ASYS - Earnings call transcript Q2 2024

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Operator

Good day, and welcome to the Amtech Systems' Fiscal Second Quarter 2024 Earnings 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 Second Quarter 2024 Conference Call. the and Bob Lisa on Chief Chairman today Officer; Executive Gibbs, me call Daigle, are and With Financial Officer. market second of for close today, its released After financial the fiscal quarter XXXX. of Amtech results is release Investors the www.amtechsystems.com earnings company's website posted The section. at in the on

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

such and to contain are all statements. comments within the our be including, risks forward-looking subject assumes our of forward-looking and of today's in will Investors website. made the limited Some call of not The no that statements assumptions to contained any posted to, company uncertainties, but to during obligation section corporate which those are filings, SEC update

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

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

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

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

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

Robert Daigle

Thank you, Erica.

we're $X.X soft Revenue results of our markets more company and and end demand. thank recover. strong with million Amtech's The we operating high guidance our to $XX.X with I'm call. pleased remains everyone, end quarterly target EBITDA as the macroeconomic for afternoon, for structure delivered position mixed. range joining of for million our overall exceeded the the conference making and of you markets progress importantly, adjusted landscape improve good So cost

the industry, near-term in we demand experience Within in back-end America are Chinese uptick to applications, OSATs continue activities we as capacity. an while add semiconductor in seeing softness they and packaging for near-shoring at North

customer softening Within semiconductor silicon takes. our and end for materials in we and particularly Consumables been balance are substrates production electric a in carbide seeing overall vehicle and markets, buying demand, patterns due to demand. has similar lumpy puts

are we replacement parts However, seeing stronger services. demand in for foundry our

While focus we resulted on across support demand over to aligned operations. near-term the operating believe once await profitability organization our semiconductor Through adjusted past we the demand. we This measures have of the to continue better size has markets, broader deliver strong the will we implemented EBITDA and the in market our quarters, optimizing results market and several current rebounds. help broader us rebound

flexibility. manufacturing leveraging efficiencies more Moreover, partnerships we our to enhance and actively operational contract further provide are

the a the manufacturing. fixed to first expand creating assemblies capitalize partners and throughout our major through flexibility trade our semiconductor complete one positions our components to greater goal underscores reflow us and showcased oven we from on operations by our being regional solutions industry investments North optimize of American example, our to recent For at assembled cost structure, manufacturing well of milestone This in this show. made industry

quarter our last on the actions building refine inflation to input also to address pricing in recent are cost experienced taken We years.

to the and see of is we the improvement are tool closely in now with our aligned costs, New more profile pricing margin beginning prevailing backlog.

parts before be quarters of existing benefit in due backlog the will full to we see it several our However, business.

aspects the of our in optimizing we in remain of initiatives second target our In The the the our a within have cyclical on our flow quarter cash despite and serve. business markets markets. softness in the anticipate prevailing consecutive success we upturn as control positive EBITDA summary, adjusted operating resulted next we focused of

remains well several Amtech Despite demand ahead, well driver primary Looking to growth softness positioned mobility remain for products. a expected advanced electric include the the industry. market, secular that full vehicles both which trends vehicle near-term on our hybrid for capitalize drive will to are in electric of applications, as as

semiconductor broader intelligence advanced critical artificial role an the the high-performance applications. market, play well processors in a for Within our used as packaging of as tools advanced computing

and industry. build more pandemic for assembly of being are semiconductor and the confident create the generate the and and target secure are we made value that efficiency electronics working across strategic as investments our tools enhance the will to supply operational momentum. by capital and with shareholder This regain implementing our governments Also, chains. I'm significant initiatives resilient reduce markets to global tensions, additional sizable to backdrop opportunities industry electronics

I'll details over that, Lisa for on turn with the it further quarter. And second to

Lisa Gibbs

of X% the consumable million primarily We backlog, due Thank increase a in with patterns our is you, broader the XXXX. ended second sales The adjust increased and XXXX. portfolio of a December segment decrease Substrates quarter lower from their Material is from sales of in sequential product customers revenues million $XX.X Bob. to to most XX, prior in Net fiscal our and due quarter attributable slowdown decrease update and market. semiconductor primarily year as the across $X.X from levels. decreased XX% buying The inventory sequentially to increased

Our ratio March of book-to-bill XX, XXXX, X.X:X. was as

contract now extending are improving. have too we And with lead times times As commented previously, lead were our manufacturers, our our long.

ago, year. some our shipping to better that this due in negatively impacted booking this several margins past and equipment margin lead with quarter improved months year cases, which was profiles. over business are booked over inflation the out our a times We We've

this quarter. margin our book-to-bill result X:X a Material of a also and mix had are seeing which We segment, improvement a product Substrates as within

same increased was negatively mix decreased margin gross product segment, was by both primarily increased margin our costs, shipments of material sequentially our affected flat in primarily gross to Material increased prior the horizontal by and compared semiconductor our a gross margin prior partially GAAP the diffusion period. same and sequentially period consumable lower to with equipment sales. GAAP to GAAP mix Substrates compared sales, attributed segment In product furnaces. more to offset and year due favorable year and

to is sequential of year expenses. and and to expenses, in Compared due or to shipping the expense well $X.X in to prior lower primarily is SG&A due administrative The $X.X of general lower reductions Selling, acquisition compared decrease as and expenses a million reductions expenses amortization same commissions period, and the on primarily decreased as $X.X shipping decrease labor million lower $X.X the labor and sequential million million commissions year decreased lower prior period. expenses, expenses. basis

related engineering the due development year purchases Research, timing decreased of in $X.X primarily segment. and specific million to our million and sequentially period decreased expenses semiconductor to $X.X projects same prior the to compared

As we headquarters you in of gain our fiscal for building Tempe, during corporate quarter XXXX, a saw in our the press of Arizona sold release, million. second $X.X

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

quarter fiscal building share. for sale adjustment was the non-GAAP gain on for $X.XX second million or $X.X includes the which $X.X per of $X.X loss, our remove $X.XX to compares million net share and the to XXXX of for or quarter quarter or net per net share an loss This second XXXX. non-GAAP Non-GAAP of $X.XX preceding million the income of per fiscal

pay of building, our on CapEx primarily net generate $XXX,XXX of remaining of of of proceeds the result print during which hand proceeds used the paid we $X.X quarter, March which full plus building cash for a credit, cash revolving expect ongoing As We was we to XXXX. were build-out to of annualized sale, these our The of new generated used $X.X as million savings. line approximately approximately fund BTU's XX, to smaller proceeds in down million. additional

months X were XX, March million. ended XXXX, during payments $X.X Debt the

XXXX. debt only balance Our $X.X is of loan as remaining was March a our of XX, term million

$XX $X.X operating improvements working and by in ended During we March were was XXXX, the to at XX, generated cash compared $XX million equivalents X to March $X.X in months cash cash December of as XXXX, March cash primarily to million million provided million XX, due Net as at $X XX, XX, million compared XXXX. XXXX. Unrestricted December capital. activities, XXXX, XX, of

our to outlook. turning Now

ending XX, EBITDA downtime and in quarter facility includes move. revenues of we associated $XX June XXXX, positive, For with third adjusted $XX to production expect BTU expenses some million which fiscal million the the nominally with the range

XXXX, are by steps significantly Amtech's strong which reduce serving and first both value. structural applications. annually product million actions revenue we and for improve Although and We These second remain that challenging, consumables confident will of quarters and market the the costs with cycles. packaging approximately results prospects better profitability earnings and advanced the remains future should and pricing outlook align through during equipment enhance $X fiscal our mobility advanced took near-term for

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

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

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

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

Operator

Your Miller Mark [Operator question Instructions] Benchmark. first comes from of

Mark Miller

about Just activity? seeing comment And wanted quoting -- so, you you pickup about if Have ask where? you seen activity? in to any can are quoting

Robert Daigle

definitely very processing. have we uptick Mark, significant yes, a on seen back-end

equipment changes quarter now we things surface softened also it seeing last equipment. were basically, And seeing usually a multiple advanced of update reflow mount We're in had We're chip point We activity, units is the involves applications. the more packaging area. the I single of the think where things provided where one seeing in versus So pieces were big lot quoting was to the soft. particular. when which

resiliency. And I end. manufacturing. of of I chain during the on We've comments, interesting to say, one mentioned is back localization the had seems that activity North some been that's as quoting would tied That's American quoting that some the is supply particular, now thing in involving, the

other been, business of activity where X we The where end, as the some would service and we've a getting at months now I'd front areas seen we're well ago. has parts say, higher strength the much have side the seen than

a -- signs think at seeing than still it's mixed situation, definitely life months But least we're of seeing ago. X more we So Mark. I were

Mark Miller

assume sales, any positively. that you impacted that consumables margins? I in how margins Can provide estimate improvement aided The can

Lisa Gibbs

guess, I line the see, Well, can about XX% non-GAAP gross from on to margin it mean, XX%. did. I certainly, you improved

a exited to had nice polishing impact. we what really to were right? as That's that's great And the it equipment we business. So us, the business get for hoping

Operator

Kevin from comes question Garrigan of next WestPark Your Capital.

Kevin Garrigan

Team, speaking you great with again. guys

across recovery would seeing the you of softness any of And do market, kind be is a of demand? the the tunnel? the Or think a it Regarding end broader in more light U-shape? you are at snapback

Robert Daigle

about interesting, we that. example, Again, same Kevin, related read has been mostly for the memory, have It's things, side bookings to in Yes. of on AI. the reading strong, pricing firmed up memory the things quite you're

It's utilization say, up, through bit least utilization see little the kind increase come more case to year. little likely in orders. we're as a to It's real they a consumables, customer. end a the in at obviously, at pretty they percent to equipment tends in XX-plus equipment now applications volumes of of the pick be think range do that, have towards with quickly. and because bit let's little And to early the little flow factor I need trigger us. we back in AI, always see It's you typically, tend related a it -- that time of to the to bit trickier before rates for stronger to industry start next rates, complicated year, bit a that So

bit little instances. trickier So predict in I both think to a timing is

Kevin Garrigan

No, makes Yes. ton sense. that a of

us as of I them Okay. ideal said Lisa, a And do what that follow-up, your your you prepared improving. back normal? are? then getting quick to lead you times when remind just kind times in remarks Perfect. And see lead just are Can think you

Lisa Gibbs

Sure.

weeks. the So was those can X in fact referencing, lead it equipment product. by be that can X The times Bob to vary

furnaces, down. we the high-end I a equipment that would impacted that a And the of horizontal like that negatively Some down lead our belt on times this now. We've of furnace. come quarter talked margins diffusion we And equipment. of to brought about have months say year our certainly handful over on that's

Robert Daigle

to, frame with I'd reasonable more diffusion let's Yes. normalized at backlog horizontal a mode, to under to moving is on X level. say, to closer down with an But from operational times, lead X to subcontractors be, probably furnaces even to X time goal a chain, into is the manufacture. supply say, to components if months frankly, -- minimum months, say, we're cycle supply going our chain how where And on would based maybe X a the times -- we've in our drive get standpoint, takes things really our long leveraging done it to we're

equipment it some that With had over of we the yes, year part of partly on this a the ago. idea headwinds quoted we margin came because,

more that our conditions effectively. make we've our reflects So cost to got so times down current sure pricing get cycle

Operator

comes ROTH Your from of MKM. Irwin question next Craig

Craig Irwin

was I this tremendous product wafers, a used being there. maybe premium on carbide given production an wafers market. the the side are the your positioned of but a generate us comment of to you maybe providing market, most today. opportunity potentially serving Is value see could silicon X-inch of a bit you yourselves out business? there Hoffman interest really tell produced for Hoffman hoping on if little additional incremental X-inch X-inch there's way of X-inch were another is do Can that positioning impeccable there offer you How the most cassettes that the to out the So today, in about amount is

Robert Daigle

Yes.

out, much -- to Craig. and point answer think generic the depend as what possible, their it but position that can where value, again, extent most -- on it CMP base on -- ourselves customer. trying you the But we're again, There's really some it X-inch technology And customer depends -- in incremental is what the market I and we today. very at of who X-inch do play on area. so that that, and depend -- in can not to we the is to the one So get will does is

Craig Irwin

the pipeline much a the even looks China, big that your little share of on not that then unique for market I EVs semiconductor the production, specifically board. -- facility on temperatures bit furnace a product, will of potential carbide, in there the air seems drawing understand traditional at, with run very maybe bit construction. but an what some facilities interest there's with a Bruce us plants, on power can just the large you that of pocket processes And product has equipment that It color side, but higher there's and for in though industrial pretty of color a you silicon give given the in Any big about There's that there's could us still the activity? amount like?

Robert Daigle

Yes.

key demand customers that from opportunities the some forward. received large going we that is pretty some there's significant So requirements fairly

in I little the the at -- on a how the continue a depend may down timing the ultimately, frankly, migrate migrate the carbide of is with may of industry. -- the to much is in things least It out, have bit so pretty going of the efficiency aggressively But because to silicon towards EV. inverters. the and bit bit a utilization It's industry -- expectations more slow little point of you industry. As drop-off there is view

terms I trajectory the of EV on. slowdown of a going think changes may little affect timing, think we're some don't what's it I market on and of So been but in bit the

And in silicon-based fairly are IGBTs used sizable significantly silicon-based business maybe participate in participate in that a HEV greater our the emphasis EV, also I'd furnaces for copper electric the BTU. these particular, is part for near additional participate present bond do because pretty and packaging. are for we I could power module think this pivot opportunities hybrid the term, of the at in us the power With the we but vehicles. electronics that direct say -- wildcard -- also we in on

Craig Irwin

air a of we've net like to good very doing something good play something? are both right, cash, pocket this you've this macro Usually, conversations getting know a today? silicon or and Is managing sort really out side? properties So some directly carbide, likely the continue seen active How are time there's been cash M&A in that into when semiconductor priority maybe to acquisitions. an a silicon on consumables it's there's there, step quarter. the interesting job and you in materials I How see and the grab actually position power traditional to we around on side a carbide up consolidate you markets.

Robert Daigle

near-term of in we're flow in the priority current our a goal silicon industry. a opportunity the cash area, -- a But obviously with sluggish electronics say see we market tremendous was and I'd growth carbide. power Ultimately, company. the positive realities are around and being ultimately, particular,

So can't it's to strategic about us drivers terms might exposure, trying timing for growth it area. what much, I in be. the in a time. in bring this the It's spending priority terms of more an area we being too really a Craig, company. breadth, definitely But are say more for priority more of

Craig Irwin

last Excellent. question, I if And may. then

help the appreciate December? your right? the play that's reaches Can And through the exceed short guidance comment sentiment your color sort visibility you good, about have a could out? the seems be -- maybe quarter. a to, understand visibility would to around this how investors that that where us you might little that out see us of we give you year? Is Do least in pretty may term. did You It back that visibility in there at end changing is materially revenue of for anything

Robert Daigle

Yes.

have about I various think, segments. So talk again, the to we

furnace things providing that's whether like -- percentage -- backlog look out applications, copper it's horizontal, in of the us we're the the direct ovens the a quarter. through December high you in at furnace for or that and bond we're fusion area is takes our area, if So again,

look that book part up tends pretty the quarter, If and and at relatively get same quickly. business, the to we'll lead times, you short consumables to that ship even of the within tend

So there's going tends market our from to to again, to that. customer drive -- not on medium, depend we base. the forecast long-term demand more And ultimately that's visibility be get

those of the of beyond activity in -- and pretty lead also But time X are quite visibility or great have life that seen X on packaging of a true, mentioned items. weeks signs area because earlier, not parts even be terms back-end well months frankly, to and we're bit tend lead it's times a our that's in reflow, X as mine packaging, chip month service. as there, we And like to short in the And surface a the as in pickup industry. Lisa equipment We've recent weeks.

ahead there's to. of incentive, things X X, So They frankly, They not really customers time. book months equipment can for pretty quickly from don't to get an out us. need

a it's of in furnace where So really the is have say the because lead mixed area the really most historically. times we bag. long I'd visibility

Lisa Gibbs

the And on margin Craig, similar fairly we product into add a expect gross QX. would side, just I going mix

some QX. higher the we're has margin do beginning newer fiscal out and to So with backlog in then as been that we into quotes costs material of shipping that I again we'll and We ship we've in out quoted think expect incremental see repeat of using. backlog QX these improvements saw older headwinds some that this the of kind QX

Craig Irwin

offline. on my executing. see Congratulations the you results. good It's of rest revenue questions the take I'll guys to

Lisa Gibbs

Craig. Great. Thank you,

Operator

for no comments. are Daigle, closing over call hand time. would questions the to proceed. Bob at Please CEO, There I further this

Robert Daigle

and on conference everybody months again look thank making our we're forward joining the for the Well, to progress come. updating you call, to in I

Operator

you Thank now this call. participation, you gentlemen, and today's for and Ladies disconnect. conference concludes may your

Amtech Systems (ASYS) 8 May 242024 Q2 Earnings call transcript