Earnings call transcript Q3 2023

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Operator

Good day and welcome to the Amtech Systems Third Quarter Fiscal 2023 Earnings Conference Call. Please note that this event is being recorded.

I would now like to turn the call over to Erica Mannion of Sapphire Investor Relations. Please go ahead.

Erica Mannion

Good afternoon and thank you for joining us for Amtech Systems' fiscal third quarter 2023 conference call. and the Lisa Bob and Gibbs, Vice of on Chief Chairman Paul today President Officer; Executive Chief Sales me call Daigle, are and Lancaster, With Service. Customer Financial Officer;

fiscal the market of Investors earnings its for XXXX. Amtech After at third posted www.amtechsystems.com close of on today, quarter is section. website financial released results the company's release the The in

our like Harbor covers I'd begin, to and disclaimer this our we that Safe remind Before the filings in public call webcast. everyone

the assumptions to of not statements uncertainties our today's are in be call will during within which Some of contained but posted comments of made corporate that our the to website. contain including all section SEC limited those forward-looking risks and to subject filings are and Investors

update forward-looking obligation The statements. no company assumes any such to

differ cautioned future are as only a today. You on reliance to and undue performance which actual from guarantee not forward-looking are speak statements could These materially not of current statements expectations. of place results

and January supply our pandemic, we acquired overall conditions COVID-XX which labor -- logistics, of of acquisition the chain the allocation the important the political market changes ongoing the demand volatility products; which are the of including XXXX. to the credit changing worldwide and results of including customers statements forward-looking equity those the to and actual Inc., challenges, market in ability risks, materially and and cause from and effect used competitors; credit in differ economic change in effectively by for Entrepix acceptance markets plans, and sections, in Among worldwide conditions trade effect technologies our capital could factors the integrate

XX-K XX-Q. our are our including and factors detailed SEC filings risk Other Form in Form

third will be Additionally in financial the measures to referring as financial conference results. discuss we call, quarter non-GAAP today's we

the included find a GAAP our these issued in reconciliation non-GAAP of to release press results measures actual You'll today.

Executive new now Bob over to Officer, the Daigle. call I Amtech's turn Chief will

Bob Daigle

to and everyone Lisa. before I'd turn thank our some a myself introduce and quarterly afternoon and you minutes and you the conference to joining call. thoughts take share Paul to of like good Thank over for call I couple

spent electronic variety $X senior materials Rogers where the publicly-traded a I at of Corporation billion years a company executive over I industry held XX in primarily positions.

Rogers a profitable business and I power semiconductor at building focus industry businesses materials wireless my interconnects. led and packaging focused tenure business My supported was during electronics circuit the that and a on

foundation while gaps new profitability companies trends The secular growing focusing markets all growth on products acquiring for with investment. margins and introducing and capabilities, to on close included to technologies these strong return drive businesses for and and

During on company to Board, my years the has apparent that promise. it's two tremendous me become Amtech the

to have great products on several secular extremely capitalize and We are trends. well-positioned

to to ability The benefit both wide market semiconductors for efficiency growth battery will drive carbide electric array vehicle Over due electronic costs. silicon power their down carbide will time, a also applications. of silicon improve and drive semiconductors

experience to the Within semiconductor the will applications processors the needed intelligence And in market, years. coming AI advanced need will explosive high-performance support broader growth artificial semiconductor packaging.

the resilient consumables. pandemic strong drive trends have abundantly for a made electronic that clear industry, equipment semiconductor demand and electronics broader global our secular will more chain the supply across And and These needed. assembly our tensions is and it

Lisa meaningful express disappointment in I Our details quarter last my the this mission chain supply is these needed our quarter growth. and operating to in operational improvements from fully to third minute will or making shareholder while issues into want performance. value capitalize get growth create so, opportunities, on addressing a to but concerning

meaningful more next call. from opportunities. on value our will We'll the company We in earnings prepare and presenting growth address be plans targets performance the our about deliver information gaps and these to

discuss our turn I'll over it to Paul markets. to Now end

Paul Lancaster

Thank you, Bob.

a experiencing for low used are and Looking persistent high-temp a a our at high products by in for belt has environment, our of demand continuous offset SMT variety demand been packaging advanced including vehicles. demand electric furnaces which we the applications

relates packaging us allows to believe capitalize favorably the not our SMT on we advanced servicing and As current us it cycle. competitive but advantage our the markets, products significant up to opportunities weather to challenges positions Paramax only the next also during

As at phase and to research our are the continuously advancements. ensuring stay we forefront this in navigate through we of strategizing that development enhance we investing offerings product technology and

cautious macroeconomic with semiconductor-related conversations outlook remain our the industry. rebound While we uncertainties a surrounding OSATs, due the leading continue within the of timing about to have for constructive we products demand to

belt greater ongoing high-temp transition boosted systems the our the furnaces. high-performance complex more in towards the the for automotive sector has furnace Within and market, particularly electrification need

this to reputation demand as committed supplier industry. in a our maintaining trusted meeting are We rising and the

Materials silicon see & our Substrate we continue products. specialized demand In strong our division, to carbide for

processing. some both to with output the capacity carbide silicon are As are grow wafer and customers total in challenging for fiscal cases Year-to-date silicon carbide our the for year on the greatly year's silicon exceeding last bookings prior industry works top spend. and many bookings differences between par and their vendors realizing full total

customers Additionally, evaluating carbide our new qualifications consumables. ongoing who we silicon are have with

our ownership. Given our of industry total highly in and improvements are leader of provide position cost the a the believe we in products markets serve, significant long-time as segments differentiated we

our overall consumable result, with demand line for we capacity grow wafer products a industry in to as As expect estimates. volumes increase

into with As we in seeing end and our softness a but silicon sapphire markets we carbide ceramics currently continued some demand pleased consumables. reminder, our very silicon, consumable of are related are the and multiple sell

cycle, will our stronger cycle. Simultaneously in position commitment belt next semi excellence the and to up the In competitive optimistic the that high-temperature solutions Substrate during reinforces carbide emerge and Materials summary, the while cutting-edge high-end customers. demand we're division headwinds we prospects for silicon the of currently furnaces providing in instill confidence strong facing spending our our innovation our valued & division in to

financial review results. Lisa will call to turn our over the I now to

Lisa Gibbs

Paul. you Thank

third The furnaces. increase our of is from from revenue XXXX. million $X.X fiscal additional year quarter prior attributable results. sequentially decreased to from to our high-temperature revenues X% Turning quarterly primarily belt and increased shipments of of increased Net and Entrepix XX% the

shifted during Additionally challenges third new fiscal at protocols. closed quarter to in COVID of of of system the of from factory for to million out due that sequential our our three to to the primarily the fourth XXXX, year approximately dates pushing quarter two operational customers the $X.X was implementation decrease Hoffman. Shanghai ERP BTU PR due revenue third The months is fiscal quarter and XXXX delivery due surrounding prior

XXXX year period by quarter segment. within Shanghai Gross location. mandated manufacturing the margin decreased shutdown was the mix product Gross of increased to of when as to government prior affected fiscal due semi sequentially compared our margin the primarily our third

Compared increased added basis consulting were year, Entrepix' $X.X of in sequential of during year prior third of the the SG&A and Selling, expenses. general sequential million administrative acquisition prior not and inclusive incurred decreased of $X.X SG&A the due prior well the period, $X.X $X.X $X.X to due amortization of primarily ERP quarter. million the million to intangible on to The as increased compared million expenses million project which as period. increase is to assets, sequential costs decrease or a and primarily is

quarter income expenses statements in the the financial and prior prior in includes sale-leaseback included million our loss prior on $X.X company million incurred increased million engineering of acquisition related $X.X compared period Entrepix million assets Massachusetts GAAP second Inc. fiscal operating year period. income year same GAAP increased year the intangible of of same GAAP the $X.X to $X.X million GAAP its Research, The compared operating the development sequentially in was XXXX of the period. operating and of has and of gain $X.X facility. The to amortization to

to in allocation of amortization of reflected can vary related The amount purchase financial is its The in preliminary. intangible acquisition significantly. price an purchase price GAAP our terms statements assets allocated

acquired As incur company we of assets to $XXX,XXX quarter, to XXXX $XXX,XXX December Inc. thereafter. approximately through Entrepix of per quarter XX, the quarter approximately expects per relating intangible stated last and amortization

was and a prior million the quarter $X.X $X.X of the quarter tax the expense three for $X.X same compared June in months of period. in to in period. million non-GAAP same million operating of prior fiscal million loss $X.X year of expense operating million preceding income XX, compared to year benefit XXXX income XXXX was the non-GAAP and operating in $XX,XXX Income second the of Non-GAAP ended $X.X

the XXXX portion Income assets. months XX, ended tax million recorded to includes Entrepix tax benefit which in different of onetime previously relating in acquisition benefit our tax a resulted with of related March a of $X.X a allowance of connection the for three deferred the liability release recognition valuation to

the fiscal and quarter per for per per third million million net $X.XX $X.X of million for net net quarter the Non-GAAP XXXX of third or $X.X or net loss fiscal GAAP non-GAAP net million per quarter or $X.X for income was compares the share per share for and This non-GAAP This of was income or XXXX third of XXXX. fiscal share per $X.XX $X.X share. quarter $X.XX share preceding quarter $X $X.XX share. loss of or income net to quarter the or million income $X.XX XXXX. million the of compares the fiscal of $X.XX to for preceding GAAP for of $XX.X third GAAP

States. pre-acquisition XXXX cash The cash million was payments, Unrestricted due primarily our and have June purchases of compared cash primarily quarter balance liabilities PP&E of ERP is our where bookings $XX.X approximately lowered XXXX our XX, $XX.X March settlement implementation and contract of this million cash XX, in of decrease recent down XXXX by at the in decrease June held to our equivalents a to the XX, liabilities. United Entrepix at were XX% as driven

of under million. revolving We borrowed revolver. our line have have $X in availability To any up to date, not amounts we credit of the full

be or logistical negatively by and manufacturers. orders, can shipments, challenges financial results results the of timing Operating of system impacted semiconductor significantly the positively

ahead. and industries by cyclical demand. equipment semiconductor the differ in can be may materially changes weeks the Actual months market Additionally, in results impacted and inherently

our turning Now to outlook.

improve For quarter the of fiscal the XXXX. the fiscal by profit September of system XX, XXXX, logistical results financial orders, over positively be semiconductor or impacted fourth negatively timing shipments, challenges of operating results quarter and to incrementally significantly expect we revenue manufacturers. and the can Operating third ending

equipment in results differ may the materially inherently impacted Actual cyclical market months ahead. changes semiconductor by can in demand. and weeks the Additionally, industries be and

provided States outlook results of and dollar exchange RMB cause expectations. the The the rate Chinese United Changes differ is portion relation in between a United the based actual the is to to of Amtech's currency. States in could from the assumed A RMB. in dollar an on RMBs value denominated results

the I over call to for the now operator turn questions. will Operator?

Operator

and from Miller Benchmark. line Mark Instructions] now Please first comes question question-and-answer of ahead. gentlemen, Ladies the the you. your begin we go session And [Operator will Thank from

Mark Miller

last backlog Thank if you wondering break I you was for and out the the bookings quarter? question. could Entrepix

Lisa Gibbs

into We that Mark. Substrate segment. put Hi, all of Material our &

out So we don't unfortunately, Entrepix. break

Mark Miller

Cash, breakeven you've consecutive consuming that? cash about something your have plans a you are cash Okay. level? do been what three for quarters. Do to And

Lisa Gibbs

in cash Good we receipts do We've again, We've part And question. we our payments payment things revolving we the of have and this July on ERP and credit customers. of that breakeven had payments some cash We cash liabilities debt strong very implementation level. terms and collections like but obviously assumed to yet. we tap were much ongoing a into some subsequent quarter, tax had line acquisition. have the need of focus to it the continue if of haven't our

Mark Miller

were the the ago. question third inventories. in in you back that? significantly queue the from up about Final is a they year discuss Can somewhat jump did Inventories quarter but I'll decline

Lisa Gibbs

that inventory that materials products. raw belt to are furnaces builds in we our to for related and high-temperature Massachusetts A that relates those are build lot necessary the of that

that acquisition. inventory we're in backlog through enormous we the as have that an as from have product Entrepix We working well area added

Mark Miller

you. Thank

Lisa Gibbs

Thank you, Mark.

Operator

go from Kevin your Thank Garrigan you. Please Westpark ahead. Capital. question And line next the comes from of

Kevin Garrigan

when with much you systems? you when kind wondering to us of an they CEO were of the I And How these congrats again -- on a think you the the get just little Yeah. resolved? Bob you What speaking was color impact kind on, the could of -- challenges? would operational do are Hi and revenue ERP all. give challenges? Great on role, challenges more

Lisa Gibbs

a implemented antiquated Sure. are Hoffman we at a had ERP very I'm always know PR implementations challenging as you sure system. system

a it's So been for them. change big

an ramp terms in It around go-live that operational was that then planning orders was disappointing of They've production production big The the there. before after to issue, pulling so ramped and expected in disappointment go-live back up us. up significantly. execution certainly was

was that with hill So continuing in we're think to light early through challenges And quite we're pleased of over go that. but June. that which the I some work we're

at a July. So part where of the and million. we probably was I revenue their the and few XX-XX shipments the combined think we're the the had amount $X.X release then, a there. number. shifted And That We getting in of pickup so into there ERP press customers mentioned dates was about other BTU

Kevin Garrigan

Lisa, remind Okay. of for Got just kind is allocation for a it us then, what just it. share but I anything with touched can And That think previous the on you quickly kind kind of makes sense. capital question, you rest of just focus the XXXX repurchases? of and in

Lisa Gibbs

Well, can on and that. cash focus improving cash big our our improving next for is -- on we conversion capital allocation collections really cycle quarter this focusing

quarter. we talk capital a perspective, that from So meeting allocation Board about every the at

that cash capital discussions be continues now think our with are priority, quarter. point right of our levels the not repurchases but each focal a allocation to share I highest

Kevin Garrigan

you. Great. Okay. Thank

Lisa Gibbs

you. Thank

Operator

[Operator you. comments. further to have will the turn over closing no now we I at Mr. Instructions] questions for call As time. Thank Daigle, this

Bob Daigle

Thank And a Amtech's shareholders. you conference you. Have months meet out weeks I'd evening. for like joining ahead, I good look with to get I you on to the in forward to and road meeting the as thank call. the

Operator

that Ladies you. today. participating. our all you Thank Thank gentlemen, for for does conclude conference and

all may You disconnect.

Amtech Systems (ASYS) 9 Aug 232023 Q3 Earnings call transcript