ASYS - Earnings call transcript Q3 2019

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

Operator

Good afternoon, and welcome to Amtech Systems Third Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note, today’s event is being recorded.

I would now like to turn the conference over to Lisa Gibbs, Chief Financial Officer. Please go ahead, ma’am.

Lisa Gibbs

Good afternoon, and thank you for joining us for Amtech Systems third quarter fiscal year 2019 results conference call. call J.S. the on me today are With Whang, Hass, Michael Amtech’s Chairman and Whang, Officer; Robert Chief Executive Executive Chief Officer. Amtech’s Operating Executive our Vice President; and results today, After of June Amtech for the released XX, the XXXX. third trading its close ending quarter financial will earnings amtechsystems.com. release company’s at posted be That the on website

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

our J.S.? Chief Executive I will and Wang, the call now Chairman J.S. the Officer, to to turn Executive over begin discussion.

J.S. Whang

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

global the the more plan initiatives semiconductor evolving continue shift semiconductor, work focus fully opportunities on we and the to from we growing to our business in market. our As optimize our solar within to

market, a uncertainties. the are trade continued a tariff positive extended and which very perspective, semiconductor to of impact long-term. Although we From the impacted be the for weakened have by we feeling the near-term outlook

our and well-positioned drivers opportunities to continue we However, on to the This And the growth focused be sectors. The will again, factors in fueled power use carbide particularly to chip a and clear. the site and in technological role a growth carbide next is plays is the be our are semi participate mobility, critical the long-term power our especially and potential cycle, future IoT, speed expanding within fundamentals. XG, silicon silicon like But business evolution clicker. in silicon by continuously long-term of invest devices a data-driven we this performance are market both power chips. of AI, multiple world,

electric are our autonomous assisted As fully applications. more We driving increasing Undoubtedly, these opportunities. new essential eventually, foundations. products increased And growth create to expect will devices services. capable and demand position industrial for are industry ourselves vehicles, we the driving to in and the and fully evolves will and longer-term technologies automotive participate evolving factors and power

will I Mike? He Michael Whang. will Operating discuss turn operations. the now call continuing Officer, to Chief our our

Michael Whang

Thank you, J.S.

we and market the communications environment stay to customers constant efforts with our and are current, suppliers. Given in our

calendar signs at XXXX. is Although to visibility this recovery of mid in time, upturn a all limited an lead

can next the to to costs growth our responsive even in We we quick our will continue ensuring activity cycle. closely see that we monitor while at if customers, wrap a be

needed announced prudent plans our business larger investment While much being we dollars, with very Hoffman to facility. recently our a PR to move

made changes in to plan there be add move operational XXXX. begin to only are new will We in calendar our continue capacity that improve we to over and areas operate advantage next sustain and ensure efficiency position and of our in being early that facility operations Investments being of capability, position Not our on to also the we customer schedule to a participation with the need, the the made growth responsiveness. that industry from and competitive upcycle enable are to planned time. this in

to strategy will XXX-millimeter chip just furnace in the enlarged market. high-end relationship, new our significant order to to in validates power temp XXX-millimeter power our a the and technology order we growth we strengthening positive, industry chip opportunity. The its for establishes XXXX semi that long-term XXX-millimeter our top-tier subsidiary, customer in expand capitalize XXX-millimeter fiscal and and diffusion We Additionally, QX as top-tier high expected a which remains installed our leader the from the further ship return fast-growing is be another believe for a our position will outlook received segment technologies, power to market the customer. Bruce announced ready base on This order, market. currently

I will now Lisa? review turn financials. quarter third our over to the call to Lisa

Lisa Gibbs

you, Michael. Thank

Let’s now quarter of fiscal for the XXXX. year XXXX third Net the $XX.X $XX XXXX fiscal million review the and revenue in preceding our million fiscal of compared $XX.X quarter third financial results. in quarter to million third was quarter

approximately by semiconductor million revenue silicon semi We of $X.X and $X.X million carbide machine by due continue decreased prior by the by trade revenue revenue decreased to Sequentially, see conditions $X.X approximately weaker million. due LED demand, $X.X to carbide the approximately net resulting dispute. primarily Compared million. primarily economic decreased Silicon shipments. increased from revenues to to year, timing approximately the LED

quarter million includes most at backlog in quarter notably to $XX.X Unrestricted our compared Compared to June Backlog stronger At sales million Gross our primarily third fiscal were September that XX, product expected compared mix, margin higher-margin the equivalents to XX% and XXXX. gross ship backlog total due $XX to was March to XXXX. customer cash next machines. XXXX, to million our third June months. XXXX of of and orders within operations $XX.X cash at XX, are million at at year, margins quarter increased XXXX. prior the total XXXX, XX, of XX% was fiscal compared XX, XX in continuing the XX% of $XX.X the in preceding

due of in to preceding and administrative lower revenue. or quarter quarter lower in prior stock of Compared in lower the XXXX. lower expense. million to to $X.X slightly expense million compensation quarter was fiscal SG&A SG&A on $X.X to employee-related and fiscal general year, primarily commissions decreased $X.X decreased million Selling, SG&A third the expenses due the lower headcount, third Sequentially, XXXX compared and

net tax the XXXX million to the was in benefit discontinued due in primarily in quarter quarter preceding We $X.X compared the quarter operations third third in fiscal $X.X fiscal quarter income million and million of to $X.X Income tax of expense of third an in XXXX, of fiscal realized sale XXXX. or our the or in XXXX the for $X.XX $X.XX per million the share million for $X.XX $X $X operations of third per the Compared $X.X XXXX share. share and preceding fiscal quarter quarter. from or million Income was to the SoLayTec. tax of of continuing fiscal third quarter per

Now our turning outlook. to

the demand. the inherently restructuring equipment operating mid assumes weakness in industries XX, to excludes any range the million September slightly semiconductor $XX third can For the cyclical business the million. with quarter and in – of impacted September and the is in in the September to be Gross for to XX, actions. company revenue the quarter trade outlook The XX% demand, upper continued softness positive. margin market quarter industry ongoing continuing The expects dispute, of X to range, semiconductor $XX margin ending equipment soft changes be potential to impact for the in conditions result ending ending XXXX, expected by be to in XXXX, given due

impacted of the significantly press and States system exchange on semiconductor release to Amtech’s the A be from can results financial between assumed and provided results an the dollar States United positively shipments denominated orders, cause of value differ portion results this the United relation could or rate is manufacturers. to RMBs. actual The the expectations. in the the dollar Changes operating in based RMB. negatively results RMB of outlook are timing by of Additionally, in in

And Executive Vice now our to operations. Robert turn will to discontinued discuss President, I Hass,

Robert Hass

to Thank our divest business energy businesses. end the carbide the third step sale you, and continued is to Lisa. and in of key of sale SoLayTec solar business on silicon Tempress At semiconductor SoLayTec focus and the efforts the resources expectation our our quarter, announced The and first we business. of our a sell our our

with interested actively including private on sale and equity in be progress investors. to the strategic and advisers continue Tempress, of our making parties, We good engaging both engaged with discussions who are the Netherlands in

fiscal of by $X.X SoLayTec was for the which income quarter results, XXXX, income million, QX sale XXXX an operations an the million. ended $X.X June our benefit XX, of of from partially on million, loss at of offset discontinued included million, Looking $X.X tax a gain $X.X operating

our a With buyer is resources our our and segments. with from the We X continue and or the assurance of the And how profitable solar until more Tempress could of our importantly, divested, value in be finding recovering sold. reduce to we discontinued losses the direction can on of are moving fast-growing we carrying operations we devoting one are subsidiary. divestiture plan. investments to SiC/LED no the focus semiconductor divisions right There

the Now for call to operator let’s turn Operator? questions. the over

Operator

Thank Company. Instructions] comes Jeff first Cowen go today’s you. [Operator and from Please And of Osborne question ahead.

Jeff Osborne

Tempress the if not busy with Wondering multiple we’re Great. in an where with can stands update on would And us it what you negotiations parties. be? give accounting so treatment

Robert Hass

Jeff, for you, the Thank question.

A we few we and see with expressed how But information So as have Tempress. an under them. interest those in parties progress. have several of sharing negotiations are them go we NDAs, we’ll already

predicted you know, negotiations timing through and can But diligence, we’re say cannot as be midway extend final with accuracy. I’d So really maybe the process. the and due

As of loss the sale. would sale the normal accounting far on accounting assets, or liabilities as net treatment, would those – be treatment held it for gain just of

Jeff Osborne

expansion. you with any multi-quarter with like the discussions Can are it. then about a Got in or just framework Hoffman And mentioned rollout. sort talk PR people – over of you you multi-year agreements

guess, that what added I that visibility capacity. need gives the you you Just,

Michael Whang

please? you repeat question can that Jeff, again,

Jeff Osborne

discussions about Hoffman weak about any why that capacity? for asking type that Do in needs doing was a they multi-quarter, macro. might you’re And I people expansion? of Yes, PR that with such why longer-term multi-year have now you the the – have

Michael Whang

in select we the debt we participate close expect. regards strategic investments right in that customers now, with such. have cycle, to make in to down to the We’re And during all our our their planning even contact and in upturn capacity

Jeff Osborne

had. That’s Thank you. it. all Got I

Operator

next go the question today Roth Please ahead. from Capital And of Partners. Irwin comes Craig

Craig Irwin

taking Good evening, and thanks questions. for my

built, So few released east XXX-millimeter process Is of that the a further of booking you X America say, Can is couple equipment? others? I in in that’s bit order Or it kind furnace. is let’s new some of us on. you maybe Southern the is a fabs maybe the ask first Europe, going couple potentially the yesterday, this in being North bit are little just process give in chatter the the to of it’s press little that fabs than and few expansions a of a question yard about There’s color. of the want along

Michael Whang

about our the we this is great, tight-lipped been major opportunities power excited space. the always semiconductor of customers, particularly players we’ve in of we order, see very new for Craig, this Well, ahead us. customers, one And great and are

Craig Irwin

tell whether give standing going carbide legacy us So expanding new production mass new or helpful. business, us into fab looking I customer, business? the would from not you pre this Or can maybe mean, where capabilities someone silicon new we’re a any into with color fab, at can it’s a is be a silicon? you

Michael Whang

won’t silicon because This it’s be carbon XXX-millimeter.

is chip a silicon it So customer. power

now. In unfortunately, I’m exactly that liberty right this occur expansion where to not will terms of divulge at

Craig Irwin

Okay. little In was a polishing weak. business Understood. quarter, Understood. your the bit

the carbide serves multiple LED, remarks you a color, little it more give there charge? that serves, understand Or back have momentum market? customers are some to us it segments with that, the that handful amount you references applications. leading seen silicon of different of same made the that in pull macro. prepared other side the continue do bit polishing carbide serves the of Can maybe obviously, customers you I and have specifically You the on see the from silicon to been business,

Michael Whang

prepare will being momentum in of pullback, downstream, have announcements the customers, our that not expansion. catalyst the silicon seen forward. for of terms still we right? a upstream the be value then also carbide made lot to coming There deals are any chain for going So of seen We’ve

So we still good. feel

outlook still We’re industry, for about silicon power carbide still it’s the But positive immature future is an compared relatively overall. this to very evolving devices silicon.

they chain, the are are So some weight. also, prior factors we large saw inventory some some uncertainties And see years has that with seasonal adjustments of value order every There from the the volumes. we ready. getting where macro part

Craig Irwin

products bit that is favorable understood. of the about we Okay, progression then the some more of if little much And quarter. into larger fourth a of margin How talk are mix? the slightly margin attributes could of the margin of weak piece your gross guidance becoming the factoring versus macro the the really a

Lisa Gibbs

well product of an a of consumables, as mix, machines Craig, macro the can some mix I affect certainly that the the as gross combination versus which as the margin terms our of it’s of well. in weak that has impact think

combination So factors. a those it’s of

Craig Irwin

have excellent. for is to bit transaction the this Okay, final that? the by there’s where disposal, Or a be completed? marked of it And when been than Is expect little end something that assets that something will more year? potentially you would done the uncertainty be the

Robert Hass

I would say than more uncertainty that. there’s

Of course, of achieved. near-term are that targeting quickly can as uncertainty we there’s how be yes, lot as But as to possible. a

Craig Irwin

Great. questions. for Thanks, again my taking

Lisa Gibbs

Craig. you, Thank

Operator

Please Mark the Benchmark [Operator from of go Instructions] Today’s next Company. ahead. question Miller comes

Mark Miller

end stronger the or digits of it bookings quarter sequentially at year-over-year, in bookings? down in quarter? was beginning of it Or terms the the the Your in were or was weaker your X linear all double segments

Lisa Gibbs

fairly think I it’s linear.

macro of a it So lot is environment. this

timing it the orders large our Some of some as furnace of of well. is

seeing that combination we’re So there.

Mark Miller

Thank you.

Operator

question-and-answer and this conference over turn concludes And to for team remarks. management I’d ladies back the gentlemen, to our like final any the session.

Lisa Gibbs

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

Operator

now conference presentation. attending concluded. you Today’s Ma’am. you, all has thank for Thank We today’s

your You and a may lines, have wonderful day. disconnect now

Amtech Systems (ASYS) 9 Aug 192019 Q3 Earnings call transcript