Amtech Systems, Inc. ("Amtech") (NASDAQ: ASYS), a manufacturer
of thermal processing, wafer cleaning and chemical mechanical
polishing (CMP) capital equipment and related consumables used in
semiconductor, advanced mobility and renewable energy manufacturing
applications, today reported results for its first quarter ended
December 31, 2023.
First Quarter Fiscal 2024 Financial and Operational
Results:
- Net revenue of $24.9 million
- GAAP operating loss of $8.9 million, inclusive of non-cash
impairment charges of $7.6 million due to our book value materially
exceeding our market value as of December 31, 2023
- Non-GAAP operating loss of $0.2 million (1)
- GAAP net loss of $9.4 million
- Non-GAAP net loss of $0.6 million (1)
- Customer orders of $23.1 million
- Book to bill ratio of 0.9:1
- Backlog of $50.0 million
(1) See GAAP to non-GAAP reconciliation in
schedules following this release.
“I am pleased with the progress we are making to improve our
cost structure and position the Company for strong operating
results as markets recover. Our revenue of $24.9 million and
adjusted EBITDA(1) of $0.2 million exceeded the high-end of our
expectations. We remain focused on operational optimization, having
achieved $6 million in annualized cost savings through actions
implemented over the past four months. Looking ahead, we believe
the strategic actions we are taking will lead to significant
improvements in operational efficiency, operating leverage, and
increased shareholder value,” commented Mr. Bob Daigle, Chief
Executive Officer of Amtech.
GAAP and Non-GAAP Financial
Results
(in millions, except per share
amounts)
Q1
Q4
Q1
FY 2024
FY 2023
FY 2023
Revenues, net
$
24.9
$
27.7
$
21.6
Gross profit
$
8.2
$
2.8
$
8.3
Gross margin
33.0
%
10.1
%
38.5
%
Non-GAAP gross profit (1)
$
9.3
$
8.9
$
8.3
Non-GAAP gross margin (1)
37.5
%
32.2
%
38.5
%
GAAP operating loss
$
(8.9
)
$
(11.7
)
$
(2.7
)
GAAP operating margin
-35.9
%
-42.2
%
-12.4
%
Non-GAAP operating loss (1)
$
(0.2
)
$
(3.0
)
$
(0.7
)
Non-GAAP operating margin (1)
-0.8
%
-10.9
%
-3.1
%
GAAP net loss
$
(9.4
)
$
(12.0
)
$
(2.7
)
GAAP net loss per diluted share
$
(0.66
)
$
(0.85
)
$
(0.20
)
Non-GAAP net loss (1)
$
(0.6
)
$
(2.5
)
$
(0.7
)
Non-GAAP net loss per diluted share
(1)
$
(0.04
)
$
(0.18
)
$
(0.05
)
(1) See GAAP to non-GAAP reconciliation in
schedules following this release.
Net revenues decreased 10% sequentially and increased 16% from
the first quarter of fiscal 2023. The sequential decrease is
primarily due to a decrease in equipment shipments across our
business segments due to continued softness in the semiconductor
market. The increase from prior year is primarily attributable to
increases in our belt furnace shipments and the addition of
Entrepix, partially offset by lower shipments of our reflow
equipment in fiscal 2024.
GAAP gross margin increased sequentially due primarily to the
intangible asset impairment charge of $4.6 million that was
recorded in fiscal Q4 2023. Compared to the prior year period, GAAP
gross margin decreased primarily due to a less favorable product
mix and an intangible asset impairment charge of $0.8 million
recorded in Q1 2024. Non-GAAP gross margin increased sequentially
due primarily to lower overhead expenses and a more favorable
product mix. Non-GAAP gross margin in fiscal Q1 2024 was slightly
lower compared to the same prior year period due primarily to a
less favorable product mix.
During the first quarter of fiscal 2024, the market value of our
stock materially declined below our book value. Accordingly, we
recorded $1.3 million of intangible asset impairment charges and
$6.4 million of goodwill charges in our Material and Substrate
segment, of which $0.8 million is recorded within gross profit and
the remainder is recorded within operating expenses.
Selling, General & Administrative (“SG&A”) expenses
decreased $2.5 million on a sequential basis and decreased $0.6
million compared to the prior year period. The sequential decrease
is due primarily to reductions in the following expenses: $0.7
million of intangible asset amortization, $0.4 million of equity
compensation, $0.4 million of labor, and $0.3 million of consulting
and audit fees. Compared to the prior year, the decrease is due
primarily to $1.4 million of lower acquisition expenses and $0.3
million of lower consulting expenses, partially offset by added
SG&A from the addition of Entrepix.
Research, Development and Engineering expenses decreased $1.0
million sequentially and increased $0.2 million compared to the
same prior year period. The sequential decrease is due primarily to
lower development efforts in our Material & Substrate segment
as we wind down development of our next-gen polishing
equipment.
GAAP operating loss was $8.9 million, compared to GAAP operating
loss of $11.7 million in the fourth quarter of fiscal 2023 and GAAP
operating loss of $2.7 million in the same prior year period.
Non-GAAP operating loss was $0.2 million, compared to non-GAAP
operating loss of $3.0 million in the fourth quarter of fiscal 2023
and non-GAAP operating loss of $0.7 million in the same prior year
period.
GAAP net loss for the first quarter of fiscal 2024 was $9.4
million, or 66 cents per share. This compares to GAAP net loss of
$12.0 million, or 85 cents per share, for the preceding quarter and
GAAP net loss of $2.7 million, or 20 cents per share, for the first
quarter of fiscal 2023.
Non-GAAP net loss for the first quarter of fiscal 2024 was $0.6
million, or 4 cents per share. This compares to non-GAAP net loss
of $2.5 million, or 18 cents per share, for the preceding quarter
and non-GAAP net loss of $0.7 million, or 5 cents per share, for
the first quarter of fiscal 2023.
Unrestricted cash and cash equivalents at December 31, 2023,
were $17.0 million, compared to $13.1 million at September 30,
2023, due primarily to strong accounts receivable collection
efforts during the quarter. Additionally, in January we paid $2.0
million on our revolving line of credit.
In discussing financial results for the three months ended
December 31, 2023 and 2022 and the three months ended September 30,
2023, in this press release, the Company refers to certain
financial measures that are adjusted from the financial results
prepared in accordance with United States generally accepted
accounting principles ("GAAP"). All non-GAAP amounts exclude
certain adjustments for stock compensation expense, severance
expense, expenses related to the discontinued product line,
intangible asset impairment, gain on sale-leaseback of our
Massachusetts facility, amortization of acquired intangible assets,
acquisition expenses, and income tax benefit related to our
acquisition of Entrepix, Inc. A tabular reconciliation of financial
measures prepared in accordance with GAAP to the non-GAAP financial
measures is included at the end of this press release.
Outlook
Operating results can be significantly impacted, positively or
negatively, by the timing of orders, system shipments, logistical
challenges, and the financial results of semiconductor
manufacturers. Additionally, the semiconductor equipment industries
can be cyclical and inherently impacted by changes in market
demand. Actual results may differ materially in the weeks and
months ahead.
For the second fiscal quarter ending March 31, 2024, we expect
revenues in the range of $22 - $25 million with EBITDA nominally
negative to neutral. Although the near-term outlook for revenue and
earnings remains challenging, we remain confident that the future
prospects are strong for both our consumables and equipment serving
advanced mobility and advanced packaging applications. We took
actions during the first and second quarters of fiscal 2024, which
will reduce Amtech's structural costs by approximately $6 million
annually and better align product pricing with value. These steps
should significantly improve results and enhance profitability
through market cycles.
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 at 8:00 a.m. ET on
Monday, February 12, 2024 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. 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
thermal processing, wafer cleaning and chemical mechanical
polishing (CMP) capital equipment and related consumables used in
semiconductor, advanced mobility and renewable energy manufacturing
applications. We sell process equipment and services used in the
fabrication of semiconductor devices, such as silicon carbide
(SiC), silicon power, electronic assemblies and modules to
semiconductor device and module manufacturers worldwide,
particularly in Asia, North America and Europe. Our strategic focus
is on growth opportunities which leverage our strengths in thermal
and substrate processing. Amtech's products are recognized under
the leading brand names BTU International, Entrepix, Inc., 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, 2023, 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, 2023
September 30, 2023
December 31, 2022
Amtech Systems, Inc.
Revenues, net
$
24,920
$
27,707
$
21,558
GAAP gross profit
$
8,219
$
2,794
$
8,303
Non-GAAP gross profit
$
9,341
$
8,926
$
8,303
GAAP gross margin
33
%
10
%
39
%
Non-GAAP gross margin
37
%
32
%
39
%
GAAP operating loss
$
(8,934
)
$
(11,690
)
$
(2,680
)
Non-GAAP operating loss
$
(210
)
$
(3,020
)
$
(670
)
New orders
$
23,105
$
18,185
$
25,229
Backlog
$
49,979
$
51,794
$
54,452
Semiconductor Segment
Revenues, net
$
17,527
$
18,820
$
16,887
GAAP gross profit
$
6,159
$
7,374
$
6,172
Non-GAAP gross profit
$
6,159
$
7,374
$
6,172
GAAP gross margin
35
%
39
%
37
%
Non-GAAP gross margin
35
%
39
%
37
%
GAAP operating income
$
1,081
$
2,046
$
869
Non-GAAP operating income
$
1,192
$
2,046
$
869
New orders
$
17,129
$
10,834
$
21,084
Backlog
$
44,835
$
45,233
$
52,209
Material and Substrate Segment
Revenues, net
$
7,393
$
8,887
$
4,671
GAAP gross profit (loss)
$
2,060
$
(4,580
)
$
2,131
Non-GAAP gross profit
$
3,182
$
1,552
$
2,131
GAAP gross margin
28
%
-52
%
46
%
Non-GAAP gross margin
43
%
17
%
46
%
GAAP operating (loss) income
$
(7,844
)
$
(10,176
)
$
633
Non-GAAP operating income (loss)
$
452
$
(2,455
)
$
633
New orders
$
5,976
$
7,351
$
4,145
Backlog
$
5,144
$
6,561
$
2,243
AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Statements of
Operations
(in thousands, except per share
data)
Three Months Ended December
31,
2023
2022
Revenues, net
$
24,920
$
21,558
Cost of sales
15,852
13,255
Intangible asset impairment
849
—
Gross profit
8,219
8,303
Selling, general and administrative
8,567
9,190
Research, development and engineering
1,588
1,393
Goodwill impairment
6,370
—
Intangible asset impairment
430
—
Severance expense
198
400
Operating loss
(8,934
)
(2,680
)
Interest income
19
290
Interest expense
(198
)
(2
)
Foreign currency loss
(187
)
(347
)
Other
—
(9
)
Loss before income tax provision
(9,300
)
(2,748
)
Income tax provision (benefit)
58
(4
)
Net loss
$
(9,358
)
$
(2,744
)
Loss Per Share:
Net loss per basic share
$
(0.66
)
$
(0.20
)
Net loss per diluted share
$
(0.66
)
$
(0.20
)
Weighted average shares
outstanding:
Basic
14,188
14,008
Diluted
14,188
14,008
AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Balance Sheets
(in thousands, except share
data)
December 31, 2023
September 30, 2023
Assets
Current Assets
Cash and cash equivalents
$
17,033
$
13,133
Accounts receivable (less allowance for
credit losses of $83 and $146 at December 31, 2023 and September
30, 2023, respectively)
21,403
26,474
Inventories
34,030
34,845
Income taxes receivable
664
632
Other current assets
5,061
6,105
Total current assets
78,191
81,189
Property, Plant and Equipment - Net
9,353
9,695
Right-of-Use Assets - Net
10,541
11,217
Intangible Assets - Net
4,526
6,114
Goodwill
21,261
27,631
Deferred Income Taxes - Net
126
101
Other Assets
1,044
1,074
Total Assets
$
125,042
$
137,021
Liabilities and Shareholders’
Equity
Current Liabilities
Accounts payable
$
8,545
$
10,815
Accrued compensation and related taxes
2,652
3,481
Accrued warranty expense
791
965
Other accrued liabilities
1,461
1,551
Current maturities of finance lease
liabilities and long-term debt
934
2,265
Current portion of long-term operating
lease liabilities
2,292
2,623
Contract liabilities
9,518
8,018
Total current liabilities
26,193
29,718
Finance Lease Liabilities and Long-Term
Debt
9,197
8,422
Long-Term Operating Lease Liabilities
8,598
8,894
Income Taxes Payable
1,384
1,575
Other Long-Term Liabilities
49
47
Total Liabilities
45,421
48,656
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: 14,190,977 and
14,185,977 at December 31, 2023 and September 30, 2023,
respectively
142
142
Additional paid-in capital
127,308
126,963
Accumulated other comprehensive loss
(1,426
)
(1,695
)
Retained deficit
(46,403
)
(37,045
)
Total Shareholders’ Equity
79,621
88,365
Total Liabilities and Shareholders’
Equity
$
125,042
$
137,021
AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Statements of Cash
Flows
(in thousands)
Three Months Ended December
31,
2023
2022
Operating Activities
Net loss
$
(9,358
)
$
(2,744
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
852
388
Write-down of inventory
572
48
Goodwill impairment
6,370
—
Intangible asset impairment
1,279
—
Deferred income taxes
(25
)
(35
)
Non-cash share-based compensation
expense
317
164
Loss on sale of property, plant and
equipment
20
—
(Reversal of) provision for allowance for
credit losses
(42
)
35
Changes in operating assets and
liabilities:
Accounts receivable
5,114
3,194
Inventories
223
(2,796
)
Other assets
1,783
1,106
Accounts payable
(1,661
)
(643
)
Accrued income taxes
(222
)
(284
)
Accrued and other liabilities
(1,751
)
(665
)
Contract liabilities
1,500
(276
)
Net cash provided by (used in) operating
activities
4,971
(2,508
)
Investing Activities
Purchases of property, plant and
equipment
(756
)
(224
)
Net cash used in investing activities
(756
)
(224
)
Financing Activities
Proceeds from the exercise of stock
options
28
34
Payments on long-term debt
(556
)
(14
)
Net cash (used in) provided by financing
activities
(528
)
20
Effect of Exchange Rate Changes on Cash
and Cash Equivalents
213
372
Net Increase (Decrease) in Cash and
Cash Equivalents
3,900
(2,340
)
Cash and Cash Equivalents, Beginning of
Period
13,133
46,874
Cash and Cash Equivalents, End of
Period
$
17,033
$
44,534
AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Reconciliation of GAAP to Non-GAAP
Financial Measures
(in thousands, except per share
data)
Three Months Ended
December 31, 2023
September 30, 2023
December 31, 2022
Amtech Systems, Inc. Operating
Loss:
GAAP operating loss
$
(8,934
)
$
(11,690
)
$
(2,680
)
Acquisition expenses
-
-
1,446
Write-down of inventory related to
polishing equipment
273
1,487
-
Amortization of acquired intangible
assets
287
985
-
Stock compensation expense
317
744
164
Goodwill impairment
6,370
-
-
Intangible asset impairment
1,279
5,189
-
Severance expense
198
265
400
Non-GAAP operating loss
$
(210
)
$
(3,020
)
$
(670
)
GAAP operating margin
(35.9
)%
(42.2
)%
(12.4
)%
Non-GAAP operating margin
(0.8
)%
(10.9
)%
(3.1
)%
Consolidated Net Loss:
GAAP net loss
$
(9,358
)
$
(12,015
)
$
(2,744
)
Acquisition expenses
-
-
1,446
Write-down of inventory related to
polishing equipment
273
1,487
-
Amortization of acquired intangible
assets
287
985
-
Stock compensation expense
317
744
164
Goodwill impairment
6,370
-
-
Intangible asset impairment
1,279
5,189
-
Severance expense
198
265
400
Income tax provision related to
acquisition
-
856
-
Non-GAAP net loss
$
(634
)
$
(2,489
)
$
(734
)
Net Loss per Diluted Share:
GAAP net loss per diluted share
$
(0.66
)
$
(0.85
)
$
(0.20
)
Acquisition expenses
-
-
0.10
Write-down of inventory related to
polishing equipment
0.02
0.10
-
Amortization of acquired intangible
assets
0.02
0.07
-
Stock compensation expense
0.02
0.05
0.01
Goodwill impairment
0.45
-
-
Intangible asset impairment
0.09
0.37
-
Severance expense
0.02
0.02
0.04
Income tax provision related to
acquisition
-
0.06
-
Non-GAAP net loss per diluted share
$
(0.04
)
$
(0.18
)
$
(0.05
)
Semiconductor Segment Operating
Income:
GAAP operating income
$
1,081
$
2,046
$
869
Severance expense
111
-
-
Non-GAAP operating income
$
1,192
$
2,046
$
869
Material and Substrate Segment
Operating (Loss) Income:
GAAP operating (loss) income
$
(7,844
)
$
(10,176
)
$
633
Write-down of inventory related to
polishing equipment
273
1,487
-
Amortization of acquired intangible
assets
287
985
-
Goodwill impairment
6,370
-
-
Intangible asset impairment
1,279
5,189
-
Severance expense
87
60
-
Non-GAAP operating income (loss)
$
452
$
(2,455
)
$
633
AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Reconciliation of GAAP to Non-GAAP
Financial Measures
(in thousands, except per share
data)
Three Months Ended
December 31, 2023
September 30, 2023
December 31, 2022
Amtech Systems, Inc. Gross
Profit:
GAAP gross profit
$
8,219
$
2,794
$
8,303
Write-down of inventory related to
polishing equipment
273
1,487
-
Intangible asset impairment
849
4,645
-
Non-GAAP gross profit
$
9,341
$
8,926
$
8,303
GAAP gross margin
33
%
10
%
39
%
Non-GAAP gross margin
37
%
32
%
39
%
Semiconductor Segment Gross
Profit:
GAAP gross profit
$
6,159
$
7,374
$
6,172
Write-down of inventory related to
polishing equipment
-
-
-
Intangible asset impairment
-
-
-
Non-GAAP gross profit
$
6,159
$
7,374
$
6,172
GAAP gross margin
35
%
39
%
37
%
Non-GAAP gross margin
35
%
39
%
37
%
Material and Substrate Segment Gross
Profit (Loss):
GAAP gross profit (loss)
$
2,060
$
(4,580
)
$
2,131
Write-down of inventory related to
polishing equipment
273
1,487
-
Intangible asset impairment
849
4,645
-
Non-GAAP gross profit
$
3,182
$
1,552
$
2,131
GAAP gross margin
28
%
(52
)%
46
%
Non-GAAP gross margin
43
%
17
%
46
%
AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Reconciliation of Net Loss to EBITDA
and Adjusted EBITDA
(in thousands, except per share
data)
Three Months Ended December
31, 2023
Amtech Systems, Inc. EBITDA:
GAAP net loss
$
(9,358
)
Interest income
(19
)
Interest expense
198
Income tax provision (benefit)
58
Depreciation and amortization expense
852
EBITDA
(8,269
)
Write-down of inventory related to
polishing equipment
273
Stock compensation expense
317
Goodwill impairment
6,370
Intangible asset impairment
1,279
Severance expense
198
Adjusted EBITDA
$
168
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240209639848/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
Amtech Systems (NASDAQ:ASYS)
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