Form 10-Q AMTECH SYSTEMS INC For: Mar 31

May 11, 2022 4:22 PM EDT

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10-Q
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: March 31, 2022

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission File Number: 0-11412

img249556864_0.jpg 

 

AMTECH SYSTEMS, INC.

 

(Exact name of registrant as specified in its charter)

 

Arizona

 

86-0411215

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

 

 

131 South Clark Drive, Tempe, Arizona

 

85281

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: 480-967-5146

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.01 per share

 

ASYS

 

NASDAQ.Global Select Market

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

 

Large Accelerated Filer

 

 

Accelerated Filer

Non-Accelerated Filer

 

 

Smaller Reporting Company

 

 

 

 

Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

At May 6, 2022, there were outstanding 13,888,683 shares of Common Stock.

 


AMTECH SYSTEMS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

 

 

Page

Cautionary Statement Regarding Forward-Looking Statements

3

PART I. FINANCIAL INFORMATION

4

Item 1. Condensed Consolidated Financial Statements

4

Condensed Consolidated Balance Sheets March 31, 2022 (Unaudited) and September 30, 2021

4

Condensed Consolidated Statements of Operations (Unaudited) Three and Six Months Ended March 31, 2022 and 2021

5

Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three and Six Months Ended March 31, 2022 and 2021

6

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) Three and Six Months Ended March 31, 2022 and 2021

7

Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended March 31, 2022 and 2021

8

Notes to Condensed Consolidated Financial Statements (Unaudited)

9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

Overview

18

Results of Operations

20

Liquidity and Capital Resources

23

Off-Balance Sheet Arrangements

24

Contractual Obligations

24

Critical Accounting Policies

25

Impact of Recently Issued Accounting Pronouncements

25

Item 3. Quantitative and Qualitative Disclosures About Market Risk

25

Item 4. Controls and Procedures

25

PART II. OTHER INFORMATION

27

Item 1. Legal Proceedings

27

Item 1A. Risk Factors

27

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

27

Item 3. Defaults Upon Senior Securities

28

Item 4. Mine Safety Disclosures

28

Item 5. Other Information

28

Item 6. Exhibits

29

SIGNATURES

30

 

2


 

Cautionary Statement Regarding Forward-Looking Statements

 

Unless otherwise indicated, the terms “Amtech,” the “Company,” “we,” “us” and “our” refer to Amtech Systems, Inc. together with its subsidiaries.

 

Our discussion and analysis in this Quarterly Report on Form 10-Q ("Quarterly Report"), our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 (the “2021 Form 10-K”), our other reports that we file with the Securities and Exchange Commission (the “SEC”), our press releases and in public statements of our officers and corporate spokespersons contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our or our officers’ current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current events. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management. We have tried, wherever possible, to identify such statements by using words 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 thereof or variations thereon or similar terminology relating to the uncertainty of future events or outcomes. Any expectations based on these forward-looking statements are subject to risks and uncertainties and other important factors. Some factors that could cause actual results to differ materially from those anticipated include, among others, future economic conditions, including changes in the markets in which we operate; changes in demand for our services and products; our revenue and operating performance; difficulties in successfully executing our growth initiatives; difficulties in executing on our strategic efforts with respect to our material and substrate business segment; the effects of competition in the markets in which we operate, including the adverse impact of competitive product announcements or new entrants into our markets and transfers of resources by competitors into our markets; the cyclical nature of the semiconductor industry; pricing and gross profit pressures; control of costs and expenses; risks associated with new technologies and the impact on our business; legislative, regulatory, and competitive developments in markets in which we operate; possible future claims, litigation or enforcement actions and the results of any such claim, litigation, or enforcement action; business interruptions, including those related to the COVID-19 pandemic and the cybersecurity incident that occurred in April 2021; the potential impacts of the COVID-19 pandemic, including ongoing logistical and supply chain challenges, the recent Chinese government mandated shutdown in Shanghai, and any future pandemic on our business operations, financial results and financial position; the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel; the resolution of our cybersecurity incident and related costs; risks of future cybersecurity incidents; and other circumstances and risks identified in this Quarterly Report or referenced from time to time in our filings with the SEC. The occurrence of the events described, and the achievement of expected results, depend on many events, some or all of which are not predictable or within our control. These and many other factors could affect Amtech’s future operating results and financial condition and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by Amtech or on its behalf.

 

You should not place undue reliance on these forward-looking statements. We cannot guarantee that any forward-looking statement will be realized, although we believe that the expectations reflected in the forward-looking statements are reasonable as of the date of this Quarterly Report. Achievement of future results is subject to events out of our control, risks, uncertainties and potentially inaccurate assumptions. The 2021 Form 10-K listed various important factors that could affect Amtech’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 “Item 1A. Risk Factors” in our 2021 Form 10-K and investors should refer to them as well as the additional risk factors identified in this Quarterly Report. 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.

 

The Company undertakes no obligation to update or publicly revise any forward-looking statement whether as a result of new information, future developments or otherwise. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this paragraph. You are advised, however, to consult any further disclosures we make on related subjects in our subsequently filed Form 10-Q and Form 8-K reports and our other filings with the SEC. As noted above, we provide a cautionary discussion of risks, uncertainties and possibly inaccurate assumptions relevant to our business under “Item 1A. Risk Factors” of our 2021 Form 10-K. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand it is not possible to predict or identify all such factors.

3


 

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share data)

 

 

 

March 31,
2022

 

 

September 30,
2021

 

Assets

 

(Unaudited)

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

27,897

 

 

$

32,836

 

Restricted cash

 

 

524

 

 

 

 

Accounts receivable (less allowance for doubtful accounts of $225 and $188 at
   March 31, 2022, and September 30, 2021, respectively)

 

 

30,782

 

 

 

22,502

 

Inventories

 

 

24,393

 

 

 

22,075

 

Income taxes receivable

 

 

 

 

 

1,046

 

Other current assets

 

 

3,440

 

 

 

2,407

 

Total current assets

 

 

87,036

 

 

 

80,866

 

Property, Plant and Equipment - Net

 

 

13,447

 

 

 

14,083

 

Right-of-Use Assets - Net

 

 

8,441

 

 

 

8,646

 

Intangible Assets - Net

 

 

808

 

 

 

858

 

Goodwill

 

 

11,168

 

 

 

11,168

 

Deferred Income Taxes - Net

 

 

671

 

 

 

631

 

Other Assets

 

 

618

 

 

 

661

 

Total Assets

 

$

122,189

 

 

$

116,913

 

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts payable

 

$

9,635

 

 

$

8,229

 

Accrued compensation and related taxes

 

 

3,449

 

 

 

2,881

 

Accrued warranty expense

 

 

804

 

 

 

545

 

Other accrued liabilities

 

 

679

 

 

 

903

 

Current maturities of long-term debt

 

 

405

 

 

 

396

 

Current portion of long-term lease liability

 

 

563

 

 

 

531

 

Contract liabilities

 

 

5,576

 

 

 

1,624

 

Income taxes payable

 

 

294

 

 

 

 

Total current liabilities

 

 

21,405

 

 

 

15,109

 

Long-Term Debt

 

 

4,195

 

 

 

4,402

 

Long-Term Lease Liability

 

 

8,175

 

 

 

8,389

 

Income Taxes Payable

 

 

3,208

 

 

 

3,277

 

Other Long-Term Liabilities

 

 

48

 

 

 

102

 

Total Liabilities

 

 

37,031

 

 

 

31,279

 

Commitments and Contingencies (Note 9)

 

 

 

 

 

 

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:
13,887,050 and 14,304,492 at March 31, 2022
   and September 30, 2021, respectively

 

 

139

 

 

 

143

 

Additional paid-in capital

 

 

123,534

 

 

 

126,380

 

Accumulated other comprehensive income

 

 

353

 

 

 

14

 

Retained deficit

 

 

(38,868

)

 

 

(40,903

)

Total Shareholders’ Equity

 

 

85,158

 

 

 

85,634

 

Total Liabilities and Shareholders’ Equity

 

$

122,189

 

 

$

116,913

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except per share data)

 

 

 

Three Months Ended March 31,

 

 

Six Months Ended March 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues, net

 

$

28,579

 

 

$

19,790

 

 

$

55,908

 

 

$

37,765

 

Cost of sales

 

 

16,396

 

 

 

12,062

 

 

 

32,961

 

 

 

22,525

 

Gross profit

 

 

12,183

 

 

 

7,728

 

 

 

22,947

 

 

 

15,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

7,788

 

 

 

5,688

 

 

 

15,740

 

 

 

10,901

 

Research, development and engineering

 

 

1,800

 

 

 

1,869

 

 

 

3,372

 

 

 

3,114

 

Operating income

 

 

2,595

 

 

 

171

 

 

 

3,835

 

 

 

1,225

 

Interest income (expense) and other, net

 

 

30

 

 

 

73

 

 

 

(53

)

 

 

(182

)

Income before income tax provision

 

 

2,625

 

 

 

244

 

 

 

3,782

 

 

 

1,043

 

Income tax provision

 

 

660

 

 

 

490

 

 

 

820

 

 

 

570

 

Net income (loss)

 

$

1,965

 

 

$

(246

)

 

$

2,962

 

 

$

473

 

Income (Loss) Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per basic share

 

$

0.14

 

 

$

(0.02

)

 

$

0.21

 

 

$

0.03

 

Net income (loss) per diluted share

 

$

0.14

 

 

$

(0.02

)

 

$

0.21

 

 

$

0.03

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

13,979

 

 

 

14,151

 

 

 

14,118

 

 

 

14,121

 

Diluted

 

 

14,144

 

 

 

14,151

 

 

 

14,318

 

 

 

14,217

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


 

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands)

 

 

 

Three Months Ended March 31,

 

 

Six Months Ended March 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

1,965

 

 

$

(246

)

 

$

2,962

 

 

$

473

 

Foreign currency translation adjustment

 

 

102

 

 

 

(225

)

 

 

339

 

 

 

370

 

Comprehensive income (loss)

 

$

2,067

 

 

$

(471

)

 

$

3,301

 

 

$

843

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


 

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)

(in thousands)

 

 

 

Common Stock

 

 

Treasury Stock

 

 

 

 

 

Accumulated
Other

 

 

 

 

 

Total

 

 

 

Shares

 

 

Par Value

 

 

Shares

 

 

Cost

 

 

Additional Paid-
In Capital

 

 

Comprehensive
Income (Loss)

 

 

Retained
 Deficit

 

 

Shareholders'
Equity

 

Balance at September 30, 2020

 

 

14,063

 

 

$

141

 

 

 

 

 

$

 

 

$

124,435

 

 

$

(646

)

 

$

(42,411

)

 

$

81,519

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

719

 

 

 

719

 

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

595

 

 

 

 

 

 

595

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

65

 

 

 

 

 

 

 

 

 

65

 

Stock options exercised

 

 

28

 

 

 

 

 

 

 

 

 

 

 

 

135

 

 

 

 

 

 

 

 

 

135

 

Balance at December 31, 2020

 

 

14,091

 

 

 

141

 

 

 

 

 

 

 

 

 

124,635

 

 

 

(51

)

 

 

(41,692

)

 

 

83,033

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(246

)

 

 

(246

)

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(225

)

 

 

 

 

 

(225

)

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

84

 

 

 

 

 

 

 

 

 

84

 

Stock options exercised

 

 

131

 

 

 

1

 

 

 

 

 

 

 

 

 

794

 

 

 

 

 

 

 

 

 

795

 

Balance at March 31, 2021

 

 

14,222

 

 

$

142

 

 

 

 

 

$

 

 

$

125,513

 

 

$

(276

)

 

$

(41,938

)

 

$

83,441

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2021

 

 

14,304

 

 

$

143

 

 

 

 

 

$

 

 

$

126,380

 

 

$

14

 

 

$

(40,903

)

 

$

85,634

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

997

 

 

 

997

 

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

237

 

 

 

 

 

 

237

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

103

 

 

 

 

 

 

 

 

 

103

 

Repurchase of treasury stock

 

 

 

 

 

 

 

 

(291

)

 

 

(2,713

)

 

 

 

 

 

 

 

 

 

 

 

(2,713

)

Retirement of treasury stock

 

 

(291

)

 

 

(3

)

 

 

291

 

 

 

2,713

 

 

 

(2,122

)

 

 

 

 

 

(588

)

 

 

 

Stock options exercised

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

69

 

 

 

 

 

 

 

 

 

69

 

Balance at December 31, 2021

 

 

14,025

 

 

 

140

 

 

 

 

 

 

 

 

 

124,430

 

 

 

251

 

 

 

(40,494

)

 

 

84,327

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,965

 

 

 

1,965

 

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

102

 

 

 

 

 

 

102

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

137

 

 

 

 

 

 

 

 

 

137

 

Repurchase of treasury stock

 

 

 

 

 

 

 

 

(143

)

 

 

(1,402

)

 

 

 

 

 

 

 

 

 

 

 

(1,402

)

Retirement of treasury stock

 

 

(143

)

 

 

(1

)

 

 

143

 

 

 

1,402

 

 

 

(1,062

)

 

 

 

 

 

(339

)

 

 

 

Stock options exercised

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

29

 

 

 

 

 

 

 

 

 

29

 

Balance at March 31, 2022

 

 

13,887

 

 

$

139

 

 

 

 

 

$

 

 

$

123,534

 

 

$

353

 

 

$

(38,868

)

 

$

85,158

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

7


 

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Six Months Ended March 31,

 

 

 

2022

 

 

2021

 

Operating Activities

 

 

 

 

 

 

Net income

 

$

2,962

 

 

$

473

 

Adjustments to reconcile net income to net cash used in
   operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

864

 

 

 

644

 

Write-down of inventory

 

 

115

 

 

 

230

 

Non-cash stock compensation expense

 

 

240

 

 

 

149

 

Provision for allowance for doubtful accounts

 

 

41

 

 

 

28

 

Other, net

 

 

(2

)

 

 

8

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

(8,321

)

 

 

(5,485

)

Inventories

 

 

(2,433

)

 

 

859

 

Other assets

 

 

(788

)

 

 

(1,132

)

Accounts payable

 

 

1,407

 

 

 

3,122