ASYS - Earnings call transcript Q2 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Amtech Systems Second Quarter 2019 Earnings Conference Call. 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 Lisa Gibbs, Chief Financial Officer. ahead. go Please

Lisa Gibbs

Executive thank Second and With joining for Vice Whang, us on Robert Executive Good Amtech's Hass, Fiscal you Year Systems Executive Amtech's J.S. are Quarter call Call. and XXXX Amtech Chief the Officer; afternoon, today for Chairman on Results me President; will XX, financial company's the the results the of and second Chief be XXXX. today, amtechsystems.com. trading quarter After Whang, Officer. our March That for release earnings Amtech posted Michael ending at site Operating close released Web Conference its

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

J.S. Whang

are on as The joining SoLaytec resources operations carbide to Executive all intent solar Robert for Tempress later emerging focus In provide business majority and and and last we our now month, our divest you details. further April, reported Thank and to of semi our our business announced and today. call our silicon power including results discontinued our call Haas, just this Lisa. will VP opportunities. attention the financial segment you, Thank solar of our on

and Amtech As organic to to begun for as to data. emerging big devices capitalize and Amtech technology silicon by used we power such artificial the have mobility, demand believe in look on well segment is future. we there carbide many industrial believe future based grow former We for growing carbide XG on electrical consumer competency our in new and and growth core LED Group, profitable and plan and our executing and opportunities polishing intelligence exciting inorganic silicon semi in substrate both IoT, vehicles processing. substrate are automotive and We this positioned Amtech's sensors, driven

market consists and over product COO, turn timely enhance having customers within. the innovations pace involvement external growth. now to Our keep to the strategy the further to and he will capitalize of on our will progress Mike? call our opportunities Mike, discuss I with needs

Mike Whang

Thank you, J.S.

continue softness results continued the with The to impacted primarily from of trade uncertainties market the and we are effects in our success. Asia tariffs. especially softer from U.S. quarter where semiconductor operating find are the pleased We currently second by tempers market given related a that robustness we

remain industry growth will remain growth. a term, are fundamentals our the for impact trade forecasting this calendar we to year industry XXXX. and negatively Nevertheless, longer if well negotiation customers' in estimates long-term in uncertainties strong positioned the However, rebound current participate

flow and through culture innovations. to positive chip and cash and packaging relentless customer continues generate product includes Our core semiconductor businesses margins service good which SMT

confident our substrate power XXX-millimeter and The Our strong performance industry good we business are high be enjoy contributor meet across in RF to will power growth growing semiconductor industry continues growing to the chip recognition. compound chip brand device business and multiple fabrication verticals. a chip industry

technical the addition providing taken demands and to opportunities. capacity we In evolving expanding new to the solutions customers, reach inroads sales that include are have marketing compound of customers and in to our existing new steps to and implementing into ever new order making semiconductor initiatives growing

our also We internal current are to polishing to of meet capabilities as our segment as future LED strengthening adding capacity customers. silicon our needs carbide and well

maintain profitable to position drive long-term. position to existing and productivity believe and working a customers. constantly innovation grow the to efficiency are new We us and customer operational best our service, with Amtech goal our in growth our relentless and over to competencies with We leverage to improve strengths core our

opportunities our long-term about enthusiastic are We for growth.

objective to and organic power markets. growth areas investments the fastest the to make Our of RF support in growing is chip

second present Our capabilities cash to our turn quarter Lisa? results. silicon enhance now, and flow. will with drive silicon growth to the to Lisa and carbide opportunities financial further I review And

Lisa Gibbs

Thank you, Mike.

customer the primarily while by to year, approximately due $X.X to to primarily $X.X $X.X market, second compared by XXXX to the in did net compared million expenses of in revenue LED XXXX. cash our compared includes Backlog Silicon the of products XXXX. expense million of quarter fiscal and of quarter. XXXX. at due for Research quarter was preceding second of that of equivalents quarter quarter XX, in Net of decreased year, SGA, the semiconductor million notably of customer. revenue X.X Sequentially, $XX.X $X.X operations the decreased China or the of in March compared $X due quarter XXXX. in increased review general quarter Restructuring in of initial was in and solar fiscal engineering mix reflects primarily $XX.X Sequentially orders and professional fiscal continuing continuing second XX% $X.XX margin $X.X second $X.X was slightly cash consumables quarters $X.X XXXX, $X.X $X.X the in in continuing of Let's net the million fiscal expense in of and XX, expense was quarter machine million per was to the quarter semi XXXX preceding expected $XX.X March $X.X from to quarter the restructuring due quarter million Sequentially share the and XXXX SG&A million of the the our and the times most second in in fiscal fees. September the per quarter expense silicon expense second at quarter. our approximately million second $X.X $XX.X the and preceding $XX XXXX to and in in of At XXXX prior Income weakness are our shorter carbide operations fiscal XX, share million increased carbide have second primarily quarter decreased revenue orders tax the and of the $XX.X lower to million of of million was to second compared in backlog approximately of December or million in second at fiscal The sales $X.X quarter XXXX. million year compared fiscal sold We the operations, Income within development prior headcount, sales. million second the XXXX, fiscal to million in revenue second share fiscal the $X.X backlog each to for Unrestricted not quarter and of million second any product preceding year fiscal employee-related quarter results. million and million second in million quarter the XX, $X.XX million or to gross prior fiscal compared now and revenue Compared margins fiscal million quarter at one were and of XX% preceding by fiscal due and XXXX. million $X.X of XXXX. XXXX million backlog of was to schedules $X.X per primarily previous XXXX. quarter to from XXXX. and to in XXXX million preceding type XX% volume and the $X.XX Gross quarter lead financial XXXX due was quarter-to-quarter to delivery compared in fiscal decreased when $XX.X cancellation preceding risk XXXX variability $X.X tax ship quarter second decreased orders. to quarter higher approximately or of next Selling, XX nature fiscal compared lower and LED that primarily and million by second compared compared quarter. the administrative equipment consumable composition the months. to for included in to

Now turning to outlook. our

be cyclical ending softness in digits. low-single the $XX equipment in quarter company in operating the XX, The be can the semiconductor expected industry result ending XX% June the impacted to with XX, June inherently million. revenue the changes the to in the mid is equipment by and continuing semiconductor margin XXXX upper industries market range $XX be to range quarter million in to in Gross to margin For of XXXX, expects in demand.

be between the I release revenue denominated to the United RMBs. discontinued manufacturers. revenues revenue Additionally, on now, the could based our to relation A is of operating States United in rate to the decrease Vice than cause Robert financial or results an outlook shipments exchange operations. to value A impacted turn in be Hass, this timing portion and significantly dollar RMB of orders, substantial discuss of are negatively States Dollar by semiconductor RMB. in press the results Executive anticipated. can positively provided President significant our the of actual will system And the assumed The Amtech's and in lower

Robert Hass

Thank Lisa. you,

such owners good March was was Now million of the as committed approximately to believe loss of costs which Tempress restructuring costs. fit a discontinued a brief the write-offs future new operations. investing to severance be XXXX, provide for on of will and We SoLaytec operations in inventory I The and other quarter due and ended receivables, $X million from one-time solar. XX, for update will the the discontinued $X.X

and We complete advise divestiture of a expect a by Oakland's discontinued sale. in is carrying from [BB] to located end the Under hope any the cap quarterly small these calendar buyer the be the advisory divestiture [ph] to divestiture no excluding and this completed, subsidiaries. sale assurance losses have SoLaytec of we or the There on -- us operations of of can engaged much value Tempress the year. of Netherlands until results recovering lower the finding

through growth those serving products and markets. expanding More importantly, segments we our both look best businesses forward the and profitable or growing of semiconductor to organic SiC/LED acquisition

call section. Now Operator? Q&A for over turn the operator let's the to the

Operator

Thank you.

today question ahead. first We begin will Our the Company. and session. Cowen come Osborne Please now from go question-and-answer Jeff will Instructions] [Operator of

Jeff Osborne

Hey, more the guys. or that of model sort with god what what end, carbide mixes questions my razor you talk maybe market, the revenue in of recurring of about Can afternoon versus Couple broadly silicon silicon of LED talk carbide? the particular? can on you blade segment upfront about and the on

Mike Whang

Good growth revenue same is growing morning, I understand, rate. What Jeff. carbide the is of is at going projection this is kidding. of industry continue say silicon forecasted don't at words, lot to industry the a the There segments specific can rate, component and is the forward I that

Jeff Osborne

talking of Got days capital, to about nature it. much revenue of to you've nature of segment just -- more a a to your though dollars expansions. how stream had billion bias recurring tied facility sense a that upfront versus revenue of recurring the is of adding get recent Is in in people versus trying CapEx, there I'm recent a

page the same very growing itself is I think the we're at quickly? on market both

Mike Whang

it side to CapEx So on little I CapEx would tick as in more reoccurring an terms revenue revenue of mix, there bit versus well. streams although say is customer tilted up a the

strategy and our we're from digesting that expansions customers reacting also that what plant news capabilities forward. field billion other going accordingly you and the the revamping internal and our equipment, marketing still capacity So, and and including in dollar sales and from we're investment mentioned where

Jeff Osborne

I then you a your and just in mentioned rid in there's that Makes around or and about what automation. it, prepared piece all exposure release XX-Q selling through bulk XX-Q, but that J.S.'s the of, but sure is the rid you of exactly automation, still solar sense. just the of remarks talk specifically not is? that like new getting monetize there's some looks were And and it it the to looking reading getting segment wasn't of Can to he solar for what

Robert Hass

are largest piece, was the of course, side. segment And semi part right. market. Tempress which number was so The it automation solar past and strategy But RXD, new the been if solar to Yes. it's into on I it both and the and mean at provided the SoLaytec of you're during we see our years is has fits to composed focus Robert. This the its not sale. of the of solar which looking

Jeff Osborne

Got to to given what specifically it RMB just is. XX the other of a revenue your think you quarter it of like it. around XX, here it And that talk trade is the safe That -- RMB find makes about, trying in revenue in exposure can I'm looks R the understand any XX-ish sense. RMB next hours going less or China. Lisa six I'm the was also than months then, to segments mentioned quickly or trying in with the your percent just the to and in first Is assumption just business affiliated Taiwan a I talks. what's on

Robert Hass

China So largely in RMB, BTU, operations business in but China sell are dollars. production its has of what our of and its most backend some of costs our part U.S. in which RMB, was are is sales does in it the that so -- part this

Jeff Osborne

it. Got

So percentage Y and a is that to way exposed that of of exposed X percent RMB is sort revenue is your goods dump of cost there no? down or RMB of

Robert Hass

it granularly. We down break don't that

Jeff Osborne

Got it.

you Okay. word you had is, the -- And last talk I the in then, about organic. question can acquisition used just

around the in is prepared over about sort which the just something kind semiconductors in Can that interest strategy the of several sense? head or three there, makes you talk pipeline past I pursuing think acquisitions? the you've two what waves of silicon actively years, Is in times that remarks. you're carbide of with new

J.S. Whang

Hi, our strategy. part lot a opportunities. pay Jeff. those It's And we opportunities growth external of always to J.S. Amtech's capitalizing on Acquisition important -- attention is

a we time. is it's any not continuing, effort our pipeline information that So, given a share in

Jeff Osborne

Thank you. good. Very Understand.

Mike Whang

Jeff. it, Appreciate

J.S. Whang

Thank you, Jeff.

Operator

question Greenleaf will [Operator Instructions] go next Please [indiscernible] ahead. Our Management. of come from

Unidentified Analyst

sales report In and XX-K have very brief and if marketing your brief on memory X, a correctly, me your really of serves have you you Page programs is very description and it sales have force? particular do on so, not sales questions presently My an organization past. in addressed the are, of if group? that you staff what the And size a is in-house

Mike Whang

work large network. force sales also and do opportunities. we functions then a to and agent and of global extensive agent and main new is the have We our global sales have internal very force opportunities Yes. internal The customer network with our manage to secure

Unidentified Analyst

for you Well, person can responsible and sales you managing say distributors interactions the the that that S&M and overseeing who and your customers stated? does various is reps the with independent daily programs and person have

Mike Whang

own of and that's force with our along So, a their managers agents. responsibility myself the shared Each divisions. J.S. sales at them have internal between sales and

on and we frequent existing sales whether direct Now customer in customers other very it do daily, new trade our shows but and frequently networking terms I interaction, of with opportunities. opportunities. wouldn't say very it's interact calls,

Unidentified Analyst

it. Okay. much. Thanks Appreciate very

Operator

come next of from Thank Company. ahead. will Mark Benchmark Please Miller question The go you. The

Mark Miller

your automation and are segment it's segment it its looks for your et that are for increase keep or I cetera? indicated been loss to some like that operating try segment, just You what RXD, you wondering sales a it to going time was included plans

Mike Whang

Yes.

concerned are as see about stages not. to or are. So, a Certainly, we're of it's you evaluating But that situation. the middle that we're we the definitely fit evaluating in losses if

Mark Miller

does What besides else provide products equipment solar it for?

Mike Whang

automation other automation [ph] provides fabs and well as semiconductor for like products -- also products. It [sorters]

quite of sophisticated. Some advanced, quite them

Mark Miller

Thank you.

Operator

ahead. is Osborne Please next Cowen Company. question The Jeff from of a go follow-up and

Jeff Osborne

should about of the any the trying look sense there Hi, items just what Very quickly, Is rate segments do the the at operations as and moving up. run going A in throughout Thanks we kind forward. expenses around rate reporting run of now. a pieces a or is year. discontinued just you I'm lot different get the think good follow quarter of not. what one-time you reported letting expansion to the recent just excluding me for guys. OpEx of

Lisa Gibbs

fairly this are quarter internal for right we'll think as it's update and for to a I now I made is our projections. But good like run Jeff, good we investments we're make at we decisions a rate run mentioned now, think would where looking right as rate.

Jeff Osborne

any sold? there piece. sale the be is anything it Is either discontinued should relates then, with we there And to to need be of taxes as it for or that aware assets

Lisa Gibbs

tax to complex going fairly probably It's situation. be a

advisors complex. be our closely But, it. don't But on to we will it working have we're further with So, enough on it. information say

Jeff Osborne

Got it. you. I all have. Thank That's

Lisa Gibbs

you. Thank

Operator

this conclude time, Lisa for over our turn session. This any like conference the question-and-answer Gibbs will I'd back remarks. At to [Operator closing Instructions] to

Lisa Gibbs

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

Operator

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

lines. now your disconnect may You

Amtech Systems (ASYS) 9 May 192019 Q2 Earnings call transcript