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Amtech Reports Third Quarter Fiscal 2018 Results
[August 09, 2018]

Amtech Reports Third Quarter Fiscal 2018 Results


TEMPE, Ariz., Aug. 9, 2018 /PRNewswire/ -- Amtech Systems, Inc. (NASDAQ: ASYS), a global manufacturer and supplier of advanced thermal processing and polishing equipment and related consumables to the semiconductor / electronics, power IC businesses, solar, and advanced lighting markets, today reported results for its third quarter ended June 30, 2018.

Third Quarter Fiscal 2018 Financial and Operational Highlights:

  • Net revenues of $41.2 million (Combined Semi and LED/SiC* $27.1M, Solar $14.1M)
  • Net income of $5.0 million
  • Diluted earnings per share of $0.33
  • Customer orders of $26.2 million (Combined Semi and LED/SiC* $21.2M, Solar $5.0M)
  • June 30, 2018 backlog of $41.2 million (Combined Semi and LED/SiC* $22.3M, Solar $19.0M)
  • Book to bill ratio of 0.7:1 (Combined Semi and LED/SiC* 0.8:1, Solar 0.4:1)
  • Unrestricted cash of $48.7 million

Year-To-Date (9 Months) Fiscal 2018 Financial and Operational Highlights:

  • Net revenues of $147.6 million (Combined Semi and LED/SiC* $71.7M, Solar $75.9M)
  • Net income of $14.3 million
  • Diluted earnings per share of $0.94
  • Customer orders of $92.3 million (Combined Semi and LED/SiC* $72.9M, Solar $19.4M)
  • Book to bill ratio of 0.6:1 (Combined Semi and LED/SiC* 1.0:1, Solar 0.3:1)

Mr. Fokko Pentinga, Chief Executive Officer of Amtech, commented, "We are pleased to report third quarter consolidated revenue grew by more than 25%, resulting in improved operating profit compared to the second quarter. Our combined Semiconductor and LED/SiC* segments, representing 66% of total company third quarter sales, delivered revenue growth of 34.1% sequentially, 44.1% year-over-year, and record combined operating profits. The significant drivers of this growth and related operating profits are the demand we are seeing in certain markets including automotive, consumer and industrial electronics, including sensors, power chips, the internet of things ("IoT") devices, and advanced lighting.  In our solar business, recent changes in China's domestic solar policies have slowed cell capacity expansion plans.  However, we believe follow-on orders for the next phases of the large 1 GW+ turnkey project will be received in the next few quarters and look to participate in other selective growth opportunities as we serve core customers over the long term."

Net revenue for the third quarter of fiscal 2018 was $41.2 million compared to $32.8 million in the preceding quarter and $47.8 million in the third quarter of fiscal 2017. The sequential increase is primarily due to increased shipments of our semiconductor equipment. Compared to the prior year quarter, net revenue decreased due to lower shipments of solar equipment for the turnkey project, partially offset by significant increases in Semiconductor and LED/SiC shipments.

Unrestricted cash and cash equivalents at June 30, 2018 were $48.7 million, compared to $51.1 million at September 30, 2017.

At June 30, 2018, our total order backlog was $41.2 million (Semi and LED/SiC* segments $22.3 million, Solar segment $19.0 million), compared to total backlog of $63.1 million (Semi and LED/SiC* segments $28.2 million, Solar segment $35.0 million) at March 31, 2018.  Backlog includes deferred revenue and customer orders that are expected to ship within the next 12 months.  We have excluded from reported backlog approximately $5.8 million of solar customer orders that are not expected to ship in the next twelve months.

Gross margin in the third quarter of fiscal 2018 was 35%, compared to 36% in the preceding quarter and 32% in the third quarter of fiscal 2017.  Sequentially, gross margin was relatively flat, with product mix changes increasing solar gross margin and decreasing semiconductor gross margin. Compared to the prior year quarter, gross margin on products from our Solar segment increased due to recognition of previously deferred revenue, while gross margin on products from our Semiconductor and LED/SiC segments decreased due to product mix.

Selling, general and administrative expense ("SG&A") in the third quarter of fiscal 2018 was $9.5 million, compared to $9.5 million in the preceding quarter and $10.1 million in the third quarter of fiscal 2017.  The decrease in SG&A from the prior year quarter is due primarily to decreased employee-related expenses, partially offset by higher commissions and selling expenses related to higher revenues in our Semiconductor segment.

Due to the ongoing challenges we are experiencing in our Solar segment, we are implementing a restructuring plan ("the Plan"). Once fully implemented, we expect the Plan to reduce operating costs by approximately $3 million on an annualized basis.  The Plan is to better align our workforce with the current needs of our business and enhance our competitive position for long-term success.  Under the Plan, we will reduce our Solar workforce by approximately 35-40 employees. We expect to record approximately $0.6 million to $0.8 million of related costs in the fourth quarter of fiscal 2018.

Research, development and engineering (RD&E) expense was $2.1 million in the third quarter of fiscal 2018 compared to $2.2 million in the preceding quarter and $1.4 million in the third quarter of fiscal 2017.

Effective June 29, 2018, we sold our remaining 15% ownership interest in Kingstone Technology Hong Kong Limited for approximately $5.7 million.  We recognized a gain of approximately $2.9 million in the third quarter of fiscal 2018 and recorded a short-term note receivable of $5.7 million.  The note is due in August 2018.

Income tax in the third quarter of fiscal 2018 was an expense of $1.4 million compared to a benefit of $2.8 million in the preceding quarter and expense of $1.0 million in the third 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 third quarter of fiscal 2018 was $5.0 million, or $0.33 per diluted share, compared to net income of $3.3 million, or $0.25 per share for the third quarter of fiscal 2017 and net income of $2.8 million or $0.19 per diluted share in the preceding quarter.

*Note:  LED/SiC (silicon carbide) refers to our Polishing segment.  Combined Semi and LED/SiC refers to the sum of our Semiconductor and LED/SiC segments. Solar refers to our Solar segment, which includes products sold for semiconductor applications of no more than 25% of the segment's totals.  The Combined Semi and LED/SiC amounts above are non-GAAP measures, as they are a subtotal of two separate segments. These non-GAAP financial measures are not prepared in accordance with GAAP and may be different from non-GAAP financial measures presented by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.  A tabular reconciliation of financial measures prepared in accordance with GAAP to the non-GAAP financial measures is included in the Summary Financial Information table in this press release.

Outlook

The company expects revenues for the quarter ending September 30, 2018 to be in the range of $26 to $28 million. Gross margin for the quarter ending September 30, 2018 is expected to be in the upper 20 to lower 30 percent range, with operating margin negative, partly due to expected restructuring costs in the quarter.

The solar and semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Additionally, operating results can be significantly impacted, positively or negatively, by the timing of orders, system shipments, and the net impact of revenue deferral on shipments, recognition of revenue based on customer acceptances and the financial results of solar and semiconductor manufacturers. The results for the coming quarters will be significantly influenced by the timing of future orders of the 1GW turnkey project and the timing of meeting start-up milestones of the turnkey production lines.

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 third 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 August 16, 2018.  To access the replay please dial US toll free (877) 344-7529 and enter code 10122655.  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 and polishing equipment and related consumables to the semiconductor / electronics, power IC businesses, solar, and advanced lighting manufacturing markets. Amtech's equipment includes diffusion, solder reflow systems. wafer handling automation, ALD and PECVD systems and polishing equipment and related consumables for surface preparation of various materials, including silicon carbide ("SiC"), sapphire and silicon. The Company's wafer handling, thermal processing, polishing and consumable products currently address the diffusion, oxidation, and deposition steps used in the fabrication of semiconductors, printed circuit boards, semiconductor packaging, solar cells, MEMS, and advanced lighting, including the polishing of newly sliced sapphire and silicon wafers. Amtech's products are recognized under the leading brand names BTU International, Bruce TechnologiesTM, PR HoffmanTM, Tempress SystemsTM, R2D AutomationTM and SoLayTec.

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.





Contacts:



Amtech Systems, Inc.

Christensen


Robert T. Hass

Investor Relations


Chief Financial Officer

Patty Bruner


(480) 967-5146

(480) 201-6075


irelations@Amtechsystems.com

pbruner@christensenir.com


 

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

August 9, 2018

(Unaudited)


Summary Financial Information

(in thousands, except percentages and ratios)






Three Months Ended


June 30, 2018

March 31, 2018

June 30, 2017

Amtech Systems, Inc.




   Revenues, net of returns and allowances

$

41,200


$

32,783


$

47,760


   Gross profit

$

14,599


$

11,725


$

15,502


   Gross margin

35

%

36

%

32

%

   Operating income

$

2,936


$

65


$

3,971


   New orders

$

26,207


$

28,759


$

79,949


   Book-to-bill ratio

0.7:1


0.9:1


1.7:1


   Backlog

$

41,231


$

63,115


$

125,744


Semiconductor Segment




   Revenues, net of returns and allowances

$

23,472


$

16,582


$

15,951


   Gross profit

$

8,721


$

7,075


$

6,428


   Gross margin

37

%

43

%

40

%

   Operating income

$

3,861


$

2,257


$

2,250


   New orders

$

17,871


$

19,227


$

23,354


   Book-to-bill ratio

0.8:1


1.2:1


1.5:1


   Backlog

$

20,764


$

26,366


$

26,966


Solar Segment




   Revenues, net of returns and allowances

$

14,134


$

12,598


$

28,981


   Gross profit

$

4,584


$

3,110


$

7,948


   Gross margin

32

%

25

%

27

%

   Operating (loss) income

$

(85)


$

(1,903)


$

2,991


   New orders

$

5,029


$

7,000


$

54,203


   Book-to-bill ratio

0.4:1


0.6:1


1.9:1


   Backlog

$

18,960


$

34,955


$

98,223


LED/SiC Segment




   Revenues, net of returns and allowances

$

3,594


$

3,603


$

2,828


   Gross profit

$

1,294


$

1,540


$

1,126


   Gross margin

36

%

43

%

40

%

   Operating income

$

938


$

1,111


$

738


   New orders

$

3,307


$

2,532


$

2,392


   Book-to-bill ratio

0.9:1


0.7:1


0.8:1


   Backlog

$

1,507


$

1,794


$

555


 

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

August 9, 2018

(Unaudited)


Condensed Consolidated Statements of Operations

(in thousands, except per share data)










Three Months Ended June 30,


Nine Months Ended June 30,


2018


2017


2018


2017

Revenues, net of returns and allowances

$

41,200



$

47,760



$

147,594



$

109,839


Cost of sales

26,601



32,258



100,933



77,499


Gross profit

14,599



15,502



46,661



32,340










Selling, general and administrative

9,541



10,108



29,599



25,366


Research, development and engineering

2,122



1,423



6,295



4,586


Operating income

2,936



3,971



10,767



2,388










Gain on sale of other assets

2,883





2,883




Income (loss) from equity method investment

232



(110)



234



(200)


Interest and other expense, net

310



(34)



224



(151)


Income before income taxes

6,361



3,827



14,108



2,037


Income tax provision (benefit)

1,390



986



(150)



1,270


Net income

4,971



2,841



14,258



767










Add: net loss attributable to noncontrolling interest



446





1,045


Net income attributable to Amtech Systems, Inc.

$

4,971



$

3,287



$

14,258



$

1,812










Income Per Share:








Basic income per share attributable to Amtech shareholders

$

0.33



$

0.25



$

0.96



$

0.14


Weighted average shares outstanding

14,925



13,242



14,867



13,203


Diluted income per share attributable to Amtech shareholders

$

0.33



$

0.25



$

0.94



$

0.14


Weighted average shares outstanding

15,091



13,398



15,181



13,288


 

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

August 9, 2018

(unaudited)


Condensed Consolidated Balance Sheets

(in thousands, except share data)



June 30,
2018


September 30,
2017

Assets





Current Assets





Cash and cash equivalents


$

48,729



$

51,121


Restricted cash


6,876



24,640


Accounts receivable





Trade (less allowance for doubtful accounts of $1,441 and $866 at June 30, 2018, and September 30, 2017, respectively)


27,627



22,519


Unbilled and other


14,748



14,275


Inventories


22,590



30,210


Note receivable


5,738




Vendor deposits


1,802



11,806


Other


2,688



2,542


Total current assets


130,798



157,113


Property, Plant and Equipment - Net


16,314



15,792


Intangible Assets - Net


3,039



3,495


Goodwill - Net


11,342



11,405


Investments




2,615


Deferred Income Taxes - Long-Term




200


Other Assets - Long-Term


948



1,003


Total Assets


$

162,441



$

191,623


Liabilities and Stockholders' Equity





Current Liabilities





Accounts payable


$

12,579



$

21,555


Accrued compensation and related taxes


6,539



7,592


Accrued warranty expense


1,223



1,254


Other accrued liabilities


3,077



2,056


Customer deposits


15,065



48,784


Current maturities of long-term debt


371



361


Deferred profit


3,560



4,081


Income taxes payable


2,246



286


Total current liabilities


44,660



85,969


Long-Term Debt


8,028



8,134


Income Taxes Payable - Long-Term


3,334



7,037


Total Liabilities


56,022



101,140


Commitments and Contingencies





Stockholders' 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: 14,986,620 and 14,710,591 at June 30, 2018, and September 30, 2017, respectively


150



147


Additional paid-in capital


128,083



125,564


Accumulated other comprehensive loss


(9,373)



(8,529)


Retained deficit


(12,441)



(26,699)


Total stockholders' equity


106,419



90,483


Total Liabilities and Stockholders' Equity


$

162,441



$

191,623


 

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

August 9, 2018

(unaudited)


Condensed Consolidated Statements of Cash Flows

(in thousands)






Nine Months Ended June 30,


2018


2017

Operating Activities




  Net income

$

14,258



$

767


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




Depreciation and amortization

1,622



1,871


Write-down of inventory

195



448


Capitalized interest

143



307


Deferred income taxes

206



(10)


Non-cash share based compensation expense

632



978


(Gain) loss on sale of property, plant and equipment

(53)



107


Gain on sale of other assets

(2,883)




(Gain) loss from equity method investment

(234)



200


Provision for (reversal of) allowance for doubtful accounts, net

64



(898)


  Changes in operating assets and liabilities:




Restricted cash

17,956



(3,576)


Accounts receivable

(5,877)



(8,997)


Inventories

6,565



(245)


Accrued income taxes

(1,742)



742


Vendor deposits and other assets

10,034



(5,521)


Accounts payable

(9,022)



6,616


Customer deposits and accrued liabilities

(34,025)



17,526


Deferred profit

(486)



626


  Net cash (used in) provided by operating activities

(2,647)



10,941


Investing Activities




  Purchases of property, plant and equipment

(845)



(355)


  Proceeds from sale of property, plant and equipment

64



39


  Costs related to sale of equity method investment

(6)




  Net cash used in investing activities

(787)



(316)


Financing Activities




  Proceeds from the exercise of stock options

1,889



894


  Payments on long-term debt

(275)



(485)


  Borrowings on long-term debt



384


  Net cash provided by financing activities

1,614



793


Effect of Exchange Rate Changes on Cash and Cash Equivalents

(572)



87


Net (Decrease) Increase in Cash and Cash Equivalents

(2,392)



11,505


Cash and Cash Equivalents, Beginning of Period

51,121



27,655


Cash and Cash Equivalents, End of Period

$

48,729



$

39,160






 

Cision View original content:http://www.prnewswire.com/news-releases/amtech-reports-third-quarter-fiscal-2018-results-300695075.html

SOURCE Amtech Systems, Inc.


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