Mail Stop 6010
September 19, 2005
Jong S. Whang
Chairman of the Board, President and Chief Executive Officer
Amtech Systems, Inc.
131 South Clark Drive
Tempe, AZ 85281
Re: Amtech Systems, Inc.
Form 10-K for the fiscal year ended September 30, 2004
Form 8-K dated September 27, 2004
Response letter dated July 21, 2005
File No. 0-11412
Dear Mr. Whang:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-K or the Fiscal Year Ended September 30, 2004
Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies, page 41
Revenue Recognition, page 41
1. We note your response to prior comment 17 in our letter dated
June
30, 2005. You explain that the gross margin of deferred items has
significantly increased because it is related to "holdbacks," i.e.
payments contingent upon the completion of installation and
acceptance. We see that deferred gross margin is 100% at March
31,
2005 and decreases to 40% at June 30, 2004. Please explain the
circumstances contributing to the decrease in deferred gross
margin.
Clarify why you would not defer a consistent amount of revenue and
costs for sales that have not met the revenue recognition
criteria.
Clarify how you determine the amount of product costs to be
deferred
for the holdback related to products that have not been accepted
by
the customer. Future filings should also clearly disclose the
underlying reasons for changes in the amount of revenue and costs
deferred.
Controls and Procedures, page 57
2. We note your responses to prior comments 23, 26 and 27. Please
file the amendments to your Form 10-K, as well as your Form 10-Q
for
the quarter ended December 31, 2004, as requested.
Form 8-K dated September 27, 2004
Unaudited Pro Forma Condensed Combined Financial Information
3. We note your response to prior comment 22 and 29 in our letter
dated June 30, 2005 that you will account for contingent payments
made for inventory in excess of the amount originally paid to the
seller similar to any other inventory purchase. It appears, based
upon the guidance in paragraph 37(c) of SFAS 141, that inventory
should be recorded initially at estimated selling prices. Tell us
how you originally valued the inventory acquired and whether the
acquired inventory was originally recorded at fair value.
Additionally, contingent payments should be recorded as additional
cost of the acquired entity. Refer to paragraph 27 of SFAS 141.
Please support your accounting basis for recording contingent
payments as inventory rather than additional purchase price.
* * *
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested information. Detailed cover letters
greatly
facilitate our review. Please understand that we may have
additional
comments after reviewing your amendment and responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Kristin Lochhead at 202.551.3664 or Brian
Cascio at 202.551.3676 if you have questions regarding comments on
the financial statements and related matters. Please contact
Adelaja
Heyliger at 202.551.3636 or me at 202.551.3625 with any other
questions.
Sincerely,
Mary Beth Breslin
Attorney-Advisor
Jong S. Whang
Amtech Systems, Inc.
September 19, 2005
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