ASYS - Earnings call 1 2024 | Amtech Systems, Inc.

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Operator

Good day, and welcome to the Amtech Systems Fiscal First Quarter 2024 Earnings Conference Call. Please note that this call is being recorded.

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

Erica Mannion

you XXXX us Conference thank Fiscal Amtech and Quarter First Call. morning, for for joining Systems' Good With me Financial of on Customer its Chairman Lancaster, and financial the President Service. After call today Executive Vice the Friday, Lisa are close Officer; results of Gibbs, Amtech Sales for XXXX. Chief of Officer; market Paul Chief and and Bob released Daigle, quarter first posted in is release on the section. earnings website www.amtechsystems.com the Their at Investors company's

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

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

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

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

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

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

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

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

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

Robert Daigle

over strong pleased structure through call. the operating progress Good position the joining to quarterly cost with for cost our Thank on past company and markets remained operational million recover. I'm actions morning, you months. We for having in improve conference Amtech's over X focused $X making achieved annualized results implemented as the everyone. we're optimization, savings

million of importantly, surpassed the marking Revenue million from in million the the of our and EBITDA a adjusted $XX.X exceeded adjusted our high EBITDA more $X.X significant range expectations, guidance prior of improvement end $X.X quarter. loss

to target macroeconomic end mixed, markets equipment demand somewhat this within and landscape in for near-term quarters. packaging back-end wafer In especially plans as and for market. digests our used the continue the for expansion existing industry the fabrication experience remains The fraud applications, sector, upcoming capacity semiconductor softness we most for evaluates

carbide we electric and in However, pockets production. to experience production, silicon continue carbide are for silicon for vehicles. packaging submarkets to of and consumables amidst semiconductor improving used seeing related this produce for Demand high-end we power resilience, and diffusion used backdrop, wafer furnaces demand silicon strong to used for been furnaces materials has and particularly hybrid belt semiconductor

optimizing first to our for dedicated broader which we on In streamline cost to inopportunities, our in in million quarter. we $X performance. cost Building improved and aspect our $X to last drive additional in quarter, the discussed savings enhance every an structure our annualized financial million await the first we in identified on implemented continued organization operations. the rebound the demand markets, While efforts we of our is operations the call,

the annualized when to these actions over of combination the second starting period million compared XXXX, The quarter $X in generate same savings to of last expected is in year.

achieve simultaneously market current near-term leverage for continues demand market EBITDA profitability, conditions primary aligning while to as organization's rebounds. significant the with Our be ourselves objective positioning to size operating

partnerships. manufacturing optimize completed our actively strategic are we initiatives, to opportunities exploring operations these Beyond contract manufacturing through

this cost is overarching structure. of highly fixed through large enhance while optimizing simpler We focus workforce and components and complex the our believe throughput, overall streamlining Our will assemblies our manufacturing outsourcing. production skilled systems, on goal approach while of our to flexibility

example, to expand plan reduce expenses, quarter move of in facility. the U.S. some anticipated building from our and, outsourcing the positive preserving strategic more third the enhancing smaller, results initiatives, manufacturing fixed relocating on facilities initial production instances, For our in capabilities. while a these to we in This efforts is the by one to cost-effective

to of restructuring quarter, the actions our not over we been we couple Despite to additional inflationary last as to first increases quoting tools, with addition years, ensure closely diligent seeing input our took objectives costs. more activities, aligns that strategy. we promising input are place, In the these in pricing current in pricing to refine in new new pricing have for affecting during on passing our the With customers. conditions progress

lag to the the anticipate the we a full impact flow backlog. existing Shifting before sheet. We balance adjustments do work through through of these as

in of notable timing pleased increase the the and quarter. our cash comes increase receivables managing a to We capital, payments. are million report of working $X to particularly optimizing approach This in from primarily during focused upfront

are ahead, additional to inventory opportunities, further we to including reduction balance of strength enhance identifying Looking sheet. our the committed

current company our In growing to operations rapidly as to is differentiated stands markets, optimizing closing, exposure with while unique Amtech focus out profitability. on increase a several

these highlights quarter of flow the success -- in market EBITDA cash performance challenging the initial conditions. first with positive efforts operating increase despite the Our and

our that are the an to global made AI-related major demand result the ahead, infrastructure in investments equipment. investments diversify in supply confident chains will and Looking that will be for we back-end strong

and semiconductor believe also growth business production. strong wafer our carbide manufacturing in from benefit silicon greatly We equipment will consumables

we're markets to reduce confident strategic value. recover, efficiency operational our and working taking that improve I'm shareholder today As actions will meaningful capital generate the

over I'll the on turn With quarter. first that, Lisa details it further for to

Lisa Gibbs

equipment a across decreased you, revenues of due and in shipments sequential XX% from business primarily Thank first XX% decrease quarter segments. The fiscal increased sequentially is the Bob. Net our XXXX. decrease to

margin intangible shipments our the due experiencing in softness primarily belt to the XXXX. in lower fiscal of Entrepix, areas market. $X.X and are increases the to equipment. GAAP million of prior-year addition in of furnish offset XXXX. we a to due less million The recorded asset to product to margin business in sequentially and was QX mentioned, charge is the charge primarily our semiconductor period, year from impairment Compared due recorded Bob prior primarily gross impairment the shipments As by QX $X.X that in mix lower asset increased increase reflow of gross decreased of multiple favorable an bookings partially our intangible attributable GAAP

favorable and mix. Non-GAAP fiscal period, gross lower favorable lower product gross the mix. margin to Non-GAAP prior-year a QX same a more XXXX was due margin in to primarily increased expenses slightly sequentially primarily to product less due overhead compared

impairment assessment. recorded Accordingly, $X.X and million Material impairment of us of below which our is us factors guidance as could book a segment, value we operating be totaling remainder stock the considered in recorded Substrates the recorded to XX, this requires to noncash $X.X XXXX, is charge Accounting million expenses. decline that in impairment. required & within price triggering within a our perform event assess for material gross December profit, And

million prior QX number XXXX, compensation, of $X.X to lower and equity $X.X to Selling, SG&A, decrease million general period. intangible in that decreased same basis labor, is fees. That and expenses were compared year administrative a a including sequential and on the or expenses, amortization, sequential consulting the decreased due audit

from million the addition by fees, year, of to offset Compared acquisition $X.X well partially is as the decrease primarily consulting due SG&A expenses added prior the to of as Entrepix. lower lower

the Research, prior the development P.R. next-generation we sequentially, quarter. sequential same engineering to and referenced decrease year million compared of period. The and last is with decreased reduction associated investment $X.X in Hoffman expenses million the tools at that $X polishing increased

compared loss operating of operating operating of compared million GAAP million period. the non-GAAP prior loss quarter fiscal of $X.X XXXX, in loss $X of year in to the was and GAAP the million in operating million period. year $X.X of same operating $X.X non-GAAP the fourth prior loss XXXX, to quarter million of loss operating in $XX.X million $X.X same Non-GAAP loss was fiscal and fourth GAAP

net $XX $X.X net per fiscal to or the first GAAP net for per quarter for GAAP share first million the compares $X.XX for $X.X per $X.XX of of $X.XX This XXXX. million and GAAP of or loss of loss or fiscal quarter, was XXXX million the preceding loss quarter share. share

share net or cash our $X.XX in quarter share loss $XX.X the as for of per and loss non-GAAP per XX% the $X.XX preceding the States. of million $XX at equivalents United cash $X.X for September million is loss XX, Approximately of million XXXX. per Non-GAAP first for held fiscal Unrestricted quarter fiscal was of or cash quarter, to net XXXX XXXX, XXXX. million non-GAAP December December share. $X.XX were of or of $X.X compares $X.X XXXX, XX, net to and at million compared first XX, the balance This

As had Bob our we continue during and strong focus mentioned, we managing very working capital, December on the to quarter. collections

reminder, was of $X.X that a term revolver our the leaving to portion a and the and debt a $X.X The we million. changed million. of from was loan balance was $XX our was structure terms December our our as to debt, moved revolver, loan In our of maximum our in over revolver amount the raised of to on term term capacity loan borrowing million, transferred

$X.X revolver, the million. with an paid we balance $X January, leaving In approximate of towards us million

So than balance borrowed the other the revolver. against date, to not have we transfer,

interest We we'll liquidity, to in the minimize our capital our balance cash an expense. evaluate our on continue and monitor to needs closely and and working effort revolver

on Our to will BTUs working the execute facility $XX our million. their months. smaller may as capital of we with summer, this expenditures coming in capital we backlog have vary needs And moved

our outlook. Now turning to

March EBITDA revenues of million XX, fiscal negative we the million, to nominally the expect For range $XX $XX with ending second quarter to XXXX, in neutral.

we the prospects applications. outlook both and that equipment, packaging near-term mobility advanced for challenging, advanced our and remain earnings revenue remains the strong confident serving are consumables for Although and future

by took and of better align million product fiscal and structural during cycles. We which with market $X significantly These improve should actions results profitability through Amtech's first reduce costs approximately steps will XXXX, the enhance value. pricing annually quarter

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

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

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

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

Operator

At question-and-answer with the Craig ROTH first question comes this Our session. time, [Operator Instructions] we'll a of be Irwin MKM. from conducting line

Craig Irwin

a in only rest execution I'd congratulations to positive First, just environment. but that leadership, like say I a lot know employees. takes the not difficult from the on really the of

long-term we things is and right? My substantial very markets a the Systems, offer. strong, driving a backlog that question It's diversified Your lines you look if history of healthy book right? is Amtech are of for business this, that number and is product across customers with at

that the are power Can fabs the drawing that are probably us, there semis fabs of I look over in construction the years. industry more backlog, the slated and there, you As several many also now. for not highlight many can on but are right? the typical right you carbide There out other out things semiconductor maybe see mainline boards for next pipeline, sort silicon

over broader the sat years? the where the characterize book points of cycle you would next in over business the number different versus you of potential few last how at years But

Robert Daigle

Yes. Yes.

through off the carbide little an there's the It's into lot tailwinds, think are I I yes, some because a there area. very a there's business about I'd still agree -- a the talk let the strong still say, of parts especially bit on news strong different broader And bit with growth EV the of absolutely silicon Craig, power market. all with awful backing these in business. slowdown, electronics me even to, regards you and very that days of projections going the little investment

our recently broadly is a vehicles, really electric emphasis more backlog for more from, relation electronics is hybrid shift think, And a I on the that, business. power in than positive secular a But of more lot to lot tailwind very that. also

actual at power the for packaging it silicon carbide. you If of and in some and area look the cases, really both a lot backlog, semiconductor in production IGBTs is wafer current

in more and the some starting as that area. starting -- We're -- what rebounds power We're some silicon the fabs some look I to X we're happen would would end. to activity -- electronics during expect carbide a year in And would next consumables capital in in continue. comments, I I to back see in equipment as see out inventory, to mentioned point, digestion expect coming of think some we'll And even or see expect manufacturing some to the I -- -- we there the I market of regards the in to that our the expand. as recovery was I at expect these area. continue in would

probably as softest rebound part been packaging businesses slowed capacity. significantly, been nicely would That's that's the really we mount end, in really to of industry and but existing the business mean, that -- the in the has assembly, I digests surface been back our advanced even our the area of the has expect

in tailwinds or a do exactly or next over the we start easy the basis. it's quarterly see X when that -- some year heavy business the activity to next again, to So which point on strong predict to for very --

Craig Irwin

Understood. Okay.

way positive make this restructuring So maybe all quarter? does changes months, way this Or see made? lag or next demand, were ability were in how if the materializes now, a us your in and given positioned just crimp your your the And better achieved that that understand does any you're of profitable in more it serve what by million you from P&L to be demand end right? past the you $X serve on the you to does quarter, to time, anticipating that markets? uptick can the achieved the into you savings Will potentially ratably that this help over few

Lisa Gibbs

the impact of that. let would Sure, I see savings. I'll Craig. in the lag, but not see $X fiscal bit say I'll that should a here, we should full of quarter lot, that first million additional the full part. part take has Bob QX, definitely other we annualized, a by the the X answer but the of a

Robert Daigle

the Yes. would create And that issues Craig, market your done to anything as about question, have we rebounds.

in an -- And some growth scale. way in about the to place -- get to more we and past. that's fixed will the jeopardize we By capability than part we that for strategic we of Now very contract partners of manufacturing. of more careful a move been aligned some us we've reducing scale scale help which making that in sure cost-effective we've some really of area costs, because really with haven't a that, is strategic partners have the in maintain

of again, I the we're rebound the ready comes, I So taken think for whenever jeopardize we've actions it and of any don't think really that. any

Craig Irwin

Excellent. Last I takes Congrats know I also that the on significant in may. positive discipline. cash movement right? question, some quarter, if the

balance other of for you need the working further over Is cash? potential Do capital adjustments to there months? is the for next number a potential there any see sheet? And I gains to would is now position. that did you balance maybe adjustment right? But is secure any mean want your Your sheet much debt, you the highlight? other to debt in more there a

Lisa Gibbs

worked And hard into will to think collections to capital. building kind We've I this quarter team over well as this the got we're -- down, of moving it and backlog into summer. managing smaller was on working work fluctuate. the Massachusetts It continue a as BTU really

So there be some next over quarters. CapEx of will expenditures couple the

I focus will we'll capital. continue a on fluctuate, working but think strong very it

buying can them balance to power our some partners our them capital mentioned consume instead working of working and will their where with we see leverage Bob be let sheet.

very fluctuate it focus little we'll forward. but going to it on a have So will continue bit, a strong

Craig Irwin

Good luck.

Lisa Gibbs

you, Craig. Thank

Operator

Company. Mark Miller the from question Instructions] the [Operator Our Benchmark line with comes next of

Mark Miller

your now just at Congratulations reducing are your progress right was of covenants on to on lender? financial with relation your some with you where I wondering, cost.

Lisa Gibbs

covenants covenant, those quarterly with revised EBITDA It's and quarter. were we of our that well with we in lender. excess compliance this covenant a compliance in that So with

Mark Miller

Okay.

trying mentioned that? increases to you give could implementing How you've that along color were You a little and -- is on strategy pricing some you a pass seen. more

Robert Daigle

that, a bit of think Mark. a the seeing is little mentioned part And talk little happening I bit about we what was I as commentary, Yes. I'll weren't accordingly. more because approach in margin Yes. market. we've how changed and pricing rising updated -- and costs that input our the We've we really of pricing our we models adjusting were pressure and were

well been and received actions. But price in was just this done increases. are lagged a And case, it happy okay. mean that's about think, might we with I think frankly, it's been. I customers I bit, we never expected, where little we've pretty have otherwise behind -- those But

some build have be our we'll to at backlog -- margin. in going it's we've backlog, it's we and all got as again, working which out come But a not replace through, immediate. better And we backlog, so

Operator

Thank see time. for back this at questions other floor turn you. the no any to Ladies I'll final comments. and gentlemen, I Daigle Mr.

Robert Daigle

All months right. progress and you. look I a Thank Thank our you you to on joining good again Have forward our call, to updating conference for the everyone. day, you. Thank in come.

Operator

today's you. conference Thank call. This concludes

You may at disconnect this lines time. Thank for participation. your you your

Amtech Systems (ASYS) 12 Feb 242024 Q1 Earnings call transcript