Amtech reports third quarter fiscal 2022 results
Tempe, ariz.--(business wire)--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 third quarter ended june 30, 2022. third quarter fiscal 2022 financial and operational highlights: net revenue of $20.0 million shanghai facility fully reopened on june 1, 2022 customer orders of $30.1 million book to bill ratio of 1.5:1 completed sale-leaseback of billerica, ma facility, with pretax gain of $12.5 million and cash inflow of $14.9 million operating income of $9.6 million net income of $10.2 million net income per diluted share of $0.73 unrestricted cash of $47.7 million june 30, 2022 backlog of $62.7 million mr. michael whang, chief executive officer of amtech, commented, “the robust demand for our products continued in the third quarter with bookings of $30.1 million, representing our sixth straight quarter of bookings over $30 million. while we experienced revenue headwinds in the third quarter due to the shanghai covid lockdown, we successfully re-opened our facility in early june. our confidence around the long-awaited silicon carbide wafer ramp is building, with revenue for these applications more than doubling over the last two quarters. given our established market leading position in consumables, we remain excited as the mid to long-term opportunities in front of us come into focus.” gaap financial results (in millions, except per share amounts) q3 q2 q3 9 months 9 months fy 2022 fy 2022 fy 2021 2022 2021 revenues, net $ 20.0 $ 27.6 $ 23.1 $ 74.0 $ 60.9 gross profit $ 5.9 $ 11.2 $ 10.1 $ 27.0 $ 25.3 gross margin 29.6 % 40.5 % 43.6 % 36.4 % 41.6 % operating income $ 9.6 $ 2.6 $ 1.2 $ 13.4 $ 2.4 operating margin 47.9 % 9.4 % 5.2 % 18.1 % 4.0 % net income $ 10.2 $ 2.0 $ 0.4 $ 13.2 $ 0.8 net income per diluted share $ 0.73 $ 0.14 $ 0.03 $ 0.93 $ 0.06 net revenues decreased 28% sequentially and 14% from the third quarter of fiscal 2021, primarily attributable to lower shipments of our advanced packaging equipment due to our shanghai facility closure, partially offset by increased shipments of our consumables products. the decrease in production from the shanghai facility was caused by the government-mandated closure relating to its covid policies, which closed the company’s facility on march 28, 2022. the facility was allowed to partially reopen in may 2022 and fully reopened on june 1, 2022. gross margin decreased sequentially and compared to the same period last year primarily due to the above-mentioned closure of the shanghai manufacturing facility. this closure resulted in decreased utilization during the period as the company continued to pay employees while ceasing production entirely. selling, general & administrative (“sg&a”) expenses increased $0.4 million on a sequential basis, with higher legal expenses related to the sale-leaseback transaction and increased consulting expenses offset by lower commission on lower sales. sg&a decreased slightly compared to the prior year period primarily due to a reduction in commissions due to lower sales in fiscal 2022 partially offset by an increase in employee-related expenses and consulting. on june 23, 2022, the company’s subsidiary, btu international, inc. ("btu"), completed the sale and leaseback of btu's building in billerica, massachusetts (the "property"). the sale price was $20.6 million. simultaneously with the sale closing, btu entered into a two-year leaseback of the property. the lease terms include base rent of $1.5 million per year in an absolute triple net lease. in connection with the sale, btu recognized a pretax gain of $12.5 million. this sale-leaseback transaction resulted in a net cash inflow of approximately $14.9 million, after repayment of the existing mortgage and settlement of related sale expenses. research, development and engineering decreased $0.2 million sequentially and increased $0.1 million compared to the same prior year period. operating income was $9.6 million, compared to operating income of $2.6 million in the second quarter of fiscal 2022 and operating income of $1.2 million in the same prior year period. income tax provision was $20,000 for the three months ended june 30, 2022, compared to a provision of $0.7 million in both the preceding quarter and the same prior year period. net income for the third quarter of fiscal 2022 was $10.2 million, or 73 cents per diluted share. this compares to net income of $2.0 million, or 14 cents per diluted share, for the preceding quarter and net income of $0.4 million, or 3 cents per diluted share, for the third 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. 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 fourth fiscal quarter ending september 30, 2022, revenues are expected to be in the range of $30 to $32 million with operating margin in the low double-digits. 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 third quarter financial results. the call will be available to interested parties by dialing 1-313-209-6672. for international callers, please dial +1 800-458-4121. the confirmation code is 2312671. 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 nine months ended june 30, june 30, 2022 march 31, 2022 june 30, 2021 2022 2021 amtech systems, inc. revenues, net $ 19,964 $ 27,556 $ 23,100 $ 73,983 $ 60,865 gross profit $ 5,900 $ 11,160 $ 10,079 $ 26,958 $ 25,319 gross margin 30 % 40 % 44 % 36 % 42 % operating income $ 9,562 $ 2,595 $ 1,204 $ 13,397 $ 2,429 new orders $ 30,145 $ 33,695 $ 30,861 $ 95,477 $ 81,256 backlog $ 62,731 $ 53,566 $ 34,295 $ 62,731 $ 34,295 semiconductor segment revenues, net $ 15,135 $ 23,584 $ 19,501 $ 61,484 $ 52,195 gross profit $ 3,590 $ 9,255 $ 8,599 $ 21,507 $ 22,604 gross margin 24 % 39 % 44 % 35 % 43 % operating income $ 10,521 $ 3,368 $ 2,114 $ 16,246 $ 5,976 new orders $ 24,144 $ 28,039 $ 26,607 $ 79,992 $ 71,741 backlog $ 58,344 $ 50,352 $ 32,388 $ 58,344 $ 32,388 material and substrate segment revenues, net $ 4,829 $ 3,972 $ 3,599 $ 12,499 $ 8,670 gross profit $ 2,310 $ 1,905 $ 1,480 $ 5,451 $ 2,715 gross margin 48 % 48 % 41 % 44 % 31 % operating income $ 1,156 $ 654 $ 333 $ 1,991 $ 14 new orders $ 6,001 $ 5,656 $ 4,254 $ 15,485 $ 9,515 backlog $ 4,387 $ 3,214 $ 1,907 $ 4,387 $ 1,907 amtech systems, inc. (nasdaq: asys) (unaudited) consolidated statements of operations (in thousands, except per share data) three months ended june 30, nine months ended june 30, 2022 2021 2022 2021 revenues, net $ 19,964 $ 23,100 $ 73,983 $ 60,865 cost of sales 14,064 13,021 47,025 35,546 gross profit 5,900 10,079 26,958 25,319 selling, general and administrative 7,157 7,281 21,008 18,182 research, development and engineering 1,646 1,523 5,018 4,637 gain on sale of fixed assets (12,465 ) — (12,465 ) — severance expense — 71 — 71 operating income 9,562 1,204 13,397 2,429 interest income (expense) and other, net 680 (155 ) 627 (337 ) income before income tax provision 10,242 1,049 14,024 2,092 income tax provision 20 680 840 1,250 net income $ 10,222 $ 369 $ 13,184 $ 842 income per share: net income per basic share $ 0.74 $ 0.03 $ 0.94 $ 0.06 net income per diluted share $ 0.73 $ 0.03 $ 0.93 $ 0.06 weighted average shares outstanding: basic 13,889 14,176 14,042 14,163 diluted 14,026 14,373 14,220 14,292 amtech systems, inc. (nasdaq: asys) (unaudited) consolidated balance sheets (in thousands, except share data) june 30, 2022 september 30, 2021 assets current assets cash and cash equivalents $ 47,689 $ 32,836 restricted cash 524 — accounts receivable (less allowance for doubtful accounts of $172 and $188 at june 30, 2022, and september 30, 2021, respectively) 20,779 22,502 inventories 27,457 22,075 income taxes receivable 52 1,046 other current assets 3,978 2,407 total current assets 100,479 80,866 property, plant and equipment - net 5,863 14,083 right-of-use assets - net 11,019 8,646 intangible assets - net 783 858 goodwill 11,168 11,168 deferred income taxes - net 560 631 other assets 834 661 total assets $ 130,706 $ 116,913 liabilities and shareholders’ equity current liabilities accounts payable $ 9,831 $ 8,229 accrued compensation and related taxes 3,812 2,881 accrued warranty expense 827 545 other accrued liabilities 1,206 903 current maturities of long-term debt 104 396 current portion of long-term lease liability 1,806 531 contract liabilities 5,888 1,624 total current liabilities 23,474 15,109 long-term debt 230 4,402 long-term lease liability 9,321 8,389 income taxes payable 2,996 3,277 other long-term liabilities 62 102 total liabilities 36,083 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: 13,889,259 and 14,304,492 at june 30, 2022 and september 30, 2021, respectively 139 143 additional paid-in capital 123,693 126,380 accumulated other comprehensive (loss) income (563 ) 14 retained deficit (28,646 ) (40,903 ) total shareholders’ equity 94,623 85,634 total liabilities and shareholders’ equity $ 130,706 $ 116,913 amtech systems, inc. (nasdaq: asys) (unaudited) consolidated statements of cash flows (in thousands) nine months ended june 30, 2022 2021 operating activities net income $ 13,184 $ 842 adjustments to reconcile net income to net cash provided by (used in) operating activities: depreciation and amortization 1,330 1,038 write-down of inventory 235 278 non-cash stock compensation expense 386 277 gain on sale of property, plant and equipment (12,465 ) — provision for allowance for doubtful accounts 10 16 other, net — 8 changes in operating assets and liabilities: accounts receivable 1,714 (9,385 ) inventories (5,617 ) (3,328 ) other assets (1,298 ) (324 ) accounts payable 1,603 5,815 accrued income taxes 713 536 accrued and other liabilities 1,031 809 contract liabilities 4,264 646 net cash provided by (used in) operating activities 5,090 (2,772 ) investing activities purchases of property, plant and equipment (325 ) (790 ) proceeds from the 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 19,583 (5,872 ) financing activities proceeds from the exercise of stock options 111 1,148 repurchase of common stock (4,115 ) — payments on long-term debt (4,851 ) (284 ) net cash (used in) provided by financing activities (8,855 ) 864 effect of exchange rate changes on cash, cash equivalents and restricted cash (441 ) (250 ) net increase (decrease) in cash, cash equivalents and restricted cash 15,377 (8,030 ) cash and cash equivalents, beginning of period 32,836 45,070 cash, cash equivalents and restricted cash, end of period $ 48,213 $ 37,040
