Press releases

TEMPE, Ariz., Feb. 6, 2020 /PRNewswire/ -- Amtech Systems, Inc. (NASDAQ: ASYS), a manufacturer of capital equipment, including thermal processing and wafer polishing, and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power chips, electronic assemblies and light-emitting diodes (LEDs), today reported results for its first quarter ended December 31, 2019.

First Quarter Fiscal 2020 Financial and Operational Highlights from Continuing Operations:

• Net revenue of $20.7 million
• Operating income of $1.6 million
• Loss from continuing operations, net of tax, of $1.3 million, which includes a pre-tax loss of $2.7 million on the sale of R2D
• Loss per diluted share from continuing operations of $0.09
• Customer orders of $17.6 million
• Unrestricted cash of $52.7 million
• Board of Directors approval to renew our share repurchase program of up to $4 million of outstanding common stock, effective for the next 12 months

Mr. Michael Whang, Chief Executive Officer of Amtech, commented, "We continue to prepare for the anticipated strengthening of the semiconductor market in the second half of 2020 and for longer-term organic growth opportunities.  We are investing in new product development, market-advancing technologies, our people, capacity expansion and IT systems.  We also continue to evaluate strategic M&A opportunities to build upon our strengths in the high growth areas in semi and silicon carbide."

Mr. Whang continued, "In the first quarter of fiscal 2020, we shipped our 300 mm diffusion furnace to a new top-tier, power semiconductor customer.  We have also just announced another order for the 300mm clustered HTR diffusion furnace, further validating our power semiconductor strategy and the market interest in this technology. With this new order we are establishing close relationships with top-tier global power semiconductor customers in North America, Europe and Asia."

GAAP Financial Results

Net revenues increased slightly compared to the preceding quarter and decreased 11% from the first quarter of fiscal 2019. Semiconductor revenue in fiscal Q1 2020 includes the shipment of our 300 mm diffusion furnace to a new top-tier, power semiconductor customer, which contributed to the sequential increase in revenue. Semiconductor revenue decreased compared to the prior year quarter due primarily to lower diffusion furnace shipments. SiC/LED revenue decreased sequentially due primarily to lower machine shipments and was relatively flat compared to the prior year quarter. Gross margin increased in the first quarter of fiscal 2020 compared to the prior year quarter, primarily due to a shift in product mix, while decreasing on a sequential basis primarily due to a higher margin product mix in the fourth quarter of fiscal 2019. Operating margin improved sequentially to 7.9%, primarily due to lower employee-related expenses, partially offset by increased legal fees relating to our solar divestitures. The Company recognized a pre-tax loss from the sale of its automation division, R2D, of $2.8 million. Loss from continuing operations, net of tax, for the first quarter of fiscal 2020 was $1.3 million, or 9 cents per share. This compares to income of $0.2 million, or 2 cents per share, for the first quarter of fiscal 2019 and income of $1.0 million, or 7 cents per share, in the preceding quarter.

As announced previously, we sold our shares of Tempress to Stichting Continuiteit Tempress, an independent foundation ("the Foundation") formed under Dutch law and created for the sole benefit of the employees, customers and suppliers of Tempress. The Foundation is governed by an independent board with members who have restructuring expertise and have no affiliation with Amtech. Effective as of the closing of the sale of Tempress, Amtech has no financial interest in the future losses or profits of the Foundation and will have no further involvement with and no control over the Foundation, absent the right to receive certain limited information from the Foundation pursuant to covenants set forth in the term loan agreement with the Foundation. To-date, we have received repayment of $0.5 million of the loan balance.

Outlook

Our outlook reflects the January 27 announcement by China's government to extend the Lunar New Year holiday and keep enterprises closed until February 9, due to the coronavirus outbreak. Our outlook also builds in estimated time we believe will be required for employees and the supply chain to resume normal work and production levels. The outlook does not account for any future measures taken by the Chinese government in response to the health crisis that could further delay businesses from returning to a normal operating schedule, which could cause our results to be materially lower than the outlook. Lastly, the outlook reflects some historical softness that occurs in our fiscal Q2, attributable to seasonality and the Chinese New Year. For the quarter ending March 31, 2020 (our 2^nd fiscal quarter), revenues are expected to be in the range of $10 to $14 million. Gross margin for the quarter ending March 31, 2020 is expected to be in the upper 20's to 30% range, with operating margin negative.

Additionally, in fiscal Q2, we expect to record a pre-tax loss on deconsolidation of Tempress in the range of $12.5 million to $13 million, of which approximately $7.3 million is the recognition of previously recorded accumulated foreign currency translation losses. The total pre-tax loss is not expected to have a material effect on our cash balances from our continuing operations. We also expect to recognize a significant tax benefit relating to this loss, which can be carried over to future years.

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 first 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 February 13, 2020.  To access the replay please dial US toll free (877) 344-7529 and enter code 10138192.  Internationally, dial (412) 317-0088 and use the same code.  A live and archived webcast 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 leading, global manufacturer of capital equipment, including thermal processing and wafer polishing, and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power chips, electronic assemblies and light-emitting diodes (LEDs). We sell these products to semiconductor and automotive component manufacturers worldwide, particularly in Asia, North America and Europe.  Our strategic focus is on semiconductor growth opportunities in power electronics, leveraging our strength in our core competencies in thermal and substrate processing. We are a market leader in the high-end power chip market (SiC and 300mm silicon horizontal thermal reactor), developing and supplying essential equipment and consumables used in the semiconductor industry. Amtech's products are recognized under the leading brand names BTU International, Bruce Technologies^TM, and PR Hoffman^TM.

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, the planned divestiture of our solar business, 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," "anticipate," "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, 2019, 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.

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SOURCE Amtech Systems, Inc.