Amtech Systems Inc.: Second Quarter Fiscal 2012 Results
Tempe, Arizona - Amtech Systems Inc., a global supplier of production and automation systems and related supplies for the manufacture of solar cells, semiconductors, and sapphire and silicon wafers, today reported results for its second fiscal quarter ending March 31, 2012.
Second Quarter Fiscal 2012 Financial Summary:
Net revenue of $21.6 million
Solar revenue of $10.6 million
Semi revenue of $11.0 million
Quarterly bookings of $18.0
Quarter-end backlog of $67.4 million; solar backlog $54.1 million
Gross margin of 19%
Operating loss of $6.0 million, including $2.0 million of inventory write-down and impairment charges, and $3.3 million in R&D
Net loss of $5.1 million, or $(0.54) per diluted share
Mr. Fokko Pentinga, Chief Executive Officer of Amtech, commented, "As the second quarter results validate, the demand for solar equipment continues to be slow and we remain cautious about fiscal year 2012 expectations. While we have already reduced our headcount by almost 30% from the peak, we continue to review our cost structure and will take additional steps to reduce our expenses in the coming quarters."
Pentinga continued, "We were encouraged by our order intake in the quarter, which was up 62% sequentially, driven by an increase in both solar and semiconductor orders. And due to our continued investment during this slowdown we now look forward, after a little over a year of development time, to introducing our ion implant system to customers at the SNEC PV Power Expo in Shanghai next week, along with our new tube-type batch PECVD product."
Net revenue for the second quarter of fiscal 2012 was $21.6 million, down 13% sequentially from $24.7 million for the preceding quarter, and down 65% from $61.3 million for the second quarter of fiscal 2011. The decrease was driven by lower system shipments to customers in the solar industry. Semiconductor revenue totaled $11.0 million a 36% increase from semiconductor revenue in the second quarter of fiscal 2011 and 21% higher than the semiconductor revenue in first quarter of fiscal 2012.
Total orders in the second quarter of fiscal 2012 were $18.0 million ($7.2 million solar), up 62% compared to total orders of $11.1 million ($3.1 million solar) in the preceding quarter, due primarily to selective capacity expansion plans by both solar and semiconductor customers.
At March 31, 2012, the Company's total order backlog was $67.4 million, compared to total backlog of $69.2 million at December 31, 2011. Total backlog at March 31, 2012 includes $54.0 million in solar orders and deferred revenue, compared to solar backlog of $55.8 million at December 31, 2011. The effect of foreign exchange on backlog was a positive $1.8 million in the March quarter. Backlog includes deferred revenue and customer orders that are expected to ship within the next 12 months.
Gross margin in the second quarter of fiscal 2012 was 19%, compared to 29% sequentially and 40% in the second quarter of fiscal 2011. The lower gross margin is primarily due to significantly lower capacity utilization and write-down of inventory, partially offset by recognition of previously deferred revenue. The inventory charge was $1.3 million.
Selling, general and administrative (SG&A) expenses in the second quarter of fiscal 2012 decreased to $6.0 million compared to $6.3 million in the preceding quarter and $11.2 million in the second quarter of fiscal 2011. The decrease in SG&A expenses, as compared to the second quarter of fiscal 2011 and the first quarter of fiscal 2012, was primarily due to lower commissions and shipping costs corresponding to reduced sales volumes and also reflected corporate-wide cost control initiatives.
Impairment charges of $688,000 were recorded in the second quarter of fiscal 2012 due to the write-down of certain licenses and related assets associated with the Company's PSG removal and previous in-line PECVD tools.
Research and Development expense was $3.3 million in the second quarter of fiscal 2012 compared to $2.8 million in the preceding quarter and $0.9 million in the second quarter of fiscal 2011. The year-over-year quarterly change is primarily due to investment in the Company's solar ion-implant project and development costs associated with other product and technology development programs.
Depreciation and amortization in the second quarter of fiscal 2012 was $760,000, compared to $769,000 in the first quarter of fiscal 2012.
Included in the second quarter of fiscal 2012 results is $437,000 of stock option expense, compared to $369,000 in the fiscal second quarter a year ago and $465,000 in the first quarter of 2012.
Income tax in the second quarter of fiscal 2012 was a benefit of $220,000, resulting in an effective tax rate of approximately 4%.
The net loss for the second quarter of fiscal 2012 was $5.1 million, or ($0.54) per diluted share, compared to a net loss of $0.9 million, or ($0.09) per diluted share, for the first quarter of fiscal 2012. The increased loss was primarily due to lower sales volumes, inventory write-down, impairment charges, and increased investment in research and development. Net income for the second quarter 2011 was $7.5 million, or $0.77 per diluted share.
Total cash and cash equivalents at March 31, 2012 were $48.8 million, compared to $54.9 million at December 31, 2011 and $67.4 million at September 30, 2011.
The supply/demand imbalance for solar cells and modules continues to negatively impact the entire solar supply chain. As a result, the Company expects revenues in its fiscal 2012 third quarter ending June 30, 2012 to be in the range of $18 - $20 million. Gross margins are expected to be in line with or slightly higher than the second quarter of fiscal of 2012. Research and development expenses are expected to be significantly higher in the June quarter compared to the March quarter due primarily to the build of the beta version of the company's solar ion implant system. As a result, Amtech expects to incur a net loss in the third quarter.
Operating results 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.
A substantial portion of Amtech's revenues are denominated in Euros. The revenue outlook provided in this press release is based on an assumed exchange rate between the United States Dollar and the Euro. A significant decrease in the value of the Euro in relation to the United States Dollar could cause actual revenues to be lower than anticipated.
The Company continues to invest in next generation solar technologies while also evaluating opportunities to further diversity its business mix in solar or non-solar technologies.
Amtech Systems will host a conference call and webcast today at 5:00pm ET to discuss second quarter fiscal 2012 financial results. Those in the USA wishing to participate in the live call should dial (877) 317-6789. From Canada, dial (866)-605-3852, and internationally, dial (412) 317-6789. Request "Amtech" when connected to the operator. A replay of the call will be available one hour after the end of the conference through May 18. To access the replay please dial US toll free (877) 344-7529 and enter code 10013678. Internationally, dial (412) 317-0088 and use the same code. A live and archived web cast 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. manufactures capital equipment, including silicon wafer handling automation, thermal processing equipment and related consumables used in fabricating solar cells, LED 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, LEDs, semiconductors, MEMS and the polishing of newly sliced silicon wafers.
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 ("the Company" or "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). In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "would," "expects," "plans," "anticipates," "intends," "believes," "estimates," "predicts," "potential," "continue," or the negative of these terms or other comparable terminology. Examples of forward-looking statements include statements regarding Amtech's future financial results, operating results, business strategies, projected costs, products under development, competitive positions and plans and objectives of the Company and its management for future operations.
We cannot guarantee that any forward-looking statement will be realized, although we believe that the expectations reflected in the forward-looking statements are reasonable. Achievement of future results is subject to risks, uncertainties and potentially inaccurate assumptions. The Form 10-K that we filed with the Securities and Exchange Commission for the year-ended September 30, 2011 listed various important factors that could affect Amtech'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.
Bradley C. Anderson
Chief Financial Officer
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shares issued and outstanding: 9,479,007 and 9,431,393
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