Amtech Reports Second Quarter Fiscal 2018 Results

Amtech Reports Second Quarter Fiscal 2018 Results

PR Newswire

TEMPE, Ariz., May 10, 2018 /PRNewswire/ -- Amtech Systems, Inc. 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.

Contacts:

Amtech Systems, Inc.

Robert T. Hass

Chief Financial Officer

(480) 967-5146

irelations@Amtechsystems.com

Christensen

Investor Relations

Patty Bruner

(480) 201-6075

pbruner@christensenir.com

 

AMTECH SYSTEMS, INC.

ASYS

May 10, 2018

(Unaudited)



Condensed Consolidated Statements of Operations



















(in thousands, except per share data)





































Three Months Ended March 31,



Six Months Ended March 31,



2018



2017



2018



2017

Revenues, net of returns and allowances

$

32,783





$

32,944





$

106,394





$

62,079



Cost of sales

21,058





24,549





74,332





45,241



Gross profit

11,725





8,395





32,062





16,838



















Selling, general and administrative

9,478





8,260





20,058





15,258



Research, development and engineering

2,182





1,535





4,173





3,163



Operating income (loss)

65





(1,400)





7,831





(1,583)



















Income (loss) from equity method investment

28





52





2





(91)



Interest and other expense, net

(38)





(197)





(86)





(116)



Income (loss) before income taxes

55





(1,545)





7,747





(1,790)



Income tax (benefit) provision

(2,780)





194





(1,540)





284



Net income (loss)

2,835





(1,739)





9,287





(2,074)



















Add: net loss attributable to noncontrolling interest





319









599



Net income (loss) attributable to Amtech Systems, Inc.

$

2,835





$

(1,420)





$

9,287





$

(1,475)



















Income (Loss) Per Share:















Basic income (loss) per share attributable to Amtech shareholders

$

0.19





$

(0.11)





$

0.63





$

(0.11)



Weighted average shares outstanding

14,891





13,188





14,835





13,184



Diluted income (loss) per share attributable to Amtech shareholders

$

0.19





$

(0.11)





$

0.61





$

(0.11)



Weighted average shares outstanding

15,154





13,188





15,223





13,184



 

AMTECH SYSTEMS, INC.

ASYS

May 10, 2018

(unaudited)



Condensed Consolidated Balance Sheets









(in thousands, except share data)













March 31,

2018



September 30,

2017

Assets









Current Assets









Cash and cash equivalents



$

50,495





$

51,121



Restricted cash



9,662





24,640



Accounts receivable









Trade (less allowance for doubtful accounts of $1,499 and $866 at March 31, 2018, and September 30, 2017, respectively)



22,719





22,519



Unbilled and other



18,651





14,275



Inventories



29,043





30,210



Vendor deposits



3,034





11,806



Other



2,633





2,542



Total current assets



136,237





157,113



Property, Plant and Equipment - Net



16,083





15,792



Intangible Assets - Net



3,289





3,495



Goodwill - Net



11,646





11,405



Investments



2,616





2,615



Deferred Income Taxes - Long-Term



200





200



Other Assets - Long-Term



946





1,003



Total Assets



$

171,017





$

191,623



Liabilities and Stockholders' Equity









Current Liabilities









Accounts payable



$

19,129





$

21,555



Accrued compensation and related taxes



6,865





7,592



Accrued warranty expense



1,495





1,254



Other accrued liabilities



3,262





2,056



Customer deposits



18,260





48,784



Current maturities of long-term debt



369





361



Deferred profit



5,085





4,081



Income taxes payable



1,933





286



Total current liabilities



56,398





85,969



Long-Term Debt



8,217





8,134



Income Taxes Payable - Long-Term



3,490





7,037



Total Liabilities



68,105





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: 14,896,004 and 14,710,591 at March 31, 2018, and September 30, 2017, respectively



149





147



Additional paid-in capital



127,367





125,564



Accumulated other comprehensive loss



(7,192)





(8,529)



Retained deficit



(17,412)





(26,699)



Total stockholders' equity



102,912





90,483



Total Liabilities and Stockholders' Equity



$

171,017





$

191,623



 

AMTECH SYSTEMS, INC.

ASYS

May 10, 2018

(unaudited)



Condensed Consolidated Statements of Cash Flows







(in thousands)

















Six Months Ended March 31,



2018



2017

Operating Activities







Net income (loss)

$

9,287





$

(2,074)



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







Depreciation and amortization

916





1,255



Write-down of inventory

126





51



Capitalized interest

143





204



Deferred income taxes

(23)





24



Non-cash share based compensation expense

463





624



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

(57)





9



(Gain) loss from equity method investment

(2)





91



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

48





(1,217)



Changes in operating assets and liabilities:







Restricted cash

15,710





(1,703)



Accounts receivable

(3,642)





(2,002)



Inventories

1,644





1,840



Accrued income taxes

(1,899)





169



Vendor deposits and other assets

9,097





(5,557)



Accounts payable

(2,954)





1,823



Customer deposits and accrued liabilities

(31,481)





17,531



Deferred profit

819





520



Net cash (used in) provided by operating activities

(1,805)





11,588



Investing Activities







Purchases of property, plant and equipment

(686)





(210)



Proceeds from sale of property, plant and equipment

68





34



Net cash used in investing activities

(618)





(176)



Financing Activities







Proceeds from exercise of stock options

1,340





94



Payments on long-term debt

(183)





(319)



Borrowings on long-term debt





137



Net cash provided by (used in) financing activities

1,157





(88)



Effect of Exchange Rate Changes on Cash and Cash Equivalents

640





(119)



Net (Decrease) Increase in Cash and Cash Equivalents

(626)





11,205



Cash and Cash Equivalents, Beginning of Period

51,121





27,655



Cash and Cash Equivalents, End of Period

$

50,495





$

38,860











 

Cision View original content:http://www.prnewswire.com/news-releases/amtech-reports-second-quarter-fiscal-2018-results-300646656.html

SOURCE Amtech Systems, Inc.

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