Amtech Reports Second Quarter Fiscal 2017 Results
TEMPE, Ariz., May 10, 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 second fiscal quarter ending March 31, 2017.
Second Quarter Fiscal 2017 Financial and Operational Highlights:
Customer orders of $68.2 million (solar $46.9 million)
Quarter-end backlog of $87.4 million (solar $66.9 million)
Net revenues of $32.9 million (solar $16.6 million)
Book to bill ratio of 2.0:1 (2.7:1 solar)
Net loss of $1.4 million, or $0.11 per share
Unrestricted cash of $38.9 million
Mr. Fokko Pentinga, Chief Executive Officer of Amtech, commented, "Our second quarter financial results show that our three segments, solar, semi, and polishing, all contributed to the 46% increase in revenue and the significantly improved operating margin compared to one year ago." 
Mr. Pentinga continued, "We are pleased with our $68 million of total bookings in the second quarter, including $47 million of solar orders, which is the highest solar bookings since the second quarter of 2011.  With those bookings, our March 31, 2017 backlog is $87 million, a 67 percent increase since December 31, 2016 and the highest in six years.   As announced on April 25, 2017, we received a follow-on order for the second phase of a multi-phase 1GW project, in addition to the order for the first phase announced in January 2017.  The Company's total order backlog as of April 25, 2017 was approximately $125 million. We expect financial results for the second half of this fiscal year and first half of fiscal year 2018 to benefit from this activity including the initial and follow on orders received this calendar year for our bi-facial N-type technology which includes our distinguishable high throughput PECVD and diffusion systems."  
At March 31, 2017, the Company's total order backlog was $87.4 million (solar $66.9 million), compared to total backlog of $51.5 million (solar $35.8 million) at December 31, 2016. Backlog includes deferred revenue and customer orders that are expected to ship within the next 12 months.
Net revenue for the second quarter of fiscal 2017 was $32.9 million compared to $ 29.1 million in the preceding quarter and $22.5 million in the second quarter of fiscal 2016. The sequential increase and the increase from the prior year quarter is due primarily to increased demand for our solar PECVD and ALD tools, as well as our semiconductor equipment.
Gross margin in the second quarter of fiscal 2017 was 25%, compared to 29% in the preceding quarter and 27% in the second quarter of fiscal 2016. Sequentially and compared to prior year, the gross margins were lower in our solar segment primarily due to a net deferral of profit compared to a net recognition of previously deferred profit, but were partially offset by higher gross margins in our semiconductor segment due to favorable product mix.  Gross margins in our semiconductor segment were also higher in the second quarter of 2017 compared to prior year due higher sales volumes and higher capacity utilization.
Selling, general and administrative (SG&A) expenses in the second quarter of fiscal 2017 were $8.3 million compared to $7.0 million in the preceding quarter and $7.4 million in the second quarter of fiscal 2016.  Sequentially, the increase results primarily from the collection in Q1 2017 of approximately $1.0 million of previously reserved accounts receivable.  Compared to the same quarter in fiscal 2016, the increase results primarily from higher selling expenses related to higher revenues.
Research, development and engineering (RD&E) expense was $1.5 million in the second quarter of fiscal 2017 compared to $1.6 million in the preceding quarter and $2.2 million in the second quarter of fiscal 2016.   
Depreciation and amortization in the second quarter of fiscal 2017 was $0.6 million, compared to $0.7 million in the preceding quarter and $0.7 million in the second quarter of fiscal 2016.
Income tax expense in the second quarter of fiscal 2017 was $0.2 million compared to $0.1 million in the preceding quarter and $1.7 million in the second quarter of fiscal 2016.  Income tax expense in Q2 2016 is primarily related to tax on the $2.6 million pre-tax gain on the sale of the exclusive sales and service rights for the Kingstone ion implanter. 
The net loss for the second quarter of fiscal 2017 was $1.4 million, or $0.11 per share, compared to a net loss of $53,000 or $0.00 per share in the preceding quarter and a net loss of $1.5 million, or $0.11 per share for the second quarter of fiscal 2016.  The second quarter of 2017 did not benefit from any items comparable to the gain on the sale of the exclusive sales and service rights for the Kingstone ion implanter in the same quarter last year. 



Unrestricted cash and cash equivalents at March 31, 2017 were $38.9 million, compared to $23.6 million at December 31, 2016. The increase in cash and cash equivalents is primarily due to customer deposits received from the turnkey order announced on January 24, 2017, and good collection on receivables for both Solar and Semi, partially offset by cash used to begin work on the turnkey order.
Outlook
Revenue in the second half of fiscal 2017 is expected to be much higher than in the first half of this fiscal year and is expected to lead to an improvement in the results of operations for the second half as compared to the first half of the fiscal year due to the shipment of the equipment for the large turnkey order announced in January 2017 ("Phase I").  Even so, a meaningful portion of the revenue and profit from Phase I will be deferred until the installation and acceptance, which is expected in fiscal 2018. The large follow-on turnkey order announced in April 2017 ("Phase II") is not included in the backlog as of March 31, 2017 and is expected to ship in the first half of fiscal 2018.
The company expects revenues for the quarter ending June 30, 2017 to be in the range of $39 to $42 million. Gross margin for the quarter ending June 30, 2017 is expected to be in the low to mid 20s percent range, with operating margin slightly negative, both influenced by product mix and revenue deferrals.
Operating results could be impacted by the timing of system shipments, particularly the first shipment of equipment for the turnkey order, the net impact of revenue deferral on those shipments, and recognition of revenue based on customer acceptances, 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 5:00pm ET to discuss second quarter 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 May 17, 2017.  To access the replay please dial US toll free (877) 344-7529 and enter code 10104917. 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 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-Ks 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)
May 10, 2017
(Unaudited)
 
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
Six Months Ended March 31,
 
 
 
 
 
 
 
 
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
Revenues, net of returns and allowances
$  32,944
 
$  22,483
 
$  62,079
 
$  44,557
Cost of sales
24,549
 
16,482
 
45,241
 
32,601
Gross profit
8,395
 
6,001
 
16,838
 
11,956
 
 
 
 
 
 
 
 
Selling, general and administrative
8,260
 
7,448
 
15,258
 
15,044
Research, development and engineering
1,535
 
2,160
 
3,163
 
4,447
Operating loss
(1,400)
 
(3,607)
 
(1,583)
 
(7,535)
 
 
 
 
 
 
 
 
Gain on sale of other assets
-
 
2,576
 
-
 
2,576
Income (loss) from equity method investment
52
 
688
 
(91)
 
671
Interest expense and other income, net
(197)
 
33
 
(116)
 
(169)
Loss before income taxes
(1,545)
 
(310)
 
(1,790)
 
(4,457)
 
 
 
 
 
 
 
 
Income tax provision
194
 
1,670
 
284
 
1,970
Net loss
(1,739)
 
(1,980)
 
(2,074)
 
(6,427)
 
 
 
 
 
 
 
 
Add: net loss attributable to noncontrolling interest
319
 
481
 
599
 
914
Net loss attributable to Amtech Systems, Inc.
$  (1,420)
 
$  (1,499)
 
$  (1,475)
 
$  (5,513)
 
 
 
 
 
 
 
 
Loss Per Share:
 
 
 
 
 
 
 
Basic loss per share attributable to Amtech shareholders
$    (0.11)
 
$    (0.11)
 
$    (0.11)
 
$    (0.42)
Weighted average shares outstanding
13,188
 
13,169
 
13,184
 
13,161
 
 
 
 
 
 
 
 
Diluted loss per share attributable to Amtech shareholders
$    (0.11)
 
$    (0.11)
 
$    (0.11)
 
$    (0.42)
Weighted average shares outstanding
13,188
 
13,169
 
13,184
 
13,161
 



AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
May 10, 2017
 
Condensed Consolidated Balance Sheets
(in thousands)
 
 
 
 
 
 
 
 
March 31,
September 30,
Assets
2017
2016
 
 
 
(Unaudited)
 
Current Assets
 
 
 
Cash and cash equivalents
$         38,860
$         27,655
 
Restricted cash
2,565
893
 
Accounts receivable
 
 
 
 
Trade (less allowance for doubtful accounts of $1,164 and $3,730 at March 31, 2017 and September 30, 2016 , respectively)
19,484
17,642
 
 
Unbilled and other
9,430
8,634
 
Inventories
20,778
23,223
 
Refundable income taxes
-
260
 
Vendor deposits
7,970
1,962
 
Other
2,138
2,655
 
 
Total current assets
101,225
82,924
 
 
 
 
 
Property, Plant and Equipment - Net
15,014
15,960
Deferred Income Taxes - Long Term
200
200
Other Assets - Long Term
1,050
1,095
Investments
2,942
3,032
Intangible Assets - Net
3,740
4,100
Goodwill
10,867
11,119
 
Total Assets
$       135,038
$       118,430
 
 
 
 
 
Liabilities and Stockholders'  Equity
 
 
 
 
 
 
 
Current Liabilities
(Unaudited)
 
 
Accounts payable
$         16,850
$         15,397
 
Current maturities of long-term debt
860
1,134
 
Accrued compensation and related taxes
5,819
5,710
 
Accrued warranty expense
885
795
 
Deferred profit
5,009
4,709
 
Customer deposits
24,214
7,055
 
Other accrued liabilities
1,815
2,164
 
Income taxes payable
1,170
1,100
 
 
Total current liabilities
56,622
38,064
 
 
 
 
 
Long-term Debt
9,285
9,097
Income Taxes Payable - Long-term
5,770
5,930
 
 
Total liabilities
71,677
53,091
 
 
 
 
 
 
Preferred stock; 100,000,000 shares authorized; none issued
-
-
 
Common stock; $0.01 par value; 100,000,000 shares authorized; shares issued and outstanding: 13,200,510 and 13,179,355 at March 31, 2017 and  September 30, 2016, respectively
132
132
 
Additional paid-in capital
112,350
111,631
 
Accumulated other comprehensive loss
(9,430)
(8,876)
 
Retained deficit
(37,305)
(35,830)
 
 
Total stockholders' equity
65,747
67,057
 
Noncontrolling interest
(2,386)
(1,718)
 
 
Total equity
63,361
65,339
 
Total Liabilities and Stockholders' Equity
$       135,038
$       118,430




AMTECH SYSTEMS, INC.
(NASDAQ: ASYS)
May 10, 2017
 
 
Condensed Consolidated Statements of Cash Flows
(in thousands)
 
 
 
 
 
 
 
 
Six Months Ended
March 31,
 
 
 
2017
2016
Operating Activities
 
 
 
Net loss
$  (2,074)

$  (6,427)

 
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
Depreciation and amortization
1,255

1,529

 
 
Write-down of inventory
51

74

 
 
Capitalized interest
204

-

 
 
Deferred income taxes
24

(5)

 
 
Non-cash share based compensation expense
624

708

 
 
Loss on sale of fixed assets
9

-

 
 
Gain on sale of other assets
-

(2,576)

 
 
Loss (gain) from equity method investment
91

(671)

 
 
Reversal of allowance for doubtful accounts, net of provision
(1,217)

(122)

 
Changes in operating assets and liabilities:
 
 
 
 
Restricted cash
(1,703)

97

 
 
Accounts receivable
(2,002)

475

 
 
Inventories
1,840

(656)

 
 
Accrued income taxes
169

1,939

 
 
Vendor deposits and other assets
(5,557)

(120)

 
 
Accounts payable
1,823

(707)

 
 
Accrued liabilities and customer deposits
17,531

1,515

 
 
Deferred profit
520

(1,440)

 
 Net cash provided by (used in) operating activities
11,588

(6,387)

Investing Activities
 
 
 
Purchases of property, plant and equipment
(210)

(192)

 
Proceeds from sale of property, plant and equipment
34

-

 
Proceeds from partial sale of subsidiary
-

7,012

 
Proceeds from the sale of other assets
-

4,884

 
Net cash (used in) provided by investing activities
(176)

11,704

Financing Activities
 
 
 
Proceeds from the exercise of stock options
94

30

 
Payments on long-term debt
(319)

(259)

 
Borrowings on long-term debt
137

830

 
Net cash (used in) provided by financing activities
(88)

601

Effect of Exchange Rate Changes on Cash
(119)

48

Net Increase in Cash and Cash Equivalents
11,205

5,966

Cash and Cash Equivalents, Beginning of Period
27,655

25,852

Cash and Cash Equivalents, End of Period
$
38,860

$
31,818