software

Net cash used in investing activities

—
(8,718)
(8,718)

168
(7,434)
(7,266)

—
(11,969)
(11,969)

Cash flows from financing activities

Net settlement on restricted stock grants
Repurchase of common stock
Proceeds from Employee Stock Purchase Plan
Principal payments on finance lease obligation
Proceeds from exercise of stock options
Net cash used in financing activities

(6,564)
(49,992)
1,179
(763)
3,687
(52,453)

(3,915)
(7,501)
1,009
(399)
8,419
(2,387)

(1,632)
(17,744)
863
—
5,105
(13,408)

Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash, cash equivalents and restricted cash

2,429
91,448

(2,352)
57,698

603
(38,368)

Cash, cash equivalents and restricted cash at beginning of period
Cash, cash equivalents and restricted cash at end of period

204,232
184,902
146,534
$ 295,680 $ 204,232 $ 146,534

Supplemental disclosure of cash flow information
Cash paid for:

Income taxes
Interest

$
$

1,500 $
5,086 $

876 $
5,156 $

1,028
5,207

See accompanying Notes to these Consolidated Financial Statements

Axcelis Technologies, Inc.
Notes to Consolidated Financial Statements

Note 1. Nature of Business

Axcelis Technologies, Inc. (“Axcelis” or the “Company”) was incorporated in Delaware in 1995, and is a
worldwide producer of ion implantation and other processing equipment used in the fabrication of semiconductor chips in
the United States, Europe and Asia. In addition, we provide extensive aftermarket service and support, including spare
parts, equipment upgrades, used equipment and maintenance services to the semiconductor industry.

Note 2. Summary of Significant Accounting Policies

The accompanying consolidated financial statements reflect the application of certain significant accounting

policies as described in this note and elsewhere in the footnotes.

(a) Basis of Presentation

The accompanying consolidated financial statements include the consolidated accounts of the Company and its

wholly-owned, controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Events occurring subsequent to December 31, 2021 have been evaluated for potential recognition or disclosure in

the consolidated financial statements.

(b) Use of Estimates

The preparation of these consolidated financial statements in conformity with accounting principles generally

accepted in the United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements
and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, we evaluate our
estimates and judgments, including those related to revenue recognition, the realizable value of accounts receivable and
inventories, valuing stock-based compensation instruments and reserves relating to tax assets and liabilities. Actual
amounts could differ from these estimates. Changes in estimates are recorded in the period in which they become known.

The functional currency for substantially all operations outside the United States is the local currency. Financial

statements for these operations are translated into United States dollars at year-end rates as to assets and liabilities and
average exchange rates during the year as to revenue and expenses. The resulting translation adjustments are recorded in
stockholders’ equity as an element of accumulated other comprehensive income (loss). Foreign currency transaction gains
and losses are included in other income (expense) in the Consolidated Statements of Operations.

For the year ended December 31, 2021 we had $2.5 million in foreign exchange loss. For the year ended

December 31, 2020 we had $1.4 million in foreign exchange gain. For the year ended December 31, 2019 we had $0.6
million in foreign exchange loss.

(d) Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of ninety

days or less. Cash equivalents consist primarily of money market funds, U.S. Government and Agency Securities and
deposit accounts. Cash equivalents are carried on the balance sheet at fair market value.

(e) Inventories

Inventories are carried at the lower of cost or net realizable value, determined using the first-in, first-out (“FIFO”)
method. We periodically review our inventories and make provisions as necessary for estimated obsolescence or damaged

goods to ensure values approximate lower of cost or net realizable value. The amount of such markdowns is equal to the
difference between cost of inventory and the estimated market value based upon assumptions about future demands, selling
prices, and market conditions.

We record a provision for estimated excess inventory. The provision is determined using management’s

assumptions of materials usage, based on estimates of demand, market conditions, and the size and utilization of our
installed base. If actual market conditions become less favorable than those projected by management, additional inventory
write-downs may be required.

(f) Property, Plant and Equipment and Leased Assets

Property, plant and equipment are stated at cost, less accumulated depreciation and amortization.

On January 30, 2015, we sold our corporate headquarters facility. As part of this sale, we also entered into a 22-
year lease agreement. We accounted for the sale leaseback transaction as a financing arrangement for financial reporting
purposes. We retained the historical costs of the property and the related accumulated depreciation on our financial books
within property, plant and equipment and will continue to depreciate the property for financial reporting purposes over the
lesser of its remaining useful life or its initial lease term of 22 years.

Depreciation and amortization are recorded using the straight-line method over the estimated useful lives of the

related assets as follows:

Asset Classification

Estimated Useful Life

Land, buildings and equipment (under lease)
Machinery and equipment

Lesser of the lease term or
estimated useful life of the asset

3 to 10 years

Repairs and maintenance costs are expensed as incurred. Expenditures greater than $2.5 thousand for renewals and

betterments are capitalized and depreciated over their useful lives.

(g) Impairment of Long-Lived Assets

We record impairment losses on long-lived assets when events and circumstances indicate that these assets might

not be recoverable. Recoverability is assessed by a comparison of the assets’ carrying amount to their expected future
undiscounted net cash flows. If such assets are considered to be impaired, the impairment is measured based on the amount
by which the carrying value exceeds its fair value.

We did not have any indicators of impairment during the period ending December 31, 2021. We did not record an

impairment charge in the years ended December 31, 2021, 2020, or 2019.

Actual performance could be materially different from our current forecasts, which could impact estimates of

undiscounted cash flows and may result in the impairment of the carrying amount of the long-lived assets in the future. This
could be caused by strategic decisions made in response to economic and competitive conditions, the impact of the
economic environment on our customer base, or a material adverse change in our relationships with significant customers.

(h) Concentration of Risk and Off-Balance Sheet Risk

Financial instruments that potentially subject us to concentrations of credit risk are principally cash equivalents
and accounts receivable. Our cash equivalents are principally maintained in investment grade money-market funds, U.S.
Government and Agency Securities and deposit accounts.

We have no significant off-balance-sheet risk such as currency exchange contracts, option contracts or other

hedging arrangements.

Our exposure to market risk for changes in interest rates relates primarily to cash equivalents. The primary
objective of our investment activities is to preserve principal without significantly increasing risk. This is accomplished by
investing in marketable investment grade securities. We do not use derivative financial instruments to manage our
investment portfolio and do not expect operating results or cash flows to be affected to any significant degree by any
change in market interest rates.

We perform ongoing credit evaluations of our customers’ financial condition and generally require no collateral to

secure accounts receivable. For selected overseas sales, we require customers to obtain letters of credit before product is
shipped. We maintain an allowance for doubtful accounts based on our assessment of the collectability of accounts
receivable. We review the allowance for doubtful accounts quarterly. We do not have any off-balance sheet credit exposure
related to our customers.

Our customers consist of semiconductor chip manufacturers located throughout the world and net sales to our ten

largest customers accounted for 69.5%, 74.0% and 74.1% of revenue in 2021, 2020 and 2019, respectively.

For the year ended December 31, 2021 we had two customers representing 17.8% and 15.4% of total revenue,

respectively. For the year ended December 31, 2020, we had two customers representing 17.9% and 16.4% of total revenue,
respectively. For the year ended December 31, 2019, we had three customers representing 18.2%, 14.2% and 12.0% of total
revenue, respectively.

As of December 31, 2021, we had two customers account for 29.1% and 13.6% of consolidated accounts

receivable, respectively. As of December 31, 2020, we had two customers account for 23.8% and 11.9% of consolidated
accounts receivable, respectively.

Some of the components and sub-assemblies included in our products are obtained either from a sole source or a

limited group of suppliers. Disruption to our supply source, resulting either from economic conditions or other factors,
could affect our ability to deliver products to our customers.

(i) Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from

Contracts with Customers or (“ASC 606”). Under ASC 606, revenue is recognized when a customer obtains control of
promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or
services. We measure revenue based on the consideration specified in the customer arrangement, and revenue is recognized
when the performance obligations in the customer arrangement are satisfied. A performance obligation is a promise in a
contract to transfer a distinct product or service to the customer. The transaction price of a contract is allocated to each
distinct performance obligation based upon the relative standalone selling price for each performance obligation and
recognized as revenue when, or as, the customer receives the benefit of the performance obligation. To account for and
measure revenue, we apply the following five steps:

Identify the contract with the customer

A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each
party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract has
commercial substance, and (iii) we determine that collection of substantially all consideration for goods and services that
are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

Identify the performance obligations in the contract

Performance obligations promised in a contract are identified based on the goods and services that will be

transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the good or
service either on its own or together with other available resources, and are distinct in the context of the contract, whereby
the transfer of the good or service is separately identifiable from other promises in the contract. To the extent a contract
includes multiple promised goods and services, we must apply judgment to determine whether promised goods and services

are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and
services are accounted for as a combined performance obligation.

Systems sales consist of multiple performance obligations, including the system itself and obligations that are not

delivered simultaneously with the system. These undelivered obligations might include a combination of installation
services, extended warranty and support and spare parts, all of which are generally covered by a single sales price.

The Aftermarket business includes both products and services type arrangements. Performance obligations in these

contracts consist of used tools, spare parts, equipment upgrades, maintenance services and customer training.

Customers who purchase new systems are provided an assurance-type warranty for one year after acceptance of

the tool. For aftermarket transactions, we provide customers an assurance-type warranty for 90 days. Customers can choose
to purchase extended warranty terms with enhanced support similar to a service-type warranty ranging from one to three
years. In accordance with ASC 606, assurance-type warranties are not considered a performance obligation, whereas
service-type warranties are.

3) Determine the transaction price

The transaction price is determined based on the consideration to which we will be entitled in exchange for

transferring goods and services to the customer. To the extent the transaction price includes variable consideration, we
estimate the amount of variable consideration that should be included in the transaction price utilizing either the expected
value method or the most likely amount method depending on the nature of the variable consideration. Variable
consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of
cumulative revenue under the contract will not occur. Any estimates, including the effect of the constraint on variable
consideration, are evaluated at each reporting period for any changes. In applying this guidance, Companies must also
consider whether any significant financing components exist.

The transaction price for all transactions is based on the price reflected in the individual customer’s purchase
order. Variable consideration has not been identified as a significant component of the transaction price for any of our
transactions.

For those transactions where all performance obligations will be satisfied within one year or less, we apply the

practical expedient outlined in ASC 606-10-32-18. This practical expedient allows us not to adjust promised consideration
for the effects of a significant financing component if we expect at contract inception that the period between when we
transfer the promised good or service to a customer and when the customer pays for that good or service will be one year or
less. For those transactions that are expected to be completed after one year, we have assessed that there are no significant
financing components because any difference between the promised consideration and the cash selling price of the good or
service is for reasons other than the provision of financing.

4) Allocate the transaction price to performance obligations in the contract

If the contract contains a single performance obligation, the entire transaction price is allocated to the single

performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction
price to each performance obligation on a relative standalone selling price basis unless the transaction price is variable and
meets the criteria to be allocated entirely to a performance obligation or to a distinct service that forms part of a single
performance obligation.

Where required, we determine standalone selling price (“SSP”) for each obligation based on consideration of both
market and Company specific factors, including the selling price and profit margin for similar products, the cost to produce,
and the anticipated margin.

For those contracts that contain multiple performance obligations (primarily systems sales, as well as some

aftermarket contracts requiring both time and material inputs), we must determine the SSP. We use a cost plus margin
approach in determining the SSP for any materials related performance obligations (such as upgrades, spare parts, systems).
To determine the SSP for labor related performance obligations (such as the labor component of installation), we use

directly observable inputs based on the standalone sale prices for these services.

5) Recognize revenue when or as we have satisfied a performance obligation

We satisfy performance obligations either over time or at a point in time. Revenue is recognized over time if either

1) the customer simultaneously receives and consumes the benefits provided by the entity’s performance, 2) the entity’s
performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or 3) the entity’s
performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment
for performance completed to date. If the entity does not satisfy a performance obligation over time, the related
performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer.
Examples of control are using the asset to produce goods or services, enhance the value of other assets or settle liabilities,
and holding or selling the asset. For over time recognition, ASC 606 requires us to select a single revenue recognition
method for the performance obligation that faithfully depicts our performance in transferring control of the goods and
services. The guidance allows entities to choose between two methods to measure progress toward complete satisfaction of
a performance obligation:

Output methods - recognize revenue on the basis of direct measurements of the value to the customer of the goods
or services transferred to date relative to the remaining goods or services promised under the contract (e.g. surveys
of performance completed to date, appraisals of results achieved, milestones reached, time elapsed, and units
produced or units delivered); and

Input methods - recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance
obligation (e.g., resources consumed, labor hours expended, costs incurred, or time elapsed) relative to the total
expected inputs to the satisfaction of that performance obligation.

We have the right to consideration from a customer in an amount that corresponds directly with the value to the

customer of the entity’s performance completed to date (i.e., certain aftermarket contracts), as such we have elected a
practical expedient to recognize revenue in the amount to which the entity has a right to invoice for such services.

Product related revenues (whether for systems or aftermarket business) are recognized at a point in time, when

they are shipped or delivered, depending on shipping terms.

For installation services, revenue is recognized at a point in time, once the installation of the tool is complete. The

nature of the installation services is such that the customer does not simultaneously receive and consume the benefits
provided by the entity’s performance, nor does performance of installation services create or enhance an asset that the
customer controls. Installation services do not create an asset with an alternative use to the entity, and the entity does not
have an enforceable right to payment for performance completed to date.

Contract liabilities are reflected as deferred revenue on the consolidated balance sheet. Contract liabilities relate to

payments invoiced or received in advance of completion of performance obligations under a contract. Contract liabilities
are recognized as revenue upon the fulfillment of performance obligations.

Service-type warranties for any product are recognized over time, as these represent a stand ready obligation to
service the product during the warranty period. Progress in the satisfaction of these performance obligations is measured
using an input method of time elapsed.

Maintenance and service contracts are recognized over time. Progress in the satisfaction of these performance
obligations is measured using an input method of either time elapsed in the case of fixed period contracts, or labor hours
expended, in the case of project-based contracts.

(j) Recognizing Assets related to Recoverable Customer Contract Costs

We recognize an asset related to incremental costs incurred by us to obtain a contract with a customer if we expect
to recover those costs. We will recognize an asset from costs incurred to fulfill a contract only if such costs relate directly to
a contract with an entity that we can specifically identify, the costs incurred will generate or enhance resources that will be

used in satisfying performance obligations in the future, and the costs are expected to be recovered. Any assets recognized
related to costs to obtain or fulfill a contract are amortized on a systematic basis that is consistent with the transfer to the
customer of the goods or services to which the asset relates.

In substantially all of our business transactions, we incur incremental costs to obtain contracts with customers, in

the form of sales commissions. We maintain a commission program which awards our employees for System sales,
aftermarket activity and other individual goals. Under ASC 606, an asset is amortized on a systematic basis that is
consistent with the transfer to the customer of the goods or services to which the asset relates. However, ASC 606 provides
a practical expedient to allow for the recognition of commission expense when incurred if the amortization period of the
asset that the entity otherwise would have recognized is one year or less. Based on the nature of our commission
agreements, all commissions are expensed as incurred based upon the expectation that the amortization period would be
one year or less.

(k) Shipping and Handling Costs

Shipping and handling costs are included in cost of revenue.

(l) Stock-Based Compensation

We generally recognize compensation expense for all stock-based payments to employees and directors, including

grants of stock options and restricted stock units, based on the grant-date fair value of those stock-based payments. For
stock option awards, we use the Black-Scholes option pricing model, adjusted for expected forfeitures. Other valuation
models may be utilized in the limited circumstances where awards with market-based vesting considerations, such as the
price of our common stock, or performance-based awards, are granted. Stock-based compensation expense is recognized
ratably over the requisite service period. For each stock option or restricted stock unit grant with vesting based on a
combination of time, market or performance conditions, where vesting will occur if either condition is met, the related
compensation costs are recognized over the shorter of the explicit service period or the derived service period.

See Note 13 for additional information relating to stock-based compensation.

(m) Income Taxes

Our consolidated financial statements contain certain deferred tax assets which have arisen primarily as a result of

operating losses, as well as other temporary differences between financial and tax basis accounting. We establish a
valuation allowance if the likelihood of realization of the deferred tax assets is reduced based on an evaluation of objective
verifiable evidence. Significant management judgment is required in determining our provision for income taxes, our
deferred tax assets and liabilities and any valuation allowance recorded against those net deferred tax assets. We evaluate
the weight of all available evidence to determine whether it is more likely than not that some portion or all of the net
deferred income tax assets will not be realized.

Income taxes include the largest amount of tax benefit for an uncertain tax position that is more likely than not to
be sustained upon audit based on the technical merits of the tax position. Settlements with tax authorities, the expiration of
statutes of limitations for particular tax positions, or obtaining new information on particular tax positions may cause a
change to the effective tax rate. We recognize accrued interest related to unrecognized tax benefits as interest expense and
penalties within operating expense in the consolidated statements of operations.

See Note 18 for additional information relating to income taxes.

(n) Computation of Net Income per Share

Basic earnings per share is computed by dividing income available to common stockholders (the numerator) by the

weighted-average number of common shares outstanding (the denominator) for the period. The computation of diluted
earnings per share is similar to basic earnings per share, except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potentially dilutive common shares had been issued,
calculated using the treasury stock method.

The components of net income per share are as follows:

Net income available to common stockholders
Weighted average common shares outstanding used in computing basic income per share
Incremental options and RSUs
Weighted average common shares used in computing diluted net income per share
Net income per share

2021

2019

Year ended December 31,
2020
(in thousands, except per share data)
$ 98,650 $ 49,982 $ 17,034
32,559
1,269
33,828

33,257
871
34,128

33,555
713
34,268

Basic
Diluted

$
$

2.94 $
2.88 $

1.50 $
1.46 $

0.52
0.50

Diluted weighted average common shares outstanding does not include restricted stock units outstanding to

purchase 2,554, 1,951 and 232,844 common equivalent shares for the periods ended December 31, 2021, 2020 and 2019,
respectively, as their effect would have been anti-dilutive.

(o) Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive income, net of tax, by component,

for the year ended December 31, 2021:

Balance at December 31, 2020

Other comprehensive loss and pension reclassification

Balance at December 31, 2021

(p) Recent Accounting Guidance

Foreign Defined benefit

currency

pension plan

Total

(in thousands)

$ 3,945 $
(1,881)
$ 2,064 $

(510) $
211
(299) $

3,435
(1,670)
1,765

Accounting Standards Update 2019-12 Income Taxes (Topic 740)

We adopted Financial Accounting Standards Board ASU No. 2019-12 “Income Taxes (Topic 740)” (“ASU 2019-
12”) as of January 1, 2021 on a prospective basis. The amendments in this ASU simplify the accounting for income taxes
by removing certain exceptions from the previous standard as well as requiring entities to include franchise tax partially
based on income as an income based tax and to account for an enacted change in tax laws or rates in the annual effective
tax rate computation in the interim period that includes the enactment date. The guidance in ASU 2019-12 is required for
annual reporting periods beginning after December 15, 2020. Adoption of ASU 2019-12 had no material effect on our
consolidated financial statements and disclosures.

Note 3. Revenue

We design, manufacture and service ion implantation and other processing equipment used in the fabrication of
semiconductor chips and sell our products to leading semiconductor chip manufacturers worldwide. We offer a complete

line of high energy, high current and medium current implanters for all application requirements. In addition, we provide
extensive aftermarket lifecycle products and services, including used tools, spare parts, equipment upgrades, maintenance
service and customer training. Our revenue recognition policies are set forth in Section (i) of Note 2, Summary of
Significant Accounting Policies.

(a) Alternative Operational Revenue Categories used by Management

To reflect the organization of our business operations, management reviews revenue in two categories: revenue

from sales of new systems and revenue arising from the sale of used systems, parts and labor to customers who own
systems, which we refer to as “CS&I” or “aftermarket.”

Below are the revenues by categories used by management for the periods covered in this report:

Systems
Aftermarket
Total Revenue

2021

Year ended
December 31,

2020

(in thousands)

2019

454,598
207,830
662,428

293,624
180,936
474,560

202,571
140,387
342,958

(b) Economic Factors Affecting our Revenue: Geographic Breakdown of Revenue

Global economic conditions have a direct impact on our revenue. We are substantially dependent on sales of our

products and services to customers outside of the United States. Adverse economic conditions, political instability, potential
adverse tax consequences, regulatory changes and volatility in exchange rates pose a risk that our clients may reduce,
postpone or cancel spending for our products and services, which would impact our revenue.

Revenue by geographic markets is determined based upon the location to which our products are shipped and where our
services are performed. Revenue in our principal geographic markets is as follows:

North America
Asia Pacific
Europe
Total Revenue

Contract liabilities are as follows:

Year ended
December 31,

2021

2020

2019

(in thousands)

48,715 $
516,105
97,608
662,428 $

50,786 $
385,233
38,541

474,560 $

36,206
251,020
55,732
342,958

Balance, beginning of the period
Deferral of revenue
Recognition of deferred revenue
Balance, end of the period

2021

23,058
66,349
(20,971)
68,436

Year ended
December 31,
2020
(in thousands)
$

29,251 $
17,862
(24,055)
23,058 $

2019

22,584
24,403
(17,736)
29,251

Contract liabilities are reflected as deferred revenue on the consolidated balance sheet. Contract liabilities relate to

payments received or amounts invoiced in advance of completion of performance obligations under a contract. Contract
liabilities are recognized as revenue upon the fulfillment of performance obligations.

As of December 31, 2021, we had deferred revenue of $68.4 million. This represents the portion of the transaction
price for contracts with customers allocated to the performance obligations that remain unsatisfied or partially unsatisfied.
Short-term deferred revenue of $60.5 million as of December 31, 2021 represents performance obligations that are expected
to be satisfied within the next 12 months. This amount relates primarily to prepayments made prior to system delivery as
well as to installation and non-standard warranty performance obligations for system sales. Long-term deferred revenue of
$8.0 million as of December 31, 2021 relates prepayments made prior to system delivery as well as to extended warranty
performance obligations that we expect to be completed in excess of the next 12 months but within the next 24 months.

The majority of our system transactions have payment terms that are 90% due upon shipment of the tool and 10%

due upon installation. Aftermarket transaction payment terms are such that payment is due either within 30 or 60 days of
service provided or delivery of parts.

Note 4. Cash, cash equivalents and restricted cash

Cash and cash equivalents
Long-term restricted cash
Total cash, cash equivalents and restricted cash

December 31,
2021

December 31,

2020

(in thousands)

294,923 $
757
295,680 $

203,479
753
204,232

As of December 31, 2021, we had $0.8 million in restricted cash which relates to a $0.7 million letter of credit

relating to workers’ compensation insurance and a $0.1 million deposit relating to customs activity.

Note 5. Accounts Receivable and Allowance for Credit Losses

All trade receivables are reported on the Consolidated Balance Sheets at their amortized cost adjusted for any write-

offs and net of allowances for credit losses.

Axcelis maintains an allowance for credit losses, which represents an estimate of expected losses over the remaining
contractual life of its receivables considering current market conditions and estimates for supportable forecasts when
appropriate. The estimate is a result of the Company’s ongoing assessments and evaluations of collectability, historical loss
experience, and future expectations in estimating credit losses in its receivable portfolio. Axcelis uses historical loss
experience rates and applies them to a related aging analysis while also considering customer and/or economic risk where
appropriate. Determination of the proper amount of allowances requires management to exercise judgment about the timing,
frequency and severity of credit losses that could materially affect the provision for credit losses and, as a result, net earnings.
The allowance takes into consideration numerous quantitative and qualitative factors that include receivable type, historical
loss experience, delinquency trends, collection experience, current economic conditions, estimates for supportable forecasts,
when appropriate, and credit risk characteristics.

Axcelis evaluates the credit risk of the customer when extending credit based on a combination of various financial

and qualitative factors that may affect its customers’ ability to pay. These factors may include the customer’s financial
condition, past payment experience, and credit ratings from credit bureaus, as well as the value of the underlying collateral.

Management performs detailed reviews of its receivables on a quarterly basis to assess the adequacy of the
allowances and to determine if any impairment has occurred. Amounts determined to be uncollectable are charged directly
against the allowance, while amounts recovered on previously written-off accounts increase the allowance. Changes to the
allowance for credit losses are maintained through adjustments to the provision for credit losses, which are charged to current
period earnings.

The following table shows changes of the allowances for credit losses related to trade receivables for the twelve

months ended December 31, 2020 and 2019, respectively:

Balance, beginning of period
Provision for credit losses
Charge-offs
Recoveries
Balance, end of period

The components of accounts receivable are as follows:

Trade receivables
Allowance for doubtful accounts
Trade receivables, net

Note 6. Inventories, net

The components of inventories are as follows:

Raw materials
Work in process
Finished goods (completed systems)
Inventories, net

Year ended
December 31,

2021

2020

(in thousands)

— $
—
—
—
— $

818
—
(818)
—
—

December 31,

2021

2020

(in thousands)
$ 104,410 $ 86,865
—
$ 104,410 $ 86,865

—

December 31,

2021

2020

(in thousands)
$ 133,784 $ 100,254
33,867
26,955
$ 194,984 $ 161,076

43,164
18,036

When recorded, inventory reserves are intended to reduce the carrying value of inventories to their net realizable

value. We establish inventory reserves when conditions exist that indicate inventory may be in excess of anticipated
demand or is obsolete based upon assumptions about future demand for our products or market conditions. We regularly
evaluate our ability to realize the value of inventories based on a combination of factors including the following: forecasted
sales and the size and utilization of our installed base, estimated product end of life dates, estimated current and future
market value and new product introductions. Purchasing and usage alternatives are also explored to mitigate inventory
exposure. In 2021, we recorded a decrease of $1.9 million in inventory reserves. At December 31, 2021 and 2020,
inventories are stated net of inventory reserves of $6.5 million and $8.3 million, respectively.

During the years ended December 31, 2021, 2020 and 2019, we recorded charges to cost of sales of $3.8 million,

$3.7 million and $2.8 million, respectively, to reflect the lower of cost or net realizable value.

We have inventory on consignment at customer locations at December 31, 2021 and 2020, of $5.5 million and

$4.9 million, respectively.

Note 7. Property, Plant and Equipment, net

The components of property, plant and equipment are as follows:

Land and buildings

Machinery and equipment

Construction in process

Total cost

Accumulated depreciation

Property, plant and equipment, net

December 31,

2021

2020

(in thousands)

$ 15,881 $

10,887

34,312

30,768

6,852

6,697

57,045

48,352

(22,073)

(18,512)

$ 34,972 $

29,840

Depreciation expense was $4.2 million, $3.4 million and $2.6 million for the years ended December 31, 2021,

2020 and 2019, respectively.

Note 8. Assets Manufactured for Internal Use, net

Assets manufactured for internal use, included in other assets, are depreciated using the straight-line method over

their 10 year estimated useful life. Their components are as follows:

Internal use assets
Construction in process

Total cost

Accumulated depreciation

Assets manufactured for internal use, net

December 31,

2021

2020

(in thousands)
$ 60,596 $ 62,462
156
62,618
(24,155)
$ 32,004 $ 38,463

172
60,768
(28,764)

These products are used for research and development, training, and customer demonstration purposes.

Depreciation expense was $5.3 million, $5.2 million and $3.9 million for the years ended December 31, 2021,

2020 and 2019, respectively.

Note 9. Leases

We have operating leases for manufacturing, office space, warehouse space, computer and office equipment and

vehicles used in our business operations. We have a finance lease in relation to the 2015 sale-leaseback of our corporate
headquarters in Beverly, Massachusetts. We review all agreements to determine if the agreement contains a lease
component. An agreement contains a lease component if it provides the use of a specific physical space or a specific
physical item.

We recognize operating lease obligations under Accounting Standards Codification Leases (Topic 842). The

guidance in Topic 842 requires recognition of lease assets and related liabilities on a discounted basis using the explicit or
implicit discount rate stated within the agreement. We recognize a corresponding right-of-use asset, which is initially
determined based upon the net present value of the associated liability and is adjusted for deferred costs and possible
impairment, if any. For those lease agreements that do not indicate the applicable discount rate, we use our incremental
borrowing rate. The value of the right-of-use asset is initially determined based on the net present value of the associated

liability, and is adjusted for deferred costs and possible impairments, if any. We have made the following policy elections:
(i) operating leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet; (ii) we
recognize lease expense for operating leases on a straight-line basis over the lease term; and (iii) we account for lease
components and non-lease components that are fixed payments as one component. Some of our operating leases include
one or more options to renew, with renewal terms that can extend the respective lease term 1 to 3 years. The exercise of
lease renewal options is at our sole discretion. For lease extensions that are reasonably certain to occur, we have included
the renewal periods in our calculation of the net present value of the lease obligation and related right-of-use asset. Certain
leases also include options to purchase the leased property. The depreciable life of certain assets and leasehold
improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain
of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The amounts of operating and finance lease right-of-use assets and related lease obligations recorded within our
consolidated balance sheets are as follows:

Leases

Assets

Operating leases

Finance lease

Total leased assets

Liabilities

Current

Operating

Finance

Noncurrent

Operating

Finance

Total lease liabilities

Classification

2021

2020

December 31, December 31,

Operating lease assets

Finance lease assets *

(in thousands)

9,242

19,238

28,480

4,542
20,544
25,086

Other current liabilities
Current portion of finance
lease obligation

Other long-term liabilities

Finance lease obligation

4,716

979

4,357

46,415

56,467

2,573

756

1,949
47,393
52,671

* Finance lease assets are recorded net of accumulated depreciation of $48.6 million and includes $0.7 million of prepaid financing costs as of
December 31, 2021. Finance lease assets are recorded net of accumulated depreciation of $48.4 million and includes $0.7 million of prepaid
financing costs as of December 31, 2020.

All of our office locations support selling and servicing functions. We also have a manufacturing facility in South

Korea. Lease expense, depreciation expense relating to finance leased assets and interest expense relating to our finance
lease obligation recognized within our consolidated statement of operations for the twelve-month periods ended December
31, 2021, 2020 and 2019 are as follows:

Lease cost

Operating lease cost

Service

Research and development

Sales and marketing*

General and administrative*

Total operating lease cost

Finance lease cost

Depreciation of leased assets

Interest on lease liabilities

Total finance lease cost

Total lease cost

Classification

2021

2020

2019

Year ended

December 31,

Cost of revenue

Operating expenses

Cost of revenue, R&D, Sales and
marketing and G&A

Interest expense

(in thousands)

2,978 $

430

1,605

996

6,009 $

2,402 $
491
1,389
877
5,159 $

2,315
313
1,378
788
4,794

1,306 $

5,086

6,392 $

1,336 $
5,211
6,547 $

1,348
5,155
6,503

$ 12,401 $ 11,706 $ 11,297

* Sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately
$1.9 million, $1.2 million and $0.9 million for the twelve months ended December 31, 2021, 2020 and 2019, respectively.

Our corporate headquarters, shown below under finance leases, has an original lease term of 22 years. All other

locations are treated as operating leases, with lease terms ranging from 1 to 10 years. The tables below reflect the minimum
cash outflow regarding our current lease obligations as well as the weighted-average remaining lease term and weighted-
average discount rates used in our calculation of our lease obligations and right-of-use assets:

Maturity of Lease Liabilities

2022
2023
2024
2025
2026
Thereafter

Total lease payments

Less interest portion*

Finance lease and operating lease obligations

Finance
Leases

Operating
Leases
(in thousands)

Total
Leases

5,980 $
6,114
6,252
5,930
6,008
67,715

4,939 $
2,610
902
700
464
73

97,999 $

9,688 $

(50,605)

(615)

47,394 $

9,073 $

10,919
8,724
7,154
6,630
6,472
67,788
107,687
(51,220)
56,467

* Finance lease interest calculated using the implied interest rate; operating lease interest calculated using estimated corporate borrowing rate.

Lease term and discount rate

Weighted-average remaining lease term (years):

Operating leases

Finance leases

Weighted-average discount rate:

Operating leases

Finance leases

December 31,

2021

2.6

15.1

4.5%

10.5%

Our cash outflows from our operating leases include rent expense and other charges associated with these leases.

These cash flows are included within the operating section of our statement of cash flows. Our cash flows from our finance

lease include an interest and payment of principal component. The table below shows our cash outflows, by lease type and
related section of our statement of cash flows, as well as the non-cash amount capitalized on our balance sheet in relation to
our operating lease right-of-use assets:

Cash paid for amounts included in the measurement of lease liabilities

Operating cash outflows from operating leases

Operating cash outflows from finance leases

Financing cash outflows from finance leases

Operating lease assets obtained in exchange for operating lease liabilities

Finance lease assets obtained in exchange for new finance lease liabilities

Note 10. Product Warranty

Year ended December 31,

2021

2020

2019

(in thousands)

6,009

5,159

5,086

763

8,670

—

5,321

399

2,369

—

4,794
5,594
—
5,849
—

We generally offer a one year warranty for all of our systems, the terms and conditions of which vary depending
upon the product sold. For all systems sold, we accrue a liability for the estimated cost of standard warranty at the time of
system shipment and defer the portion of systems revenue attributable to the fair value of non-standard warranty. Costs for
non-standard warranty are expensed as incurred. Factors that affect our warranty liability include the number of installed
units, historical and anticipated product failure rates, material usage and service labor costs. We periodically assess the
adequacy of our recorded liability and adjust the amount as necessary.

The changes in our product warranty liability are as follows:

Balance at January 1 (beginning of year)
Warranties issued during the period
Settlements made during the period
Changes in estimate of liability for pre-existing warranties during the period

Balance at December 31 (end of period)

Amount classified as current
Amount classified as long-term

Total warranty liability

Note 11. Financing Arrangements

2021

2019

Year ended December 31,
2020
(in thousands)
$ 4,612 $ 3,244 $ 5,091
3,615
(5,548)
86
$ 6,924 $ 4,612 $ 3,244

5,005
(4,270)
633

7,808
(4,282)
(1,214)

$ 6,424 $ 4,280 $ 2,759
485
$ 6,924 $ 4,612 $ 3,244

500

332

On January 30, 2015, we sold our corporate headquarters facility for the sale price of $48.9 million. As part of the

sale, we also entered into a 22-year lease agreement with the buyer. The sale leaseback is accounted for as a financing
arrangement for financial reporting purposes and, as such, we recorded a financing obligation of $47.4 million as of
December 31, 2021, $1.0 million of which is classified within current liabilities. The associated lease payments include
both an interest component and payment of principal, with the underlying liability being extinguished at the end of the
original lease term. We posted a collateralized security deposit of $5.9 million in the form of an irrevocable letter of credit
at the time of the closing. This letter of credit is currently issued under the credit facility described in the next paragraph.

On July 31, 2020, we entered into a Senior Secured Credit Facilities Credit Agreement (the “Credit Agreement”)

with Silicon Valley Bank, in its capacity as administrative agent and collateral agent for itself and as a lender, and such
other banks and financial institutions or entities that from time to time join as lenders under the Credit Agreement. The

Credit Agreement provides for a revolving credit facility in an aggregate principal amount not to exceed $40.0 million. Our
obligations under the Credit Agreement are secured by a security interest, senior to any current and future debts and to any
security interest, in all of our rights, title, and interest in, to and under substantially all of our assets, subject to limited
exceptions, including permitted liens. The revolving credit facility terminates on July 31, 2023. As of December 31, 2021,
we were in compliance with all covenant requirements of the Credit Agreement. As of such date, no borrowings had been
made under the Credit Agreement, although a letter of credit for $5.9 million reduces the funds available for borrowing
under the credit line. We entered into a First Amendment to the Credit Agreement with Silicon Valley Bank in March 2021
to (i) align the covenants with our 2021 stock repurchase program, and (ii) establish terms to transition from a Eurodollar
based interest rate option to an interest rate benchmark using a secured overnight financing rate (known as “SOFR”)
published by the Federal Reserve Bank of New York.

Note 12. Employee Benefit Plans

(a) Defined Contribution Plan

We maintain the Axcelis Long-Term Investment Plan, a defined contribution plan. Eligible employees may

contribute up to 35% of their compensation on a before-tax basis subject to Internal Revenue Service (“IRS”) limitations.
Highly compensated employees may contribute up to 16% of their compensation on a before-tax basis subject to IRS
limitations. In 2021, 2020 and 2019 we provided an employer match of 50% of employees’ pre-tax contributions on the
first 6% of eligible compensation. Total related matching contribution expense was $2.2 million, $2.0 million and $1.9
million, for 2021, 2020 and 2019, respectively.

(b) Other Compensation Plans

We operate in foreign jurisdictions that require lump sum benefits, payable based on statutory regulations, for

voluntary or involuntary termination. Where required, an annual actuarial valuation of the benefit plans is obtained.

We have recorded an unfunded liability of $4.7 million and $5.1 million at December 31, 2021 and 2020,

respectively, for costs associated with these compensation plans in foreign jurisdictions. The following table presents the
classification of these liabilities in the Consolidated Balance Sheets:

Long-term:

Other long-term liabilities

Total liabilities

Year ended
December 31,
2020

2021

(in thousands)

4,681

5,121
$ 4,681 $ 5,121

The expense recorded in connection with these plans was $1.5 million, $1.2 million and $1.2 million during the

years ended December 31, 2021, 2020 and 2019, respectively.

Note 13. Stock Award Plans and Stock Based Compensation

(a) Equity Incentive Plans

We maintain the Axcelis Technologies, Inc. 2012 Equity Incentive Plan (the “2012 Equity Plan” or the “Plan”),

which became effective on May 2, 2012.

The 2012 Equity Plan, as amended, reserves 9.5 million shares of common stock, $0.001 par value, for grant and

permits the issuance of options, stock appreciation rights, restricted stock, restricted stock units, stock equivalents and
awards of shares of common stock that are not subject to restrictions or forfeiture to selected employees, directors and
consultants of the Company. The total number of shares reserved for issuance under the Plan is the sum of 7.76 million
shares approved by the shareholders, and 1.78 million shares added in accordance with the terms of the Plan as a result of

the expiration or forfeiture of awards granted under our prior equity plan. Shares that are not issued under an award
(because such award expires, is terminated unexercised or is forfeited) revert back to the Plan.

The term of stock options granted under the Plan is specified in the award agreements. Unless a lesser term is

otherwise specified by the Compensation Committee of the Company’s Board of Directors, awards under the 2012 Equity
Plan will expire seven years from the date of grant. Under the terms of the Plan, the exercise price of a stock option may not
be less than the fair market value of a share of the Company’s common stock on the date of grant. Under the 2012 Equity
Plan, fair market value is defined as the last reported sale price of a share of the Company’s common stock on a national
securities exchange as of any applicable date, as long as the Company’s shares are traded on such exchange.

Stock options granted to employees generally vest over a period of four years, while stock options granted to

non-employee members of the Company’s Board of Directors generally vest over a period of six months and, once vested,
are not affected by the director’s termination of service to the Company. In limited circumstances, the Company may grant
stock option awards with market-based vesting conditions, such as the Company’s common stock price, or other
performance conditions. Termination of service by an employee will cause options to cease vesting as of the date of
termination, and in most cases, employees will have 90 days after termination to exercise options that were vested as of the
termination of employment. In general, retiring employees will have one year after termination of employment to exercise
vested options. The Company settles stock option exercises with newly issued common shares.

Restricted stock units granted to employees during 2021 had both service-based vesting provisions and
performance-based vesting provisions. Restricted stock units granted to employees generally vest over a service period of
four years, while restricted stock units granted to non-employee members of the Company’s Board of Directors generally
vest over a service period of six months. We have granted restricted stock units to executive officers and other senior
employees with performance vesting conditions, which may be subject to further service-based vesting terms. Unvested
restricted stock unit awards expire upon termination of service to the Company. We settle restricted stock units upon
vesting with newly issued common shares. No restricted stock was granted during the three year period ended December
31, 2021.

As of December 31, 2021, there were 1.5 million shares available for grant under the 2012 Equity Plan.

As of December 31, 2021, there were 0.1 million options outstanding and 0.9 million unvested restricted stock

units outstanding under the 2012 Stock Plan.

(b) Employee Stock Purchase Plan

The 2020 Employee Stock Purchase Plan (the “2020 ESPP”) provides effectively all of our employees the

opportunity to purchase common stock of the Company at less than market prices. Purchases are made through payroll
deductions of up to 10% of the employee’s salary as elected by the participant, subject to certain caps set forth in the 2020
ESPP. Employees may purchase the Company’s common stock at 85% of its market price on the day the stock is
purchased.

The 2020 ESPP is considered compensatory and as such, compensation expense has been recognized based on the

benefit of the discounted stock price, amortized to compensation expense over each offering period of six months.
Compensation expense relating to the 2020 ESPP was approximately $0.2 million for the year ended December 31, 2021.
Compensation expense under the 2020 ESPP and our prior employee stock purchase plan (the “2000 ESPP”) was
approximately $0.2 million for the year ended December 31, 2020. Compensation expense under the 2000 ESPP was
approximately $0.2 million for the year ended December 31, 2019.

As of December 31, 2021, there were approximately 1.0 million shares reserved for issuance and available for

purchase under the 2020 ESPP, with 10,588 shares purchased on that date to be issued pending settlement. Less than 0.1
million shares were purchased under the 2020 ESPP for the year ended December 31, 2021. The 2000 ESPP expired in
June 2020. Less than 0.1 million shares were purchased under the 2020 ESPP and 2000 ESPP for the year ended December
31, 2020. Less than 0.1 million shares were purchased under the 2000 ESPP in the year ended December 31, 2019.

For the purpose of valuing stock options with service conditions, we use the Black-Scholes option pricing model

to calculate the grant-date fair value of an award.

Weighted-average expected volatility
Weighted-average expected term
Risk-free interest rate
Expected dividend yield

Year ended December 31,
2021
53.07%
4.71 years
1.22%
0.00%

There were no stock option awards granted in 2020 and 2019.

The fair value of the Company’s restricted stock units is calculated based upon the fair market value of the

Company’s stock at the date of grant.

(d) Summary of Stock-based Compensation Expense

We use the straight-line attribution method to recognize expense for stock-based awards such that the expense

associated with awards is evenly recognized throughout the period.

The amount of stock-based compensation recognized is based on the value of the portion of the awards that are

ultimately expected to vest. We estimate forfeitures at the time of grant and revise them, if necessary, in subsequent
periods, if actual forfeitures differ from those estimates. The term “forfeitures” is distinct from “cancellations” or
“expirations” and represents only the unvested portion of the surrendered stock-based award. Based on a historical analysis,
a forfeiture rate of 5% per year was applied to stock-based awards, including executive officer awards, for the years ended
December 31, 2021, 2020 and 2019.

For the years ended December 31, 2021, 2020 and 2019, we recognized stock-based compensation expense of

$12.1 million, $10.5 million and $8.2 million, respectively. We present the expenses related to stock-based compensation in
the same expense line items as cash compensation paid to our employees. For the years ended December 31, 2021, 2020
and 2019, we used restricted stock units in our annual equity compensation program.

The benefit of tax deductions in excess of recognized compensation cost is reported in the consolidated statements

of cash flows as part of cash flows from operating activities. Axcelis had tax deductions in excess of recognized
compensation cost of $18.7 million for the year ended December 31, 2021 which resulted in a tax benefit of $3.9 million.

(e) Stock Option Awards

The following table summarizes the stock option activity for the year ended December 31, 2021:

Weighted

Weighted Average
Average
Exercise
Price

Remaining
Contractual
Term
(years)

Aggregate
Intrinsic
Value
(in thousands)

Options
(in thousands)

Outstanding at December 31, 2020
Granted
Exercised
Canceled
Expired
Outstanding at December 31, 2021
Exercisable at December 31, 2021
Options Vested at December 31, 2021

3
(396)
—
—

504 $ 9.93
61.81
9.31
—
—
111 $ 13.51
108 $ 12.17
108 $ 12.17

0.73 $
0.56 $
0.56 $

6,792
6,753
6,753

The total intrinsic value, which is defined as the difference between the market price at exercise and the price paid

by the employee to exercise the options, for options exercised during the years ended December 31, 2021, 2020 and 2019
was $12.8 million, $18.4 million and $10.9 million, respectively.

No stock options vested during the year ended December 31, 2021. The total fair value of stock options vested

during the years ended December 31, 2020 and 2019 was $0.1 million and $0.9 million respectively. As of December 31,
2021, there was less than $0.1 million of unrecognized compensation cost related to non-vested stock options granted under
the 2012 Equity Incentive Plan.

(f) Restricted Stock Units and Restricted Stock

Restricted stock units represent the Company’s unfunded and unsecured promise to issue shares of the common

stock at a future date, subject to the terms of the Award Agreement issued under the 2012 Equity Incentive Plan. Restricted
stock unit awards granted in 2021 included time vested share awards and awards with performance vesting conditions.
Restricted stock awards are issued shares of common stock that are subject to forfeiture on terms described in the Award
Agreement, and may be granted under the 2012 Equity Incentive Plan. No restricted stock awards were granted, or vested,
during the years ended December 31, 2021, 2020 and 2019. The fair value of a restricted stock unit and restricted stock
award is charged to expense ratably over the applicable service period. The purpose of these awards is to assist in attracting
and retaining highly competent employees and directors and to act as an incentive in motivating selected employees and
directors to achieve long-term corporate objectives.

Changes in the Company’s non-vested restricted stock units for the year ended December 31, 2021 is as follows:

Outstanding at December 31, 2020
Granted
Vested
Forfeited
Outstanding at December 31, 2021

Weighted-Average
Grant Date Fair
Value per Share

Shares/units
(in thousands)

1,089 $
318
(496)
(12)
899 $

20.77
38.54
21.32
19.76
26.74

The weighted average grant-date fair value of restricted stock units granted for the years ended December 31,

2021, 2020 and 2019 was $38.54, $23.60 and $17.08, respectively. Most restricted stock units provide for net share
settlement to cover the employee’s personal income tax withholding obligations on vesting of the employee’s restricted
stock units. Vesting activity above reflects shares vested before net share settlement. As of December 31, 2021, there was

$18.5 million of total forfeiture-adjusted unrecognized compensation cost related to non-vested restricted stock units
granted under the 2012 Equity Incentive Plan. That cost is expected to be recognized over a weighted-average period of
2.4 years.

Note 14. Stockholders’ Equity

We may issue up to 75 million shares of common stock without additional shareholder approval. At December 31,

2021 and 2020, there were 33.2 million and 33.6 million outstanding shares of common stock, respectively.

Note 15. Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit

price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market
participants on the measurement date.

(a) Fair Value Hierarchy

The accounting guidance for fair value measurement requires an entity to maximize the use of observable inputs

and minimize the use of unobservable inputs when measuring fair value. The standard establishes a fair value hierarchy
based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial
instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the
fair value measurement. The fair value hierarchy is as follows:

Level 1—applies to assets or liabilities for which there are quoted prices in active markets for identical

assets or liabilities.

Level 2—applies to assets or liabilities for which there are inputs other than quoted prices that are
observable for the asset or liability, such as quoted prices for similar assets or liabilities in active markets; quoted
prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active
markets); or model-derived valuations in which significant inputs are observable or can be derived principally
from, or corroborated by, observable market data.

Level 3—applies to assets or liabilities for which there are unobservable inputs to the valuation

methodology that are significant to the measurement of the fair value of the assets or liabilities.

(b) Assets and Liabilities Measured at Fair Value

Our money market funds and short-term investments are included in cash and cash equivalents in the consolidated

balance sheets.

The following table sets forth Company’s assets which are measured at fair value by level within the fair value

hierarchy.

Assets
Cash equivalents:

December 31, 2021
Fair Value Measurements

Level 1

Level 2
(in thousands)

Level 3

Total

Money market funds, U.S. Government Securities and
Agency Investments

$ 261,090

— $

261,090

December 31, 2020
Fair Value Measurements

Level 1

Level 2

Level 3

Total

(in thousands)

Assets
Cash equivalents:

Money market funds, U.S. Government Securities and
Agency Investments

$ 172,119 $

— $

— $ 172,119

The carrying amounts reflected in the consolidated balance sheets for accounts receivable, prepaid expenses and
other current and non-current assets, restricted cash, accounts payable and accrued expenses approximate fair value due to
their short-term maturities.

Note 16. Commitments and Contingencies

In addition to the finance and operating leases discussed in Note 9, we have purchase commitments and other

contingency considerations.

(a) Purchase Commitments

We have contracts and purchase orders for inventory and other expenditures of $226.4 million at December 31,

2021, approximately $224 million are expected to occur in 2022.

(b) Litigation

We are not presently a party to any litigation that we believe might have a material adverse effect on our business

operations. We are, from time to time, a party to litigation that arises in the normal course of our business operations.

Our system sales agreements typically include provisions under which we agree to take certain actions, provide

certain remedies and defend our customers against third-party claims of intellectual property infringement under specified
conditions and to indemnify customers against any damage and costs awarded in connection with such claims. We have not
incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such
obligations in the accompanying consolidated financial statements.

Note 17. Business Segment and Geographic Region Information

We operate in one business segment, which is the manufacture of capital equipment for the semiconductor chip
manufacturing industry. The principal market for semiconductor capital equipment is semiconductor chip manufacturers.
Substantially all sales are made directly by us to our customers located in the United States, Europe and Asia Pacific.

Our ion implantation systems product line includes high current, medium current and high energy implanters.

Other legacy processing products include curing and thermal processing systems. In addition to new equipment, we provide
post-sales equipment service and support, including spare parts, equipment upgrades, used equipment, maintenance
services and customer training.

Revenue by product lines is as follows:

Ion implantation systems and services
Other systems and services
Total revenue

2021

Year ended December 31,
2020
(in thousands)
$ 645,504 $ 456,788 $ 326,029
16,929
$ 662,428 $ 474,560 $ 342,958

16,924

17,772

2019

Revenue and long-lived assets by geographic region, based on the physical location of the operation recording the

sale or the asset, are as follows:

2021
United States
Europe
Asia Pacific

2020
United States
Europe
Asia Pacific

2019
United States
Europe
Asia Pacific

Revenue

Long-Lived
Assets

(in thousands)

$ 519,408 $ 63,590
191
3,194
$ 662,428 $ 66,975

36,622
106,398

$ 351,069 $ 67,521
235
547
$ 474,560 $ 68,303

28,977
94,514

$ 256,092 $ 67,336
—
748
$ 342,958 $ 68,084

28,743
58,123

Long-lived assets consist of property, plant and equipment, net, and assets manufactured for internal use, net.

Operations in Asia Pacific consist of manufacturing, sales and service organizations. Operations in Europe consist of sales
and service organizations.

International revenue, which includes export sales from U.S. manufacturing facilities to foreign customers and
sales by foreign subsidiaries and branches, was $613.5 million (92.6% of total revenue), $423.7 million (89.3% of total
revenue) and $306.6 million (89.4% of total revenue) in 2021, 2020 and 2019, respectively.

Note 18. Income Taxes

Income before income taxes is as follows:

United States
Foreign

Income before income taxes

Provision for income taxes is as follows:

Current:

United States

Federal
State
Foreign
Total current
Deferred:
Federal
State
Foreign
Total deferred
Income tax provision

2021

Year ended December 31,
2020
(in thousands)
$ 116,380 $ 51,934 $ 18,148
2,774
$ 120,428 $ 55,886 $ 20,922

3,952

4,048

2019

Year ended December 31,

2021

2020

2019

(in thousands)

— $
82
1,439
1,521

— $

157
1,062
1,219

20,521
406
(670)
20,257
$ 21,778 $

4,594
295
(204)
4,685
5,904 $

—
5
579
584

3,962
(855)
197
3,304
3,888

Reconciliation of income taxes at the United States Federal statutory rate to the effective income tax rate of 18.1%

is as follows:

2021

Year ended December 31,
2020
(in thousands)

2019

Income taxes at the United States statutory rate
State income taxes
Unrecognized tax benefits
Effect of change in valuation allowance
Foreign income tax rate differentials
Stock based compensation
Credit expirations
Rate change
Credit generation
Discrete items, net
Previously unrecognized tax benefit
GILTI inclusion
Other, net

Income tax provision

$ 25,290 $ 11,736 $

387
(222)
(1,443)
152
(3,658)
2,342
159
(3,096)
72
—
301
1,494

226
—
806
181
(2,803)
(14)
151
(2,473)
(147)
(4,063)
732
1,572

$ 21,778 $ 5,904 $

4,393
78
(251)
1,492
129
(1,257)
894
194
(3,124)
18
—
566
756
3,888

Significant components of long-term deferred income taxes are as follows:

Year ended December 31,

2021

2020

(in thousands)

Deferred tax assets:
Federal net operating loss carryforwards
State net operating loss carryforwards
Foreign net operating loss carryforwards
Federal tax credit carryforwards
State tax credit carryforwards
Property, plant and equipment
Operating lease liability
Accrued compensation
Inventories
Stock compensation
Warranty
Deferred revenue
Capitalized research and development costs
Gross deferred tax assets
Valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Intangible assets
Right-of-use asset
Other
Gross deferred tax liabilities
Deferred taxes, net

5,635 $ 23,193
969
529
19,377
7,358
9,501
348
16
2,271
1,566
982
1,032
5,785
72,927
(9,133)
63,794

727
371
18,840
8,138
8,967
792
280
1,729
1,401
1,471
836
—
49,187
(7,689)
41,498

(72)
(4,918)
(1,054)
(6,044)

(80)
(4,756)
(1,107)
(5,943)
$ 35,454 $ 57,851

Changes in tax rates and tax laws are accounted for in the period of enactment. Our deferred tax assets and

liabilities are measured at the enacted tax rate expected to apply when these temporary differences are expected to be
realized or settled.

At December 31, 2021, we had $35.5 million of net deferred tax assets worldwide relating to net operating loss

carryforwards, tax credit carryforwards and other temporary differences, which are available to reduce income taxes in
future years. At December 31, 2021, we maintain a $7.7 million valuation allowance in the U.S. against certain tax credits
and state net operating losses due to the uncertainty of their realization based on long-term Company forecasts and the
expiration dates on these attributes. This represents a decrease of $1.4 million from the prior year.

At December 31, 2021, we have federal and state net operating loss carryforwards of $30.5 million and $13.6

million, respectively. Federal and net operating losses will expire between 2033 and 2034. State net operating losses will
expire between 2022 and 2034. The federal net operating loss carryforwards are subject to an uncertain tax position reserve
of $3.7 million. At December 31, 2021, we have foreign net operating loss carryforwards of $1.5 million. The majority of
our foreign net operating losses have an unlimited carryforward period.

At December 31, 2021, we have research and development and other tax credit carryforwards of $38.3 million.
These carry forwards are subject to an uncertain tax position reserve of $9.2 million. These credits can be used to reduce
future federal and state income tax liabilities and expire principally between 2022 and 2035.

We consider the undistributed earnings of our foreign subsidiaries as of December 31, 2021, to be indefinitely

We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign

jurisdictions. We and most foreign subsidiaries are subject to income tax examinations by tax authorities for all years dating
back to 2009. Our policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as
operating expenses. We believe that we have appropriate support for the income tax positions taken and to be taken on our
tax returns and that our accruals for tax liabilities are adequate for all open years based on an assessment of many factors
including past experience and interpretations of tax law applied to the facts of each matter.

At December 31, 2021, we had unrecognized tax benefits related to uncertain tax positions of approximately $10.0

million, all of which reduced the Company’s deferred tax assets and the offsetting valuation allowance.

A reconciliation of the beginning and ending balance of unrecognized tax benefits are as follows:

Year ended December 31,
2020

2019

2021

Balance at beginning of year
(Decrease) / increase in unrecognized tax benefits as a result of tax positions taken
during a prior period
Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute
of limitation
Increases in unrecognized tax benefits as a result of tax positions taken during the
current period
Balance at end of year

Recorded as other long-term liability
Recorded as a decrease in deferred tax assets
Balance at end of year

(in thousands)
$ 10,044 $ 9,799 $ 9,127

(546)

(502)

215

(472)

—

(334)

935
$ 9,961

747

791
$ 10,044 $ 9,799

—
9,961
$ 9,961

472 $

409
$
9,572
9,390
$ 10,044 $ 9,799

As of December 31, 2021, we had $10.0 million of unrecognized tax benefits which, if recognized would reduce

the effective tax rate.

Schedule II—Valuation and Qualifying Accounts
Axcelis Technologies, Inc.
(In thousands)

Balance at Charged to
Beginning of Costs and
Expenses

Period

Balance at
End of
Period

Deductions

Year ended December 31, 2021
Allowance for doubtful accounts and returns
Deferred tax valuation allowance
Year ended December 31, 2020
Allowance for doubtful accounts and returns
Deferred tax valuation allowance
Year ended December 31, 2019
Allowance for doubtful accounts and returns
Deferred tax valuation allowance

— $

9,133

— $
780

— $

2,224

—
7,689

818 $

8,327

— $
806

818 $
—

—
9,133

— $

818 $

6,835

1,492

— $
—

818
8,327

Exhibit
No.
3.1

Restated Certificate of Incorporation of the Company, filed November 2, 2017. Incorporated by reference to

Exhibit 3.1 of the Company’s Form 10-Q filed with the Commission on November 3, 2017.

Exhibit Index

Description

3.2

Bylaws of the Company, as amended and restated as of May 13, 2014. Incorporated by reference to Exhibit 3.2

of the Company’s Form 8-K filed with the Commission on May 19, 2014.

4.4

Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934. Incorporated by
reference to Exhibit 4.4 of the Company’s Form 10-K for the year ended December 31, 2019 filed with the
Commission on March 2, 2020.

10.1*

Axcelis Technologies, Inc. 2012 Equity Incentive Plan, as approved by stockholders on May 14, 2019.

Incorporated by reference to Exhibit 10.1 of the Company’s Form S-8 registration statement filed with the
Commission on May 21, 2019.

10.2*

Axcelis Management Incentive Plan, as amended and restated by the Compensation Committee of the Board of

Directors on February 11, 2010. Incorporated by reference to Exhibit 10.2 of the Company’s report on
Form 10-K for the year ended December 31, 2009 filed with the Commission on March 15, 2010.

10.3*

Form of Indemnification Agreement approved by the Board of Directors of the Company on February 9, 2012
for use with each of its directors and officers. Incorporated by reference to Exhibit 10.4 of the Company’s
report on Form 10-K for the year ended December 31, 2011 filed with the Commission on February 29, 2012.

10.4*

Form of Change in Control Agreement, as amended, as approved by the Compensation Committee of the
Board of Directors on November 11, 2016, between the Company and each of its executive officers.
Incorporated by reference to Exhibit 10.6 of the Company’s Form 10-K for the year ended December 31, 2016
filed with the Commission on March 14, 2017.

10.5*

Form of Employee Non-Qualified Stock Option Certificate under the 2012 Equity Incentive Plan, adopted

June 18, 2012. Incorporated by reference to Exhibit 10.2 of the Company’s report on Form 10-Q for the quarter
ended June 30, 2012 filed with the Commission on August 7, 2012.

10.6*

Form of Non-Employee Director Non-Qualified Stock Option Certificate under the 2012 Equity Incentive

Plan, adopted June 18, 2012. Incorporated by reference to Exhibit 10.3 of the Company’s report on Form 10-Q
for the quarter ended June 30, 2012 filed with the Commission on August 7, 2012.

10.7*

Form of Restricted Stock Unit Award Agreement under the 2012 Equity Incentive Plan, adopted June 18,

2012. Incorporated by reference to Exhibit 10.4 of the Company’s report on Form 10-Q for the quarter ended
June 30, 2012 filed with the Commission on August 7, 2012.

10.8*

Named Executive Officer Base Compensation at February 25, 2022. Filed herewith.

10.9*

Non-Employee Director Cash Compensation at February 25, 2022. Filed herewith.

10.10* Amended and Restated Employment Agreement between the Company and Mary G. Puma dated November 6,

2007. Incorporated by reference to Exhibit 10.3 of the Company’s report on Form 10-Q for the quarter ended
September 30, 2007 filed with the Commission on November 8, 2007.

10.11* Form of Amended and Restated Executive Separation Pay Agreement between the Company and Kevin J.

Brewer, William Bintz, John E. Aldeborgh, Russell Low, Lynnette C. Fallon and Douglas Lawson dated May
15, 2019. Incorporated by reference to Exhibit 10.2 of the Company’s Form 10-Q for the quarter ended June
30, 2019 filed with the Commission on August 7, 2019.

10.12

Lease Agreement between the Company and Beverly Property Owner LLC, effective January 30, 2015.

Incorporated by reference to Exhibit 10.24 of the Company’s Form 10-K for the year ended December 31,
2014 filed with the Commission on March 11, 2015.

Exhibit
No.

10.13

Description

Senior Secured Credit Facilities Credit Agreement dated as of July 31, 2020, among the Company, as the
Borrower, the several lenders from time to time party thereto, and Silicon Valley Bank, as Administrative
Agent, Issuing Lender and Swingline Lender, and as Lead Arranger. Incorporated by reference to Exhibit 10.1
of the Company’s Form 10-Q for the quarter ended September 30, 2020 filed with the Commission on
November 6, 2020.

10.14

Guarantee and Collateral Agreement dated as of July 31, 2020 made by the Company and the other grantors
referred to therein in favor of Silicon Valley Bank, as Administrative Agent. Incorporated by reference to
Exhibit 10.2 of the Company’s Form 10-Q for the quarter ended September 30, 2020 filed with the
Commission on November 6, 2020.

14.1

Ethical Business Conduct at Axcelis, revised through January 2003. Incorporated by reference to Exhibit 14.1

of the Company’s report on Form 10-K filed with the Commission on March 28, 2003.

21.1

Subsidiaries of the Company. Filed herewith.

23.1

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm. Filed herewith.

31.1

Certification of the Principal Executive Officer under Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of

the Sarbanes-Oxley Act), dated February 25, 2022. Filed herewith.

31.2

Certification of the Principal Financial Officer under Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of

the Sarbanes-Oxley Act), dated February 25, 2022. Filed herewith.

32.1

Certification of the Principal Executive Officer pursuant to Section 1350 of Chapter 63 of title 18 of the United

States Code (Section 906 of the Sarbanes-Oxley Act), dated February 25, 2022. Filed herewith.

32.2

Certification of the Principal Financial Officer pursuant to Section 1350 of Chapter 63 of title 18 of the United

States Code (Section 906 of the Sarbanes-Oxley Act), dated February 25, 2022. Filed herewith.

101

The following materials from the Company’s Form 10-K for the year ended December 31, 2021, formatted in

eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Operations,
(ii) Consolidated Statement of Comprehensive Income (iii) Consolidated Balance Sheets, (iv) Consolidated
Statements of Equity, (v) Consolidated Statements of Cash Flows, and (vi) Notes to Consolidated Financial
Statements.

104

Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101).

Indicates a management contract or compensatory plan.

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has

duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

AXCELIS TECHNOLOGIES, INC.

By: /s/ MARY G. PUMA
Mary G. Puma,
President and Chief Executive Officer

Dated: February 25, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the

following persons on behalf of the Registrant and in the capacities and on the date indicated.

Signature

/s/ MARY G. PUMA
Mary G. Puma

/s/ KEVIN J. BREWER
Kevin J. Brewer

/s/ TZU-YIN CHIU
Tzu-Yin Chiu

/s/ RICHARD J. FAUBERT
Richard J. Faubert

/s/ ARTHUR L. GEORGE, JR.
Arthur L. George Jr.

/s/ JOSEPH P. KEITHLEY
Joseph P. Keithley

/s/ JOHN T. KURTZWEIL
John T. Kurtzweil

/s/ THOMAS ST. DENNIS
Thomas St. Dennis

/s/ JORGE TITINGER
Jorge Titinger

Jeanne Quirk

Dipti Vachani

Title

Date

Director and Principal Executive Officer

February 25, 2022

Principal Accounting and Financial Officer

February 25, 2022

Director

STOCK PERFORMANCE GRAPH

This graph compares the five-year cumulative total stockholder returns for our common stock to that

of the Philadelphia Semiconductor Index and the Nasdaq Composite Index at each of the last five fiscal
year ends. The cumulative returns are based on a $100 investment on December 31, 2016, with all dividends,
if any, being reinvested. The stock performance shown on the graph below is not necessarily indicative of
future price performance.

$600.00

$500.00

$400.00

$300.00

$200.00

$100.00

$0.00

12/30/2016

12/29/2017

12/31/2018

12/31/2019

12/31/2020

12/31/2021

Axcelis Technologies, Inc. (ACLS)

Nasdaq Composite Index (COMPX)

Philadelphia Semiconductor Index (SOX)

$100.00

$197.25

$128.24

$138.23

$122.34

$123.26

$127.44

$165.64

$166.68

$204.05

$200.14

$239.42

$308.39

$512.44

$290.63

$435.33

Axcelis Technologies, Inc. (ACLS)

Nasdaq Composite Index (COMPX)

Philadelphia Semiconductor Index (SOX)

SAFE HARBOR STATEMENT

This document contains forward-looking statements under the SEC safe harbor provisions. These
statements are based on management’s current expectations and should be viewed with caution. They are
subject to various risks and uncertainties, many of which are outside the control of the Company, including
our ability to implement successfully our profit plans, the continuing demand for semiconductor equipment,
relative market growth, continuity of business relationships with and purchases by major customers,
competitive pressure on sales and pricing, increases in material and other production costs that cannot be
recouped in product pricing and global economic and financial conditions. These risks and uncertainties are
discussed in more detail in our Form 10-K and other SEC filings, which may be obtained as described on
the next page under “Investor Information/SEC Form 10-K”.

(This page has been left blank intentionally.)

BOARD OF DIRECTORS

EXECUTIVE OFFICERS

Mary G. Puma
President and CEO

Kevin J. Brewer
Executive Vice President and CFO

Russell J. Low, Ph.D.
Executive Vice President, Global
Customer and Engineering Operations

William Bintz
Executive Vice President,
Product Development

Douglas A. Lawson
Executive Vice President,
Corporate Marketing and Strategy

Lynnette C. Fallon
Executive Vice President, HR/Legal,
General Counsel and Secretary

Tzu-Yin Chiu
President, National
Silicon Industry Group

Richard J. Faubert
Chairperson of the Board,
Axcelis Technologies, Inc.
Retired CEO,
AmberWave Systems Corporation

Arthur L. George, Jr.
Retired Executive,
Texas Instruments

Joseph P. Keithley
Retired Chairperson and CEO,
Keithley Instruments

John T. Kurtzweil
Independent Consultant

Mary G. Puma
President and CEO,
Axcelis Technologies, Inc.

Jeanne Quirk
SVP, Mergers and Acquisitions,
TE Connectivity

Thomas St. Dennis
Non-executive Chairman,
FormFactor, Inc.

Jorge Titinger
Principal, Titinger Consulting

Dipti Vachani
SVP, General Manager,
Automotive and Embedded
Line of Business, Arm Limited

AUDIT COMMITTEE

John T. Kurtzweil, Chairperson
Joseph P. Keithley
Jeanne Quirk
Jorge Titinger

COMPENSATION COMMITTEE

Arthur L. George, Jr., Chairperson
Richard J. Faubert
John T. Kurtzweil
Jorge Titinger
Dipti Vachani

NOMINATING AND GOVERNANCE
COMMITTEE

Joseph P. Keithley, Chairperson
Tzu-Yin Chiu
Jeanne Quirk
Thomas St. Dennis

TECHNOLOGY AND NEW
PRODUCT DEVELOPMENT
COMMITTEE
Thomas St. Dennis, Chairperson
Tzu-Yin Chiu
Richard J. Faubert
Arthur L. George, Jr.
Dipti Vachani

ANNUAL MEETING DATE &
LOCATION

The annual meeting of stockholders will
be held at 12:30 p.m. on Tuesday, May 10,
2022 at the Company’s corporate
headquarters.

CORPORATE HEADQUARTERS
108 Cherry Hill Drive
Beverly, MA 01915-1053
978-787-4000

INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072

INVESTOR INFORMATION/SEC
FORM 10-K
Information on the Company, as well as
the Company’s 2021 Annual Report on
SEC Form 10-K and other SEC filings,
can be obtained free of charge either on
our website at http://www.axcelis.com or
by contacting Investor Relations at
Axcelis Technologies, Inc., 108 Cherry
Hill Drive, Beverly, MA 01915-1053. You
can also e-mail investor relations at
investor.relations@axcelis.com.

LEGAL COUNSEL
Mintz Levin
One Financial Center
Boston MA 02111

STOCK LISTING
The Company’s common stock is traded
on the NASDAQ Global Select market
under the symbol ACLS.

TRANSFER AGENT & REGISTRAR
For questions regarding misplaced stock
certificates, changes of address, or the
consolidation of accounts, please contact
Computershare Trust Company, N.A., the
company’s transfer agent:

Telephone: 1-781-575-2725
Toll Free: 1-877-373-6374
Hearing Impaired
TDD#: 1-800-952-9245

Website:
http://www.computershare.com/investor

Mailing Address:
Computershare Trust Company, N.A.
P.O. Box 505000
Louisville, KY 40233-5000

Overnight Correspondence:
Computershare Trust Company, N.A.
462 South 4th Street, Suite 1600
Louisville, KY 40202

WEBSITE
http://www.axcelis.com