July 1, 2009
Brian Cascio, Branch Chief
Division
of Corporation Finance
United States
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: | Amtech Systems, Inc. | |
Form 10-K for the fiscal year ended September 30, 2008 | ||
Filed December 10, 2008 | ||
File No. 000-11412 | ||
Form 8-K/A filed November 2, 2007 | ||
Form 10-Q for the quarter ended March 31, 2009 | ||
Filed May 11, 2009 | ||
Form 8-K/A filed June 5, 2009 |
Dear Mr. Cascio:
This letter sets forth the responses of Amtech Systems, Inc. (the "Company") to your comment letter, dated June 17, 2009, relating to (i) the Form 10-K for the fiscal year ended September 30, 2008 of the Company filed with the Securities and Exchange Commission (the "Commission") on December 10, 2008; (ii) the current report on Form 8-K/A filed with the Commission on November 2, 2007; (iii) Form 10-Q for the quarter ended March 31, 2009 filed with the Commission on May 11, 2009 and (iv) Form 8-K/A filed with the Commission on June 5, 2009.
The Company is filing, via EDGAR, this letter setting forth the Company's responses to comments of the Staff of the Commission (the "Staff"). Enclosed as well are two hard copies of the Company's response letter. We have included your original questions in addition to providing our responses.
Form 10-K for the fiscal year ended September 30, 2008
Item 11. Executive Compensation
Determining Executive Compensation, page 7
1. | We note your responses to prior comments 2 and 3. Please disclose in future filings, if true, that you do not know the names of the individual companies that comprise of the American Electronics Association Salary Survey. | |
R. | We will make the requested disclosure in future filings. |
Brian Cascio, Branch Chief
Division
of Corporation Finance
United States
Securities and Exchange Commission
July 1, 2009
Page 2 of 7
Elements of Our Executive Compensation Program, page 8 | ||
2. |
With regard to your response to prior comment 4, please note that we would expect to see discussion in your future filing that addresses how individual performance and specific contributions by each named executive officer are evaluated by the compensation committee and how such appraisal translates into actual compensation. With regard to the quantitative contributions that are assessed by the committee in granting annual cash incentive bonuses, please expand your discussion in future filings to disclose how the performance objectives you cite on page 9 apply to each named executive officer. For example, it is unclear from your current disclosure whether these objectives are weighted equally and how your named executive officers may achieve these goals. Accordingly, please expand your discussion of your named executive officers responsibilities and objective and how your compensation levels reflect those responsibilities and objectives. We refer you to Regulation S-K item 402(b)(xii). | |
R. |
In future filings, we will discuss how individual performance and specific contribution by each named executive officer are evaluated by the compensation committee and how such appraisal translates into actual compensation. We will also expand the discussion in future filings to disclose how the performance objectives we cite are weighted and how our named executive officers may achieve these goals. In future filings, we will generally expand the discussion of the responsibilities and objectives of our named executive officers and how their compensation levels reflect those responsibilities and objectives. |
Item 13. Certain Relationships and Related Party Transactions
3. |
Please note that you must include disclosure regarding policies for the review, approval or ratification of related person transactions under Item 404(b)(1) even when you do not have any reportable transactions under Item 404(a). See Question 130.06 of our Regulation S-K Compliance and Disclosure Interpretations, available on our website at http://www.sec.gov/division/corpfin/guidance/regs-kinterp.htm. Accordingly, please include the discussion of your policy regarding the review of related party transactions that you provided in response to prior comment 7 in your future filings. | |
R. |
In future filings, we will disclose our policies for the review, approval or ratification of related person transactions, even when we do not have reportable transactions. | |
Brian Cascio, Branch Chief
Division
of Corporation Finance
United States
Securities and Exchange Commission
July 1, 2009
Page 3 of 7
Form 8-K/A dated November 2, 2007
4. | We refer to your response to our prior comment number 15. Please tell us where you have presented the interim financial statements required by Rules 3-01, 3-02, 3-05 and Article 10 of Regulation S-X. In addition, tell us how the interim financial statement provided on pages 3 and 4 of the pro forma financial information meet these requirements. | |
R. | Item 2.01 of Form 8-K refers to the financials required by Item 9.01 of Form 8- K. Item 9.01 refers to Rule 3-05(b)(2)(ii), which required us to file audited financial statements of the acquired company for at least the most recent fiscal years and any interim periods specified in Rule 3-01 and 3-02. We filed two years of audited financial statements as Exhibit 99.3 to the referenced Form 8-K/A. Rule 3-01(e) required us to present the balance sheet of the acquired company as of June 30, 2007, which we filed in Exhibit 99.4 as part of the pro forma information. See the column labeled R2D Ingenierie SAS on page 3 of Exhibit 99.4, Unaudited Pro Forma Condensed Combined Balance Sheet as of June 30, 2007. | |
Rule 3-02(b) requires us to present, for any interim period between the latest audited balance sheet and the date of the most recent interim balance sheet being filed, and for the corresponding period of the preceding year, statements of income and cash flows of the acquired company. The statements of income and cash flows of the acquired company for the six month period between the December 31, 2006 audited balance sheet and the June 30, 2007 balance sheet were inadvertently omitted. Within the next 30 days, we will review the available information and prepare the inadvertently omitted interim financial statements and file them with the further amended Form 8-K/A referred to in our responses to comments number 6 and 7. |
Form 10-Q for the quarter ended March 31, 2009
Critical Accounting Policies, page 25
5. | In the interest of providing readers with a better insight into managements judgments into accounting for goodwill, please tell us and disclose the following in future filings: | ||
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Brian Cascio, Branch Chief
Division of
Corporation Finance
United States Securities
and Exchange Commission
July 1, 2009
Page 4 of 7
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R. | In future filings, we will expand our critical accounting policy for impairment of long-lived assets to provide better insight into managements judgments into accounting for goodwill, as follows: |
|
Brian Cascio, Branch Chief
Division
of Corporation Finance
United States
Securities and Exchange Commission
July 1, 2009
Page 5 of 7
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i. |
One valuation methodology used is to determine the multiples of market value of invested capital (MVIC) of similar public companies to their revenue for the last twelve months (LTM) and next twelve months (NTM), and apply those multiples to the revenue for the comparable periods of the reporting unit being tested for impairment. One benefit of this approach is it is the closest to quoted market prices that are readily available. However, we generally give less weight to this method, because the market value of the minority interest of public companies may not be that relevant to the fair value of our wholly-owned reporting units, which are not public companies. Also, MVIC to revenue for the LTM uses a historical value in the denominator, while the market values tend to be forward looking; and MVIC of revenue for the NTM involves the use of projections for both the comparable companies and the reporting unit. | |||||
ii. |
Another market approach that we sometimes use is based upon prices paid in merger and acquisition transactions for other companies in the same industry, again applying the MVIC to revenue of those companies to the historical and projected revenue of the reporting unit. When we use both market prices determined as described in (i), above, and prices paid in merger and acquisition transactions, we weight them to determine an indicated value under the market approach. | |||||
iii. |
As stated, we also use discounted cash flows as an indication of what a third-party would pay for the reporting unit in an arms-length transaction. This method requires projections of EBITDA (earnings before interest, taxes, depreciation and amortization) and applying an appropriate discount rate based on the weighted average cost of capital for the reporting unit. | |||||
|
Brian Cascio, Branch Chief
Division of Corporation
Finance
United States Securities and Exchange
Commission
July 1, 2009
Page 6 of 7
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Form 8-K/A filed June 5, 2009
6. |
We note that your amended Form 8-K only includes the revised audit report for the financial statements of R2D. Please further amend the Form 8-K to include a complete Exhibit 99.3, including the financial statements and the related audit report. | |
R. |
We will further amend the Form 8-K to include a complete Exhibit 99.3, including the financial statements and the related audit report. We expect to file the further amended Form 8-K along with the additional interim financials statements referred to in our response to comment number 4. |
7. |
Please revise the audit report to specifically state that the audit was conducted in accordance with generally accepted auditing standards in the United States. | |
R. |
The auditor of the acquired company has revised their audit report to specifically state that the audit was conducted in accordance with generally accepted auditing standards in the United States. See response to comment number 6, above. |
The Company acknowledges that it is responsible for the adequacy of the disclosure in the filings, that staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filings; and the
Brian Cascio, Branch Chief
Division
of Corporation Finance
United States
Securities and Exchange Commission
July 1, 2009
Page 7 of 7
Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
We trust that the foregoing is responsive to your comments. If you have any questions or comments, please contact the undersigned.
Best regards,
Amtech Systems, Inc.
Robert T. Hass, CPA
Chief
Accounting Officer
CC: |
Michael Garnreiter, Chairman of the Audit Committee of the Board of Directors | |
Robert F. King, Chairman of the Compensation and Stock Option Committee of the Board of Directors | ||
Christopher Johnson, Squire, Sanders & Dempsey L.L.P. |