Amtech Reports First Quarter Fiscal 2023 Results

Rhea-AI Summary

Amtech Systems, Inc. (ASYS) reported a net revenue of $21.6 million for Q1 FY 2023, a 33% decrease from the previous quarter. The company faced an operating loss of $2.7 million, reflecting a decline in shipments of semiconductor and polishing equipment. Customer orders remained strong at $25.2 million, with a book-to-bill ratio of 1.2:1. The net loss per diluted share was $0.20, compared to a profit of $0.30 in the prior quarter. For Q2 FY 2023, revenues are projected to be between $30 million and $32 million, including the Entrepix acquisition.

Positive

• Customer orders of $25.2 million indicating strong demand for EV applications.
• Book to bill ratio of 1.2:1 suggests positive future revenue potential.
• Projected revenues for Q2 FY 2023 are expected between $30 million and $32 million.

Negative

• Net revenue decreased by 33% sequentially and 19% year-over-year.
• Operating loss of $2.7 million compared to operating income in previous quarters.
• Increased SG&A expenses by $1.9 million sequentially due to acquisition costs.

TEMPE, Ariz.--(BUSINESS WIRE)-- Amtech Systems, Inc. ("Amtech") (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, analog and discrete devices, and electronic assemblies and modules focusing on enabling technologies for electric vehicles (EV) and clean technology (CleanTech) applications, today reported results for its first quarter ended December 31, 2022.

First Quarter Fiscal 2023 Financial and Operational Highlights:

• Net revenue of $21.6 million
• Operating loss of $2.7 million, inclusive of $1.4 million in acquisition costs and $0.4 million in severance expenses
• Net loss of $2.7 million
• Net loss per diluted share of $0.20
• Customer orders of $25.2 million
• Book to bill ratio of 1.2:1
• December 31, 2022 backlog of $54.5 million

“While the uncertain macroeconomic outlook and timing of capacity expansion projects are creating near-term softness for our advanced packaging and SMT products, demand for EV applications remained robust, with customer orders of $25.2 million during our first quarter of fiscal 2023. Together with our recent acquisition of Entrepix, we are confident that our strategy to align our divisions to high-growth megatrend markets, such as EV and silicon carbide is gaining traction. We believe this strategic alignment to megatrend growth areas across multiple product and customer touchpoints creates a strong and durable foundation for value creation in the coming years,” commented Mr. Michael Whang, Chief Executive Officer of Amtech.

GAAP Financial Results

(in millions, except per share amounts)	Q1			Q4			Q1
	FY 2023			FY 2022			FY 2022
Revenues, net	$	21.6		$	32.3		$	26.5
Gross profit	$	8.3		$	12.6		$	9.9
Gross margin		38.5	%		38.8	%		37.4	%
Operating (loss) income	$	(2.7	)	$	3.9		$	1.2
Operating margin		-12.4	%		12.0	%		4.7	%
Net (loss) income	$	(2.7	)	$	4.2		$	1.0
Net (loss) income per diluted share	$	(0.20	)	$	0.30		$	0.07

Net revenues decreased 33% sequentially and 19% from the first quarter of fiscal 2022. The decrease is primarily attributable to lower shipments of our semiconductor and polishing equipment, partially offset by an increase in consumable shipments compared to the prior year quarter.

Gross margin was relatively consistent among periods.

Selling, General & Administrative (“SG&A”) expenses increased $1.9 million on a sequential basis and $2.1 million compared to the prior year period due primarily to $1.4 million in acquisition costs and consulting and ERP expenses.

Research, Development and Engineering was relatively flat sequentially and decreased $0.2 million compared to the same prior year period.

Operating loss was $2.7 million, compared to operating income of $3.9 million in the fourth quarter of fiscal 2022 and operating income of $1.2 million in the same prior year period.

Income tax benefit was less than $0.1 million for the three months ended December 31, 2022, compared to a provision of $0.6 million in the preceding quarter and $0.2 million in the same prior year period.

Net loss for the first quarter of fiscal 2023 was $2.7 million, or 20 cents per share. This compares to net income of $4.2 million, or 30 cents per share, for the preceding quarter and net income of $1.0 million, or 7 cents per share, for the first quarter of fiscal 2022.

Outlook

The Company’s outlook reflects the ongoing logistical impacts and the related delays for goods shipped to and from China. 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 second fiscal quarter ending March 31, 2023, which will include Entrepix, revenues are expected to be in the range of $30 to $32 million with operating margin in the low single digits, excluding approximately $1.1 million in acquisition costs.

A portion of Amtech's results is 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 first quarter financial results. The call will be available to interested parties by dialing 1-877-407-0784. For international callers, please dial +1-201-689-8560. The confirmation code is 13735895. A live webcast of the conference call will be available in the Investor Relations section of Amtech’s website at: https://www.amtechsystems.com/investors/events.

A replay of the webcast will be available in the Investor Relations section of the company’s website 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, wafer cleaning, chemical mechanical polishing (CMP) technology, and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC), silicon power, electronic assemblies and modules focusing on enabling technologies for electric vehicles (EV) and clean technology (CleanTech) applications. We sell process equipment and services 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 core competencies in thermal and substrate processing. Amtech's products are recognized under the leading brand names BTU International, Entrepix, Inc., Bruce Technologies™, PR Hoffman™ and Intersurface Dynamics, Inc.

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," "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, 2022, 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 in our subsequently filed Quarterly Reports on Form 10-Qs, 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)
(Unaudited)
Summary Financial Information
(in thousands, except percentages)
		Three Months Ended
		December 31, 2022				September 30, 2022				December 31, 2021
Amtech Systems, Inc.
Revenues, net		$	21,558			$	32,315			$	26,463
Gross profit		$	8,303			$	12,553			$	9,898
Gross margin			39	%			39	%			37	%
Operating (loss) income		$	(2,680	)		$	3,889			$	1,240
New orders		$	25,229			$	20,365			$	31,637
Backlog		$	54,452			$	50,780			$	48,452
Semiconductor Segment
Revenues, net		$	16,887			$	26,498			$	22,765
Gross profit		$	6,172			$	9,373			$	8,662
Gross margin			37	%			35	%			38	%
Operating income		$	869			$	4,425			$	2,357
New orders		$	21,084			$	16,165			$	27,809
Backlog		$	52,209			$	48,011			$	46,921
Material and Substrate Segment
Revenues, net		$	4,671			$	5,817			$	3,698
Gross profit		$	2,131			$	3,180			$	1,236
Gross margin			46	%			55	%			33	%
Operating income		$	633			$	1,737			$	181
New orders		$	4,145			$	4,200			$	3,828
Backlog		$	2,243			$	2,769			$	1,531

AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Statements of Operations
(in thousands, except per share data)
		Three Months Ended December 31,
		2022				2021
Revenues, net		$	21,558			$	26,463
Cost of sales			13,255				16,565
Gross profit			8,303				9,898
Selling, general and administrative			9,190				7,086
Research, development and engineering			1,393				1,572
Severance expense			400				—
Operating (loss) income			(2,680	)			1,240
Interest expense and other, net			(68	)			(83	)
(Loss) income before income tax provision			(2,748	)			1,157
Income tax (benefit) provision			(4	)			160
Net (loss) income		$	(2,744	)		$	997
(Loss) Income Per Share:
Net (loss) income per basic share		$	(0.20	)		$	0.07
Net (loss) income per diluted share		$	(0.20	)		$	0.07
Weighted average shares outstanding:
Basic			14,008				14,254
Diluted			14,008				14,485

AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Balance Sheets
(in thousands, except share data)
		December 31, 2022				September 30, 2022
Assets
Current Assets
Cash and cash equivalents		$	44,534			$	46,874
Accounts receivable (less allowance for doubtful accounts of $147 and $114 at December 31, 2022 and September 30, 2022, respectively)			21,785				25,013
Inventories			28,236				25,488
Other current assets			4,890				5,561
Total current assets			99,445				102,936
Property, Plant and Equipment - Net			6,451				6,552
Right-of-Use Assets - Net			10,832				11,258
Intangible Assets - Net			733				758
Goodwill			11,168				11,168
Deferred Income Taxes - Net			114				79
Other Assets			794				783
Total Assets		$	129,537			$	133,534
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable		$	6,835			$	7,301
Accrued compensation and related taxes			2,923				4,109
Other accrued liabilities			2,722				1,771
Current maturities of finance lease liabilities and long-term debt			71				107
Current portion of long-term operating lease liabilities			2,134				2,101
Contract liabilities			6,955				7,231
Income taxes payable			19				6
Total current liabilities			21,659				22,626
Finance Lease Liabilities and Long-Term Debt			59				220
Long-Term Operating Lease Liabilities			8,937				9,395
Income Taxes Payable			2,551				2,849
Other Long-Term Liabilities			93				76
Total Liabilities			33,299				35,166
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: 14,003,029 and 13,994,154 at December 31, 2022 and September 30, 2022, respectively			140				140
Additional paid-in capital			124,656				124,458
Accumulated other comprehensive loss			(1,351	)			(1,767	)
Retained deficit			(27,207	)			(24,463	)
Total Shareholders’ Equity			96,238				98,368
Total Liabilities and Shareholders’ Equity		$	129,537			$	133,534

AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Statements of Cash Flows
(in thousands)
		Three Months Ended December 31,
		2022				2021
Operating Activities
Net (loss) income		$	(2,744	)		$	997
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization			388				430
Write-down of inventory			48				120
Deferred income taxes			(35	)			—
Non-cash stock compensation expense			164				103
Provision for (reversal of) allowance for doubtful accounts			35				(19	)
Changes in operating assets and liabilities:
Accounts receivable			3,194				(2,683	)
Inventories			(2,796	)			(2,161	)
Other assets			1,106				(207	)
Accounts payable			(643	)			1,979
Accrued income taxes			(284	)			968
Accrued and other liabilities			(665	)			140
Contract liabilities			(276	)			2,822
Net cash (used in) provided by operating activities			(2,508	)			2,489
Investing Activities
Purchases of property, plant and equipment			(224	)			(45	)
Net cash used in investing activities			(224	)			(45	)
Financing Activities
Proceeds from the exercise of stock options			34				69
Repurchase of common stock			—				(2,713	)
Payments on long-term debt			(14	)			(97	)
Net cash provided by (used in) financing activities			20				(2,741	)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash			372				175
Net Decrease in Cash, Cash Equivalents and Restricted Cash			(2,340	)			(122	)
Cash and Cash Equivalents, Beginning of Period			46,874				32,836
Cash, Cash Equivalents and Restricted Cash, End of Period		$	44,534			$	32,714

 

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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

Source: Amtech Systems, Inc.

FAQ

What were Amtech Systems' Q1 FY 2023 financial results?

Amtech reported net revenue of $21.6 million, a net loss of $2.7 million, and a net loss per diluted share of $0.20.

How did customer orders perform for Amtech in Q1 FY 2023?

Customer orders totaled $25.2 million, reflecting strong demand particularly in the EV sector.

What is the outlook for Amtech in Q2 FY 2023?

For Q2 FY 2023, Amtech expects revenues between $30 million and $32 million, including contributions from the recent Entrepix acquisition.

What impact did the acquisition costs have on Amtech's financial performance?

The acquisition costs contributed to an operating loss of $2.7 million, impacting overall profitability.