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Amtech Reports Fourth Quarter and Fiscal 2019 Results

TEMPE, Ariz., Nov. 21, 2019 /PRNewswire/ -- Amtech Systems, Inc. (ASYS), a manufacturer of capital equipment, including thermal processing and wafer polishing, and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power chips, electronic assemblies and light-emitting diodes (LEDs), today reported results for its fourth quarter and year ended September 30, 2019.

Fourth Quarter Fiscal 2019 Financial and Operational Highlights from Continuing Operations:

  • Net revenue of $20.2 million

  • Income from continuing operations, net of tax, of $1.0 million

  • Income per diluted share from continuing operations of $0.07

  • Customer orders of $20.3 million

  • Unrestricted cash of $53.0 million

Fiscal 2019 Financial and Operational Highlights from Continuing Operations:

  • Net revenue of $85.0 million

  • Income from continuing operations, net of tax, of $3.1 million

  • Income per diluted share from continuing operations of $0.22

  • Customer orders of $76.6 million

  • September 30, 2019 backlog of $17.3 million

Mr. J.S. Whang, Executive Chairman and Chief Executive Officer of Amtech, commented, "We can now report that we are in the final stages of the planned divestiture of our solar business and expect to have an announcement before 2019 year-end. Additionally, while evaluating how R2D, our French automation division, might fit into our power semi strategy, a buy-out offer was submitted by certain key members of R2D management. After careful consideration, we accepted the offer and expect to complete the sale in fiscal Q1 2020. We are confident that each of these divestitures is the right decision for Amtech and these businesses. We see this as another step completed in our plan to dedicate our focus and resources to our semiconductor and silicon carbide growth opportunities."

Mr. Whang continued, "We believe we are on a well-defined path to build our power semi business, including making key investments to develop next-generation equipment and enhance and expand our product portfolio, increasing capacity, and other select investments in our silicon carbide and semi businesses. As the market shifts from silicon to silicon carbide solutions for many next-generation applications, we expect to be ready with leading-edge technology solutions. We see indicators that the semi industry will rebound in the second half of 2020, and we will be ready to participate in the recovery and growth. We believe the future is bright and look forward to converting our investments to greater value for all Amtech stakeholders."

GAAP Financial Results

(in millions, except per share amounts)

Q4 FY


Q3 FY


Q4 FY


12 Months


12 Months



2019


2019


2018


2019


2018


Net revenues

$

20.2


$

21.0


$

23.1


$

85.0


$

100.1


Gross profit

$

8.6


$

7.9


$

8.2


$

33.4


$

36.9


Gross margin


42.4

%


37.4

%


35.5

%


39.2

%


36.9

%

Operating income (loss)

$

1.7


$

1.4


$

(1.1)


$

4.9


$

6.1


Operating margin


8.2

%


6.4

%


-4.8

%


5.8

%


6.1

%

Income (loss) from continuing operations, net of tax

$

1.0


$

0.9


$

(1.1)


$

3.1


$

6.6


Diluted income (loss) per share from continuing operations

$

0.07


$

0.06


$

(0.08)


$

0.22


$

0.44


Net revenues decreased 4% from the preceding quarter and 13% from the fourth quarter of fiscal 2018, as macroeconomic conditions and trade tensions continue to impact the semiconductor cycle. Gross margin increased in the fourth quarter of fiscal 2019, both on a sequential and year-over-year basis, primarily due to favorable product mix. Operating margin improved sequentially to 8.2%, as strong gross margin performance was partially offset by an increase in selling, general and administrative expenses, primarily due to employee-related expenses. Income from continuing operations, net of tax, for the fourth quarter of fiscal 2019 was $1.0 million dollars, or 7 cents per share. This is compared to a loss of $1.1 million dollars, or 8 cents per share, for the fourth quarter of fiscal 2018, which included a goodwill impairment charge of $2.2 million in our Automation segment, and income of $0.9 million dollars, or 6 cents per share, in the preceding quarter.

Outlook

For the quarter ending December 31, 2019, further softness is expected due to continued trade tensions and the semiconductor equipment industry downcycle. Revenues for the quarter are expected to be in the range of $16 to $18 million. Gross margin for the quarter ending December 31, 2019 is expected to be in the mid 30% range, with operating margin break-even to slightly positive. The outlook assumes continued weakness in demand given soft business conditions due to the ongoing macroeconomic uncertainties and excludes the impact of any potential restructuring actions.

The semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Additionally, operating results can be significantly impacted, positively or negatively, by the timing of orders, system shipments, and the financial results of semiconductor manufacturers.

A portion of Amtech's results are denominated in Renminbis, a Chinese currency. The outlook provided in this press release is based on an assumed exchange rate between the United States Dollar and the Renminbi. Changes in the value of the Renminbi in relation to the United States Dollar could cause actual results to differ from expectations.

Conference Call

Amtech Systems will host a conference call and webcast today at 8:30 a.m. ET to discuss fourth quarter and fiscal year financial results. Those in the USA wishing to participate in the live call should dial (844) 868-9329. From Canada, dial (866) 605-3852, and internationally, dial (412) 317-6703. Request "Amtech" when connected to the operator. A replay of the call will be available one hour after the end of the conference call through November 28, 2019. To access the replay please dial US toll free (877) 344-7529 and enter code 10136104. Internationally, dial (412) 317-0088 and use the same code. A live and archived web cast of the conference call can be accessed in the investor relations section of Amtech's website at www.amtechsystems.com.

About Amtech Systems, Inc.

Amtech Systems, Inc. is a leading, global manufacturer of capital equipment, including thermal processing and wafer polishing, and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power chips, electronic assemblies and light-emitting diodes (LEDs). We sell these products to semiconductor and automotive component manufacturers worldwide, particularly in Asia, North America and Europe. Our strategic focus is on semiconductor growth opportunities in power electronics, leveraging our strength in our core competencies in thermal and substrate processing. We are a market leader in the high-end power chip market (SiC and 300mm silicon horizontal thermal reactor), developing and supplying essential equipment and consumables used in the semiconductor industry. Amtech's products are recognized under the leading brand names BTU International, Bruce TechnologiesTM, and PR HoffmanTM.

Cautionary Note Regarding Forward-Looking Statements

Certain information contained in this press release is forward-looking in nature. All statements in this press release, or made by management of Amtech Systems, Inc. and its subsidiaries ("Amtech"), other than statements of historical fact, are hereby identified as "forward-looking statements" (as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995). The forward-looking statements in this press release relate only to events or information as of the date on which the statements are made in this press release. Examples of forward-looking statements include statements regarding Amtech's future financial results, operating results, business strategies, projected costs, products under development, competitive positions, plans and objectives of Amtech and its management for future operations, efforts to improve operational efficiencies and effectiveness and profitably grow our revenue, the planned divestiture of our solar business, and enhancements to our technologies and expansion of our product portfolio. In some cases, forward-looking statements can be identified by terminology such as "may," "plan," "anticipate," "seek," "will," "expect," "intend," "estimate," "anticipate," "believe," "continue," "predict," "potential," "project," "should," "would," "could", "likely," "future," "target," "forecast," "goal," "observe," and "strategy" or the negative of these terms or other comparable terminology used in this press release or by our management, which are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. The Form 10-K that Amtech filed with the Securities and Exchange Commission (the "SEC") for the year-ended September 30, 2019, listed various important factors that could affect the Company's future operating results and financial condition and could cause actual results to differ materially from historical results and expectations based on forward-looking statements made in this document or elsewhere by Amtech or on its behalf. These factors can be found under the heading "Risk Factors" in the Form 10-K and investors should refer to them. Because it is not possible to predict or identify all such factors, any such list cannot be considered a complete set of all potential risks or uncertainties. Except as required by law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise.

Contacts:




Amtech Systems, Inc.

Lisa D. Gibbs

Chief Financial Officer

(480) 967-5146

irelations@amtechsystems.com

Christensen

Investor Relations

Patty Bruner

(480) 201-6075

pbruner@christensenir.com

AMTECH SYSTEMS, INC.

(ASYS)

November 21, 2019

(Unaudited)


Summary Financial Information for Continuing Operations

(in thousands, except percentages and ratios)




Three Months Ended




Years Ended September 30,




September 30,

2019



June 30,

2019



September 30,

2018




2019



2018


Amtech Systems, Inc.






















Revenues, net of returns and allowances


$

20,174



$

21,003



$

23,079




$

85,035



$

100,053


Gross profit


$

8,560



$

7,850



$

8,193




$

33,357



$

36,918


Gross margin



42

%



37

%



35

%




39

%



37

%

Operating income (loss)


$

1,653



$

1,351



$

(1,100)




$

4,916



$

6,072


New orders


$

20,344



$

16,278



$

26,461




$

76,560



$

102,219


Backlog


$

17,326



$

17,237



$

26,291




$

17,326



$

26,291


Semiconductor Segment






















Revenues, net of returns and allowances


$

15,188



$

16,254



$

19,218




$

66,455



$

80,163


Gross profit


$

6,866



$

6,566



$

7,238




$

27,365



$

30,522


Gross margin



45

%



40

%



38

%




41

%



38

%

Operating income


$

2,316



$

1,951



$

2,726




$

8,744



$

11,848


New orders


$

16,163



$

12,899



$

19,478




$

60,625



$

81,868


Backlog


$

14,902



$

13,931



$

21,023




$

14,902



$

21,023


SiC/LED Segment






















Revenues, net of returns and allowances


$

4,352



$

3,074



$

3,041




$

13,682



$

13,761


Gross profit


$

1,814



$

1,038



$

914




$

5,338



$

5,284


Gross margin



42

%



34

%



30

%




39

%



38

%

Operating income


$

1,388



$

607



$

520




$

3,641



$

3,672


New orders


$

2,399



$

2,697



$

4,230




$

11,973



$

14,769


Backlog


$

966



$

2,934



$

2,695




$

966



$

2,695


Automation Segment






















Revenues, net of returns and allowances


$

634



$

1,675



$

820




$

4,898



$

6,129


Gross (loss) profit


$

(120)



$

246



$

41




$

654



$

1,112


Gross margin



-19

%



15

%



5

%




13

%



18

%

Operating loss


$

(394)



$

(52)



$

(2,666)




$

(786)



$

(2,897)


New orders


$

1,782



$

682



$

2,753




$

3,962



$

5,582


Backlog


$

1,458



$

372



$

2,573




$

1,458



$

2,573


AMTECH SYSTEMS, INC.

(ASYS)

November 21, 2019

(Unaudited)


Consolidated Statements of Operations

(in thousands, except per share data)




Three Months Ended

September 30,



Years Ended

September 30,




2019



2018



2019



2018


Revenues, net of returns and allowances


$

20,174



$

23,079



$

85,035



$

100,053


Cost of sales



11,614




14,886




51,678




63,135


Gross profit



8,560




8,193




33,357




36,918



















Selling, general and administrative



6,126




6,225




24,263




25,743


Research, development and engineering



743




821




3,068




2,856


Impairment charges






2,247







2,247


Restructuring charges



38







1,110





Operating income (loss)



1,653




(1,100)




4,916




6,072



















Gain on sale of other assets












2,883


Income from equity method investment












234


Interest income and other, net



341




342




852




738


Income (loss) from continuing operations before income taxes



1,994




(758)




5,768




9,927


Income tax provision



1,012




352




2,633




3,296


Income (loss) from continuing operations, net of tax



982




(1,110)




3,135




6,631


(Loss) income from discontinued operations, net of tax



(184)




(7,843)




(8,297)




(1,326)


Net income (loss)


$

798



$

(8,953)



$

(5,162)



$

5,305



















Income (Loss) Per Basic Share:

















Basic income (loss) per share from continuing operations


$

0.07



$

(0.08)



$

0.22



$

0.45


Basic loss per share from discontinued operations


$

(0.01)



$

(0.53)



$

(0.58)



$

(0.09)


Net income (loss) per basic share


$

0.06



$

(0.61)



$

(0.36)



$

0.36



















Income (Loss) Per Diluted Share:

















Diluted income (loss) per share from continuing operations


$

0.07



$

(0.08)



$

0.22



$

0.44


Diluted loss per share from discontinued operations


$

(0.01)



$

(0.53)



$

(0.58)



$

(0.09)


Net income (loss) per diluted share


$

0.06



$

(0.61)



$

(0.36)



$

0.35



















Weighted average shares outstanding - Basic



14,266




14,730




14,240




14,833


Weighted average shares outstanding - Diluted



14,304




14,730




14,275




15,065


AMTECH SYSTEMS, INC.

(ASYS)

November 21, 2019

(Unaudited)


Consolidated Balance Sheets

(in thousands, except share data)




September 30,

2019



September 30,

2018


Assets









Current Assets









Cash and cash equivalents


$

52,982



$

45,897


Restricted cash



101




18


Accounts receivable









Trade (less allowance for doubtful accounts of $172 and $454 at September 30, 2019, and September 30, 2018, respectively)



12,873




17,985


Unbilled and other






291


Inventory



17,532




17,835


Contract assets



36





Held-for-sale assets



22,755




45,322


Other current assets



1,991




2,884


Total current assets



108,270




130,232


Property, Plant and Equipment - Net



10,217




10,509


Intangible Assets - Net



870




1,130


Goodwill - Net



6,633




6,633


Other Assets



487




902


Total Assets


$

126,477



$

149,406


Liabilities and Shareholders' Equity









Current Liabilities









Accounts payable


$

4,371



$

6,867


Accrued compensation and related taxes



2,717




3,359


Accrued warranty expense



556




644


Other accrued liabilities



1,274




667


Current maturities of long-term debt



371




350


Contract liabilities



1,378




1,519


Income taxes payable



1,434




2,357


Held-for-sale liabilities



18,547




31,798


Total current liabilities



30,648




47,561


Long-Term Debt



5,178




5,542


Income Taxes Payable



3,199




3,213


Total Liabilities



39,025




56,316


Commitments and Contingencies









Shareholders' Equity









Preferred stock; 100,000,000 shares authorized; none issued







Common stock; $0.01 par value; 100,000,000 shares authorized; shares issued and outstanding: 14,268,797 and 14,216,596 at September 30, 2019, and September 30, 2018, respectively



143




142


Additional paid-in capital



125,098




124,316


Accumulated other comprehensive loss



(11,233)




(9,974)


Retained deficit



(26,556)




(21,394)


Total shareholders' equity



87,452




93,090


Total Liabilities and Shareholders' Equity


$

126,477



$

149,406


AMTECH SYSTEMS, INC.

(ASYS)

November 21, 2019

(Unaudited)


Consolidated Statements of Cash Flows

(in thousands)




Years Ended September 30,




2019



2018


Operating Activities









Net (loss) income


$

(5,162)



$

5,305


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









Depreciation and amortization



1,690




1,854


Non-cash impairment charges






7,006


Write-down of inventory



3,193




542


Capitalized interest



106




143


Provision for allowance for doubtful accounts, net



1,074




45


Deferred income taxes



220




209


Non-cash share-based compensation expense



573




855


Loss (gain) on sale of property, plant and equipment



(11)




(92)


Gain on sale of subsidiary



(1,614)





Gain on sale of other assets






(2,883)


Income from equity method investment






(234)


Changes in operating assets and liabilities:









Accounts receivable



299




3,274


Inventory



(435)




3,965


Contract and other assets



12,847




10,649


Accounts payable



(1,787)




(10,164)


Accrued income taxes



(3,011)




(1,749)


Accrued and other liabilities



(6,876)




1,960


Contract liabilities



(933)




(34,453)


Net cash provided by (used in) operating activities



173




(13,768)


Investing Activities









Purchases of property, plant and equipment



(714)




(1,495)


Proceeds from sale of property, plant and equipment






114


Net cash disposed of in sale of subsidiary



(1,112)





Proceeds from sale of other assets






5,732


Net cash (used in) provided by investing activities



(1,826)




4,351


Financing Activities









Proceeds from the exercise of stock options



210




1,892


Repurchases of common stock






(4,000)


Payments on long-term debt



(376)




(368)


Borrowings on long-term debt



9





Net cash used in financing activities



(157)




(2,476)


Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash



(1,552)




(1,372)


Net Decrease in Cash, Cash Equivalents and Restricted Cash



(3,362)




(13,265)


Cash, Cash Equivalents and Restricted Cash, Beginning of Year*



62,496




75,761


Cash, Cash Equivalents and Restricted Cash, End of Year*


$

59,134



$

62,496


* Includes Cash, Cash Equivalents and Restricted Cash that are included in Held-For-Sale Assets on the Consolidated Balance Sheets.

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