Amtech Reports Third Quarter 2024 Results

Amtech Systems, Inc. ("Amtech") (NASDAQ:ASYS), a manufacturer of equipment and consumables for semiconductor fabrication and packaging, today reported results for its third quarter ended June 30, 2024.

Third Quarter Fiscal 2024 Financial and Operational Results:

• Net revenue of $26.7 million
• GAAP operating income of $0.8 million
• Net cash position of $8.9 million
• Non-GAAP operating income of $1.5 million ⁽¹⁾
• GAAP net income of $0.4 million
• Non-GAAP net income of $1.1 million ⁽¹⁾
• Customer orders of $18.8 million
• Backlog of $31.8 million

(1) See GAAP to non-GAAP reconciliation in schedules following this release.

"In the third quarter we continued to align our cost structure with current market conditions and lay the foundation for meaningful operating leverage as our markets recover. Revenue of $26.7 million exceeded the high-end of our guidance range, and we achieved adjusted EBITDA of $2.3 million. This is the third consecutive quarter of positive adjusted EBITDA and operating cash flow. I am pleased that we are seeing the financial benefits of the approximately $7 million of annualized operating cost reductions taken over the past few quarters," commented Mr. Bob Daigle, Chief Executive Officer of Amtech.

GAAP and Non-GAAP Financial Results

(1) See GAAP to non-GAAP reconciliation in schedules following this release.

Net revenues increased 5% sequentially and decreased 13% from the third quarter of fiscal 2023. The sequential increase is primarily due to increased sales of our reflow and wafer cleaning equipment, and higher parts and services revenue. The decrease from prior year is primarily attributable to lower sales across most of our product portfolio due to a slow-down in the broader semiconductor market.

In the third quarter of fiscal 2024, GAAP gross margin increased sequentially compared to the same prior year period. On a sequential basis, GAAP gross margin in our Semiconductor segment was positively affected by product mix attributed to increased revenues for reflow equipment, parts and services. GAAP gross margin in our Materials and Substrate segment decreased on a sequential basis due primarily to a less favorable product mix of consumables and equipment. Compared to the same prior year period, GAAP gross margin was relatively consistent between periods.

Selling, General & Administrative ("SG&A") expenses decreased by approximately $40,000 on a sequential basis and decreased $2.1 million compared to the prior year period. The sequential decrease is due primarily to reductions in labor-related expenses, partially offset by increased commissions and shipping expenses on higher sales. Compared to the same prior year period, the decrease is due primarily to lower labor and labor-related expenses as a result of our cost reduction initiatives, as well as lower shipping expenses on lower revenues.

Research, Development and Engineering expenses decreased $0.2 million sequentially and decreased $1.1 million compared to the same prior year period, with the sequential decrease due primarily to the timing of purchases related to specific projects in both segments, and the decrease from prior year attributable to development efforts in our Material & Substrate segment that did not recur.

GAAP operating income was $0.8 million, compared to GAAP operating income of $1.4 million in the second quarter of fiscal 2024 and GAAP operating loss of $1.1 million in the same prior year period.

Non-GAAP operating income was $1.5 million, compared to non-GAAP operating income of $0.2 million in the second quarter of fiscal 2024 and non-GAAP operating income of $0.4 million in the same prior year period.

GAAP net income for the third quarter of fiscal 2024 was $0.4 million, or 3 cents per share. This compares to GAAP net income of $1.0 million, or 7 cents per share, for the preceding quarter and GAAP net loss of $1.0 million, or 7 cents per share, for the third quarter of fiscal 2023.

Non-GAAP net income for the third quarter of fiscal 2024 was $1.1 million, or 8 cents per share. This compares to non-GAAP net loss of $0.2 million, or 1 cent per share, for the preceding quarter and non-GAAP net income of $0.3 million, or 2 cents per share, for the third quarter of fiscal 2023.

Unrestricted cash and cash equivalents at June 30, 2024, were $13.2 million, compared to $13.1 million at September 30, 2023. Debt payments during the three months ended June 30, 2024 were $0.3 million. Net cash as of June 30, 2024 was $8.9 million compared to $2.4 million as of September 30, 2023.

In discussing financial results for the three and nine months ended June 30, 2024 and 2023 and the three months ended June 30, 2024, 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, gain on the sale of our Arizona headquarters, moving expenses, 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 fourth fiscal quarter ending September 30, 2024, we expect revenues in the range of $22 - 25 million with adjusted EBITDA nominally positive. 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 $7 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 5:00 pm ET on Wednesday, August 7, 2024 to discuss our fiscal third quarter financial results. The call will be available to interested parties by dialing 1-800-717-1738. For international callers, please dial +1-646-307-1865. 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.