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Amtech Reports Second Quarter Fiscal 2020 Results

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 chips, electronic assemblies and light-emitting diodes (LEDs), today reported results for its second quarter ended March 31, 2020.

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

  • Net revenue of $14.5 million
  • Operating loss of $1.0 million
  • Loss from continuing operations, net of tax, of $0.5 million
  • Loss per diluted share from continuing operations of $0.04
  • Customer orders of $20.6 million
  • Unrestricted cash of $49.3 million
  • Cash provided by operations of $1.3 million
  • Repurchase of 366,000 shares of common stock at a total cost of approximately $2.0 million

Mr. Michael Whang, Chief Executive Officer of Amtech, commented, "As COVID-19 developed into a global pandemic throughout the second fiscal quarter, we faced disruptions both to our manufacturing facilities and supply chain. However, due to the extraordinary efforts of our employees and partners, we were able to continue to serve our customers, resulting in revenue for the quarter that was above the high end of our guidance.

"Despite ongoing uncertainties related to near-term demand, we are fortunate to have entered this period with both a resilient business model and strong balance sheet which will allow us to navigate the challenges likely to rise in these uncertain times while supporting the execution of our power semi growth strategy," concluded Mr. Whang.

GAAP Financial Results

(in millions, except per share amounts)

Q2

 

Q1

 

Q2

 

6 Months

 

6 Months

 

 

FY 2020

 

FY 2020

 

FY 2019

 

2020

 

2019

 

Net revenues

$

14.5

 

$

20.7

 

$

20.6

 

$

35.2

 

$

43.9

 

Gross profit

$

5.4

 

$

8.2

 

$

7.9

 

$

13.5

 

$

16.9

 

Gross margin

 

37

%

 

40

%

 

38

%

 

38

%

 

39

%

Operating (loss) income

$

(1.0

)

$

1.6

 

$

1.2

 

$

0.7

 

$

1.9

 

Operating margin

 

-6.7

%

 

7.9

%

 

6.0

%

 

1.9

%

 

4.4

%

(Loss) income from continuing operations, net of tax

$

(0.5

)

$

(1.3

)

$

1.0

 

$

(1.8

)

$

1.3

 

Diluted (loss) income per share from continuing operations

$

(0.04

)

$

(0.09

)

$

0.07

 

$

(0.13

)

$

0.09

 

Net revenues decreased 30% both sequentially and from the second quarter of fiscal 2019. Semiconductor revenue in fiscal Q2 2020 decreased primarily due to COVID-19 impacts within China, where our Shanghai facility was affected by the extended Chinese New Year and the phased return to work process and associated production ramp up. Silicon carbide/LED revenue decreased compared to the same prior year period primarily due to delayed shipments at the end of the quarter resulting from COVID-19 state-wide shutdown orders in Pennsylvania.

Gross margin decreased in the second quarter of fiscal 2020 both sequentially and compared to the same prior year period, primarily due to the lower revenue level in the quarter and product mix. Operating loss was $1.0 million, primarily from lower revenue in the quarter, compared to operating income of $1.6 million in the first quarter of fiscal 2020 and $1.2 million of operating income in the same prior year period. Loss from continuing operations, net of tax, for the second quarter of fiscal 2020 was $0.5 million, or 4 cents per share. This compares to income from continuing operations of $1.0 million, or 7 cents per share, for the second quarter of fiscal 2019 and loss of $1.3 million, or 9 cents per share, in the preceding quarter. The Company recognized a pre-tax loss from the sale of our solar subsidiary, Tempress, of $10.9 million, of which approximately $7.2 million was the recognition of previously recorded accumulated foreign currency translation losses.

Outlook

Our outlook reflects the anticipated ongoing impacts from the COVID-19 pandemic as we understand them today; however, given how fluid the situation is both for our own business as well as for that of our customers and supply chain, we 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 our third fiscal quarter ending June 30, 2020, revenues are expected to be in the range of $13.0 to $16.0 million. Gross margin for the quarter ending June 30, 2020 is expected to be in the mid to upper 30% range, with negative operating margin, primarily due to one-time moving costs for PR Hoffman to relocate into their new building and an increase in R&D related to new product development.

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 second quarter financial results. The call will be available to interested parties by dialing 800-967-7164 or +1 323-794-2094. The Conference ID number is 3182188. The call will be webcast and available in the Investor Relations section of Amtech’s website at: http://www.amtechsystems.com/conference.htm.

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 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.

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

May 7, 2020

(Unaudited)

 

Summary Financial Information for Continuing Operations

(in thousands, except percentages and ratios)

 

 

 

Three Months Ended

 

 

 

Six Months Ended March 31,

 

 

 

March 31,

2020

 

 

December 31,

2019

 

 

March 31,

2019

 

 

 

2020

 

 

2019

 

Amtech Systems, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues, net of returns and allowances

 

$

14,460

 

 

$

20,692

 

 

$

20,633

 

 

 

$

35,152

 

 

$

43,858

 

Gross profit

 

$

5,358

 

 

$

8,174

 

 

$

7,927

 

 

 

$

13,532

 

 

$

16,947

 

Gross margin

 

 

37

%

 

 

40

%

 

 

38

%

 

 

 

38

%

 

 

39

%

Operating (loss) income

 

$

(972

)

 

$

1,637

 

 

$

1,248

 

 

 

$

665

 

 

$

1,912

 

New orders

 

$

20,626

 

 

$

17,625

 

 

$

19,325

 

 

 

$

38,251

 

 

$

39,938

 

Backlog

 

$

19,618

 

 

$

13,444

 

 

$

21,991

 

 

 

$

19,618

 

 

$

21,991

 

Semiconductor Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues, net of returns and allowances

 

$

11,992

 

 

$

17,232

 

 

$

16,053

 

 

 

$

29,224

 

 

$

35,013

 

Gross profit

 

$

4,413

 

 

$

7,186

 

 

$

6,443

 

 

 

$

11,599

 

 

$

13,933

 

Gross margin

 

 

37

%

 

 

42

%

 

 

40

%

 

 

 

40

%

 

 

40

%

Operating (loss) income

 

$

(18

)

 

$

2,722

 

 

$

1,732

 

 

 

$

2,704

 

 

$

4,477

 

New orders

 

$

17,019

 

 

$

15,094

 

 

$

15,469

 

 

 

$

32,113

 

 

$

31,563

 

Backlog

 

$

17,799

 

 

$

12,764

 

 

$

17,286

 

 

 

$

17,799

 

 

$

17,286

 

SiC/LED Segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues, net of returns and allowances

 

$

2,468

 

 

$

2,817

 

 

$

3,273

 

 

 

$

5,285

 

 

$

6,256

 

Gross profit

 

$

945

 

 

$

979

 

 

$

1,262

 

 

 

$

1,924

 

 

$

2,486

 

Gross margin

 

 

38

%

 

 

35

%

 

 

39

%

 

 

 

36

%

 

 

40

%

Operating income

 

$

421

 

 

$

534

 

 

$

877

 

 

 

$

955

 

 

$

1,646

 

New orders

 

$

3,607

 

 

$

2,531

 

 

$

3,133

 

 

 

$

6,138

 

 

$

6,877

 

Backlog

 

$

1,819

 

 

$

680

 

 

$

3,311

 

 

 

$

1,819

 

 

$

3,311

 

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

May 7, 2020

(Unaudited)

 

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

 

 

 

Three Months Ended March 31,

 

Six Months Ended March 31,

 

 

2020

 

2019

 

2020

 

2019

Revenues, net of returns and allowances

 

$

14,460

 

 

$

20,633

 

 

$

35,152

 

 

$

43,858

 

Cost of sales

 

 

9,102

 

 

 

12,706

 

 

 

21,620

 

 

 

26,911

 

Gross profit

 

 

5,358

 

 

 

7,927

 

 

 

13,532

 

 

 

16,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

5,415

 

 

 

5,793

 

 

 

11,330

 

 

 

12,419

 

Research, development and engineering

 

 

915

 

 

 

713

 

 

 

1,537

 

 

 

1,579

 

Restructuring charges

 

 

 

 

 

173

 

 

 

 

 

 

1,037

 

Operating (loss) income

 

 

(972

)

 

 

1,248

 

 

 

665

 

 

 

1,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on sale of subsidiary

 

 

 

 

 

 

 

 

(2,793

)

 

 

 

Interest income and other, net

 

 

595

 

 

 

96

 

 

 

525

 

 

 

262

 

(Loss) income from continuing operations before income taxes

 

 

(377

)

 

 

1,344

 

 

 

(1,603

)

 

 

2,174

 

Income tax provision

 

 

166

 

 

 

332

 

 

 

207

 

 

 

914

 

(Loss) income from continuing operations, net of tax

 

 

(543

)

 

 

1,012

 

 

 

(1,810

)

 

 

1,260

 

Loss from discontinued operations, net of tax

 

 

(11,151

)

 

 

(6,647

)

 

 

(11,816

)

 

 

(9,267

)

Net loss

 

$

(11,694

)

 

$

(5,635

)

 

$

(13,626

)

 

$

(8,007

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Income Per Basic Share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic (loss) income per share from continuing operations

 

$

(0.04

)

 

$

0.07

 

 

$

(0.13

)

 

$

0.09

 

Basic loss per share from discontinued

operations

 

$

(0.79

)

 

$

(0.47

)

 

$

(0.83

)

 

$

(0.65

)

Net loss per basic share

 

$

(0.83

)

 

$

(0.40

)

 

$

(0.96

)

 

$

(0.56

)

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) Income Per Diluted Share:

 

 

 

 

 

 

 

 

 

 

 

 

Diluted (loss) income per share from continuing operations

 

$

(0.04

)

 

$

0.07

 

 

$

(0.13

)

 

$

0.09

 

Diluted loss per share from discontinued operations

 

$

(0.79

)

 

$

(0.47

)

 

$

(0.83

)

 

$

(0.65

)

Net loss per diluted share

 

$

(0.83

)

 

$

(0.40

)

 

$

(0.96

)

 

$

(0.56

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

 

14,150

 

 

 

14,228

 

 

 

14,193

 

 

 

14,224

 

Weighted average shares outstanding - diluted

 

 

14,150

 

 

 

14,258

 

 

 

14,193

 

 

 

14,255

 

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

May 7, 2020

(Unaudited)

 

Condensed Consolidated Balance Sheets

(in thousands, except share data)

 

 

 

March 31,

2020

 

September 30,

2019

Assets

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

49,268

 

 

$

52,982

 

Restricted cash

 

 

 

 

 

101

 

Accounts receivable (less allowance for doubtful accounts of $151 and $172 at March 31, 2020, and September 30, 2019, respectively)

 

 

11,285

 

 

 

12,873

 

Inventories

 

 

17,332

 

 

 

17,532

 

Notes and other receivables

 

 

1,250

 

 

 

 

Income taxes receivable

 

 

240

 

 

 

 

Held-for-sale assets

 

 

 

 

 

22,755

 

Other current assets

 

 

2,192

 

 

 

2,027

 

Total current assets

 

 

81,567

 

 

 

108,270

 

Property, Plant and Equipment - Net

 

 

10,100

 

 

 

10,217

 

Intangible Assets - Net

 

 

739

 

 

 

870

 

Goodwill - Net

 

 

6,633

 

 

 

6,633

 

Other Assets

 

 

559

 

 

 

487

 

Total Assets

 

$

99,598

 

 

$

126,477

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts payable

 

$

4,447

 

 

$

4,371

 

Accrued compensation and related taxes

 

 

1,525

 

 

 

2,717

 

Accrued warranty expense

 

 

398

 

 

 

556

 

Other accrued liabilities

 

 

1,423

 

 

 

1,274

 

Current maturities of long-term debt

 

 

372

 

 

 

371

 

Contract liabilities

 

 

1,532

 

 

 

1,378

 

Income taxes payable

 

 

 

 

 

1,434

 

Held-for-sale liabilities

 

 

 

 

 

18,547

 

Total current liabilities

 

 

9,697

 

 

 

30,648

 

Long-Term Debt

 

 

4,989

 

 

 

5,178

 

Long-Term Lease Liability

 

 

29

 

 

 

 

Income Taxes Payable

 

 

2,726

 

 

 

3,199

 

Total Liabilities

 

 

17,441

 

 

 

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: 14,041,322 and 14,268,797 at March 31, 2020 and September 30, 2019, respectively

 

 

140

 

 

 

143

 

Additional paid-in capital

 

 

124,145

 

 

 

125,098

 

Accumulated other comprehensive loss

 

 

(1,814

)

 

 

(11,233

)

Retained deficit

 

 

(40,314

)

 

 

(26,556

)

Total shareholders’ equity

 

 

82,157

 

 

 

87,452

 

Total Liabilities and Shareholders’ Equity

 

$

99,598

 

 

$

126,477

 

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

May 7, 2020

(Unaudited)

 

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

 

Six Months Ended March 31,

 

 

2020

 

2019

Operating Activities

 

 

 

 

 

 

Net loss

 

$

(13,626

)

 

$

(8,007

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

694

 

 

 

888

 

Write-down of inventory

 

 

330

 

 

 

2,794

 

Deferred income taxes

 

 

784

 

 

 

7

 

Non-cash share-based compensation expense

 

 

133

 

 

 

363

 

Loss on sales of subsidiaries

 

 

13,709

 

 

 

 

(Reversal of) provision for allowance for doubtful accounts, net

 

 

(32

)

 

 

1,141

 

Other, net

 

 

4

 

 

 

115

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

1,374

 

 

 

(1,533

)

Inventories

 

 

(527

)

 

 

(650

)

Other assets

 

 

3,667

 

 

 

10,143

 

Accounts payable

 

 

(1,849

)

 

 

(650

)

Accrued income taxes

 

 

(2,094

)

 

 

216

 

Accrued and other liabilities

 

 

(228

)

 

 

(378

)

Contract liabilities

 

 

(1,063

)

 

 

(7,516

)

Net cash provided by (used in) operating activities

 

 

1,276

 

 

 

(3,067

)

Investing Activities

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(345

)

 

 

(238

)

Net cash disposed of in sales of subsidiaries

 

 

(9,940

)

 

 

 

Net cash used in investing activities

 

 

(10,285

)

 

 

(238

)

Financing Activities

 

 

 

 

 

 

Proceeds from the exercise of stock options

 

 

779

 

 

 

37

 

Repurchase of common stock

 

 

(2,000

)

 

 

 

Payments on long-term debt

 

 

(194

)

 

 

(186

)

Net cash used in financing activities

 

 

(1,415

)

 

 

(149

)

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

 

 

558

 

 

 

(903

)

Net Decrease in Cash, Cash Equivalents and Restricted Cash

 

 

(9,866

)

 

 

(4,357

)

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

 

 

59,134

 

 

 

62,496

 

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

 

$

49,268

 

 

$

58,139

 

*

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/20200507005964/en/

Contacts

Amtech Systems, Inc.
Lisa D. Gibbs
Chief Financial Officer
(480) 967-5146
irelations@amtechsystems.com

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