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Amtech Reports Third Quarter Fiscal 2022 Results

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

 

 

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