Business Wire | Nov 19, 2020 04:10PM EST

Amtech Reports Fourth Quarter Fiscal 2020 Results

Nov. 19, 2020

TEMPE, Ariz.--(BUSINESS WIRE)--Nov. 19, 2020--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 devices, analog and discrete devices, electronic assemblies and light-emitting diodes (LEDs), today reported results for its fourth quarter ended September 30, 2020.

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

* Net revenue of $15.1 million * Operating loss of $1.2 million * Loss from continuing operations, net of tax, of $2.0 million * Loss per diluted share from continuing operations of $0.14 * Customer orders of $13.8 million * Unrestricted cash of $45.1 million

Fiscal 2020 Financial and Operational Highlights from Continuing Operations:

* Net revenue of $65.5 million * Operating loss of $0.5 million * Loss from continuing operations, net of tax, of $3.9 million, primarily due to the sale of the Automation business * Loss per diluted share from continuing operations of $0.28 * Customer orders of $62.8 million * Backlog of $13.9 million as of September 30, 2020

Mr. Michael Whang, Chief Executive Officer of Amtech, commented, "Given the challenges and uncertainty created by the pandemic in 2020, we are encouraged to have finished the year and begun our new fiscal year with increasing customer order momentum. With the combination of continuing improvement in near-term dialogue with customers and the robust long-term growth fundamentals across the silicon carbide, power semiconductor and advanced semiconductor packaging markets, we are increasingly confident in the opportunities for growth in 2021 and beyond."

GAAP Financial Results

(in millions, except per Q4 FY Q3 FY Q4 FY 12 12 share amounts) Months Months

2020 2020 2019 2020 2019

Net revenues $ 15.1 $ 15.2 $ 20.2 $ 65.5 $ 85.0

Gross profit $ 5.0 $ 6.0 $ 8.6 $ 24.4 $ 33.4

Gross margin 32.9 % 39.1 % 42.4 % 37.3 % 39.2 %

Operating (loss) income $ (1.2 ) $ 0.0 $ 1.7 $ (0.5 ) $ 4.9

Operating margin -7.8 % 0.2 % 8.2 % -0.7 % 5.8 %

(Loss) income fromcontinuing operations, net $ (2.0 ) $ (0.1 ) $ 1.0 $ (3.9 ) $ 3.1 of tax

Diluted (loss) income pershare from continuing $ (0.14 ) $ (0.01 ) $ 0.07 $ (0.28 ) $ 0.22 operations

Net revenues remained consistent sequentially and decreased 25% from the fourth quarter of fiscal 2019. Semiconductor and SiC/LED revenue decreased compared to the fourth quarter of fiscal 2019 primarily due to the ongoing uncertainty in the global economy from the COVID-19 virus.

Gross margin decreased in the fourth quarter of fiscal 2020 both sequentially and compared to the same prior year period. On a sequential basis, gross margin decreased primarily due to product mix and non-recurring expenses. Compared to the fourth quarter of fiscal 2019, gross margin decreased primarily due to lower volume and product mix.

Selling, General & Administrative ("SG&A") expenses increased $0.5 million sequentially due primarily to payroll tax credits the Company was able to claim in fiscal Q3 2020 as part of the COVID-19 legislation passed by U.S. Congress, the CARES Act. SG&A decreased $0.9 million compared to the same prior year period due primarily to exclusion of the Company's former Automation segment from results and lower travel due to the COVID-19 pandemic.

Operating loss was $1.2 million, compared to operating income of $31,000 in the third quarter of fiscal 2020 and $1.7 million of operating income in the same prior year period.

Loss from continuing operations, net of tax, for the fourth quarter of fiscal 2020 was $2.0 million, or a loss of 14 cent per share. This compares to income from continuing operations of $1.0 million, or 7 cents per share, for the fourth quarter of fiscal 2019 and loss of $0.1 million, or 1 cent per share, in the preceding quarter.

Outlook

The Company's outlook reflects the anticipated ongoing impacts from the COVID-19 pandemic as understood today. Given how fluid the situation is both for Amtech as well as that of its customers and supply chain, management would like to remind investors that 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, 2020, revenues are expected to be in the range of $16.0 to $18.0 million. Gross margin for the quarter ending December 31, 2020 is expected to be in the mid 30% range, with operating margin slightly negative.

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 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 800-367-2403. For international callers, please dial +1 334-777-6978. The Conference ID number is 5637065. The call will be webcast and available in the Investor Relations section of Amtech's website at: http://www.amtechsystems.com.

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(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, 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, 2020, 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.

AMTECH SYSTEMS, INC.(NASDAQ: ASYS)November 19, 2020(Unaudited)

Summary Financial Information for Continuing Operations(in thousands, except percentages and ratios)

Three Months Ended Years Ended September 30,

September June 30, September 30, 2020 30, 2020 2019 2020 2019

Amtech Systems, Inc.

Revenues, netof returns $ 15,084 $ 15,227 $ 20,174 $ 65,463 $ 85,035 andallowances

Gross profit $ 4,958 $ 5,951 $ 8,560 $ 24,441 $ 33,357

Gross margin 33 % 39 % 42 % 37 % 39 %

Operating $ (1,181 ) $ 31 $ 1,653 $ (485 ) $ 4,916 (loss) income

New orders $ 13,767 $ 10,830 $ 20,344 $ 62,848 $ 76,560

Backlog $ 13,905 $ 15,221 $ 17,326 $ 13,905 $ 17,326

Semiconductor Segment

Revenues, netof returns $ 12,935 $ 12,357 $ 15,188 $ 54,516 $ 66,455 andallowances

Gross profit $ 4,647 $ 4,953 $ 6,866 $ 21,199 $ 27,365

Gross margin 36 % 40 % 45 % 39 % 41 %

Operating $ 406 $ 1,058 $ 2,316 $ 4,168 $ 8,744 income

New orders $ 11,979 $ 8,356 $ 16,163 $ 52,448 $ 60,625

Backlog $ 12,842 $ 13,798 $ 14,902 $ 12,842 $ 14,902

SiC/LED Segment

Revenues, netof returns $ 2,149 $ 2,870 $ 4,352 $ 10,304 $ 13,682 andallowances

Gross profit $ 311 $ 998 $ 1,814 $ 3,233 $ 5,338

Gross margin 14 % 35 % 42 % 31 % 39 %

Operating $ (512 ) $ 241 $ 1,388 $ 684 $ 3,641 (loss) income

New orders $ 1,788 $ 2,474 $ 2,399 $ 10,400 $ 11,973

Backlog $ 1,063 $ 1,423 $ 966 $ 1,063 $ 966

AMTECH SYSTEMS, INC.(NASDAQ: ASYS)November 19, 2020(Unaudited)

Consolidated Statements of Operations(in thousands, except per share data)

Three Months Ended Years Ended September 30, September 30,

2020 2019 2020 2019

Revenue, net of returns $ 15,084 $ 20,174 $ 65,463 $ 85,035 and allowances

Cost of sales 10,126 11,614 41,022 51,678

Gross profit 4,958 8,560 24,441 33,357



Selling, general and 5,263 6,126 21,397 24,263 administrative

Research, development and 876 743 3,312 3,068 engineering

Restructuring charges - 38 217 1,110

Operating (loss) income (1,181 ) 1,653 (485 ) 4,916



Loss on sale of subsidiary - - (2,793 ) -

Interest (expense) income (350 ) 341 162 852 and other, net

(Loss) income fromcontinuing operations (1,531 ) 1,994 (3,116 ) 5,768 before income taxes

Income tax provision 494 1,012 791 2,633

(Loss) income fromcontinuing operations, net (2,025 ) 982 (3,907 ) 3,135 of tax

Loss from discontinued - (184 ) (11,816 ) (8,297 )operations, net of tax

Net (loss) income $ (2,025 ) $ 798 $ (15,723 ) $ (5,162 )



(Loss) Income Per Basic Share:

Basic (loss) income pershare from continuing $ (0.14 ) $ 0.07 $ (0.28 ) $ 0.22 operations

Basic loss per share from $ - $ (0.01 ) $ (0.83 ) $ (0.58 )discontinued operations

Net (loss) income per $ (0.14 ) $ 0.06 $ (1.11 ) $ (0.36 )basic share



(Loss) Income Per Diluted Share:

Diluted (loss) income pershare from continuing $ (0.14 ) $ 0.07 $ (0.28 ) $ 0.22 operations

Diluted loss per sharefrom discontinued $ - $ (0.01 ) $ (0.83 ) $ (0.58 )operations

Net (loss) income per $ (0.14 ) $ 0.06 $ (1.11 ) $ (0.36 )diluted share



Weighted average shares 14,052 14,266 14,159 14,240 outstanding - basic

Weighted average shares 14,052 14,304 14,159 14,275 outstanding - diluted

AMTECH SYSTEMS, INC.(NASDAQ: ASYS)November 19, 2020(Unaudited)

Consolidated Balance Sheets(in thousands, except share data)

September September 30, 30, 2020 2019

Assets

Current Assets

Cash and cash equivalents $ 45,070 $ 52,982

Restricted cash - 101

Accounts receivable (less allowance for doubtfulaccounts of $159 and $172 at 11,243 12,873 September 30, 2020 and September 30, 2019,respectively)

Inventory 17,277 17,532

Contract assets - 36

Income taxes receivable 1,362 -

Held-for-sale assets - 22,755

Other current assets 1,617 1,991

Total current assets 76,569 108,270

Property, Plant and Equipment - Net 11,995 10,217

Right-of-Use Assets - Net 5,124 -

Intangible Assets - Net 609 870

Goodwill - Net 6,633 6,633

Deferred Income Taxes - Net 566 -

Other Assets 602 487

Total Assets $ 102,098 $ 126,477

Liabilities and Shareholders' Equity

Current Liabilities

Accounts payable $ 2,676 $ 4,371

Accrued compensation and related taxes 2,066 2,717

Accrued warranty expense 380 556

Other accrued liabilities 751 1,274

Current maturities of long-term debt 380 371

Contract liabilities 1,224 1,378

Income taxes payable - 1,434

Held-for-sale liabilities - 18,547

Total current liabilities 7,477 30,648

Long-Term Debt 4,798 5,178

Long-Term Lease Liability 5,064 -

Income Taxes Payable 3,240 3,199

Total Liabilities 20,579 39,025

Commitments and Contingencies

Shareholders' Equity

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

Common stock; $0.01 par value; 100,000,000 sharesauthorized; shares

issued and outstanding: 14,063,172 and 14,268,797 at 141 143

September 30, 2020 and September 30, 2019,respectively

Additional paid-in capital 124,435 125,098

Accumulated other comprehensive loss (646 ) (11,233 )

Retained deficit (42,411 ) (26,556 )

Total Shareholders' Equity 81,519 87,452

Total Liabilities and Shareholders' Equity $ 102,098 $ 126,477

AMTECH SYSTEMS, INC.(NASDAQ: ASYS)November 19, 2020(Unaudited)

Consolidated Statements of Cash Flows(in thousands)

Years Ended September 30,

2020 2019

Operating Activities

Net (loss) income $ (15,723 ) $ (5,162 )

Adjustments to reconcile net (loss) income to netcash (used in) provided by

operating activities:

Depreciation and amortization 1,258 1,690

Non-cash impairment charges - -

Write-down of inventory 733 3,193

Provision for allowance for doubtful accounts 24 1,074

Deferred income taxes 218 220

Non-cash share based compensation expense 326 573

Loss (gain) on sales of subsidiaries 13,709 (1,614 )

Other, net 55 95

Changes in operating assets and liabilities:

Accounts receivable 1,359 299

Inventory (913 ) (435 )

Contract and other assets 324 12,847

Accounts payable (3,620 ) (1,787 )

Accrued income taxes (2,701 ) (3,011 )

Accrued and other liabilities 4,658 (6,876 )

Contract liabilities (1,371 ) (933 )

Net cash (used in) provided by operating activities (1,664 ) 173

Investing Activities

Purchases of property, plant and equipment (2,676 ) (714 )

Net cash disposed of in sales of subsidiaries (9,940 ) (1,112 )

Net cash used in investing activities (12,616 ) (1,826 )

Financing Activities

Proceeds from the exercise of stock options 877 210

Repurchase of common stock (2,000 ) -

Payments on long-term debt (379 ) (376 )

Borrowings on long-term debt - 9

Net cash used in financing activities (1,502 ) (157 )

Effect of Exchange Rate Changes on Cash, CashEquivalents and 1,718 (1,552 )

Restricted Cash

Net Decrease in Cash, Cash Equivalents and (14,064 ) (3,362 )Restricted Cash

Cash, Cash Equivalents and Restricted Cash, 59,134 62,496 Beginning of Year*

Cash, Cash Equivalents and Restricted Cash, End of $ 45,070 $ 59,134 Year*

* Includes Cash, Cash Equivalents and Restricted Cash that are included in Held-For-Sale Assets on the Condensed Consolidated Balance Sheets for periods prior to January 22, 2020.

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CONTACT: Amtech Systems, Inc. Lisa D. Gibbs Chief Financial Officer (480) 360-3756 irelations@amtechsystems.com Sapphire Investor Relations, LLC Erica Mannion and Mike Funari (617) 542-6180 irelations@amtechsystems.com