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, analog and discrete devices, and electronic assemblies and
modules focusing on enabling technologies for electric vehicles
(EV) and clean technology (CleanTech) applications, today reported
results for its second quarter ended March 31, 2023.
Second Quarter Fiscal 2023 Financial and Operational
Highlights:
- Net revenue of $33.3 million
- GAAP operating income of $0.5 million
- Non-GAAP operating income of $3.2 million (1)
- GAAP net income of $3.2 million
- Non-GAAP net income of $2.7 million (1)
- GAAP net income per diluted share of $0.23
- Non-GAAP net income per diluted share of $0.19 (1)
- Customer orders of $34.3 million
- Book to bill ratio of 1.0:1
- March 31, 2023 backlog of $65.8 million, inclusive of $8.2
million of backlog from Entrepix, Inc.
“In the second quarter, we achieved $33.3 million in revenue,
growing 21% year over year, inclusive of our recent acquisition of
Entrepix. Growth in our SiC products, which now represents
approximately 40% of total Material & Substrate segment sales,
and demand for our high temperature belt furnaces for EV
applications, offset the continued softness in the broader
semiconductor industry. These strong results demonstrate the
resiliency of our product and end market diversification. We
believe our strategy to capitalize on multiple, high-growth,
megatrend opportunities and efforts on operational optimization are
creating a strong and durable foundation in preparation for
sustainable value creation,” commented Mr. Michael Whang, Chief
Executive Officer of Amtech.
GAAP and Non-GAAP Financial Results
(in millions, except per share
amounts)
Q2
Q1
Q2
6 Months
6 Months
FY 2023
FY 2023
FY 2022
2023
2022
Revenues, net
$
33.3
$
21.6
$
27.6
$
54.9
$
54.0
Gross profit
$
13.5
$
8.3
$
11.2
$
21.8
$
21.1
Gross margin
40.4
%
38.5
%
40.5
%
39.7
%
39.0
%
GAAP operating income (loss)
$
0.5
$
(2.7
)
$
2.6
$
(2.2
)
$
3.8
GAAP operating margin
1.6
%
-12.4
%
9.4
%
-3.9
%
7.1
%
Non-GAAP operating income (loss) (1)
$
3.2
$
(0.7
)
$
2.7
$
2.5
$
4.1
Non-GAAP operating margin (1)
9.5
%
-3.1
%
9.9
%
4.5
%
7.5
%
GAAP net income (loss)
$
3.2
$
(2.7
)
$
2.0
$
0.5
$
3.0
GAAP net income (loss) per diluted
share
$
0.23
$
(0.20
)
$
0.14
$
0.03
$
0.21
Non-GAAP net income (loss) (1)
$
2.7
$
(0.7
)
$
2.1
$
1.9
$
3.2
Non-GAAP net income (loss) per diluted
share (1)
$
0.19
$
(0.05
)
$
0.15
$
0.14
$
0.22
(1) See GAAP to non-GAAP reconciliation in schedules following
this release.
Net revenues increased 55% sequentially and 21% from the second
quarter of fiscal 2022. The increase is primarily attributable to
additional revenue from Entrepix of $6.3 million and increased
shipments of our high temperature belt furnaces.
Gross margin increased sequentially due primarily to increased
revenues driving improved capacity utilization. Gross margin was
relatively consistent when compared to the second quarter of fiscal
2022.
Selling, General & Administrative (“SG&A”) expenses
increased $2.2 million on a sequential basis and $4.7 million
compared to the prior year period due primarily to $1.5 million in
acquisition costs, added Entrepix SG&A of $1.9 million,
inclusive of $0.7 million of amortization of intangible assets, as
well as increased consulting and ERP project expenses. Compared to
the prior year period, the increase in SG&A is due primarily to
$1.9 million of added SG&A from Entrepix and $1.5 million of
transaction expenses related to the acquisition.
Research, Development and Engineering increased $0.1 million
sequentially and decreased $0.3 million compared to the same prior
year period.
GAAP operating income was $0.5 million, compared to GAAP
operating loss of $2.7 million in the first quarter of fiscal 2023
and GAAP operating income of $2.6 million in the same prior year
period.
The Company has incurred amortization of intangible assets,
included in its GAAP financial statements, related to the
acquisition of Entrepix, Inc. The amount of an acquisition’s
purchase price allocated to intangible assets and term of its
related amortization can vary significantly. The purchase price
allocation reflected in our GAAP financial statements is
preliminary. The Company expects to incur amortization of acquired
intangible assets relating to Entrepix, Inc. of approximately
$945,000 per quarter through December 31, 2023, and approximately
$420,000 per quarter thereafter.
Non-GAAP operating income was $3.2 million, compared to non-GAAP
operating loss of $0.7 million in the first quarter of fiscal 2023
and non-GAAP operating income of $2.7 million in the same prior
year period.
Income tax benefit was $2.9 million for the three months ended
March 31, 2023, compared to a benefit of less than $0.1 million in
the preceding quarter and expense of $0.7 million in the same prior
year period. Income tax benefit for the three months ended March
31, 2023 includes a one-time tax benefit of $3.2 million related to
the release of a portion of our valuation allowance in connection
with a deferred tax liability related to the Entrepix acquisition
resulting in recognition of previously recorded deferred tax
assets.
GAAP net income for the second quarter of fiscal 2023 was $3.2
million, or 23 cents per share. This compares to GAAP net loss of
$2.7 million, or 20 cents per share, for the preceding quarter and
GAAP net income of $2.0 million, or 14 cents per share, for the
second quarter of fiscal 2022.
Non-GAAP net income for the second quarter of fiscal 2023 was
$2.7 million, or 19 cents per share. This compares to non-GAAP net
loss of $0.7 million, or 5 cents per share, for the preceding
quarter and non-GAAP net income of $2.1 million, or 15 cents per
share, for the second quarter of fiscal 2022.
In discussing financial results for the three and six months
ended March 31, 2023, and the three months ended December 31, 2022,
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,
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 third fiscal quarter ending June 30, 2023, revenues are
expected to be in the range of $31 to $33 million with operating
margin slightly positive.
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 second 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
capital equipment, including thermal processing, wafer cleaning,
chemical mechanical polishing (CMP) technology, and related
consumables used in fabricating semiconductor devices, such as
silicon carbide (SiC), silicon power, electronic assemblies and
modules focusing on enabling technologies for electric vehicles
(EV) and clean technology (CleanTech) applications. We sell process
equipment and services 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 core competencies in thermal and
substrate processing. Amtech's products are recognized under the
leading brand names BTU International, Entrepix, Inc., 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, 2022, 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
Six Months Ended March
31,
March 31, 2023
December 31, 2022
March 31, 2022
2023
2022
Amtech Systems, Inc.
Revenues, net
$
33,310
$
21,558
$
27,556
$
54,868
$
54,019
Gross profit
$
13,470
$
8,303
$
11,160
$
21,773
$
21,058
Gross margin
40
%
39
%
40
%
40
%
39
%
GAAP operating income (loss)
$
519
$
(2,680
)
$
2,595
$
(2,161
)
$
3,835
Non-GAAP operating income (loss)
$
3,162
$
(670
)
$
2,732
$
2,492
$
4,075
New orders
$
34,266
$
25,229
$
33,695
$
59,495
$
65,332
Backlog
$
65,838
$
54,452
$
53,566
$
65,838
$
53,566
Semiconductor Segment
Revenues, net
$
22,047
$
16,887
$
23,584
$
38,934
$
46,349
Gross profit
$
8,931
$
6,172
$
9,255
$
15,103
$
17,917
Gross margin
41
%
37
%
39
%
39
%
39
%
GAAP operating income
$
2,950
$
869
$
3,368
$
3,819
$
5,725
Non-GAAP operating income
$
2,950
$
869
$
3,368
$
3,819
$
5,725
New orders
$
24,606
$
21,084
$
28,039
$
45,690
$
55,848
Backlog
$
54,767
$
52,209
$
50,352
$
54,767
$
50,352
Material and Substrate Segment
Revenues, net
$
11,263
$
4,671
$
3,972
$
15,934
$
7,670
Gross profit
$
4,539
$
2,131
$
1,905
$
6,670
$
3,141
Gross margin
40
%
46
%
48
%
42
%
41
%
GAAP operating income
$
297
$
633
$
654
$
930
$
835
Non-GAAP operating income
$
1,938
$
633
$
654
$
2,571
$
835
New orders
$
9,660
$
4,145
$
5,656
$
13,805
$
9,484
Backlog
$
11,071
$
2,243
$
3,214
$
11,071
$
3,214
AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Statements of
Operations
(in thousands, except per share
data)
Three Months Ended March
31,
Six Months Ended March
31,
2023
2022
2023
2022
Revenues, net
$
33,310
$
27,556
$
54,868
$
54,019
Cost of sales
19,840
16,396
33,095
32,961
Gross profit
13,470
11,160
21,773
21,058
Selling, general and administrative
11,434
6,765
20,624
13,851
Research, development and engineering
1,517
1,800
2,910
3,372
Severance expense
—
—
400
—
Operating income (loss)
519
2,595
(2,161
)
3,835
Interest (expense) income and other,
net
(261
)
30
(329
)
(53
)
Income (loss) before income tax
provision
258
2,625
(2,490
)
3,782
Income tax (benefit) provision
(2,946
)
660
(2,950
)
820
Net income
$
3,204
$
1,965
$
460
$
2,962
Income Per Share:
Net income per basic share
$
0.23
$
0.14
$
0.03
$
0.21
Net income per diluted share
$
0.23
$
0.14
$
0.03
$
0.21
Weighted average shares
outstanding:
Basic
14,028
13,979
14,018
14,118
Diluted
14,157
14,144
14,142
14,318
AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Balance Sheets
(in thousands, except share
data)
March 31, 2023
September 30, 2022
Assets
Current Assets
Cash and cash equivalents
$
17,733
$
46,874
Accounts receivable (less allowance for
doubtful accounts of $314 and $114 at March 31, 2023 and September
30, 2022, respectively)
29,427
25,013
Inventories
35,285
25,488
Other current assets
4,416
5,561
Total current assets
86,861
102,936
Property, Plant and Equipment -
Net
8,740
6,552
Right-of-Use Assets - Net
12,448
11,258
Intangible Assets - Net
12,563
758
Goodwill
29,257
11,168
Deferred Income Taxes - Net
87
79
Other Assets
1,046
783
Total Assets
$
151,002
$
133,534
Liabilities and Shareholders’
Equity
Current Liabilities
Accounts payable
$
7,556
$
7,301
Accrued compensation and related taxes
2,949
4,109
Other accrued liabilities
2,815
1,771
Current maturities of finance lease
liabilities and long-term debt
2,202
107
Current portion of long-term operating
lease liabilities
2,771
2,101
Contract liabilities
9,661
7,231
Income taxes payable
712
6
Total current liabilities
28,666
22,626
Finance Lease Liabilities and Long-Term
Debt
9,530
220
Long-Term Operating Lease
Liabilities
9,953
9,395
Income Taxes Payable
2,445
2,849
Other Long-Term Liabilities
111
76
Total Liabilities
50,705
35,166
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: 14,039,334 and
13,994,154 at March 31, 2023 and September 30, 2022,
respectively
140
140
Additional paid-in capital
125,127
124,458
Accumulated other comprehensive loss
(967
)
(1,767
)
Retained deficit
(24,003
)
(24,463
)
Total Shareholders’ Equity
100,297
98,368
Total Liabilities and Shareholders’
Equity
$
151,002
$
133,534
AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Consolidated Statements of Cash
Flows
(in thousands)
Six Months Ended March
31,
2023
2022
Operating Activities
Net income
$
460
$
2,962
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization
1,887
864
Write-down of inventory
517
115
Deferred income taxes
(3,172
)
—
Non-cash share-based compensation
expense
338
240
Provision for allowance for doubtful
accounts
156
41
Other, net
—
(2
)
Changes in operating assets and
liabilities:
Accounts receivable
1,113
(8,321
)
Inventories
(4,631
)
(2,433
)
Other assets
2,215
(788
)
Accounts payable
(1,497
)
1,407
Accrued income taxes
(1,192
)
1,272
Accrued and other liabilities
(2,289
)
331
Contract liabilities
768
3,951
Net cash used in operating activities
(5,327
)
(361
)
Investing Activities
Purchases of property, plant and
equipment
(976
)
(125
)
Acquisition, net of cash and cash
equivalents acquired
(35,498
)
—
Net cash used in investing activities
(36,474
)
(125
)
Financing Activities
Proceeds from the exercise of stock
options
331
98
Repurchase of common stock
—
(4,115
)
Payments on long-term debt
(412
)
(198
)
Borrowings on long-term debt
12,000
—
Net cash provided by (used in) financing
activities
11,919
(4,215
)
Effect of Exchange Rate Changes on
Cash, Cash Equivalents and Restricted Cash
741
286
Net Decrease in Cash, Cash Equivalents
and Restricted Cash
(29,141
)
(4,415
)
Cash and Cash Equivalents, Beginning of
Period
46,874
32,836
Cash, Cash Equivalents and Restricted
Cash, End of Period
$
17,733
$
28,421
AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
(Unaudited)
Reconciliation of GAAP to Non-GAAP
Financial Measures
(in thousands, except per share
data)
Three Months Ended
Six Months Ended March
31,
March 31, 2023
December 31, 2022
March 31, 2022
2023
2022
Amtech Systems, Inc. Operating Income
(Loss):
GAAP operating income (loss)
$
519
$
(2,680
)
$
2,595
$
(2,161
)
$
3,835
Acquisition expenses
1,524
1,446
-
2,970
-
Amortization of acquired intangible
assets
945
-
-
945
-
Stock compensation expense
174
164
137
338
240
Severance expense
-
400
-
400
-
Non-GAAP operating income (loss)
$
3,162
$
(670
)
$
2,732
$
2,492
$
4,075
GAAP operating margin
1.6
%
(12.4
)%
9.4
%
(3.9
)%
7.1
%
Non-GAAP operating margin
9.5
%
(3.1
)%
9.9
%
4.5
%
7.5
%
Consolidated Net Income (Loss):
GAAP net income (loss)
$
3,204
$
(2,744
)
$
1,965
$
460
$
2,962
Acquisition expenses
1,524
1,446
-
2,970
-
Amortization of acquired intangible
assets
945
-
-
945
-
Stock compensation expense
174
164
137
338
240
Severance expense
-
400
-
400
-
Income tax benefit related to
acquisition
(3,164
)
-
-
(3,164
)
-
Non-GAAP net income (loss)
$
2,683
$
(734
)
$
2,102
$
1,949
$
3,202
Net Income (Loss) per Diluted
Share:
GAAP net income (loss) per diluted
share
$
0.23
$
(0.20
)
$
0.14
$
0.03
$
0.21
Acquisition expenses
0.11
0.10
-
0.21
-
Amortization of acquired intangible
assets
0.06
-
-
0.07
-
Stock compensation expense
0.01
0.01
0.01
0.02
0.01
Severance expense
-
0.04
-
0.03
-
Income tax benefit related to
acquisition
(0.22
)
-
-
(0.22
)
-
Non-GAAP net income (loss) per diluted
share
$
0.19
$
(0.05
)
$
0.15
$
0.14
$
0.22
Semiconductor Segment Operating
Income:
GAAP operating income
$
2,950
$
869
$
3,368
$
3,819
$
5,725
Acquisition expenses
-
-
-
-
-
Amortization of acquired intangible
assets
-
-
-
-
-
Stock compensation expense
-
-
-
-
-
Severance expense
-
-
-
-
-
Non-GAAP operating income
$
2,950
$
869
$
3,368
$
3,819
$
5,725
Material and Substrate Segment
Operating Income:
GAAP operating income
$
297
$
633
$
654
$
930
$
835
Acquisition expenses
696
-
-
696
-
Amortization of acquired intangible
assets
945
-
-
945
-
Stock compensation expense
-
-
-
-
-
Severance expense
-
-
-
-
-
Non-GAAP operating income
$
1,938
$
633
$
654
$
2,571
$
835
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230510005960/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
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