Amtech Reports Third Quarter Fiscal 2022 Results

Rhea-AI Summary

Amtech Systems, Inc. (NASDAQ: ASYS) reported its Q3 fiscal 2022 results, with net revenue of $20.0 million, down 28% sequentially. The Shanghai facility was fully reopened on June 1, following a government-mandated closure due to COVID-19, impacting shipments of advanced packaging equipment. Notably, customer orders totaled $30.1 million, yielding a book-to-bill ratio of 1.5:1. Operating income reached $9.6 million, while net income was $10.2 million, or $0.73 per diluted share. The outlook predicts revenues between $30 million to $32 million for Q4.

Positive

• Customer orders of $30.1 million indicate strong demand.
• Operating income increased to $9.6 million compared to $2.6 million in Q2.
• Net income rose significantly to $10.2 million from $2.0 million in Q2.

Negative

• Net revenue decreased 28% sequentially due to the Shanghai facility closure.
• Gross margin fell to 29.6%, down from 40.5% in Q2.

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 devices, analog and discrete devices, electronic assemblies and light-emitting diodes (LEDs), today reported results for its third quarter ended June 30, 2022.

Third Quarter Fiscal 2022 Financial and Operational Highlights:

• Net revenue of $20.0 million
• Shanghai facility fully reopened on June 1, 2022
• Customer orders of $30.1 million
• Book to bill ratio of 1.5:1
• Completed sale-leaseback of Billerica, MA facility, with pretax gain of $12.5 million and cash inflow of $14.9 million
• Operating income of $9.6 million
• Net income of $10.2 million
• Net income per diluted share of $0.73
• Unrestricted cash of $47.7 million
• June 30, 2022 backlog of $62.7 million

Mr. Michael Whang, Chief Executive Officer of Amtech, commented, “The robust demand for our products continued in the third quarter with bookings of $30.1 million, representing our sixth straight quarter of bookings over $30 million. While we experienced revenue headwinds in the third quarter due to the Shanghai COVID lockdown, we successfully re-opened our facility in early June. Our confidence around the long-awaited silicon carbide wafer ramp is building, with revenue for these applications more than doubling over the last two quarters. Given our established market leading position in consumables, we remain excited as the mid to long-term opportunities in front of us come into focus.”

GAAP Financial Results
(in millions, except per share amounts)	Q3				Q2				Q3				9 Months				9 Months
	FY 2022				FY 2022				FY 2021				2022				2021
Revenues, net	$	20.0			$	27.6			$	23.1			$	74.0			$	60.9
Gross profit	$	5.9			$	11.2			$	10.1			$	27.0			$	25.3
Gross margin		29.6	%			40.5	%			43.6	%			36.4	%			41.6	%
Operating income	$	9.6			$	2.6			$	1.2			$	13.4			$	2.4
Operating margin		47.9	%			9.4	%			5.2	%			18.1	%			4.0	%
Net income	$	10.2			$	2.0			$	0.4			$	13.2			$	0.8
Net income per diluted share	$	0.73			$	0.14			$	0.03			$	0.93			$	0.06

Net revenues decreased 28% sequentially and 14% from the third quarter of fiscal 2021, primarily attributable to lower shipments of our advanced packaging equipment due to our Shanghai facility closure, partially offset by increased shipments of our consumables products. The decrease in production from the Shanghai facility was caused by the government-mandated closure relating to its COVID policies, which closed the Company’s facility on March 28, 2022. The facility was allowed to partially reopen in May 2022 and fully reopened on June 1, 2022.

Gross margin decreased sequentially and compared to the same period last year primarily due to the above-mentioned closure of the Shanghai manufacturing facility. This closure resulted in decreased utilization during the period as the Company continued to pay employees while ceasing production entirely.

Selling, General & Administrative (“SG&A”) expenses increased $0.4 million on a sequential basis, with higher legal expenses related to the sale-leaseback transaction and increased consulting expenses offset by lower commission on lower sales. SG&A decreased slightly compared to the prior year period primarily due to a reduction in commissions due to lower sales in fiscal 2022 partially offset by an increase in employee-related expenses and consulting.

On June 23, 2022, the Company’s subsidiary, BTU International, Inc. ("BTU"), completed the sale and leaseback of BTU's building in Billerica, Massachusetts (the "Property"). The sale price was $20.6 million. Simultaneously with the sale closing, BTU entered into a two-year leaseback of the Property. The lease terms include base rent of $1.5 million per year in an absolute triple net lease. In connection with the sale, BTU recognized a pretax gain of $12.5 million. This sale-leaseback transaction resulted in a net cash inflow of approximately $14.9 million, after repayment of the existing mortgage and settlement of related sale expenses.

Research, Development and Engineering decreased $0.2 million sequentially and increased $0.1 million compared to the same prior year period.

Operating income was $9.6 million, compared to operating income of $2.6 million in the second quarter of fiscal 2022 and operating income of $1.2 million in the same prior year period.

Income tax provision was $20,000 for the three months ended June 30, 2022, compared to a provision of $0.7 million in both the preceding quarter and the same prior year period.

Net income for the third quarter of fiscal 2022 was $10.2 million, or 73 cents per diluted share. This compares to net income of $2.0 million, or 14 cents per diluted share, for the preceding quarter and net income of $0.4 million, or 3 cents per diluted share, for the third quarter of fiscal 2021.

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 fourth fiscal quarter ending September 30, 2022, revenues are expected to be in the range of $30 to $32 million with operating margin in the low double-digits.

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 third quarter financial results. The call will be available to interested parties by dialing 1-313-209-6672. For international callers, please dial +1 800-458-4121. The confirmation code is 2312671. 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 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^™, 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, 2021, 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														Nine Months Ended June 30,
		June 30, 2022				March 31, 2022				June 30, 2021						2022				2021
Amtech Systems, Inc.
Revenues, net		$	19,964			$	27,556			$	23,100					$	73,983			$	60,865
Gross profit		$	5,900			$	11,160			$	10,079					$	26,958			$	25,319
Gross margin			30	%			40	%			44	%					36	%			42	%
Operating income		$	9,562			$	2,595			$	1,204					$	13,397			$	2,429
New orders		$	30,145			$	33,695			$	30,861					$	95,477			$	81,256
Backlog		$	62,731			$	53,566			$	34,295					$	62,731			$	34,295
Semiconductor Segment
Revenues, net		$	15,135			$	23,584			$	19,501					$	61,484			$	52,195
Gross profit		$	3,590			$	9,255			$	8,599					$	21,507			$	22,604
Gross margin			24	%			39	%			44	%					35	%			43	%
Operating income		$	10,521			$	3,368			$	2,114					$	16,246			$	5,976
New orders		$	24,144			$	28,039			$	26,607					$	79,992			$	71,741
Backlog		$	58,344			$	50,352			$	32,388					$	58,344			$	32,388
Material and Substrate Segment
Revenues, net		$	4,829			$	3,972			$	3,599					$	12,499			$	8,670
Gross profit		$	2,310			$	1,905			$	1,480					$	5,451			$	2,715
Gross margin			48	%			48	%			41	%					44	%			31	%
Operating income		$	1,156			$	654			$	333					$	1,991			$	14
New orders		$	6,001			$	5,656			$	4,254					$	15,485			$	9,515
Backlog		$	4,387			$	3,214			$	1,907					$	4,387			$	1,907

AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Statements of Operations
(in thousands, except per share data)
		Three Months Ended June 30,								Nine Months Ended June 30,
		2022				2021				2022				2021
Revenues, net		$	19,964			$	23,100			$	73,983			$	60,865
Cost of sales			14,064				13,021				47,025				35,546
Gross profit			5,900				10,079				26,958				25,319
Selling, general and administrative			7,157				7,281				21,008				18,182
Research, development and engineering			1,646				1,523				5,018				4,637
Gain on sale of fixed assets			(12,465	)			—				(12,465	)			—
Severance expense			—				71				—				71
Operating income			9,562				1,204				13,397				2,429
Interest income (expense) and other, net			680				(155	)			627				(337	)
Income before income tax provision			10,242				1,049				14,024				2,092
Income tax provision			20				680				840				1,250
Net income		$	10,222			$	369			$	13,184			$	842
Income Per Share:
Net income per basic share		$	0.74			$	0.03			$	0.94			$	0.06
Net income per diluted share		$	0.73			$	0.03			$	0.93			$	0.06
Weighted average shares outstanding:
Basic			13,889				14,176				14,042				14,163
Diluted			14,026				14,373				14,220				14,292

AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Balance Sheets
(in thousands, except share data)
		June 30, 2022				September 30, 2021
Assets
Current Assets
Cash and cash equivalents		$	47,689			$	32,836
Restricted cash			524				—
Accounts receivable (less allowance for doubtful accounts of $172 and $188 at June 30, 2022, and September 30, 2021, respectively)			20,779				22,502
Inventories			27,457				22,075
Income taxes receivable			52				1,046
Other current assets			3,978				2,407
Total current assets			100,479				80,866
Property, Plant and Equipment - Net			5,863				14,083
Right-of-Use Assets - Net			11,019				8,646
Intangible Assets - Net			783				858
Goodwill			11,168				11,168
Deferred Income Taxes - Net			560				631
Other Assets			834				661
Total Assets		$	130,706			$	116,913
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable		$	9,831			$	8,229
Accrued compensation and related taxes			3,812				2,881
Accrued warranty expense			827				545
Other accrued liabilities			1,206				903
Current maturities of long-term debt			104				396
Current portion of long-term lease liability			1,806				531
Contract liabilities			5,888				1,624
Total current liabilities			23,474				15,109
Long-Term Debt			230				4,402
Long-Term Lease Liability			9,321				8,389
Income Taxes Payable			2,996				3,277
Other Long-Term Liabilities			62				102
Total Liabilities			36,083				31,279
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: 13,889,259 and 14,304,492 at June 30, 2022 and September 30, 2021, respectively			139				143
Additional paid-in capital			123,693				126,380
Accumulated other comprehensive (loss) income			(563	)			14
Retained deficit			(28,646	)			(40,903	)
Total Shareholders’ Equity			94,623				85,634
Total Liabilities and Shareholders’ Equity		$	130,706			$	116,913

AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Statements of Cash Flows
(in thousands)
		Nine Months Ended June 30,
		2022				2021
Operating Activities
Net income		$	13,184			$	842
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization			1,330				1,038
Write-down of inventory			235				278
Non-cash stock compensation expense			386				277
Gain on sale of property, plant and equipment			(12,465	)			—
Provision for allowance for doubtful accounts			10				16
Other, net			—				8
Changes in operating assets and liabilities:
Accounts receivable			1,714				(9,385	)
Inventories			(5,617	)			(3,328	)
Other assets			(1,298	)			(324	)
Accounts payable			1,603				5,815
Accrued income taxes			713				536
Accrued and other liabilities			1,031				809
Contract liabilities			4,264				646
Net cash provided by (used in) operating activities			5,090				(2,772	)
Investing Activities
Purchases of property, plant and equipment			(325	)			(790	)
Proceeds from the sale of property, plant and equipment			19,908				—
Acquisition, net of cash and cash equivalents acquired			—				(5,082	)
Net cash provided by (used in) investing activities			19,583				(5,872	)
Financing Activities
Proceeds from the exercise of stock options			111				1,148
Repurchase of common stock			(4,115	)			—
Payments on long-term debt			(4,851	)			(284	)
Net cash (used in) provided by financing activities			(8,855	)			864
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash			(441	)			(250	)
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash			15,377				(8,030	)
Cash and Cash Equivalents, Beginning of Period			32,836				45,070
Cash, Cash Equivalents and Restricted Cash, End of Period		$	48,213			$	37,040

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220815005632/en/

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' Q3 2022 earnings results?

Amtech reported a net income of $10.2 million, or $0.73 per diluted share, with revenues of $20.0 million.

What was the impact of the Shanghai facility closure on Amtech's revenue?

The closure led to a 28% sequential decrease in revenue due to lower shipments of advanced packaging equipment.

What is Amtech's revenue outlook for Q4 2022?

Amtech expects revenues to range from $30 million to $32 million for the fourth quarter.

How did customer orders perform in Q3 2022 for Amtech?

Customer orders reached $30.1 million, marking the sixth consecutive quarter of orders over $30 million.