Amtech Reports First Quarter Fiscal 2018 Results

February 8, 2018 4:10 PM

TEMPE, Ariz., Feb. 8, 2018 /PRNewswire/ -- Amtech Systems, Inc. (NASDAQ: ASYS), a global manufacturer and supplier of production equipment and related supplies for the solar, semiconductor and LED markets, today reported results for its first quarter ended December 31, 2017.

First Quarter Fiscal 2018 Financial and Operational Highlights:

  • Net revenues of $73.6 million (solar $49.2 million)
  • Net income of $6.5 million
  • Diluted earnings per share of $0.42
  • Customer orders of $37.3 million (solar $7.3 million)
  • Quarter-end backlog of $65.9 million (solar $39.3 million)
  • Book to bill ratio of 0.5:1 (0.1:1 solar)
  • Unrestricted cash of $52.7 million

Mr. Fokko Pentinga, Chief Executive Officer of Amtech, commented, "As anticipated, we had a very good start to our fiscal 2018. In the December quarter we had record revenues with an even higher record level of shipments, along with solid profitability. All three of our reporting segments, solar, semiconductor, and polishing, performed well, with our semiconductor and polishing segments outperforming our expectations. Our financial position is strong and we continue to make strategic investments in our businesses and to focus on operational excellence."

Net revenue for the first quarter of fiscal 2018 was $73.6 million compared to $54.7 million in the preceding quarter and $29.1 million in the first quarter of fiscal 2017. The sequential increase is due primarily to the shipment of all of the equipment for Phase II of the solar turnkey order and increased sales of our polishing templates. The increase from the prior year quarter is due primarily to shipments relating to Phase II of the solar turnkey order, as well as increased shipments of our semiconductor equipment and sales of our polishing templates.

Net income for the first quarter of fiscal 2018 was $6.5 million, or $0.42 per diluted share, compared to a net loss of $0.1 million, or $0.00 per share for the first quarter of fiscal 2017 and net income of $7.3 million or $0.51 per diluted share in the preceding quarter.

Unrestricted cash and cash equivalents at December 31, 2017 were $52.7 million, compared to $51.1 million at September 30, 2017.

At December 31, 2017, our total order backlog was $65.9 million (solar $39.3 million), compared to total backlog of $102.4 million (solar $81.4 million) at September 30, 2017. Backlog includes deferred revenue and customer orders that are expected to ship within the next 12 months.

Gross margin in the first quarter of fiscal 2018 was 28%, compared to 36% in the preceding quarter and 29% in the first quarter of fiscal 2017. Sequentially, gross margin decreased primarily due to $2.1 million in revenue deferrals in the first quarter of fiscal 2018, compared to the recognition of $1.5 million of previously deferred profit in the fourth quarter of fiscal 2017. Additionally, less utilization of previously reserved inventory and sales of lower-margin products in our semiconductor segment contributed to the sequential decrease in gross margin. Compared to the prior year quarter, gross margin decreased slightly on higher sales volumes due to a lower-margin product mix and a deferral of profit in the first quarter of fiscal 2018, compared to recognition of previously deferred profit in the first quarter of fiscal 2017.

Selling, general and administrative expense ("SG&A") in the first quarter of fiscal 2018 were $10.6 million, compared to $9.8 million in the preceding quarter and $7.0 million in the first quarter of fiscal 2017. Sequentially, the SG&A increase was due primarily to increased commissions and freight related to the higher revenues, partially offset by lower employee-related expenses. The increase in SG&A from the prior year quarter is due primarily to higher commissions, freight, and other selling expenses. For the three months ended December 31, 2016, SG&A expenses include the collection of previously reserved accounts receivable of approximately $1.0 million which contributed to the year-over-year increase.

Research, development and engineering (RD&E) expense was $2.0 million in the first quarter of fiscal 2018 compared to $1.8 million in the preceding quarter and $1.6 million in the first quarter of fiscal 2017.

Income tax expense in the first quarter of fiscal 2018 was $1.2 million compared to $0.5 million in the preceding quarter and $0.1 million in the first quarter of fiscal 2017.

Outlook

The company expects revenues for the quarter ending March 31, 2018 to be in the range of $26 to $29 million. Gross margin for the quarter ending March 31, 2018 is expected to be in the mid 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 the solar and semiconductor businesses. The results for the second half of fiscal 2018 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, 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 first 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 February 15, 2018. To access the replay please dial US toll free (877) 344-7529 and enter code 10116145. 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 SystemsTM, Bruce TechnologiesTM, PR HoffmanTM, R2D AutomationTM, 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 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.

(NASDAQ: ASYS)

February 8, 2018

(Unaudited)

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

Three Months Ended December 31,

2017

2016

Revenues, net of returns and allowances

$

73,611

$

29,135

Cost of sales

53,274

20,692

Gross profit

20,337

8,443

Selling, general and administrative

10,580

6,996

Research, development and engineering

1,991

1,627

Operating income (loss)

7,766

(180)

Loss from equity method investment

(26)

(143)

Interest and other expense, net

(48)

81

Income (loss) before income taxes

7,692

(242)

Income tax provision

1,240

90

Net income (loss)

6,452

(332)

Add: net loss attributable to noncontrolling interest

279

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

$

6,452

$

(53)

Income (Loss) Per Share:

Basic income (loss) per share attributable to Amtech shareholders

$

0.44

$

0.00

Weighted average shares outstanding

14,781

13,179

Diluted income (loss) per share attributable to Amtech shareholders

$

0.42

$

0.00

Weighted average shares outstanding

15,298

13,179

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

February 8, 2018

(unaudited)

Condensed Consolidated Balance Sheets

(in thousands, except share data)

December 31, 2017

September 30, 2017

Assets

Current Assets

Cash and cash equivalents

$

52,696

$

51,121

Restricted cash

9,913

24,640

Accounts receivable

Trade (less allowance for doubtful accounts of $1,473 and $866 at December 31, 2017, and September 30, 2017, respectively)

24,365

22,519

Unbilled and other

21,620

14,275

Inventories

22,762

30,210

Vendor deposits

5,180

11,806

Other

2,310

2,542

Total current assets

138,846

157,113

Property, Plant and Equipment - Net

15,637

15,792

Intangible Assets - Net

3,378

3,495

Goodwill - Net

11,484

11,405

Investments

2,588

2,615

Deferred Income Taxes - Long-Term

200

200

Other Assets - Long-Term

980

1,003

Total Assets

$

173,113

$

191,623

Liabilities and Stockholders' Equity

Current Liabilities

Accounts payable

$

20,483

$

21,555

Accrued compensation and related taxes

7,422

7,592

Accrued warranty expense

1,401

1,254

Other accrued liabilities

2,918

2,056

Customer deposits

19,328

48,784

Current maturities of long-term debt

365

361

Deferred profit

5,632

4,081

Income taxes payable

1,608

286

Total current liabilities

59,157

85,969

Long-Term Debt

8,225

8,134

Income Taxes Payable - Long-Term

6,802

7,037

Total Liabilities

74,184

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: 14,876,430 and 14,710,591 at December 31, 2017, and September 30, 2017, respectively

149

147

Additional paid-in capital

127,015

125,564

Accumulated other comprehensive loss

(7,988)

(8,529)

Retained deficit

(20,247)

(26,699)

Total equity

98,929

90,483

Total Liabilities and Stockholders' Equity

$

173,113

$

191,623

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

February 8, 2018

(unaudited)

Condensed Consolidated Statements of Cash Flows

(in thousands)

Three Months Ended December 31,

2017

2016

Operating Activities

Net income (loss)

$

6,452

$ (332)

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

Depreciation and amortization

471

654

Write-down of inventory

41

33

Capitalized interest

143

190

Deferred income taxes

(7)

31

Non-cash share based compensation expense

253

319

Loss from equity method investment

26

143

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

48

(1,178)

Changes in operating assets and liabilities:

Restricted cash

14,885

(2,425)

Accounts receivable

(8,869)

(3,600)

Inventories

7,558

1,621

Accrued income taxes

1,087

239

Vendor deposits and other assets

6,974

725

Accounts payable

(1,255)

78

Customer deposits and accrued liabilities

(29,023)

584

Deferred profit

1,479

(619)

Net cash provided by (used in) operating activities

263

(3,537)

Investing Activities

Purchases of property, plant and equipment

(93)

(86)

Proceeds from sale of property, plant and equipment

1

Net cash used in investing activities

(93)

(85)

Financing Activities

Proceeds from exercise of stock options

1,199

1

Payments on long-term debt

(89)

(160)

Borrowings on long-term debt

21

Net cash provided by (used in) financing activities

1,110

(138)

Effect of Exchange Rate Changes on Cash and Cash Equivalents

295

(257)

Net Increase (Decrease) in Cash and Cash Equivalents

1,575

(4,017)

Cash and Cash Equivalents, Beginning of Period

51,121

27,655

Cash and Cash Equivalents, End of Period

$

52,696

$ 23,638

Cision View original content:http://www.prnewswire.com/news-releases/amtech-reports-first-quarter-fiscal-2018-results-300596068.html

SOURCE Amtech Systems, Inc.

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