ASYS - Earnings call transcript Q1 2019

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Operator

Greetings. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mr. Financial Chief Amtech’s Hass, Officer. Robert Please go ahead.

Robert Hass

operator. us for you, Conference Good Fiscal afternoon, joining for Call. you thank Amtech Results and XXXX Thank Systems Quarter First

and Whang, call and of President myself financial Accounting Amtech’s today, and results Information Chief Financial the Systems Officer. the are Vice the Amtech and Operations Hass, Michael J.S. Robert released Risk Lisa December On Vice trading its Executive our posted on ending today earnings Global President and quarter Chairman Officer; at the Officer; CEO; Chief Vice Amtech’s President That and Whang, Chief company’s release Amtech Gibbs, for be close first After XXXX. website of XX, amtechsystems.com. will and

such expectations. turn Chairman J.S.? During materially begin Executive statements over as J.S. today’s are demand future and and performance differ risks. equity change are sanctions; of the to discussion. trade These customers forward-looking the factors in competitors; forward-looking to those and filings, effect will and to information of overall Exchange XX-Q. products; the including not and this solar the call initiatives based Commission of update current results in actual conditions, detailed conditions, could the our to materially markets; statements. Securities now guarantee the call XX-K actual our important including Other volatility changing assume us our Executive and Forms economic Officer, available market differ and and on any and our the effect for government-funded management are worldwide risk Form I political Whang, including and credit will market acceptance from to Chief changes results no from All are in statements the and a statements. which cause factors, statements we used Among date forward-looking obligation such make our by technologies could in the forward-looking of

J.S. Whang

our Thank today. you, Robert. joining you for Thank call

the well current I reference this as our we our year-end take This were One serve review review mentioned we our I two-fold. the As of time, the determine look today’s review business. business during comprehensive within discussion, call a opportunities. begin and our XXXX on At solar markets, now is at is to follow The how detailed up undergo challenges. way in that position our of November. purpose a is address them, that forward we our to I on to to we about made like to fiscal

as SiC/LED fiscal best our resources value in updating to The and we in Amtech semi company thus Group greater assessment – determine $XX forward long-terms. semi other and our One the deliver is the growth review progresses. on XXXX in result how and million and revenue near operating in million expand and provide explore to effort to $XX that conclusions look Therefore, that indicates as of best markets the profit you longer-terms. our we increase of than combined our strongly to for will segment. further announcing our profitable to SiC/LED business far position produced and our We the our over

XXXX fiscal discuss Now, business Michael? Michael will our QX performance. segment

Michael Whang

Thank you, J. S.

continuous products. million delivered and well. support income first demand SiC/LED our for quarter team The $X.X are market as end doing user semi Our operating businesses of

and flow. packaging very SMT chip attractive core Our generates cash business

the overall high We’ve perform business meet portions line gallium devices in of value can to to to looks will deliver and fully recognized growth industry nitride our good the Our as see and in enhancing chip growth growth with carbide that performance chip business substrate opportunities profitable likely power fabrication market business to continues chip our that merging seek profits specifications. is semiconductor silicon the improved industry.

However, a to ahead the as related broader the outperform this SiC we power external us and and semi-market semi-business the growth growth to our very look innovation strong devices of potential these have implementation very cash a offerings, the such confident can and our future. significantly opportunities that that pursue ongoing capture believe opportunities of and that exciting product deliver through We select growth. pieces profitable we are extend flow, present

marketplace. results quarter first and business the financial seeing business in our However, we reflect bookings segment the segment are difficulties solar

that with As of announced as respect to we government’s changing Chinese we a operating in the strategy production policy to are new have in investment equipment. their solar prior competition cell local highly competitive year, the May last solar. market for calls, mentioned environment government outlining challenge, dominate Adding in largest Chinese the

we terminated look continue We have part advanced review. important of contract XXXX, our the One challenge regarding of our part. solutions that longer-term updating Phase of their you were as by notified the fit we about for next to our following customer on business, we the feedback expect this expectations fault and in we foreseeable solar once for investment technology months that short Given update December business this completed phase had our more our by due review, turnkey best how forward other determine are II to solar our our if in. to regarding and turnkey no been of future from to customers plans seeking customer,

of equipment. is we a of the installation contract settlement integration our the not will Final review. As result, perform under and final

I decision. call over to financial first to further our Robert? results. prior And this to factors quarter We nothing from now, have expectations, change the Robert review assume the the to to explain turn we contributed but macro will add this change

Robert Hass

Michael. you, Thank

first down revenue was the in the Sequentially revenue revenue revenue quarter million, net year. and due and of we fiscal year for of $XX.X this XXXX solar results. million equipment the decreased turnkey project the Fiscal solar quarter million the XXXX as order. quarter our quarter announced Net review in first higher by of now began prior shipments semi offset preceding Compared year, compared previously the quarter financial primarily shipments fiscal than Let’s $XX.X more fiscal first of $XX.X to to for was in SiC/LED first was which the the for slightly, no XXXX. for to TopGun

semiconductor Our also not $XX.X the increased compared customers. expect semiconductor Gross XXXX, affected quarter that was in semi industry Unrestricted of solar million proportion greater customer XX, recognition $XX of compared million and quarter Sequentially December SG&A XX, and to primarily of Because by first based cash our $X.XX higher year freight a in year quarter, a year, at our prior net incurred deferred nature of and September increased legal commissions, due $X.X and restructuring commencement profit the in to administrative first for project. $X.X this the in to compares XXXX of have At the cyclical revenue as XX%, from first and with backlog compared of million by total compared million and $X were efforts shipments quarter-to-quarter to expense solar shipments $X.X to to margins per related of due first of share, future December XXXX, order XXXX and expense the to Research, other of orders of $XX.X quarter cash to $X.X million segment. of do termination quarter and last $X due in quarter known XXXX and solar The to million, administrative in quarter turnkey segment. the XX, XXXX, fiscal XXXX. decreased of impairment Phase segment that the was loss quarter million, We for established income fiscal loss the expenses net loss turnkey was due compared including in first quarter diluted Selling, and was Phase preceding Income the our the $XX.X the related quarter deferred primarily $X.X coming fiscal to of schedules $X.X and fiscal I quarter first XXXX. to segments gross general and margin per $XX.X XXXX fiscal in million. fiscal XXXX, of the Mike the in SiC/LED quarter solar fourth to turnkey did we installation quarter first to quarter. expenses, compared first equivalence SiC/LED fiscal fiscal our the semi the Backlog of orders the to delivery noncash XX and and to and quarter prior million primarily to variability XXXX. that deferred segment, XX% and of backlog the million within experience one expecting expense million XXXX are shipments, million was compared quarter the to million otherwise SiC/LED and $X.X At of to and SG&A related of engineering in on the at $X.XX prior quarter includes first quarter in quarter $X.X was personnel of previously timing of any have of or higher cost, by per the to XX% development, $X and related preceding million, XXXX. fiscal margin on in fiscal $X.X and fiscal continued revenue share the months. backlog preceding the the $XX.X the fourth Sequentially million year. XXXX fiscal $X.X II, restructuring the and segment. order fiscal in $XX.X discussed, of preceding first we first first project. have SG&A preceding million, $X.XX incur for this million II of and backlog to equipment charge September or solar in expense because coming not increased the [but semi That segment and or are million of fiscal the first was revenue relating in of in turnkey the next XXXX $XX.X the of solar the backlog million of ship the from of the million, in XX.X of segments XXXX. removed in expense Phase in XX, no] expenses the in quarter million primarily the any was this million orders tax the of year, shipment share Restructuring the fiscal our project. Net XXXX. compared from

XX, March mid-to-upper revenue The Gross the Now quarter for of to the in quarter the due be to our XXXX continuing XXXX expected faced $XX margin cyclical the turn margin XX, $XX is solar and outlook. semiconductor by headwinds let’s industries for company the March be to ending million. impacted range to expects our ending demand. to negative, changes with be The in operating XX% by inherently in can markets equipment segment. range million solar

orders, cause the positively is on RMB’s. semiconductor an of can based of the results revenues impact section. value or for to I call be between operating the Amtech’s and euro significant by The system will U.S. be of than revenues in dollar the the dollar financial revenue now over Additionally, customer of The RMBs. rate are portion timing and shipments the shipments, and Q&A the substantial anticipated. the cost acceptances. the outlook A in the the net recognition euros negatively here and decrease and of RMB cell to deferral manufacturers. turn provided significantly in lower could U.S. A operator revenue impacted and of and relationship semi on results denominated to based on solar exchange solar assumed euro revenue

Operator

first The [indiscernible] with Please Instructions] Cowen. comes go question [Operator Christopher ahead. from

Unidentified Analyst

taking my for thanks Hi, question.

life idea semi-conductor of picture customer, And bigger year, an end you customer, for would product? can’t of give understand of that’s be name market the is then able and First you of XX% a sales you that’s looking us to regarding to how for the equipment and what a silicon idea provide carbide question much if kind silicon fiscal on an can the the XXXX, but year carbide related from standpoint, backlog the that? if

Robert Hass

can't mention the obviously We name.

anticipate is semiconductor. and will forecast from in challenges XXXX We to forward-looking trade factors due in but U.S. China wars. slowdown existing Our our the positive, be headwinds macro a there

LED However, polishing growth we some are continued carbide broader seeing in of headwinds silicon tempers the our from semi market. that segment those

Michael Whang

business. We semiconductor, is tell can that also our fabrication, you part chip in customer which that our of of part is our

Unidentified Analyst

few next that And expenses over like helpful. looking that’s then the operating from trend can going you and be kind the going is standpoint? quarters, some to cadence Okay, of at provide where

Robert Hass

We change. don't a of see lot

consider flat. that relatively I’d So,

Unidentified Analyst

far there right as complement and your are potential might guys looking M&A to Okay to areas of at interesting are then diversify, you as specific further be the that portfolio? kind thinking now

J.S. Whang

have Ongoing to we to put basis, don't our name point. share at a continue this want We specific Yes. into that that. we effort

will We are SiC more in part. chain emerging chip interesting value be in newly interested silicon opportunities power our

Unidentified Analyst

I’ll hop queue. Thanks. in the that. Appreciate

J.S. Whang

you. Thank

Operator

question next Craig Capital The ahead. Partners. from ROTH with comes Please Irwin go

Craig Irwin

evening, Good taking questions. for and my thanks

from expect out your a carbide what’s of would than strength margin you have semi of fiscal you maybe talk one-time? coming gross better expected quarter. quite would continue and XXXX? bit guidance course clearly would there. to you So, the over and call silicon a you can about the there LED this What’s performance into came this was And little Is than that going the stronger working side anything as bit it house,

Robert Hass

had So, happened segments greater we turnkey our our business, Those not segment. have did what proportion and revenues greater those overall quarter they margins two were this proportion. solar any of have from revenue, a quarter this was, always higher as were a

Craig Irwin

Understood.

can my that to you share charges drive now. LED for a you carbide question is quarter. Can profitable, that income about suggest that net solar to is the you plan the in are where us side? I solar obviously $X.X silicon that the $X it power the on per you know both businesses, if business we maybe restructuring if the second update the just that roughly nicely semi’s quarter contribution earnings last losses you from know, reduce out cash zero You on on the and businesses, took the down have million us, those for this So, at in operating look and get we broke

fully can that to recently said to be needs by savings quantify net anything to implemented to with a X, the us be them April You’ve neutral expect you but it contribution? effective that maybe approximate fully of there is for sort or get done and you business back this else

J.S. Whang

comprehensive we going end rather review was indicated and as we Yes, earlier, turnkey our are that informed at we of the business terminated through also also solar our December. business last

turnkey processor look to at give cost now the with Phase and we X that will we installation close associated need the perform. So, very start don't

decide will So currently the clearly will implementing. that require the restructuring plan we’re restructuring, that for

Craig Irwin

silicon question the Thank you for may, that. I of My last character semi growth if is character, and about Polishing businesses. your carbide/LED the

we over So, in to XX% typically the of last couple of grown if backwards range have look the years XX%. these

the businesses next in there faster. in carbide to upper Sometimes silicon several course acceleration industry sort your when the expansion growth rate, of announcements of in rate tempo the today historic is an over out quarter? look on it capacity bound we these at expect even of you the seems that of the of particular would growth And be the

Michael Whang

is Craig, this Hi, Mike.

our that’s best hope. While

challenges semi of a SiC/LED we’ve calendar and of least probably facing very more At bit if our than we all the Given But over softer be not the are right historically. remainder business see that. to seen that even for all units than little growth now. going longer-term, the we we're year, that the indications close have macro will

Craig Irwin

the back I’ll performance strong on hop congratulations That’s encouraging, the queue. in really this quarter.

Robert Hass

Thank you.

Operator

from ahead. Benchmark. Please next The comes with question [Operator Instructions] Mark go Miller

Mark Miller

inventory were you any Just order, had termination deliver work of preplanned we for or equipment talk that to there the in write-offs that scheduled or is for going to about some because that? any see bought? the Are wanted because to the of any you anything impact, inventory you turnkey

Robert Hass

our So, we and when same taking inventory inventory, this shipments and the shipments quarter, past we’ve did consistently our both and unit account used every the investigate analyzed take unit and quarter. we appropriate, methodology into same results expected

Mark Miller

can carbide, XG in is through XG? wonder silicon opportunity if give mentioned little you coming a You the more specifically us color opportunity, that is about an

Michael Whang

XG going in forward. unit, change broader a sector look an where XG IoT, from consumer that at just carbide but unit participates our upcoming whether silicon is participate and we from going RF growing and power the bigdata AI If devices, evolution there to also our the will chip not driving, increased only autonomous that’s semi

Mark Miller

You at this you quarter? flat some mentioned expenses to legal SG&A are yet had expenses shouldn’t OpEx, but somewhat the prior legal lower quarter, see for because SG&A those going be you the not

Robert Hass

that, installation And of reorganization. the some and would so of having but the go Well to another the involve into without would we of on but be initially near-term phase yes, SG&A project, flat. the as size expect severance, perform in could we be eventually depending expect to we after will now to down, that quarters going that, integration reviewing turnkey we it stated

Mark Miller

Thank you.

Operator

question-and-answer This over any closing for turn I back to would session. like Hass concludes remarks. our the conference to Robert

Robert Hass

Thank for Amtech. you time your today's your and This for call. concludes interest today in

Operator

The for now presentation. you today's attending Thank is concluded. conference

may You disconnect. now

Amtech Systems (ASYS) 7 Feb 192019 Q1 Earnings call transcript