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Amtech Reports Fourth Quarter and Fiscal 2022 Results

ASYS

Amtech Systems, Inc. ("Amtech") (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 devices, analog and discrete devices, electronic assemblies and light-emitting diodes (LEDs), today reported results for its fourth quarter and fiscal year ended September 30, 2022.

Fourth Quarter Fiscal 2022 Financial and Operational Highlights:

  • Net revenue of $32.3 million
  • Operating income of $3.9 million
  • Net income of $4.2 million
  • Net income per diluted share of $0.30
  • Customer orders of $20.4 million
  • Book to bill ratio of 0.6:1
  • Unrestricted cash of $46.9 million

Fiscal 2022 Financial and Operational Highlights:

  • Net revenue of $106.3 million
  • Operating income of $17.3 million
  • Net income of $17.4 million
  • Net income per diluted share of $1.22
  • Customer orders of $114.0 million
  • Book to bill ratio of 1.1:1
  • September 30, 2022 backlog of $50.8 million
  • Repurchased 434,813 shares for $4.1 million

“Fiscal 2022 was yet another strong year for Amtech, with over $106 million in revenue, representing a year-over-year growth rate of 25%. While near-term expectations are tempered by both easing demand and supply chain limitations, in the mid-term we are well positioned with increasing alignment to high growth, megatrend end markets such as electric vehicles. Approximately half of our current backlog is related to EV capacity expansion,” commented Mr. Michael Whang, Chief Executive Officer of Amtech. “We are securing production-scale projects across multiple Amtech product lines and divisions in diverse applications including Silicon Carbide wafer polishing and thermal processing for EV sensors, power module substrates, and battery cooling assemblies, among others,” added Whang.

GAAP Financial Results

(in millions, except per share amounts)

Q4 FY

Q3 FY

Q4 FY

12 Months

12 Months

2022

2022

2021

2022

2021

Net revenues

$

32.3

$

20.0

$

24.3

$

106.3

$

85.2

Gross profit

$

12.6

$

5.9

$

9.2

$

39.5

$

34.5

Gross margin

38.8

%

29.6

%

37.8

%

37.2

%

40.5

%

Operating income

$

3.9

$

9.6

$

1.3

$

17.3

$

3.7

Operating margin

12.0

%

47.9

%

5.3

%

16.3

%

4.4

%

Net income

$

4.2

$

10.2

$

0.7

$

17.4

$

1.5

Net income per diluted share

$

0.30

$

0.73

$

0.05

$

1.22

$

0.11

Net revenues increased 62% sequentially and 33% from the fourth quarter of fiscal 2021, with the sequential increase primarily attributable to increased shipments of our advanced packaging equipment and increases in polishing equipment and consumables. During the third fiscal quarter of 2022, our Shanghai facility was closed for approximately two months due to the government-mandated closure relating to its COVID policies. The increase in net revenues from the fourth quarter of fiscal 2021 was due primarily to increased shipments across all of our product lines.

Gross margin increased sequentially and from the fourth quarter of fiscal 2021 due primarily to increased utilization at all our locations, partial offset by increasing material costs, primarily in our semiconductor segment.

Selling, General & Administrative (“SG&A”) expenses increased $0.1 million on a sequential basis and $0.7 million compared to the prior year period. The increase from the fourth quarter of fiscal 2021 primarily relates to the timing of external and internal audit fees.

Research, Development and Engineering decreased $0.3 million sequentially and was relatively consistent as compared to the same prior year period.

Operating income was $3.9 million, compared to operating income of $9.6 million in the third quarter of fiscal 2022 and operating income of $1.3 million in the same prior year period. Operating income in the third quarter of fiscal 2022 benefitted from the pre-tax gain resulting from the sale-leaseback of our building in Massachusetts.

Income tax provision was $0.6 million for the three months ended September 30, 2022, compared to a provision of $20,000 in the preceding quarter and $0.7 million in the same prior year period.

Net income for the fourth quarter of fiscal 2022 was $4.2 million, or 30 cents per share. This compares to net income of $10.2 million, or 73 cents per share, for the preceding quarter and net income of $0.7 million, or 5 cents per share, for the fourth quarter of fiscal 2021.

Outlook

The Company’s outlook reflects the ongoing logistical impacts and the related delays for goods shipped to and from China, as well as supply chain delays we are experiencing in our US business. Actual results may differ materially in the weeks and months ahead. Additionally, the semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Operating results can be significantly impacted, positively or negatively, by the timing of orders, system shipments, and the financial results of semiconductor manufacturers.

For the first fiscal quarter ending December 31, 2022, revenues are expected to be in the range of $21 to $23 million with operating margin negative.

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 today at 5:00 p.m. ET to discuss our fiscal fourth quarter financial results. The call will be available to interested parties by dialing 1-877-407-0784. For international callers, please dial +1-201-689-8560. The confirmation code is 13734277. 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 web site 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 capital equipment, including thermal processing and wafer polishing, and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power devices, analog and discrete devices, electronic assemblies and light-emitting diodes (LEDs). We sell these products to semiconductor device and module manufacturers worldwide, particularly in Asia, North America and Europe. Our strategic focus is on semiconductor growth opportunities in power electronics, sensors and analog devices 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 substrates, 300mm horizontal thermal reactor, and electronic assemblies used in power, RF, and other advanced applications), 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, 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, 2021, 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.

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

(Unaudited)

Summary Financial Information

(in thousands, except percentages)

Three Months Ended

Years Ended September 30,

September 30,
2022

June 30,
2022

September 30,
2021

2022

2021

Amtech Systems, Inc.

Revenues, net of returns and allowances

$

32,315

$

19,964

$

24,340

$

106,298

$

85,205

Gross profit

$

12,553

$

5,900

$

9,211

$

39,511

$

34,530

Gross margin

39

%

30

%

38

%

37

%

41

%

Operating income

$

3,889

$

9,562

$

1,296

$

17,286

$

3,725

New orders

$

20,365

$

30,145

$

34,188

$

113,953

$

115,444

Backlog

$

50,780

$

62,731

$

44,143

$

50,780

$

44,143

Semiconductor Segment

Revenues, net of returns and allowances

$

26,498

$

15,135

$

19,891

$

87,982

$

72,086

Gross profit

$

9,373

$

3,590

$

7,732

$

30,880

$

30,336

Gross margin

35

%

24

%

39

%

35

%

42

%

Operating income

$

4,425

$

10,521

$

2,609

$

20,672

$

8,585

New orders

$

16,165

$

24,144

$

30,247

$

94,268

$

101,988

Backlog

$

48,011

$

58,344

$

42,743

$

48,011

$

42,743

Material and Substrate Segment

Revenues, net of returns and allowances

$

5,817

$

4,829

$

4,449

$

18,316

$

13,119

Gross profit

$

3,180

$

2,310

$

1,479

$

8,631

$

4,194

Gross margin

55

%

48

%

33

%

47

%

32

%

Operating income

$

1,737

$

1,156

$

264

$

3,728

$

278

New orders

$

4,200

$

6,001

$

3,941

$

19,685

$

13,456

Backlog

$

2,769

$

4,387

$

1,400

$

2,769

$

1,400

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

(Unaudited)

Consolidated Statements of Operations

(in thousands, except per share data)

Three Months Ended
September 30,

Years Ended
September 30,

2022

2021

2022

2021

Revenue, net

$

32,315

$

24,340

$

106,298

$

85,205

Cost of sales

19,762

15,129

66,787

50,675

Gross profit

12,553

9,211

39,511

34,530

Selling, general and administrative

7,292

6,558

28,300

24,740

Research, development and engineering

1,372

1,342

6,390

5,979

Gain on sale of fixed assets

(12,465

)

Severance expense

15

86

Operating income

3,889

1,296

17,286

3,725

Interest income (expense) and other, net

872

46

1,499

(291

)

Income before income tax provision

4,761

1,342

18,785

3,434

Income tax provision

578

676

1,418

1,926

Net income

$

4,183

$

666

$

17,367

$

1,508

Income Per Share:

Net income per basic share

$

0.30

$

0.05

$

1.24

$

0.11

Net income per diluted share

$

0.30

$

0.05

$

1.22

$

0.11

Weighted average shares outstanding:

Basic

13,933

14,190

14,014

14,189

Diluted

14,080

14,387

14,184

14,340

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

(Unaudited)

Consolidated Balance Sheets

(in thousands, except share data)

September 30,
2022

September 30,
2021

Current Assets

Cash and cash equivalents

$

46,874

$

32,836

Accounts receivable - Net

25,013

22,502

Inventories

25,488

22,075

Income taxes receivable

1,046

Other current assets

5,561

2,407

Total current assets

102,936

80,866

Property, Plant and Equipment - Net

6,552

14,083

Right-of-Use Assets - Net

11,258

8,646

Intangible Assets - Net

758

858

Goodwill

11,168

11,168

Deferred Income Taxes - Net

79

631

Other Assets

783

661

Total Assets

$

133,534

$

116,913

Liabilities and Shareholders’ Equity

Current Liabilities

Accounts payable

$

7,301

$

8,229

Accrued compensation and related taxes

4,109

2,881

Accrued warranty expense

871

545

Other accrued liabilities

900

903

Current maturities of finance lease liabilities and long-term debt

107

396

Current portion of long-term operating lease liabilities

2,101

531

Contract liabilities

7,231

1,624

Income taxes payable

6

Total current liabilities

22,626

15,109

Finance Lease Liabilities and Long-Term Debt

220

4,402

Long-Term Operating Lease Liabilities

9,395

8,389

Income Taxes Payable

2,849

3,277

Other Long-Term Liabilities

76

102

Total Liabilities

35,166

31,279

Commitments and Contingencies

Shareholders’ Equity

Preferred stock; 100,000,000 shares authorized; none issued

Common stock; $0.01 par value; 100,000,000 shares authorized; shares issued and outstanding: 13,994,154 and 14,304,492 in 2022 and 2021, respectively

140

143

Additional paid-in capital

124,458

126,380

Accumulated other comprehensive (loss) income

(1,767

)

14

Retained deficit

(24,463

)

(40,903

)

Total Shareholders’ Equity

98,368

85,634

Total Liabilities and Shareholders’ Equity

$

133,534

$

116,913

AMTECH SYSTEMS, INC.

(NASDAQ: ASYS)

(Unaudited)

Consolidated Statements of Cash Flows

(in thousands)

Years Ended September 30,

2022

2021

Operating Activities

Net income (loss)

$

17,367

$

1,508

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Depreciation and amortization

1,729

1,398

Write-down of inventory

102

544

(Reversal of) provision for allowance for doubtful accounts

(32

)

44

Deferred income taxes

592

(65

)

Non-cash share-based compensation expense

543

401

Gain on sale of fixed assets

(12,465

)

Other, net

43

Changes in operating assets and liabilities:

Accounts receivable

(2,479

)

(11,023

)

Inventories

(3,684

)

(5,180

)

Contract and other assets

(2,203

)

(686

)

Accounts payable

(1,080

)

5,472

Accrued income taxes

623

353

Accrued and other liabilities

584

829

Contract liabilities

5,607

400

Net cash provided by (used in) operating activities

5,204

(5,962

)

Investing Activities

Purchases of property, plant and equipment

(1,135

)

(3,012

)

Proceeds from sale of property, plant and equipment

19,908

Acquisition, net of cash and cash equivalents acquired

(5,082

)

Net cash provided by (used in) investing activities

18,773

(8,094

)

Financing Activities

Proceeds from the exercise of stock options

720

1,546

Repurchase of common stock

(4,115

)

Payments on long-term debt

(4,872

)

(380

)

Borrowings on long-term debt

Net cash (used in) provided by financing activities

(8,267

)

1,166

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash

(1,672

)

656

Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash

14,038

(12,234

)

Cash, Cash Equivalents and Restricted Cash, Beginning of Year*

32,836

45,070

Cash, Cash Equivalents and Restricted Cash, End of Year

$

46,874

$

32,836