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Amtech Reports Fourth Quarter Fiscal 2020 Results

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Amtech Systems, Inc. (NASDAQ: 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 devices, analog and discrete devices, electronic assemblies and light-emitting diodes (LEDs), today reported results for its fourth quarter ended September 30, 2020.

Fourth Quarter Fiscal 2020 Financial and Operational Highlights from Continuing Operations:

  • Net revenue of $15.1 million

  • Operating loss of $1.2 million

  • Loss from continuing operations, net of tax, of $2.0 million

  • Loss per diluted share from continuing operations of $0.14

  • Customer orders of $13.8 million

  • Unrestricted cash of $45.1 million

Fiscal 2020 Financial and Operational Highlights from Continuing Operations:

  • Net revenue of $65.5 million

  • Operating loss of $0.5 million

  • Loss from continuing operations, net of tax, of $3.9 million, primarily due to the sale of the Automation business

  • Loss per diluted share from continuing operations of $0.28

  • Customer orders of $62.8 million

  • Backlog of $13.9 million as of September 30, 2020

Mr. Michael Whang, Chief Executive Officer of Amtech, commented, "Given the challenges and uncertainty created by the pandemic in 2020, we are encouraged to have finished the year and begun our new fiscal year with increasing customer order momentum. With the combination of continuing improvement in near-term dialogue with customers and the robust long-term growth fundamentals across the silicon carbide, power semiconductor and advanced semiconductor packaging markets, we are increasingly confident in the opportunities for growth in 2021 and beyond."

GAAP Financial Results

(in millions, except per share amounts)

Q4 FY

Q3 FY

Q4 FY

12 Months

12 Months

2020

2020

2019

2020

2019

Net revenues

$

15.1

$

15.2

$

20.2

$

65.5

$

85.0

Gross profit

$

5.0

$

6.0

$

8.6

$

24.4

$

33.4

Gross margin

32.9

%

39.1

%

42.4

%

37.3

%

39.2

%

Operating (loss) income

$

(1.2

)

$

0.0

$

1.7

$

(0.5

)

$

4.9

Operating margin

-7.8

%

0.2

%

8.2

%

-0.7

%

5.8

%

(Loss) income from continuing operations, net of tax

$

(2.0

)

$

(0.1

)

$

1.0

$

(3.9

)

$

3.1

Diluted (loss) income per share from continuing operations

$

(0.14

)

$

(0.01

)

$

0.07

$

(0.28

)

$

0.22

Net revenues remained consistent sequentially and decreased 25% from the fourth quarter of fiscal 2019. Semiconductor and SiC/LED revenue decreased compared to the fourth quarter of fiscal 2019 primarily due to the ongoing uncertainty in the global economy from the COVID-19 virus.

Gross margin decreased in the fourth quarter of fiscal 2020 both sequentially and compared to the same prior year period. On a sequential basis, gross margin decreased primarily due to product mix and non-recurring expenses. Compared to the fourth quarter of fiscal 2019, gross margin decreased primarily due to lower volume and product mix.

Selling, General & Administrative ("SG&A") expenses increased $0.5 million sequentially due primarily to payroll tax credits the Company was able to claim in fiscal Q3 2020 as part of the COVID-19 legislation passed by U.S. Congress, the CARES Act. SG&A decreased $0.9 million compared to the same prior year period due primarily to exclusion of the Company’s former Automation segment from results and lower travel due to the COVID-19 pandemic.

Operating loss was $1.2 million, compared to operating income of $31,000 in the third quarter of fiscal 2020 and $1.7 million of operating income in the same prior year period.

Loss from continuing operations, net of tax, for the fourth quarter of fiscal 2020 was $2.0 million, or a loss of 14 cent per share. This compares to income from continuing operations of $1.0 million, or 7 cents per share, for the fourth quarter of fiscal 2019 and loss of $0.1 million, or 1 cent per share, in the preceding quarter.

Outlook

The Company’s outlook reflects the anticipated ongoing impacts from the COVID-19 pandemic as understood today. Given how fluid the situation is both for Amtech as well as that of its customers and supply chain, management would like to remind investors that actual results may differ materially in the weeks and months ahead. Additionally, the semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Operating results can be significantly impacted, positively or negatively, by the timing of orders, system shipments, and the financial results of semiconductor manufacturers.

For the first fiscal quarter ending December 31, 2020, revenues are expected to be in the range of $16.0 to $18.0 million. Gross margin for the quarter ending December 31, 2020 is expected to be in the mid 30% range, with operating margin slightly negative.

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 today at 5:00 p.m. ET to discuss our fiscal fourth quarter financial results. The call will be available to interested parties by dialing 800-367-2403. For international callers, please dial +1 334-777-6978. The Conference ID number is 5637065. The call will be webcast and available in the Investor Relations section of Amtech’s website at: http://www.amtechsystems.com.

A replay of the webcast will be available in the Investor Relations section of the company’s web site at http://www.amtechsystems.com/conference.htm shortly after the conclusion of the call and will remain available for approximately 30 calendar days.

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 devices, analog and discrete devices, electronic assemblies and light-emitting diodes (LEDs). We sell these products to semiconductor device and module manufacturers worldwide, particularly in Asia, North America and Europe. Our strategic focus is on semiconductor growth opportunities in power electronics, sensors and analog devices 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 substrates, 300mm horizontal thermal reactor, and electronic assemblies used in power, RF, and other advanced applications), 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 Technologies, and PR Hoffman.

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, 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, 2020, 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.

AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
November 19, 2020
(Unaudited)

Summary Financial Information for Continuing Operations
(in thousands, except percentages and ratios)

Three Months Ended

Years Ended September 30,

September 30,
2020

June 30,
2020

September 30,
2019

2020

2019

Amtech Systems, Inc.

Revenues, net of returns and allowances

$

15,084

$

15,227

$

20,174

$

65,463

$

85,035

Gross profit

$

4,958

$

5,951

$

8,560

$

24,441

$

33,357

Gross margin

33

%

39

%

42

%

37

%

39

%

Operating (loss) income

$

(1,181

)

$

31

$

1,653

$

(485

)

$

4,916

New orders

$

13,767

$

10,830

$

20,344

$

62,848

$

76,560

Backlog

$

13,905

$

15,221

$

17,326

$

13,905

$

17,326

Semiconductor Segment

Revenues, net of returns and allowances

$

12,935

$

12,357

$

15,188

$

54,516

$

66,455

Gross profit

$

4,647

$

4,953

$

6,866

$

21,199

$

27,365

Gross margin

36

%

40

%

45

%

39

%

41

%

Operating income

$

406

$

1,058

$

2,316

$

4,168

$

8,744

New orders

$

11,979

$

8,356

$

16,163

$

52,448

$

60,625

Backlog

$

12,842

$

13,798

$

14,902

$

12,842

$

14,902

SiC/LED Segment

Revenues, net of returns and allowances

$

2,149

$

2,870

$

4,352

$

10,304

$

13,682

Gross profit

$

311

$

998

$

1,814

$

3,233

$

5,338

Gross margin

14

%

35

%

42

%

31

%

39

%

Operating (loss) income

$

(512

)

$

241

$

1,388

$

684

$

3,641

New orders

$

1,788

$

2,474

$

2,399

$

10,400

$

11,973

Backlog

$

1,063

$

1,423

$

966

$

1,063

$

966

AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
November 19, 2020
(Unaudited)

Consolidated Statements of Operations
(in thousands, except per share data)

Three Months Ended
September 30,

Years Ended
September 30,

2020

2019

2020

2019

Revenue, net of returns and allowances

$

15,084

$

20,174

$

65,463

$

85,035

Cost of sales

10,126

11,614

41,022

51,678

Gross profit

4,958

8,560

24,441

33,357

Selling, general and administrative

5,263

6,126

21,397

24,263

Research, development and engineering

876

743

3,312

3,068

Restructuring charges

38

217

1,110

Operating (loss) income

(1,181

)

1,653

(485

)

4,916

Loss on sale of subsidiary

(2,793

)

Interest (expense) income and other, net

(350

)

341

162

852

(Loss) income from continuing operations before income taxes

(1,531

)

1,994

(3,116

)

5,768

Income tax provision

494

1,012

791

2,633

(Loss) income from continuing operations, net of tax

(2,025

)

982

(3,907

)

3,135

Loss from discontinued operations, net of tax

(184

)

(11,816

)

(8,297

)

Net (loss) income

$

(2,025

)

$

798

$

(15,723

)

$

(5,162

)

(Loss) Income Per Basic Share:

Basic (loss) income per share from continuing operations

$

(0.14

)

$

0.07

$

(0.28

)

$

0.22

Basic loss per share from discontinued operations

$

$

(0.01

)

$

(0.83

)

$

(0.58

)

Net (loss) income per basic share

$

(0.14

)

$

0.06

$

(1.11

)

$

(0.36

)

(Loss) Income Per Diluted Share:

Diluted (loss) income per share from continuing operations

$

(0.14

)

$

0.07

$

(0.28

)

$

0.22

Diluted loss per share from discontinued operations

$

$

(0.01

)

$

(0.83

)

$

(0.58

)

Net (loss) income per diluted share

$

(0.14

)

$

0.06

$

(1.11

)

$

(0.36

)

Weighted average shares outstanding - basic

14,052

14,266

14,159

14,240

Weighted average shares outstanding - diluted

14,052

14,304

14,159

14,275

AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
November 19, 2020
(Unaudited)

Consolidated Balance Sheets
(in thousands, except share data)

September 30,
2020

September 30,
2019

Assets

Current Assets

Cash and cash equivalents

$

45,070

$

52,982

Restricted cash

101

Accounts receivable (less allowance for doubtful accounts of $159 and $172 at

September 30, 2020 and September 30, 2019, respectively)

11,243

12,873

Inventory

17,277

17,532

Contract assets

36

Income taxes receivable

1,362

Held-for-sale assets

22,755

Other current assets

1,617

1,991

Total current assets

76,569

108,270

Property, Plant and Equipment - Net

11,995

10,217

Right-of-Use Assets - Net

5,124

Intangible Assets - Net

609

870

Goodwill - Net

6,633

6,633

Deferred Income Taxes - Net

566

Other Assets

602

487

Total Assets

$

102,098

$

126,477

Liabilities and Shareholders’ Equity

Current Liabilities

Accounts payable

$

2,676

$

4,371

Accrued compensation and related taxes

2,066

2,717

Accrued warranty expense

380

556

Other accrued liabilities

751

1,274

Current maturities of long-term debt

380

371

Contract liabilities

1,224

1,378

Income taxes payable

1,434

Held-for-sale liabilities

18,547

Total current liabilities

7,477

30,648

Long-Term Debt

4,798

5,178

Long-Term Lease Liability

5,064

Income Taxes Payable

3,240

3,199

Total Liabilities

20,579

39,025

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: 14,063,172 and 14,268,797 at

September 30, 2020 and September 30, 2019, respectively

141

143

Additional paid-in capital

124,435

125,098

Accumulated other comprehensive loss

(646

)

(11,233

)

Retained deficit

(42,411

)

(26,556

)

Total Shareholders’ Equity

81,519

87,452

Total Liabilities and Shareholders’ Equity

$

102,098

$

126,477

AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
November 19, 2020
(Unaudited)

Consolidated Statements of Cash Flows
(in thousands)

Years Ended September 30,

2020

2019

Operating Activities

Net (loss) income

$

(15,723

)

$

(5,162

)

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

operating activities:

Depreciation and amortization

1,258

1,690

Non-cash impairment charges

Write-down of inventory

733

3,193

Provision for allowance for doubtful accounts

24

1,074

Deferred income taxes

218

220

Non-cash share based compensation expense

326

573

Loss (gain) on sales of subsidiaries

13,709

(1,614

)

Other, net

55

95

Changes in operating assets and liabilities:

Accounts receivable

1,359

299

Inventory

(913

)

(435

)

Contract and other assets

324

12,847

Accounts payable

(3,620

)

(1,787

)

Accrued income taxes

(2,701

)

(3,011

)

Accrued and other liabilities

4,658

(6,876

)

Contract liabilities

(1,371

)

(933

)

Net cash (used in) provided by operating activities

(1,664

)

173

Investing Activities

Purchases of property, plant and equipment

(2,676

)

(714

)

Net cash disposed of in sales of subsidiaries

(9,940

)

(1,112

)

Net cash used in investing activities

(12,616

)

(1,826

)

Financing Activities

Proceeds from the exercise of stock options

877

210

Repurchase of common stock

(2,000

)

Payments on long-term debt

(379

)

(376

)

Borrowings on long-term debt

9

Net cash used in financing activities

(1,502

)

(157

)

Effect of Exchange Rate Changes on Cash, Cash Equivalents and

Restricted Cash

1,718

(1,552

)

Net Decrease in Cash, Cash Equivalents and Restricted Cash

(14,064

)

(3,362

)

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

59,134

62,496

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

$

45,070

$

59,134

* Includes Cash, Cash Equivalents and Restricted Cash that are included in Held-For-Sale Assets on the Condensed Consolidated Balance Sheets for periods prior to January 22, 2020.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201119006211/en/

Contacts

Amtech Systems, Inc.
Lisa D. Gibbs
Chief Financial Officer
(480) 360-3756
irelations@amtechsystems.com

Sapphire Investor Relations, LLC
Erica Mannion and Mike Funari
(617) 542-6180
irelations@amtechsystems.com