Amtech Reports Second Quarter Fiscal 2018 Results

TEMPE, Ariz.,: Amtech Systems, Inc. (NASDAQ: ASYS), a global manufacturer and supplier of production equipment and related supplies for the solar, semiconductor and LED markets, today reported results for its second quarter ended March 31, 2018.

Second Quarter Fiscal 2018 Financial and Operational Highlights:

• Net revenues of $32.8 million (Solar segment $12.6 million)
• Net income of $2.8 million
• Diluted earnings per share of $0.19
• Customer orders of $28.8 million (Solar segment $7.0 million)
• Quarter-end backlog of $63.1 million (Solar segment $35.0 million)
• Book to bill ratio of 0.9:1 (0.6:1 Solar segment)
• Unrestricted cash of $50.5 million

Mr. Fokko Pentinga, Chief Executive Officer of Amtech, commented, “Our semiconductor and polishing businesses are continuing to show year-over-year growth with sales of higher-margin products contributing to the sequential increase in our gross margin.  Regarding our Solar segment, I am pleased to report that the installation and start-up of Phase I of the multi-phase 1 gigawatt bi-facial order is going smoothly and we have completed the first and second of three milestones.  Our solar revenue is dependent on several factors, including the timing of customers’ investment in expanding solar cell production capacity, particularly the timing of turnkey orders.  At this time, we look forward to continuing to assist our solar customers in their planning and review of optimal next-phase investments.”

Net revenue for the second quarter of fiscal 2018 was $32.8 million compared to $73.6 million in the preceding quarter and $32.9 million in the second quarter of fiscal 2017.  The sequential decrease is primarily due to the shipment in the first quarter of this fiscal year of all of the equipment for Phase II of the large solar turnkey project.  The timing of large Semiconductor orders and shipments also contributed to the sequential decrease. Compared to the prior year quarter, net revenue is relatively flat, with increases in Semiconductor and Polishing shipments offset by decreases in Solar shipments.

Unrestricted cash and cash equivalents at March 31, 2018 were $50.5 million, compared to $51.1 million at September 30, 2017.

At March 31, 2018, our total order backlog was $63.1 million (Solar segment $35.0 million), compared to total backlog of $65.9 million (Solar segment $39.3 million) at December 31, 2017.  Backlog includes deferred revenue and customer orders that are expected to ship within the next 12 months.

Gross margin in the second quarter of fiscal 2018 was 36%, compared to 28% in the preceding quarter and 25% in the second quarter of fiscal 2017.  Sequentially and compared to prior year, gross margin increased due to a higher-margin product mix and recognition of previously deferred profit, compared to revenue deferrals in the first quarter of fiscal 2018 and in the second quarter of fiscal 2017.

Selling, general and administrative expense (“SG&A”) in the second quarter of fiscal 2018 was $9.5 million, compared to $10.6 million in the preceding quarter and $8.3 million in the second quarter of fiscal 2017.  Sequentially, SG&A decreased primarily due to lower commissions and freight resulting from lower shipments. The increase in SG&A from the prior year quarter is due primarily to increased selling, freight and employee-related expenses.

Research, development and engineering (RD&E) expense was $2.2 million in the second quarter of fiscal 2018 compared to $2.0 million in the preceding quarter and $1.5 million in the second quarter of fiscal 2017.

Income tax in the second quarter of fiscal 2018 was a benefit of $2.8 million compared to expense of $1.2 million in the preceding quarter and expense of $0.2 million in the second quarter of fiscal 2017. The tax benefit recorded in the second quarter of fiscal 2018 is primarily due to the resolution of an uncertain tax position.

Net income for the second quarter of fiscal 2018 was $2.8 million, or $0.19 per diluted share, compared to a net loss of $1.4 million, or $0.11 per share for the second quarter of fiscal 2017 and net income of $6.5 million or $0.42 per diluted share in the preceding quarter.

Outlook

The company expects revenues for the quarter ending June 30, 2018 to be in the range of $34 to $37 million. Gross margin for the quarter ending June 30, 2018 is expected to be in the mid to upper 20 percent range, with operating margin slightly negative.

The solar and semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Additionally, operating results can be impacted by the timing of orders, system shipments and the financial results of solar and semiconductor manufacturers.  The results for the coming quarters will be significantly influenced by the timing of the Phase III order of the 1GW turnkey project. Operating results could also be affected by the net impact of revenue deferral on shipments, recognition of revenue based on customer acceptances, and meeting start-up milestones of the turnkey production lines, all of which can have a significant effect on operating results.

A substantial portion of Amtech’s revenues are denominated in Euros.  The revenue outlook provided in this press release is based on an assumed exchange rate between the United States Dollar and the Euro.  A significant decrease in the value of the Euro in relation to the United States Dollar could cause actual revenues to be lower than anticipated.

Conference Call

Amtech Systems will host a conference call and webcast today at 5:00 p.m. ET to discuss second quarter fiscal 2018 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 May 17, 2018.  To access the replay please dial US toll free (877) 344-7529 and enter code 10119630.  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 global supplier of advanced thermal processing equipment to the solar, semiconductor / electronics, and LED manufacturing markets. Amtech’s equipment includes diffusion, ALD and PECVD systems and solder reflow systems. Amtech also supplies wafer handling automation and polishing equipment and related consumable products. The Company’s wafer handling, thermal processing and consumable products currently address the diffusion, oxidation, and deposition steps used in the fabrication of solar cells, LEDs, semiconductors, MEMS, printed circuit boards, semiconductor packaging, and the polishing of newly sliced sapphire and silicon wafers. Amtech’s products are recognized under the leading brand names Tempress Systems™, Bruce Technologies™, PR Hoffman™, R2D Automation™, SoLayTec, and BTU International.

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). 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, and plans and objectives of Amtech and its management for future operations.  In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “would,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology or our management 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, as amended, that Amtech filed with the Securities and Exchange Commission (the “SEC”) for the year-ended September 30, 2017, 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.

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Source: Amtech Systems, Inc.