Amtech Reports Fourth Quarter and Fiscal 2017 Results

November 20, 2017 4:10 PM

TEMPE, Ariz., Nov. 20, 2017 /PRNewswire/ -- Amtech Systems, Inc. (NASDAQ: ASYS), a global supplier of production equipment and related supplies for the solar, semiconductor, and LED markets, today reported results for its fourth quarter and fiscal year ended September 30, 2017.

Fourth Quarter Fiscal 2017 Financial and Operational Highlights:

  • Net revenues of $54.7 million (solar $30.1 million)
  • Net income of $7.3 million
  • Diluted earnings per share of $0.51
  • Customer orders of $27.6 million (solar $9.6 million)
  • Quarter-end backlog of $102.4 million (solar $81.4 million)
  • Book to bill ratio of 0.5:1 (0.3:1 solar)
  • Unrestricted cash of $51.1 million

Fiscal Year 2017 Financial and Operational Highlights:

  • Net revenues of $164.5 million (solar $87.0 million)
  • Net income of $9.1 million
  • Diluted earnings per share of $0.68
  • Cash provided by operating activities of $11.8 million
  • Customer orders of $210.5 million (solar $126.6 million)
  • Book to bill ratio of 1.3:1 (1.4:1 solar)

Mr. Fokko Pentinga, Chief Executive Officer of Amtech, commented, "We are pleased to report that shipment of Phase I of the turnkey order and strong shipments of semiconductor products led to strong financial results in the fourth quarter and fiscal year 2017. All three of our businesses delivered very positive earnings in the fourth quarter. Both our solar and semiconductor business units performed well with sequential quarter-to-quarter and year-over year improvements in both revenue and operating profit. The polishing segment also produced higher quarterly profits sequentially and year-over-year. In August, we successfully completed a round of equity financing, which enhanced our financial position as we continue to develop next-generation products and solutions, focus on operational excellence, and the long-term profitable growth of the company."

At September 30, 2017, our total order backlog was $102.4 million (solar $81.4 million), compared to total backlog of $125.7 million (solar $98.2 million) at June 30, 2017. Backlog includes deferred revenue and customer orders that are expected to ship within the next 12 months.

Net revenue for the fourth quarter of fiscal 2017 was $54.7 million compared to $47.8 million in the preceding quarter and $42.4 million in the fourth quarter of fiscal 2016. The sequential increase is due primarily to increased shipments of our semiconductor equipment. The increase from the prior year quarter is due primarily to shipments relating to the large solar turnkey order, as well as increased shipments of our semiconductor equipment.

Gross margin in the fourth quarter of fiscal 2017 was 36%, compared to 32% in the preceding quarter and 29% in the fourth quarter of fiscal 2016. Sequentially and compared to prior year, gross margin increased primarily due to higher sales volumes, favorable product and customer mix, and the recognition of previously deferred profit.

Selling, general and administrative (SG&A) expenses in the fourth quarter of fiscal 2017 were $9.8 million compared to $10.1 million in the preceding quarter and $10.3 million in the fourth quarter of fiscal 2016. Sequentially, the SG&A decrease was due primarily to lower severance and employee-related expenses. The decrease in SG&A from prior year is due primarily to a $1.8 million provision for doubtful accounts receivable in the fourth quarter of fiscal 2016. The fourth quarter of fiscal 2017 included increased commissions and selling expenses on higher sales and higher employee related expenses.

Research, development and engineering (RD&E) expense was $1.8 million in the fourth quarter of fiscal 2017 compared to $1.4 million in the preceding quarter and $2.0 million in the fourth quarter of fiscal 2016.

Depreciation and amortization in the fourth quarter of fiscal 2017 was $0.6 million, compared to $0.6 million in the preceding quarter and $0.7 million in the fourth quarter of fiscal 2016.

Income tax expense in the fourth quarter of fiscal 2017 was $0.5 million compared to $1.0 million in the preceding quarter and $1.1 million in the fourth quarter of fiscal 2016.

Net income for the fourth quarter of fiscal 2017 was $7.3 million, or $0.51 per diluted share, compared to a net loss of $0.3 million, or $0.02 per share for the fourth quarter of fiscal 2016 and net income of $3.3 million or $0.25 per diluted share in the preceding quarter.

Unrestricted cash and cash equivalents at September 30, 2017 were $51.1 million, compared to $39.2 million at June 30, 2017.

Outlook

The company expects revenues for the quarter ending December 31, 2017 to be in the range of $60 to $70 million. Gross margin for the quarter ending December 31, 2017 is expected to be in the mid 20 percent range, with operating margin percentage in the mid-single digits, both influenced by product mix.

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 the solar and semiconductor businesses. The first quarter of fiscal 2018 ending December 31, 2017 is expected to be positively impacted by the solar business due to the shipment of all Phase II equipment of a large multi-phase turnkey order, followed by softer second quarter shipments and operating results. Depending on the timing of the order for the next phase of the turnkey project, the results for the second half of the year potentially may be in line with the first half of the year. Operating results could also be affected by the net impact of revenue deferral on shipments, and recognition of revenue based on customer acceptances, and progress on the start-up 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 fourth quarter and fiscal 2017 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 November 27, 2017. To access the replay please dial US toll free (877) 344-7529 and enter code 10114411. 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). 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. 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. 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, 2016, 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)

November 20, 2017

(Unaudited)

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

Three Months EndedSeptember 30,

Years Ended September 30,

2017

2016

2017

2016

Revenues, net of returns and allowances

$

54,677

$

42,409

$

164,516

$

120,308

Cost of sales

35,085

29,933

112,584

86,245

Gross profit

19,592

12,476

51,932

34,063

Selling, general and administrative

9,771

10,259

35,135

33,967

Research, development and engineering

1,787

1,989

6,372

8,004

Operating income (loss)

8,034

228

10,425

(7,908)

Gain on sale of other assets

2,576

(Loss) income from equity method investment

(216)

73

(417)

299

Interest and other expense, net

(27)

18

(178)

(417)

Income (loss) before income taxes

7,791

319

9,830

(5,450)

Income tax provision

474

1,060

1,744

3,100

Net income (loss)

7,317

(741)

8,086

(8,550)

Add: net loss attributable to noncontrolling interest

456

1,045

1,542

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

$

7,317

$

(285)

$

9,131

$

(7,008)

Income (Loss) Per Share:

Basic income (loss) per share attributable to Amtech shareholders

$

0.53

$

(0.02)

$

0.68

$

(0.53)

Weighted average shares outstanding

13,895

13,177

13,378

13,168

Diluted income (loss) per share attributable to Amtech shareholders

$

0.51

$

(0.02)

$

0.68

$

(0.53)

Weighted average shares outstanding

14,294

13,177

13,501

13,168

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

November 20, 2017

Condensed Consolidated Balance Sheets

(in thousands, except share data)

September 30, 2017

September 30, 2016

Assets

Current Assets

Cash and cash equivalents

$

51,121

$

27,655

Restricted cash

24,640

893

Accounts receivable

Trade (less allowance for doubtful accounts of $866 and $3,730 at September 30, 2017, and September 30, 2016, respectively)

22,519

17,642

Unbilled and other

14,275

8,634

Inventories

30,210

23,223

Refundable income taxes

260

Vendor deposits

11,806

1,962

Other

2,542

2,655

Total current assets

157,113

82,924

Property, Plant and Equipment - Net

15,792

15,960

Intangible Assets - Net

3,495

4,100

Goodwill - Net

11,405

11,119

Investments

2,615

3,032

Deferred Income Taxes - Long-Term

200

200

Other Assets - Long-Term

1,003

1,095

Total Assets

$

191,623

$

118,430

Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable

$

21,555

$

15,397

Accrued compensation and related taxes

7,592

5,710

Accrued warranty expense

1,254

795

Other accrued liabilities

2,056

2,164

Customer deposits

48,784

7,055

Current maturities of long-term debt

361

1,134

Deferred profit

4,081

4,709

Income taxes payable

286

1,100

Total current liabilities

85,969

38,064

Long-Term Debt

8,134

9,097

Income Taxes Payable - Long-Term

7,037

5,930

Total Liabilities

101,140

53,091

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: 14,710,591 and 13,179,355 at September 30, 2017, and September 30, 2016, respectively

147

132

Additional paid-in capital

125,564

111,631

Accumulated other comprehensive loss

(8,529)

(8,876)

Retained deficit

(26,699)

(35,830)

Total stockholders' equity

90,483

67,057

Noncontrolling interest

(1,718)

Total equity

90,483

65,339

Total Liabilities and Stockholders' Equity

$

191,623

$

118,430

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

November 20, 2017

Condensed Consolidated Statements of Cash Flows

(in thousands)

Years Ended September 30,

2017

2016

Operating Activities

Net income (loss)

$

8,086

(8,550)

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

Depreciation and amortization

2,493

2,974

Write-down of inventory

420

84

Capitalized interest

277

322

Deferred income taxes

(27)

2,280

Non-cash share based compensation expense

1,328

1,390

Loss on sale of property, plant and equipment

26

(60)

Gain on sale of other assets

(2,576)

Loss (income) from equity method investment

417

(299)

(Reversal of) provision for allowance for doubtful accounts

(720)

1,698

Changes in operating assets and liabilities:

Restricted cash

(22,262)

(253)

Accounts receivable

(8,655)

(4,998)

Inventories

(6,638)

491

Accrued income taxes

573

351

Vendor deposits and other assets

(8,898)

(814)

Accounts payable

5,374

(224)

Customer deposits and accrued liabilities

40,817

(1,355)

Deferred profit

(822)

(150)

Net cash provided by (used in) operating activities

11,789

(9,689)

Investing Activities

Purchases of property, plant and equipment

(1,256)

(978)

Proceeds from sale of property, plant and equipment

40

255

Proceeds from partial sale of subsidiary

7,012

Proceeds from sale of other assets

4,884

Net cash (used in) provided by investing activities

(1,216)

11,173

Financing Activities

Proceeds from issuance of common stock, net

12,602

51

Payments on long-term debt

(674)

(739)

Borrowings on long-term debt

755

1,145

Excess tax benefit of stock compensation

18

Net cash provided by financing activities

12,701

457

Effect of Exchange Rate Changes on Cash

192

(138)

Net Increase in Cash and Cash Equivalents

23,466

1,803

Cash and Cash Equivalents, Beginning of Year

27,655

25,852

Cash and Cash Equivalents, End of Year

$

51,121

27,655

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SOURCE Amtech Systems, Inc.

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