Amtech Reports First Quarter 2024 Results

About this update from Amtech Systems, Inc.

TEMPE, Ariz. --(BUSINESS WIRE)-- Amtech Systems, Inc. (" Amtech ") (NASDAQ: ASYS), a manufacturer of thermal processing, wafer cleaning and chemical mechanical polishing (CMP) capital equipment and related consumables used in semiconductor, advanced mobility and renewable energy manufacturing applications, today reported results for its first quarter ended December 31, 2023 . First Quarter Fiscal 2024 Financial and Operational Results: Net revenue of $24.9 million GAAP operating loss of $8.9 million , inclusive of non-cash impairment charges of $7.6 million due to our book value materially exceeding our market value as of December 31, 2023 Non-GAAP operating loss of $0.2 million (1) GAAP net loss of $9.4 million Non-GAAP net loss of $0.6 million (1) Customer orders of $23.1 million Book to bill ratio of 0.9:1 Backlog of $50.0 million (1) See GAAP to non-GAAP reconciliation in schedules following this release. “I am pleased with the progress we are making to improve our cost structure and position the Company for strong operating results as markets recover. Our revenue of $24.9 million and adjusted EBITDA(1) of $0.2 million exceeded the high-end of our expectations. We remain focused on operational optimization, having achieved $6 million in annualized cost savings through actions implemented over the past four months. Looking ahead, we believe the strategic actions we are taking will lead to significant improvements in operational efficiency, operating leverage, and increased shareholder value,” commented Mr. Bob Daigle , Chief Executive Officer of Amtech . GAAP and Non-GAAP Financial Results (in millions, except per share amounts) Q1 Q4 Q1 FY 2024 FY 2023 FY 2023 Revenues, net $ 24.9 $ 27.7 $ 21.6 Gross profit $ 8.2 $ 2.8 $ 8.3 Gross margin 33.0 % 10.1 % 38.5 % Non-GAAP gross profit (1) $ 9.3 $ 8.9 $ 8.3 Non-GAAP gross margin (1) 37.5 % 32.2 % 38.5 % GAAP operating loss $ (8.9 ) $ (11.7 ) $ (2.7 ) GAAP operating margin -35.9 % -42.2 % -12.4 % Non-GAAP operating loss (1) $ (0.2 ) $ (3.0 ) $ (0.7 ) Non-GAAP operating margin (1) -0.8 % -10.9 % -3.1 % GAAP net loss $ (9.4 ) $ (12.0 ) $ (2.7 ) GAAP net loss per diluted share $ (0.66 ) $ (0.85 ) $ (0.20 ) Non-GAAP net loss (1) $ (0.6 ) $ (2.5 ) $ (0.7 ) Non-GAAP net loss per diluted share (1) $ (0.04 ) $ (0.18 ) $ (0.05 ) (1) See GAAP to non-GAAP reconciliation in schedules following this release. Net revenues decreased 10% sequentially and increased 16% from the first quarter of fiscal 2023. The sequential decrease is primarily due to a decrease in equipment shipments across our business segments due to continued softness in the semiconductor market. The increase from prior year is primarily attributable to increases in our belt furnace shipments and the addition of Entrepix , partially offset by lower shipments of our reflow equipment in fiscal 2024. GAAP gross margin increased sequentially due primarily to the intangible asset impairment charge of $4.6 million that was recorded in fiscal Q4 2023. Compared to the prior year period, GAAP gross margin decreased primarily due to a less favorable product mix and an intangible asset impairment charge of $0.8 million recorded in Q1 2024. Non-GAAP gross margin increased sequentially due primarily to lower overhead expenses and a more favorable product mix. Non-GAAP gross margin in fiscal Q1 2024 was slightly lower compared to the same prior year period due primarily to a less favorable product mix. During the first quarter of fiscal 2024, the market value of our stock materially declined below our book value. Accordingly, we recorded $1.3 million of intangible asset impairment charges and $6.4 million of goodwill charges in our Material and Substrate segment, of which $0.8 million is recorded within gross profit and the remainder is recorded within operating expenses. Selling, General & Administrative (“SG&A”) expenses decreased $2.5 million on a sequential basis and decreased $0.6 million compared to the prior year period. The sequential decrease is due primarily to reductions in the following expenses: $0.7 million of intangible asset amortization, $0.4 million of equity compensation, $0.4 million of labor, and $0.3 million of consulting and audit fees. Compared to the prior year, the decrease is due primarily to $1.4 million of lower acquisition expenses and $0.3 million of lower consulting expenses, partially offset by added SG&A from the addition of Entrepix . Research, Development and Engineering expenses decreased $1.0 million sequentially and increased $0.2 million compared to the same prior year period. The sequential decrease is due primarily to lower development efforts in our Material & Substrate segment as we wind down development of our next-gen polishing equipment. GAAP operating loss was $8.9 million , compared to GAAP operating loss of $11.7 million in the fourth quarter of fiscal 2023 and GAAP operating loss of $2.7 million in the same prior year period. Non-GAAP operating loss was $0.2 million , compared to non-GAAP operating loss of $3.0 million in the fourth quarter of fiscal 2023 and non-GAAP operating loss of $0.7 million in the same prior year period. GAAP net loss for the first quarter of fiscal 2024 was $9.4 million , or 66 cents per share. This compares to GAAP net loss of $12.0 million , or 85 cents per share, for the preceding quarter and GAAP net loss of $2.7 million , or 20 cents per share, for the first quarter of fiscal 2023. Non-GAAP net loss for the first quarter of fiscal 2024 was $0.6 million , or 4 cents per share. This compares to non-GAAP net loss of $2.5 million , or 18 cents per share, for the preceding quarter and non-GAAP net loss of $0.7 million , or 5 cents per share, for the first quarter of fiscal 2023. Unrestricted cash and cash equivalents at December 31, 2023 , were $17.0 million , compared to $13.1 million at September 30, 2023 , due primarily to strong accounts receivable collection efforts during the quarter. Additionally, in January we paid $2.0 million on our revolving line of credit. In discussing financial results for the three months ended December 31, 2023 and 2022 and the three months ended September 30, 2023 , 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, expenses related to the discontinued product line, intangible asset impairment, gain on sale-leaseback of our Massachusetts facility, 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 second fiscal quarter ending March 31, 2024 , we expect revenues in the range of $22 - $25 million with EBITDA nominally negative to neutral. Although the near-term outlook for revenue and earnings remains challenging, we remain confident that the future prospects are strong for both our consumables and equipment serving advanced mobility and advanced packaging applications. We took actions during the first and second quarters of fiscal 2024, which will reduce Amtech's structural costs by approximately $6 million annually and better align product pricing with value. These steps should significantly improve results and enhance profitability through market cycles. 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 at 8:00 a.m. ET on Monday, February 12, 2024 to discuss our fiscal first 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 thermal processing, wafer cleaning and chemical mechanical polishing (CMP) capital equipment and related consumables used in semiconductor, advanced mobility and renewable energy manufacturing applications. We sell process equipment and services used in the fabrication of semiconductor devices, such as silicon carbide (SiC), silicon power, electronic assemblies and modules to semiconductor device and module manufacturers worldwide, particularly in Asia , North America and Europe . Our strategic focus is on growth opportunities which leverage our strengths in thermal and substrate processing. Amtech's products are recognized under the leading brand names BTU International , Entrepix, Inc. , 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, 2023 , 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 December 31 , 2023 September 30 , 2023 December 31 , 2022 Amtech Systems, Inc. Revenues, net $ 24,920 $ 27,707 $ 21,558 GAAP gross profit $ 8,219 $ 2,794 $ 8,303 Non-GAAP gross profit $ 9,341 $ 8,926 $ 8,303 GAAP gross margin 33 % 10 % 39 % Non-GAAP gross margin 37 % 32 % 39 % GAAP operating loss $ (8,934 ) $ (11,690 ) $ (2,680 ) Non-GAAP operating loss $ (210 ) $ (3,020 ) $ (670 ) New orders $ 23,105 $ 18,185 $ 25,229 Backlog $ 49,979 $ 51,794 $ 54,452 Semiconductor Segment Revenues, net $ 17,527 $ 18,820 $ 16,887 GAAP gross profit $ 6,159 $ 7,374 $ 6,172 Non-GAAP gross profit $ 6,159 $ 7,374 $ 6,172 GAAP gross margin 35 % 39 % 37 % Non-GAAP gross margin 35 % 39 % 37 % GAAP operating income $ 1,081 $ 2,046 $ 869 Non-GAAP operating income $ 1,192 $ 2,046 $ 869 New orders $ 17,129 $ 10,834 $ 21,084 Backlog $ 44,835 $ 45,233 $ 52,209 Material and Substrate Segment Revenues, net $ 7,393 $ 8,887 $ 4,671 GAAP gross profit (loss) $ 2,060 $ (4,580 ) $ 2,131 Non-GAAP gross profit $ 3,182 $ 1,552 $ 2,131 GAAP gross margin 28 % -52 % 46 % Non-GAAP gross margin 43 % 17 % 46 % GAAP operating (loss) income $ (7,844 ) $ (10,176 ) $ 633 Non-GAAP operating income (loss) $ 452 $ (2,455 ) $ 633 New orders $ 5,976 $ 7,351 $ 4,145 Backlog $ 5,144 $ 6,561 $ 2,243 AMTECH SYSTEMS, INC. (NASDAQ: ASYS) (Unaudited) Consolidated Statements of Operations (in thousands, except per share data) Three Months Ended December 31 , 2023 2022 Revenues, net $ 24,920 $ 21,558 Cost of sales 15,852 13,255 Intangible asset impairment 849 — Gross profit 8,219 8,303 Selling, general and administrative 8,567 9,190 Research, development and engineering 1,588 1,393 Goodwill impairment 6,370 — Intangible asset impairment 430 — Severance expense 198 400 Operating loss (8,934 ) (2,680 ) Interest income 19 290 Interest expense (198 ) (2 ) Foreign currency loss (187 ) (347 ) Other — (9 ) Loss before income tax provision (9,300 ) (2,748 ) Income tax provision (benefit) 58 (4 ) Net loss $ (9,358 ) $ (2,744 ) Loss Per Share: Net loss per basic share $ (0.66 ) $ (0.20 ) Net loss per diluted share $ (0.66 ) $ (0.20 ) Weighted average shares outstanding: Basic 14,188 14,008 Diluted 14,188 14,008 AMTECH SYSTEMS, INC. (NASDAQ: ASYS) (Unaudited) Consolidated Balance Sheets (in thousands, except share data) December 31 , 2023 September 30 , 2023 Assets Current Assets Cash and cash equivalents $ 17,033 $ 13,133 Accounts receivable (less allowance for credit losses of $83 and $146 at December 31, 2023 and September 30, 2023 , respectively) 21,403 26,474 Inventories 34,030 34,845 Income taxes receivable 664 632 Other current assets 5,061 6,105 Total current assets 78,191 81,189 Property, Plant and Equipment - Net 9,353 9,695 Right-of-Use Assets - Net 10,541 11,217 Intangible Assets - Net 4,526 6,114 Goodwill 21,261 27,631 Deferred Income Taxes - Net 126 101 Other Assets 1,044 1,074 Total Assets $ 125,042 $ 137,021 Liabilities and Shareholders’ Equity Current Liabilities Accounts payable $ 8,545 $ 10,815 Accrued compensation and related taxes 2,652 3,481 Accrued warranty expense 791 965 Other accrued liabilities 1,461 1,551 Current maturities of finance lease liabilities and long-term debt 934 2,265 Current portion of long-term operating lease liabilities 2,292 2,623 Contract liabilities 9,518 8,018 Total current liabilities 26,193 29,718 Finance Lease Liabilities and Long-Term Debt 9,197 8,422 Long-Term Operating Lease Liabilities 8,598 8,894 Income Taxes Payable 1,384 1,575 Other Long-Term Liabilities 49 47 Total Liabilities 45,421 48,656 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: 14,190,977 and 14,185,977 at December 31, 2023 and September 30, 2023 , respectively 142 142 Additional paid-in capital 127,308 126,963 Accumulated other comprehensive loss (1,426 ) (1,695 ) Retained deficit (46,403 ) (37,045 ) Total Shareholders’ Equity 79,621 88,365 Total Liabilities and Shareholders’ Equity $ 125,042 $ 137,021 AMTECH SYSTEMS, INC. (NASDAQ: ASYS) (Unaudited) Consolidated Statements of Cash Flows (in thousands) Three Months Ended December 31 , 2023 2022 Operating Activities Net loss $ (9,358 ) $ (2,744 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 852 388 Write-down of inventory 572 48 Goodwill impairment 6,370 — Intangible asset impairment 1,279 — Deferred income taxes (25 ) (35 ) Non-cash share-based compensation expense 317 164 Loss on sale of property, plant and equipment 20 — (Reversal of) provision for allowance for credit losses (42 ) 35 Changes in operating assets and liabilities: Accounts receivable 5,114 3,194 Inventories 223 (2,796 ) Other assets 1,783 1,106 Accounts payable (1,661 ) (643 ) Accrued income taxes (222 ) (284 ) Accrued and other liabilities (1,751 ) (665 ) Contract liabilities 1,500 (276 ) Net cash provided by (used in) operating activities 4,971 (2,508 ) Investing Activities Purchases of property, plant and equipment (756 ) (224 ) Net cash used in investing activities (756 ) (224 ) Financing Activities Proceeds from the exercise of stock options 28 34 Payments on long-term debt (556 ) (14 ) Net cash (used in) provided by financing activities (528 ) 20 Effect of Exchange Rate Changes on Cash and Cash Equivalents 213 372 Net Increase (Decrease) in Cash and Cash Equivalents 3,900 (2,340 ) Cash and Cash Equivalents, Beginning of Period 13,133 46,874 Cash and Cash Equivalents, End of Period $ 17,033 $ 44,534 AMTECH SYSTEMS, INC. (NASDAQ: ASYS) (Unaudited) Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share data) Three Months Ended December 31 , 2023 September 30 , 2023 December 31 , 2022 Amtech Systems, Inc. Operating Loss: GAAP operating loss $ (8,934 ) $ (11,690 ) $ (2,680 ) Acquisition expenses - - 1,446 Write-down of inventory related to polishing equipment 273 1,487 - Amortization of acquired intangible assets 287 985 - Stock compensation expense 317 744 164 Goodwill impairment 6,370 - - Intangible asset impairment 1,279 5,189 - Severance expense 198 265 400 Non-GAAP operating loss $ (210 ) $ (3,020 ) $ (670 ) GAAP operating margin (35.9 )% (42.2 )% (12.4 )% Non-GAAP operating margin (0.8 )% (10.9 )% (3.1 )% Consolidated Net Loss: GAAP net loss $ (9,358 ) $ (12,015 ) $ (2,744 ) Acquisition expenses - - 1,446 Write-down of inventory related to polishing equipment 273 1,487 - Amortization of acquired intangible assets 287 985 - Stock compensation expense 317 744 164 Goodwill impairment 6,370 - - Intangible asset impairment 1,279 5,189 - Severance expense 198 265 400 Income tax provision related to acquisition - 856 - Non-GAAP net loss $ (634 ) $ (2,489 ) $ (734 ) Net Loss per Diluted Share: GAAP net loss per diluted share $ (0.66 ) $ (0.85 ) $ (0.20 ) Acquisition expenses - - 0.10 Write-down of inventory related to polishing equipment 0.02 0.10 - Amortization of acquired intangible assets 0.02 0.07 - Stock compensation expense 0.02 0.05 0.01 Goodwill impairment 0.45 - - Intangible asset impairment 0.09 0.37 - Severance expense 0.02 0.02 0.04 Income tax provision related to acquisition - 0.06 - Non-GAAP net loss per diluted share $ (0.04 ) $ (0.18 ) $ (0.05 ) Semiconductor Segment Operating Income: GAAP operating income $ 1,081 $ 2,046 $ 869 Severance expense 111 - - Non-GAAP operating income $ 1,192 $ 2,046 $ 869 Material and Substrate Segment Operating (Loss) Income: GAAP operating (loss) income $ (7,844 ) $ (10,176 ) $ 633 Write-down of inventory related to polishing equipment 273 1,487 - Amortization of acquired intangible assets 287 985 - Goodwill impairment 6,370 - - Intangible asset impairment 1,279 5,189 - Severance expense 87 60 - Non-GAAP operating income (loss) $ 452 $ (2,455 ) $ 633 AMTECH SYSTEMS, INC. (NASDAQ: ASYS) (Unaudited) Reconciliation of GAAP to Non-GAAP Financial Measures (in thousands, except per share data) Three Months Ended December 31 , 2023 September 30 , 2023 December 31 , 2022 Amtech Systems, Inc. Gross Profit: GAAP gross profit $ 8,219 $ 2,794 $ 8,303 Write-down of inventory related to polishing equipment 273 1,487 - Intangible asset impairment 849 4,645 - Non-GAAP gross profit $ 9,341 $ 8,926 $ 8,303 GAAP gross margin 33 % 10 % 39 % Non-GAAP gross margin 37 % 32 % 39 % Semiconductor Segment Gross Profit: GAAP gross profit $ 6,159 $ 7,374 $ 6,172 Write-down of inventory related to polishing equipment - - - Intangible asset impairment - - - Non-GAAP gross profit $ 6,159 $ 7,374 $ 6,172 GAAP gross margin 35 % 39 % 37 % Non-GAAP gross margin 35 % 39 % 37 % Material and Substrate Segment Gross Profit (Loss): GAAP gross profit (loss) $ 2,060 $ (4,580 ) $ 2,131 Write-down of inventory related to polishing equipment 273 1,487 - Intangible asset impairment 849 4,645 - Non-GAAP gross profit $ 3,182 $ 1,552 $ 2,131 GAAP gross margin 28 % (52 )% 46 % Non-GAAP gross margin 43 % 17 % 46 % AMTECH SYSTEMS, INC. (NASDAQ: ASYS) (Unaudited) Reconciliation of Net Loss to EBITDA and Adjusted EBITDA (in thousands, except per share data) Three Months Ended December 31, 2023 Amtech Systems, Inc. EBITDA: GAAP net loss $ (9,358 ) Interest income (19 ) Interest expense 198 Income tax provision (benefit) 58 Depreciation and amortization expense 852 EBITDA (8,269 ) Write-down of inventory related to polishing equipment 273 Stock compensation expense 317 Goodwill impairment 6,370 Intangible asset impairment 1,279 Severance expense 198 Adjusted EBITDA $ 168 View source version on businesswire.com : https://www.businesswire.com/news/home/20240209639848/en/ Amtech Systems, Inc. Lisa D. Gibbs Chief Financial Officer (480) 360-3756 [email protected] Sapphire Investor Relations, LLC Erica Mannion and Mike Funari (617) 542-6180 [email protected] Source: Amtech Systems, Inc.

View stock analysis, news, and events for Amtech Systems, Inc.