Amtech Systems, Inc.: Report Fiscal 2008 Q3
Third Quarter and Fiscal YTD Highlights:
- Net revenue of $24.1 million, up 88% from the prior year quarter and up 37% sequentially
- Solar revenue of $16.6 million, compared to $3.9 million in the prior year quarter
- Operating income of $1.7 million and 6.9% of revenue; or $2.0 million and 8.4% of revenue excluding $0.3 million of restructuring charges
- Net income of $1.2 million, or $0.13 per diluted share, compared to $1.0 million, or $0.15 per diluted share, in the prior year quarter
- Quarter-end backlog of approximately $60.1 million, up 191% from the prior year quarter
- Quarter-end solar backlog of $44.2 million, compared to $11.5 million in the prior year quarter
- Solar orders totaled $8.4 million, compared to $8.1 million in the prior year quarter
- Semiconductor orders totaled $11.7 million, compared to $9.3 million in the prior year quarter
- Fiscal year-to-date orders total $89 million; solar orders total $60 million and semiconductor orders total $29 million
- Fiscal year-to-date book-to-bill of 1.6 with solar at 1.6 and semiconductor at 1.6
J.S. Whang, President and Chief Executive Officer of Amtech, commented: “The strong growth in solar shipments in the quarter reflects the continuing increase in customer demand for our solar products, and our improved operational execution to leverage these higher volumes helped us achieve solid operating results. While solar bookings were lighter in Q3 than in Q2, we still generated more than $20 million in overall orders during the quarter (solar and semiconductor), and are well on our way to surpassing $100 million in total bookings (solar and semiconductor) for fiscal 2008. We remain optimistic about our order pipeline and have a healthy backlog to fuel us in the fourth quarter and into fiscal 2009.
“While semiconductor revenues are down year-to-date from fiscal 2007, we are pleased with the recent order activity and healthy book-to-bill ratios. There continues to be uncertainty within the semiconductor industry and we remain cautious about future order activity. Overall, this quarter truly demonstrates our progress toward achieving our operational objectives, and our successful transition from being a semiconductor dominant company to a solar dominant equipment supplier.”
Net revenue for the third quarter of fiscal 2008 totaled $24.1 million, up 88% compared to the fiscal 2007 third quarter and up 37% sequentially from the second quarter of fiscal 2008. The increase resulted from higher sales to the solar industry which was partially offset by lower shipments to the semiconductor industry.
At June 30, 2008, the Company’s order backlog was $60.1 million, compared to backlog of $20.7 million at June 30, 2007, and includes $44.2 million in solar orders, representing a 284% increase over the Company’s solar backlog of $11.5 million at June 30, 2007. Backlog includes deferred revenue and customer orders that are expected to ship within the next 6-12 months.
Gross margin in the third quarter was 29%, compared to 27% in the third quarter of fiscal 2007, due primarily to higher shipment volumes and the related efficiencies and economies of scale, offset by higher warranty costs and higher deferred profit. Amtech deferred $1.8 million of profit for the quarter ended June 30, 2008, net of acceptances, compared to a net deferral of $0.7 million for the quarter ended June 30, 2007.
Selling, general and administrative (SG&A) expenses were $4.8 million in the third quarter of fiscal 2008, compared to $2.7 million in the third quarter of 2007. The increase in SG&A expenses was due primarily to $1.1 million of increased selling expense related to commissions on higher revenues generated in regions where third party sales agents are utilized, SG&A expenses at R2D (which was acquired in the first quarter of fiscal 2008), stock-based compensation expenses, increased depreciation and operating costs for the Company’s new building in The Netherlands and increased personnel and consulting costs. Depreciation and amortization was $395,000 in the third quarter of fiscal 2008, compared to $195,000 in the same period a year ago. Included in the third quarter fiscal 2008 results is $125,000 of stock option expense, compared to $117,000 in the third quarter of fiscal 2007.
Amtech recorded $344,000 in restructuring charges in the third quarter of fiscal 2008 related to its Bruce Technologies division to better position the division for profitability in light of lower plant utilization resulting from a slowdown in the semiconductor industry.
Income taxes in the third quarter of fiscal 2008 were $765,000, reflecting an effective tax rate of approximately 40%. In the third quarter of fiscal 2007, Amtech recorded a net tax benefit of $233,000 as a result of reductions in the valuation allowance on deferred tax assets.
Net income for the third quarter of fiscal 2008 was $1.2 million, or $0.13 per diluted share, compared to net income of $1.0 million, or $0.15 per diluted share, for the third quarter of fiscal 2007.
For the nine months ended June 30, 2008, net revenue totaled $53.5 million, a 63% increase over $32.9 million for the same period in fiscal 2007. Net income was $1.4 million, or $0.16 per diluted share, compared to $1.3 million, or $0.25 per diluted share, for the same period in fiscal 2007.
For the fourth quarter of fiscal 2008, Amtech anticipates revenue to be in the range of $22 to $24 million, representing growth of approximately 68% to 83% over the fiscal 2007 fourth quarter. Operating margin, as a percentage of revenue, is expected to be slightly lower in the fourth quarter compared to the third quarter of fiscal 2008 (excluding the effects of the restructuring charge), due to a heavier product mix of specialty furnace systems (R&D-type furnaces) that require higher material and labor costs, and due to higher commission rates.
For fiscal year 2008, Amtech anticipates revenue to be in the range of $75 to $77 million, representing growth of 63% to 67% over fiscal 2007.
Operating results for the fourth quarter could be impacted by the timing of system shipments, the net impact of revenue deferral on those shipments, and recognition of revenue based on customer acceptances, all of which can have a significant effect on operating results.
Amtech Systems will host a conference call and webcast today at 2:00 p.m. Pacific Time (5:00 p.m. ET) to discuss its fiscal 2008 third quarter results. Those wishing to participate in the live call should dial (800) 240-7305 and request the “Amtech” call. A replay of the call will be available for one week beginning approximately one hour after the call’s conclusion by dialing (800) 405-2236 and entering 11118369 followed by the “#” key when prompted for a code. A live and archived web cast of the conference call can be accessed from the investors section of Amtech’s website at www.amtechsystems.com or at www.mkr-group.com (under featured events).
About Amtech Systems, Inc.
Amtech Systems, Inc. manufactures capital equipment, including silicon wafer handling automation, thermal processing equipment and related consumables used in fabricating solar cells and semiconductor devices. Semiconductors, or semiconductor chips, are fabricated on silicon wafer substrates, sliced from ingots, and are part of the circuitry, or electronic components, of many products including solar cells, computers, telecommunications devices, automotive products, consumer goods, and industrial automation and control systems. The Company’s wafer handling, thermal processing and consumable products currently address the diffusion, oxidation and deposition steps used in the fabrication of solar cells, semiconductors, MEMS and the polishing of newly sliced silicon wafers.
Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of the Private Litigation Reform Act. Such statements may use words such as “proposed,” "anticipate," "believe," "estimate," "expect," "intend," "predict," "project" and similar expressions as they relate to Amtech Systems, Inc. or our management. When we make forward-looking statements, we are basing them on our management's beliefs and assumptions, using information currently available to us. Although we believe that the expectations reflected in the forward-looking statements are reasonable, these forward-looking statements are subject to risks, uncertainties and assumptions, including the risks discussed in our filings with the Securities and Exchange Commission. If one or more of these risks materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements contained in this press release reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.
Amtech Systems, Inc
Bradley C. Anderson, 480-967-5146
Chief Financial Officer
MKR Group, Inc.
Todd Kehrli or Jim Byers, 323-468-2300
Source: Amtech Systems, Inc.