Amtech Reports Third Quarter Fiscal 2019 Results

TEMPE, Ariz., Aug. 8, 2019 /PRNewswire/ -- Amtech Systems, Inc. (NASDAQ: ASYS), a manufacturer of capital equipment, including thermal processing, related consumables, and wafer handling systems used in fabricating semiconductor devices, silicon carbide (SiC) and silicon power chips, electronic assemblies, light-emitting diodes (LEDs), and solar cells, today reported results for its third quarter ended June 30, 2019.

Third Quarter Fiscal 2019 Financial and Operational Highlights from Continuing Operations:

• Net revenue of $21.0 million
• Income from continuing operations, net of tax, of $0.9 million
• Income per diluted share from continuing operations of $0.06
• Customer orders of $16.3 million
• June 30, 2019 backlog of $17.2 million
• Book to bill ratio of 0.8:1
• Unrestricted cash of $49.1 million

Mr. J.S. Whang, Executive Chairman and Chief Executive Officer of Amtech, commented, "Our results reflect the slower demand environment in the semiconductor cycle, with the trade dispute and related tariffs being a significant contributing factor. We are monitoring our cost structure to ensure it is aligned with the current operating environment, while making select investments in preparation for the industry's next growth cycle and to support our semi growth strategy.  Today we also announced an order for our 300mm diffusion furnace from another top-tier power semiconductor customer. We believe having two leading players as our strong customers in the growing 300mm power semiconductor market is an important achievement which will significantly contribute to our future semi growth.  As previously announced, we are investing in a larger facility for our PR Hoffman business to increase productivity, drive sales and enhance profitability. With great enthusiasm, we are shaping our overall business, putting the right capabilities in place, and we are confident we will be a significant participant in the highest growth areas in the semiconductor market over the long term."

Mr. Whang continued, "In line with our plan to divest substantially all of our solar business, at the end of the quarter we announced the sale of our SoLayTec solar subsidiary. And, today, our advisor in the Netherlands continues to be actively engaged in discussions with private equity and strategic investors regarding the sale of Tempress."

Net revenue for the third quarter of fiscal 2019 was $21.0 million compared to $20.6 million in the preceding quarter and $28.7 million in the third quarter of fiscal 2018. We continue to see weaker demand due primarily to the economic conditions resulting from the trade dispute.  Sequentially, Semiconductor revenue increased by approximately $0.2 million, and SiC/LED revenue decreased by approximately $0.2 million. Compared to prior year, Semi net revenue decreased by approximately $7.2 million. SiC/LED revenue decreased by approximately $0.5 million, due primarily to the timing of machine shipments.

Unrestricted cash and cash equivalents at our continuing operations at June 30, 2019 were $49.1 million, compared to $45.9 million at September 30, 2018.

At June 30, 2019, our total backlog was $17.2 million, compared to total backlog of $22.0 million at March 31, 2019. Backlog includes customer orders that are expected to ship within the next 12 months.

Gross margin in the third quarter of fiscal 2019 was 37%, compared to 38% in the preceding quarter and 35% in the third quarter of fiscal 2018.  Compared to prior year, gross margins increased primarily due to product mix, most notably, stronger sales of our higher margin machines.

Selling, general and administrative expense ("SG&A") in the third quarter of fiscal 2019 was $5.7 million, compared to $5.8 million in the preceding quarter and $6.8 million in the third quarter of fiscal 2018.  Sequentially SG&A decreased slightly due to lower stock compensation expense.  Compared to prior year, SG&A decreased due primarily to lower headcount, lower employee-related expenses and lower commissions on lower revenue.

Restructuring expense was $35,000 in the third quarter of fiscal 2019, and $0.2 million in the preceding quarter. There were no restructuring expenses in the third quarter of fiscal 2018.

Research, development and engineering (RD&E) expense was $0.7 million in the third quarter of fiscal 2019 compared to $0.7 million in the preceding quarter and $0.6 million in the third quarter of fiscal 2018.

Income tax expense in the third quarter of fiscal 2019 was $0.7 million compared to $0.3 million in the preceding quarter and $1.4 million in the third quarter of fiscal 2018. We realized an income tax benefit in our discontinued operations in the third quarter of fiscal 2019 due primarily to the tax treatment related to our sale of SoLayTec.

Income from continuing operations, net of tax, for the third quarter of fiscal 2019 was $0.9 million, or $0.06 per share, compared to $5.0 million, or $0.33 per share, for the third quarter of fiscal 2018 and $1.0 million, or $0.07 per share, in the preceding quarter.

Outlook

For the quarter ending September 30, 2019, the Company expects continuing softness in the semiconductor equipment industry to result in revenue in the range of $18 to $20 million. Gross margin for the quarter ending September 30, 2019 is expected to be in the mid to upper 30% range, with operating margin slightly positive. The outlook assumes continued weakness in demand given soft business conditions due to the ongoing trade dispute and excludes the impact of any potential restructuring actions.

The semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Additionally, operating results can be significantly impacted, positively or negatively, by the timing of orders, system shipments, and the financial results of semiconductor manufacturers.

A portion of Amtech's results are 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 and webcast today at 5:00 p.m. ET to discuss third quarter 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 August 15, 2019.  To access the replay please dial US toll free (877) 344-7529 and enter code 10133320.  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 and polishing equipment and related consumables to the semiconductor / electronics, power IC businesses, and advanced lighting manufacturing markets. Amtech's equipment includes diffusion, solder reflow systems, wafer handling automation, and polishing equipment and related consumables for surface preparation of various materials, including silicon carbide ("SiC"), sapphire and silicon. The Company's wafer handling, thermal processing, polishing and consumable products currently address the diffusion, oxidation, and deposition steps used in the fabrication of semiconductors, printed circuit boards, semiconductor packaging, MEMS, and advanced lighting, including the polishing of newly sliced sapphire and silicon wafers. Amtech's products are recognized under the leading brand names BTU International, Bruce Technologies™, PR Hoffman™, and R2D Automation™.

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, plans and objectives of Amtech and its management for future operations, efforts to improve operational efficiencies and effectiveness and greater China sourcing.  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 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, 2018, 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.

SOURCE Amtech Systems, Inc.