NASDAQ:ASYS Amtech Systems Q4 2024 Earnings Report $3.55 +0.03 (+0.85%) As of 04/24/2025 04:00 PM Eastern Earnings History Amtech Systems EPS ResultsActual EPS-$0.03Consensus EPS -$0.07Beat/MissBeat by +$0.04One Year Ago EPSN/AAmtech Systems Revenue ResultsActual RevenueN/AExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AAmtech Systems Announcement DetailsQuarterQ4 2024Date12/9/2024TimeAfter Market ClosesConference Call DateMonday, December 9, 2024Conference Call Time5:00PM ETUpcoming EarningsAmtech Systems' Q2 2025 earnings is scheduled for Tuesday, May 6, 2025, with a conference call scheduled on Wednesday, May 7, 2025 at 5:00 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfilePowered by Amtech Systems Q4 2024 Earnings Call TranscriptProvided by QuartrDecember 9, 2024 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Good day, and welcome to the Amtech Systems Fiscal 4th Year and Full Year 2024 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. Speaker 100:00:16Good afternoon, and thank you for joining us for Amtech Systems' fiscal 4th quarter and full year 2024 conference call. With me on the call today are Bob Daigle, Chairman and Chief Executive Officer and Wade Janke, Chief Financial Officer. After close of market today, Amtech released its financial results for the fiscal Q4 and full year of 2024. The earnings release is posted on the company's website at www.amtechsystems.com in the Investors section. Before we begin, I'd like to remind everyone that the Safe Harbor disclaimer on our public filings covers this call and the webcast. Speaker 100:00:55Some of the comments to be made during today's call will contain forward looking statements and assumptions that are subject to risks and uncertainties, including, but not limited to, those contained in our SEC filings, all of which are posted within the Investors section of our corporate website. The company assumes no obligation to update any such forward looking statements. You are cautioned not to place undue reliance on forward looking statements, which speak only as of today. These statements are not a guarantee of future performance, and actual results could differ materially from expectations. Among the important factors which could cause actual results to differ materially from those in the forward looking statements are changes in the technologies used by customers and competitors change in volatility and the demand for products the effect of changing worldwide political and economic conditions, including trade sanctions the effect of overall market conditions, including the equity and credit markets and market acceptance risks ongoing logistics, supply chain and labor challenges and capital allocation plans. Speaker 100:02:03Other risk factors are detailed in our SEC filings, including our Form 10 ks and Forms 10 Q. Additionally, in today's conference call, we will be referring to non GAAP financial measures as we discuss the Q4 financial and year end results. You'll find a reconciliation of non GAAP measures to our actual GAAP results included in the press release issued today. I would now like to turn the call over to Amtech's Chief Executive Officer, Bob Daigle. Speaker 200:02:35Thank you, Erica. Well, good afternoon and thank you for joining us today. As we conclude our fiscal year, I'd like to take a moment to reflect on the strides we've made to transform our business and strengthen our foundation for future growth. Looking back over the last 12 months, I'm proud of what our team has accomplished. We've made significant progress in streamlining our business with a specific emphasis on optimizing our operations and delivering operating positive operating cash flow across all segments, even amid a strong secular downturn. Speaker 200:03:12While overall revenue was down 11% year over year in fiscal year 2024, we delivered $4,000,000 of adjusted EBITDA profit compared to $1,800,000 in fiscal year 2023. Contributing to this result, earlier this year, we implemented a comprehensive restructuring plan, which included organizational adjustments, cost reductions and operational enhancements. These efforts have translated into $7,000,000 of annualized operating savings, making our business both more efficient and enabling us to mitigate the existing market dynamics more effectively. As a part of this initiative, in early 2024, we took the strategic action to streamline our product portfolio by exiting from the unprofitable legacy equipment business at Piero Hoffman and investing in our more profitable and growing consumables business. The shift has paid off as sales of the consumable products at Pierre Hoffman surged by 28% year over year despite overall revenue growth of just 2%. Speaker 200:04:25Within our BTU business, with a sharp decline in demand for equipment, we've accelerated our shift to a hybrid manufacturing model, combining in house production with outsourced capabilities. In addition to strengthening our supply chain, this initiative has allowed us to manage lead times, reduce capital expenditures and enhance our operational flexibility. From a cost savings perspective, while these efforts remain ongoing by the middle of the next fiscal year, we expect to realize approximately $2,000,000 in additional operational savings above the $7,000,000 we have previously discussed. Beyond the core operations of our business, in response to the escalating input costs we faced over the past several years, we strategically adjusted pricing across our offerings, helping ensure we protect our margins while maintaining our competitiveness. Combined, despite continued weakness in the market, we managed to maintain positive adjusted EBITDA and reduce working capital to pay off our debt and end the year with a cash balance in excess of $11,000,000 Most of our efforts in 2024 focused on optimizing our business to improve profitability. Speaker 200:05:49As we begin our 2025 fiscal year, we are now focusing much more of our attention on driving sustainable long term growth with reoccurring revenue streams such as consumables, parts and services. We believe these revenue strength streams will strengthen our financial performance in the years ahead by providing higher margins with less cyclical revenue growth. To accelerate the growth in these areas of focus, we recently invested in both business leadership and marketing resources. In addition, as we close our fiscal year, we have renamed our business segments to better align with the markets we serve. Our Semiconductor Fabrication Solutions business, previously known as Materials and Substrate segment, will now focus on growing our consumables parts and service offerings for semiconductor wafer and device fabrication. Speaker 200:06:46Meanwhile, our Thermal Processing Solutions business, formerly the Semiconductor segment, will focus on capital equipment for advanced packaging with an emphasis on applications that support AI data centers and on continuing to grow our parts and services businesses. Market demand challenges persist in semiconductor segments that are not associated with AI infrastructure. Our Consumables Parts and Services business did experience some growth in 2024 even with the broad market headwinds, but could not overcome the strong headwinds from very weak demand in equipment in areas that were not associated with AI infrastructure. Timing for a broader market recovery remains uncertain, but we are well positioned to deliver strong operating results when demand recovers. In conclusion, we are quite proud of the progress we've made this year. Speaker 200:07:44Through our strategic actions to optimize our operations, reduce costs and strengthen our balance sheet, we've set ourselves up for more profitable and sustainable growth as markets recover. We are now focused on fully capitalizing on the emerging opportunities in AI infrastructure and expanding our reoccurring revenue streams to drive margin improvement and accelerate growth. To the current macro although the current macroeconomic environment is challenging, we are optimistic that our ongoing transformation will deliver profitable growth with high returns on invested capital so we can create meaningful shareholder value. With that, I'll turn it over to Wade for further details on our financial results. Speaker 300:08:28Thank you, Bob. Net revenues for the 4th quarter decreased 10% sequentially and decreased 13% from the Q4 of fiscal 2023. The sequential decrease is primarily due to lower sales of our diffusion furnaces, reflow and wafer cleaning equipment, partially offset by higher consumable parts and service revenue. The decrease from the prior year is primarily attributable to lower sales across most of our product portfolio due to the slowdown in the broader semiconductor market. In the Q4 of our fiscal 2024 period, our GAAP gross margin increased by $7,000,000 compared to the same prior year period. Speaker 300:09:12This is driven by better margin profiles, product mix and cost save this year following the 4th quarter of 2023, we had a $4,600,000 intangible asset impairment charge and the $1,500,000 write down of inventory related to the polishing equipment line. On a sequential basis, GAAP gross margins in our Thermal Processing Solutions segment was positively affected by product mix, attributed to increased revenue for parts and services as well as improved material costs. GAAP gross margin in our Semiconductor Fabrication Solutions segment slightly decreased on a sequential basis due primarily to less favorable product mix on consumables and equipment. Selling, general and administrative expenses increased by approximately $600,000 on a sequential basis and decreased $2,300,000 compared to the Q4 of 2023. The sequential increase is due primarily to increased consulting audit and IT expenses. Speaker 300:10:13Compared to the same prior year quarter, the decrease is driven by the $500,000 intangible asset impairment charge and lower labor and labor related expenses as a result of our cost reduction initiatives as well as lower shipping on expenses and lower revenues. Research and development engineering expenses increased by $300,000 sequentially and decreased $1,600,000 compared to the prior year Q4. With the sequential decrease due primarily to the timing of is related to specific projects in both segments and the decrease from prior year Q4 was attributable to development efforts in our semiconductor fabrication solutions segment that did not reoccur. GAAP net loss for the Q4 of fiscal 2024 was $500,000 or $0.04 per share. This compares to GAAP net income of $400,000 or $0.03 per share for the preceding quarter and a GAAP net loss of $12,000,000 or $0.85 per share for the Q4 of fiscal 2023. Speaker 300:11:19Non GAAP net loss for the Q4 of fiscal 2024 was $7,000 or 0 point 0 $0 per share. This compares to non GAAP. Net income of $1,100,000 or $0.08 per share for the preceding quarter and non GAAP net loss of $2,500,000 or $0.18 per share for the Q4 of fiscal 2023. For cash, unrestricted cash and cash equivalents at September 30, 2024 were $11,100,000 compared to $13,100,000 at September 30, 2023. Debt payments during the 3 months ended were $4,000,000 which included the final payment of our term loan and revolving credit facility. Speaker 300:12:05Net cash as of September 30, 2024 was $10,800,000 compared to $2,400,000 as of September 30, 2023. Now turning to our outlook. For the 1st fiscal quarter ending December 31, 2024, we expect revenues in the range of $21,000,000 to $24,000,000 with adjusted EBITDA nominally neutral. The near term outlook for revenue and earnings remains challenging. The actions we took in fiscal 2024 will reduce Amtech's structural cost by approximately $7,000,000 annually. Speaker 300:12:43Also by mid next fiscal year, we expect to realize an additional $2,000,000 in operational savings from our outsourcing to contract manufacturing. We are focused on optimizing our operations and delivering positive operating cash flows across all our segments even amid a prolonged secular downturn. Operating results can significantly be impacted positively or negatively by the timing of orders, system shipments, system shipments, logistical challenges and the financial results of semiconductor manufacturers. Additionally, the semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Actual results may differ materially in the weeks months ahead. Speaker 300:13:31A portion of Amtech's results is denominated in RMBs, a Chinese currency. The outlook provided is based on an assumed exchange rate between the United States dollar and the RMB. Changes in the value of the RMB in relation to the United States dollar could cause actual results to differ from expectations. I will now turn over the call to the operator for questions. Operator? Operator00:13:58Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of Craig Irwin from ROTH Capital Partners. Your line is now open. Speaker 400:14:29Good evening and thank you for taking my questions. First, I should say congratulations on the really good execution, bringing down costs, tightening everything up in this environment that we're all operating through. So great execution there. Speaker 200:14:46Thank you, Craig. Speaker 400:14:48My question is this, and it's a little bit high level, but you're renaming your segments, right? And that speaks for a refreshed and renewed strategic focus. Can you maybe call out some of the applications or opportunities where you think Amtech can participate in sort of AI and data center growth and electricity demand growth over the next several years. What do you see as relatively fresh products that you have to offer into this market? And how do you expect this to take shape as far as visibility for the investment community? Speaker 200:15:25All right. Great, great, great. Yes, so let me start again at the high level. There were a couple of reasons for really revisiting our segment definitions and some of it was, to be frank, I thought it was a little bit confusing. I think some of what we referred to as the semiconductor segment goes back to the days where Amtech was heavily involved with solar. Speaker 200:15:48So it was either solar business or semi. And when I looking at the portfolio, a lot of what when I look at our business, we really have the semiconductor front end of our business, which is really involved in actual semiconductor device fabrication, which is again what will be and it's broader than just materials and substrates. A lot of what we do there involves services and parts for that part of the business. And then what we've been referring to is the semiconductor segment. It's really back end packaging and assembly of the electronics. Speaker 200:16:31So again, it was trying to clean this up and get clearer definition about we have the front end of our business, which is semi fab related and then we have the back end, which is packaging and assembly and trying to get some clarity around that. Now then back to the strategic question of where do we grow, obviously AI, everybody has been targeting AI as a growth driver for their business. We're no different. We play there. We have been playing there. Speaker 200:17:03Primarily on the back end, our reflow equipment, for example, is used extensively in terms of the advanced packaging applications for semiconductor production. We are also looking, however, at opportunities that are adjacent that would relate a little bit. It's more on the consumable side where we are working in its early stage with some customers that have some unique solutions for packaging and in particular thermal management, which has been talked a lot about in terms of the challenges with these the more advanced AI chips, how much heat they're generating. We are involved and have been involved in the with consumables at the front end with one of our customers that's heavily focused on trying to solve those problems. So I see that as an opportunity really to broaden what we're doing in an area of AI beyond just the back end equipment, but also in the consumables area. Speaker 200:18:15But stepping back even further from that, I see the consumables parts and service business, which as we noted in the call, even with a very challenging industry dynamics, we did see growth. We were able to grow our consumables parts and service business, although less than we would have obviously liked, we did see growth. All of our decline, more than all our decline was driven by weakness in the equipment sector. So when I look ahead, what I want to see us is transform Amtech into much more of a consumables parts service business. Not that equipment areas, especially AI related are very much of interest, But I do see those areas as driving our margins and driving growth opportunities. Speaker 200:19:17And as we mentioned in the script, that's really where we're investing. We've brought on, we're bringing talent on board. I'll characterize, we were very, very fragmented in what we're now calling semiconductor fabrication solutions. We were really managing those as 3 tiny businesses and they're now under single leadership with shared commercial resources in marketing and sales. We will also share in areas of for product development as we move forward. Speaker 200:19:51So I see the investments in those areas where frankly we've been pretty passive, but I think there's plenty of opportunity I believe for us to proactively grow that part of the business. It will not only I think improve our margins, drive growth, but will also reduce the cyclicality that is inherent to any of these any business that's heavily reliant on equipment sales. Don't know if that answered your question, Craig, or if you'd like me to elaborate on anything. Happy to add color. Speaker 400:20:26It goes a long way to answering the question, actually starts to step into the secondary I really wanted to ask about. So many of us following Emtek for the last number of years have been quite excited about the participation in the silicon carbide industry. The emerging power semiconductor technology can be transformational to our economy, not just in electric vehicles, but in industrial equipment, military equipment, all sorts of things. And it appeared that Amtech was particularly well positioned on the consumable side to serve a niche in sort of consumables for wafer production. Can you maybe share with us your growth in the consumables business? Speaker 400:21:17Did you see absolute growth in cassettes and other materials supplied into the silicon carbide industry? That industry is going through a cyclical readjustment, as you pointed out. Yes. It seems there is absolute growth going on. Are you seeing more growth in things like cassettes for 8 inches wafers and 6 inches wafers? Speaker 400:21:36Can you just talk about where the green shoots are in that industry? Speaker 200:21:40Yes. So we again, yes, we've participated pretty broadly in and continue to do so in silicon carbide wafer production with our consumables out of PR Hoffman. And as I mentioned, we saw very substantial year over year growth in that PR Hoffman part of the business, 28% actually year over year in the consumables out of PR Hoffman. A lot of that was related to silicon carbide. So again, I think the luster in EV has dimmed a bit and there's been some inventory corrections going on. Speaker 200:22:23So at least and now this is purely opinion, Craig, but I do believe where people were expecting 30%, 40% market growth, EV related, we're likely to see something that's more in the let's say normalized 15%, 20%, still very substantial growth. But I think the wild card in all of this is there's been so much investment in silicon carbide globally and it's continuing especially in Mainland China that there's a lot of effort right now frankly in expanding the application base for silicon carbide. So I think the expectations for silicon carbide growth where maybe people were saying 30%, 40% tied directly to EV have been somewhat tempered. I'm not so sure we're not going to see growth rates that approach those levels with the combination of what was going to be EV and these other application areas that everybody's focused on for expanding their base. So I'm still very optimistic, frankly around the EV the silicon carbide growth driver for us. Speaker 200:23:40We participate broadly. It's a very attractive market application area. The enthusiasm is tempered around EV, but that made that I think will get offset at least to some degree by other applications. Speaker 400:23:58Understood. Well, thank you for taking my questions. I'll go ahead and hop back in the queue. All right. Thank you, Craig. Operator00:24:14Your next question comes from the line of Mark Miller from The Benchmark Company. Your line is now open. Speaker 500:24:20I'd like to add my congratulations to the management, the cost management and the expectations for more cost reductions next year. I was just thinking or I was just trying to understand, your cash went down $2,000,000 last quarter. What is your outlook for cash flow generation over the next 6 months? Speaker 300:24:41Yes, I can take that. So our cash flow generation will be partially fueled by our operation activities as we reduce inventory. And then of course, our positive EBITDA in the future quarters. Speaker 200:24:58Just note, Mark, we paid off what was the number? Speaker 300:25:01We paid off around $4,000,000 Yes. Speaker 200:25:05So the reason the cash went down is we've paid off the rest of our debt, right. We want to be debt free. So we basically paid off $4,000,000 and we're done. We're done. No more debt right now. Speaker 500:25:18Okay. So there's no more covenants or anything you have to worry about because you paid off your term loan and revolver? Speaker 200:25:23Yes. And frankly, again, that was our focus, right? Get the operations to be cash flow positive even during the downturn, be aggressive on working capital, get rid of the debt. Again, we control big believer we are going to control our own destiny on costs. We're going to control our own destiny in the medium long term by our growth initiatives that don't just not just be relying on market recovery, but look at expanding our business. Speaker 200:25:56And also obviously, it will be nice when the market actually does recover, which it will, I just don't know when that will be. Speaker 500:26:05Okay. Your margins ticked up. You were saying there was mix. I'm just wondering margin outlook ticked up for the highest of the year for the Q4. I'm just wondering what you're thinking about in terms of margin outlook? Speaker 300:26:17Yes, sure. Thank you. So for our margin outlook, given the guidance for Q1 coming into fiscal year 2025 is going to be slightly close, just under that Q4 performance, given what we're shipping out that quarter. But going in after that, we expect to be right in that range of 40%. Yes. Speaker 300:26:46So a Speaker 200:26:46lot of the restructuring we did, Mark, was really aimed at that, right, is at similar volume revenue numbers, similar mix, being in that 40 ish or better. And then hopefully with, again, revenue should help that. Right. Speaker 300:27:06When revenue and more volume comes in, we'll get more operating leverage and feed into some of that overhead at that cost of goods sold level and we'll be able to enhance our margins. And part of that contract manufacturing strategy that Amtech has put in place will help yield even more results in the future. Speaker 500:27:34Okay. R and D kicked up last quarter. Do you expect that to come back down to Q3 for in terms of average for 2025? Speaker 200:27:44Do you know R and D this quarter was up a little bit? Yes, it was a Speaker 300:27:48little bit offset from last quarter honestly. Some of our R and D costs pushed out into the Q4 from the Q3. So we're going to go pretty much back to our normal run rate if you average the 2 quarters. Speaker 500:28:05Can you tell me relate what that is, please? Normal run rate. Speaker 300:28:16We should be right around $1,000,000 for the quarter. Speaker 500:28:20Okay. All right. Thank you. Thank you. Speaker 300:28:23Yes, you're welcome. Speaker 400:28:26Thanks Mark. Operator00:28:28There are no further questions at this time. I will now turn the call back to Bob Daigle. Please continue. Speaker 200:28:34All right. Well, thank you for joining our conference call today and I'm looking forward to updating everybody on the progress we're making in the months to come. Thank you and have a good evening. Operator00:28:47Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallAmtech Systems Q4 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Annual report(10-K) Amtech Systems Earnings HeadlinesAmtech Systems (NASDAQ:ASYS) investors are sitting on a loss of 62% if they invested three years agoApril 20, 2025 | finance.yahoo.comAmtech Stock Plummets 31% YTD: Should Investors Hold or Fold?April 14, 2025 | msn.comReal Americans Don’t Wait on Wall Street’s Next MoveWhat's happening in the markets right now should concern every freedom-loving American who's worked hard and saved smart. Your 401(k) doesn't deserve to be dragged through the mud by tariffs, trade wars, reckless spending, and political standoffs. And you don't have to stand by while Wall Street plays roulette with your future.April 25, 2025 | Premier Gold Co (Ad)Amtech cuts Q2 revenue view to $15M-$16M from $21M-$23MApril 10, 2025 | markets.businessinsider.comAmtech Systems Shares Drop 13% After 2Q Outlook CutApril 9, 2025 | marketwatch.comAmtech Provides Second Quarter Fiscal 2025 Financial Guidance UpdateApril 9, 2025 | businesswire.comSee More Amtech Systems Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Amtech Systems? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Amtech Systems and other key companies, straight to your email. Email Address About Amtech SystemsAmtech Systems (NASDAQ:ASYS) manufactures and sells capital equipment and related consumables for use in fabricating silicon carbide (SiC), silicon power devices, analog and discrete devices, electronic assemblies, and light-emitting diodes (LEDs) worldwide. The company operates through Semiconductor and Material and Substrate segments. The Semiconductor segment designs, manufactures, sells, and services thermal processing equipment, including solder reflow ovens, horizontal diffusion furnaces, and custom high-temp belt furnaces for use by semiconductor, electronics, and electro/mechanical assembly manufacturers; and diffusion and reflow thermal systems, as well as wafer cleaning equipment and related services. The Material and Substrate segment manufactures and sells consumables and machinery for lapping and polishing of materials, such as silicon wafers for semiconductor products; sapphire substrates for LED lighting and mobile devices; silicon carbide wafers for LED and power device applications; various glass and silica components for 3D image transmission; quartz and ceramic components for telecommunications devices; and medical device components, and optical and photonics applications. It also offers substrate products comprising of double-sided wafer cleaning system, entegrity head tester, substrate carrier, substrate polishing templates, double-sided lapping and polishing machines, single-sided polisher, and substrate process chemicals. The company sells its products through sales personnel, as well as a network of independent sales representatives and distributors. Amtech Systems, Inc. was incorporated in 1981 and is headquartered in Tempe, Arizona.View Amtech Systems ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Tesla Earnings Miss, But Musk Refocuses and Bulls ReactQualcomm’s Range Narrows Ahead of Earnings as Bulls Step InWhy It May Be Time to Buy CrowdStrike Stock Heading Into EarningsCan IBM’s Q1 Earnings Spark a Breakout for the Stock? 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There are 6 speakers on the call. Operator00:00:00Good day, and welcome to the Amtech Systems Fiscal 4th Year and Full Year 2024 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. Speaker 100:00:16Good afternoon, and thank you for joining us for Amtech Systems' fiscal 4th quarter and full year 2024 conference call. With me on the call today are Bob Daigle, Chairman and Chief Executive Officer and Wade Janke, Chief Financial Officer. After close of market today, Amtech released its financial results for the fiscal Q4 and full year of 2024. The earnings release is posted on the company's website at www.amtechsystems.com in the Investors section. Before we begin, I'd like to remind everyone that the Safe Harbor disclaimer on our public filings covers this call and the webcast. Speaker 100:00:55Some of the comments to be made during today's call will contain forward looking statements and assumptions that are subject to risks and uncertainties, including, but not limited to, those contained in our SEC filings, all of which are posted within the Investors section of our corporate website. The company assumes no obligation to update any such forward looking statements. You are cautioned not to place undue reliance on forward looking statements, which speak only as of today. These statements are not a guarantee of future performance, and actual results could differ materially from expectations. Among the important factors which could cause actual results to differ materially from those in the forward looking statements are changes in the technologies used by customers and competitors change in volatility and the demand for products the effect of changing worldwide political and economic conditions, including trade sanctions the effect of overall market conditions, including the equity and credit markets and market acceptance risks ongoing logistics, supply chain and labor challenges and capital allocation plans. Speaker 100:02:03Other risk factors are detailed in our SEC filings, including our Form 10 ks and Forms 10 Q. Additionally, in today's conference call, we will be referring to non GAAP financial measures as we discuss the Q4 financial and year end results. You'll find a reconciliation of non GAAP measures to our actual GAAP results included in the press release issued today. I would now like to turn the call over to Amtech's Chief Executive Officer, Bob Daigle. Speaker 200:02:35Thank you, Erica. Well, good afternoon and thank you for joining us today. As we conclude our fiscal year, I'd like to take a moment to reflect on the strides we've made to transform our business and strengthen our foundation for future growth. Looking back over the last 12 months, I'm proud of what our team has accomplished. We've made significant progress in streamlining our business with a specific emphasis on optimizing our operations and delivering operating positive operating cash flow across all segments, even amid a strong secular downturn. Speaker 200:03:12While overall revenue was down 11% year over year in fiscal year 2024, we delivered $4,000,000 of adjusted EBITDA profit compared to $1,800,000 in fiscal year 2023. Contributing to this result, earlier this year, we implemented a comprehensive restructuring plan, which included organizational adjustments, cost reductions and operational enhancements. These efforts have translated into $7,000,000 of annualized operating savings, making our business both more efficient and enabling us to mitigate the existing market dynamics more effectively. As a part of this initiative, in early 2024, we took the strategic action to streamline our product portfolio by exiting from the unprofitable legacy equipment business at Piero Hoffman and investing in our more profitable and growing consumables business. The shift has paid off as sales of the consumable products at Pierre Hoffman surged by 28% year over year despite overall revenue growth of just 2%. Speaker 200:04:25Within our BTU business, with a sharp decline in demand for equipment, we've accelerated our shift to a hybrid manufacturing model, combining in house production with outsourced capabilities. In addition to strengthening our supply chain, this initiative has allowed us to manage lead times, reduce capital expenditures and enhance our operational flexibility. From a cost savings perspective, while these efforts remain ongoing by the middle of the next fiscal year, we expect to realize approximately $2,000,000 in additional operational savings above the $7,000,000 we have previously discussed. Beyond the core operations of our business, in response to the escalating input costs we faced over the past several years, we strategically adjusted pricing across our offerings, helping ensure we protect our margins while maintaining our competitiveness. Combined, despite continued weakness in the market, we managed to maintain positive adjusted EBITDA and reduce working capital to pay off our debt and end the year with a cash balance in excess of $11,000,000 Most of our efforts in 2024 focused on optimizing our business to improve profitability. Speaker 200:05:49As we begin our 2025 fiscal year, we are now focusing much more of our attention on driving sustainable long term growth with reoccurring revenue streams such as consumables, parts and services. We believe these revenue strength streams will strengthen our financial performance in the years ahead by providing higher margins with less cyclical revenue growth. To accelerate the growth in these areas of focus, we recently invested in both business leadership and marketing resources. In addition, as we close our fiscal year, we have renamed our business segments to better align with the markets we serve. Our Semiconductor Fabrication Solutions business, previously known as Materials and Substrate segment, will now focus on growing our consumables parts and service offerings for semiconductor wafer and device fabrication. Speaker 200:06:46Meanwhile, our Thermal Processing Solutions business, formerly the Semiconductor segment, will focus on capital equipment for advanced packaging with an emphasis on applications that support AI data centers and on continuing to grow our parts and services businesses. Market demand challenges persist in semiconductor segments that are not associated with AI infrastructure. Our Consumables Parts and Services business did experience some growth in 2024 even with the broad market headwinds, but could not overcome the strong headwinds from very weak demand in equipment in areas that were not associated with AI infrastructure. Timing for a broader market recovery remains uncertain, but we are well positioned to deliver strong operating results when demand recovers. In conclusion, we are quite proud of the progress we've made this year. Speaker 200:07:44Through our strategic actions to optimize our operations, reduce costs and strengthen our balance sheet, we've set ourselves up for more profitable and sustainable growth as markets recover. We are now focused on fully capitalizing on the emerging opportunities in AI infrastructure and expanding our reoccurring revenue streams to drive margin improvement and accelerate growth. To the current macro although the current macroeconomic environment is challenging, we are optimistic that our ongoing transformation will deliver profitable growth with high returns on invested capital so we can create meaningful shareholder value. With that, I'll turn it over to Wade for further details on our financial results. Speaker 300:08:28Thank you, Bob. Net revenues for the 4th quarter decreased 10% sequentially and decreased 13% from the Q4 of fiscal 2023. The sequential decrease is primarily due to lower sales of our diffusion furnaces, reflow and wafer cleaning equipment, partially offset by higher consumable parts and service revenue. The decrease from the prior year is primarily attributable to lower sales across most of our product portfolio due to the slowdown in the broader semiconductor market. In the Q4 of our fiscal 2024 period, our GAAP gross margin increased by $7,000,000 compared to the same prior year period. Speaker 300:09:12This is driven by better margin profiles, product mix and cost save this year following the 4th quarter of 2023, we had a $4,600,000 intangible asset impairment charge and the $1,500,000 write down of inventory related to the polishing equipment line. On a sequential basis, GAAP gross margins in our Thermal Processing Solutions segment was positively affected by product mix, attributed to increased revenue for parts and services as well as improved material costs. GAAP gross margin in our Semiconductor Fabrication Solutions segment slightly decreased on a sequential basis due primarily to less favorable product mix on consumables and equipment. Selling, general and administrative expenses increased by approximately $600,000 on a sequential basis and decreased $2,300,000 compared to the Q4 of 2023. The sequential increase is due primarily to increased consulting audit and IT expenses. Speaker 300:10:13Compared to the same prior year quarter, the decrease is driven by the $500,000 intangible asset impairment charge and lower labor and labor related expenses as a result of our cost reduction initiatives as well as lower shipping on expenses and lower revenues. Research and development engineering expenses increased by $300,000 sequentially and decreased $1,600,000 compared to the prior year Q4. With the sequential decrease due primarily to the timing of is related to specific projects in both segments and the decrease from prior year Q4 was attributable to development efforts in our semiconductor fabrication solutions segment that did not reoccur. GAAP net loss for the Q4 of fiscal 2024 was $500,000 or $0.04 per share. This compares to GAAP net income of $400,000 or $0.03 per share for the preceding quarter and a GAAP net loss of $12,000,000 or $0.85 per share for the Q4 of fiscal 2023. Speaker 300:11:19Non GAAP net loss for the Q4 of fiscal 2024 was $7,000 or 0 point 0 $0 per share. This compares to non GAAP. Net income of $1,100,000 or $0.08 per share for the preceding quarter and non GAAP net loss of $2,500,000 or $0.18 per share for the Q4 of fiscal 2023. For cash, unrestricted cash and cash equivalents at September 30, 2024 were $11,100,000 compared to $13,100,000 at September 30, 2023. Debt payments during the 3 months ended were $4,000,000 which included the final payment of our term loan and revolving credit facility. Speaker 300:12:05Net cash as of September 30, 2024 was $10,800,000 compared to $2,400,000 as of September 30, 2023. Now turning to our outlook. For the 1st fiscal quarter ending December 31, 2024, we expect revenues in the range of $21,000,000 to $24,000,000 with adjusted EBITDA nominally neutral. The near term outlook for revenue and earnings remains challenging. The actions we took in fiscal 2024 will reduce Amtech's structural cost by approximately $7,000,000 annually. Speaker 300:12:43Also by mid next fiscal year, we expect to realize an additional $2,000,000 in operational savings from our outsourcing to contract manufacturing. We are focused on optimizing our operations and delivering positive operating cash flows across all our segments even amid a prolonged secular downturn. Operating results can significantly be impacted positively or negatively by the timing of orders, system shipments, system shipments, logistical challenges and the financial results of semiconductor manufacturers. Additionally, the semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Actual results may differ materially in the weeks months ahead. Speaker 300:13:31A portion of Amtech's results is denominated in RMBs, a Chinese currency. The outlook provided is based on an assumed exchange rate between the United States dollar and the RMB. Changes in the value of the RMB in relation to the United States dollar could cause actual results to differ from expectations. I will now turn over the call to the operator for questions. Operator? Operator00:13:58Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of Craig Irwin from ROTH Capital Partners. Your line is now open. Speaker 400:14:29Good evening and thank you for taking my questions. First, I should say congratulations on the really good execution, bringing down costs, tightening everything up in this environment that we're all operating through. So great execution there. Speaker 200:14:46Thank you, Craig. Speaker 400:14:48My question is this, and it's a little bit high level, but you're renaming your segments, right? And that speaks for a refreshed and renewed strategic focus. Can you maybe call out some of the applications or opportunities where you think Amtech can participate in sort of AI and data center growth and electricity demand growth over the next several years. What do you see as relatively fresh products that you have to offer into this market? And how do you expect this to take shape as far as visibility for the investment community? Speaker 200:15:25All right. Great, great, great. Yes, so let me start again at the high level. There were a couple of reasons for really revisiting our segment definitions and some of it was, to be frank, I thought it was a little bit confusing. I think some of what we referred to as the semiconductor segment goes back to the days where Amtech was heavily involved with solar. Speaker 200:15:48So it was either solar business or semi. And when I looking at the portfolio, a lot of what when I look at our business, we really have the semiconductor front end of our business, which is really involved in actual semiconductor device fabrication, which is again what will be and it's broader than just materials and substrates. A lot of what we do there involves services and parts for that part of the business. And then what we've been referring to is the semiconductor segment. It's really back end packaging and assembly of the electronics. Speaker 200:16:31So again, it was trying to clean this up and get clearer definition about we have the front end of our business, which is semi fab related and then we have the back end, which is packaging and assembly and trying to get some clarity around that. Now then back to the strategic question of where do we grow, obviously AI, everybody has been targeting AI as a growth driver for their business. We're no different. We play there. We have been playing there. Speaker 200:17:03Primarily on the back end, our reflow equipment, for example, is used extensively in terms of the advanced packaging applications for semiconductor production. We are also looking, however, at opportunities that are adjacent that would relate a little bit. It's more on the consumable side where we are working in its early stage with some customers that have some unique solutions for packaging and in particular thermal management, which has been talked a lot about in terms of the challenges with these the more advanced AI chips, how much heat they're generating. We are involved and have been involved in the with consumables at the front end with one of our customers that's heavily focused on trying to solve those problems. So I see that as an opportunity really to broaden what we're doing in an area of AI beyond just the back end equipment, but also in the consumables area. Speaker 200:18:15But stepping back even further from that, I see the consumables parts and service business, which as we noted in the call, even with a very challenging industry dynamics, we did see growth. We were able to grow our consumables parts and service business, although less than we would have obviously liked, we did see growth. All of our decline, more than all our decline was driven by weakness in the equipment sector. So when I look ahead, what I want to see us is transform Amtech into much more of a consumables parts service business. Not that equipment areas, especially AI related are very much of interest, But I do see those areas as driving our margins and driving growth opportunities. Speaker 200:19:17And as we mentioned in the script, that's really where we're investing. We've brought on, we're bringing talent on board. I'll characterize, we were very, very fragmented in what we're now calling semiconductor fabrication solutions. We were really managing those as 3 tiny businesses and they're now under single leadership with shared commercial resources in marketing and sales. We will also share in areas of for product development as we move forward. Speaker 200:19:51So I see the investments in those areas where frankly we've been pretty passive, but I think there's plenty of opportunity I believe for us to proactively grow that part of the business. It will not only I think improve our margins, drive growth, but will also reduce the cyclicality that is inherent to any of these any business that's heavily reliant on equipment sales. Don't know if that answered your question, Craig, or if you'd like me to elaborate on anything. Happy to add color. Speaker 400:20:26It goes a long way to answering the question, actually starts to step into the secondary I really wanted to ask about. So many of us following Emtek for the last number of years have been quite excited about the participation in the silicon carbide industry. The emerging power semiconductor technology can be transformational to our economy, not just in electric vehicles, but in industrial equipment, military equipment, all sorts of things. And it appeared that Amtech was particularly well positioned on the consumable side to serve a niche in sort of consumables for wafer production. Can you maybe share with us your growth in the consumables business? Speaker 400:21:17Did you see absolute growth in cassettes and other materials supplied into the silicon carbide industry? That industry is going through a cyclical readjustment, as you pointed out. Yes. It seems there is absolute growth going on. Are you seeing more growth in things like cassettes for 8 inches wafers and 6 inches wafers? Speaker 400:21:36Can you just talk about where the green shoots are in that industry? Speaker 200:21:40Yes. So we again, yes, we've participated pretty broadly in and continue to do so in silicon carbide wafer production with our consumables out of PR Hoffman. And as I mentioned, we saw very substantial year over year growth in that PR Hoffman part of the business, 28% actually year over year in the consumables out of PR Hoffman. A lot of that was related to silicon carbide. So again, I think the luster in EV has dimmed a bit and there's been some inventory corrections going on. Speaker 200:22:23So at least and now this is purely opinion, Craig, but I do believe where people were expecting 30%, 40% market growth, EV related, we're likely to see something that's more in the let's say normalized 15%, 20%, still very substantial growth. But I think the wild card in all of this is there's been so much investment in silicon carbide globally and it's continuing especially in Mainland China that there's a lot of effort right now frankly in expanding the application base for silicon carbide. So I think the expectations for silicon carbide growth where maybe people were saying 30%, 40% tied directly to EV have been somewhat tempered. I'm not so sure we're not going to see growth rates that approach those levels with the combination of what was going to be EV and these other application areas that everybody's focused on for expanding their base. So I'm still very optimistic, frankly around the EV the silicon carbide growth driver for us. Speaker 200:23:40We participate broadly. It's a very attractive market application area. The enthusiasm is tempered around EV, but that made that I think will get offset at least to some degree by other applications. Speaker 400:23:58Understood. Well, thank you for taking my questions. I'll go ahead and hop back in the queue. All right. Thank you, Craig. Operator00:24:14Your next question comes from the line of Mark Miller from The Benchmark Company. Your line is now open. Speaker 500:24:20I'd like to add my congratulations to the management, the cost management and the expectations for more cost reductions next year. I was just thinking or I was just trying to understand, your cash went down $2,000,000 last quarter. What is your outlook for cash flow generation over the next 6 months? Speaker 300:24:41Yes, I can take that. So our cash flow generation will be partially fueled by our operation activities as we reduce inventory. And then of course, our positive EBITDA in the future quarters. Speaker 200:24:58Just note, Mark, we paid off what was the number? Speaker 300:25:01We paid off around $4,000,000 Yes. Speaker 200:25:05So the reason the cash went down is we've paid off the rest of our debt, right. We want to be debt free. So we basically paid off $4,000,000 and we're done. We're done. No more debt right now. Speaker 500:25:18Okay. So there's no more covenants or anything you have to worry about because you paid off your term loan and revolver? Speaker 200:25:23Yes. And frankly, again, that was our focus, right? Get the operations to be cash flow positive even during the downturn, be aggressive on working capital, get rid of the debt. Again, we control big believer we are going to control our own destiny on costs. We're going to control our own destiny in the medium long term by our growth initiatives that don't just not just be relying on market recovery, but look at expanding our business. Speaker 200:25:56And also obviously, it will be nice when the market actually does recover, which it will, I just don't know when that will be. Speaker 500:26:05Okay. Your margins ticked up. You were saying there was mix. I'm just wondering margin outlook ticked up for the highest of the year for the Q4. I'm just wondering what you're thinking about in terms of margin outlook? Speaker 300:26:17Yes, sure. Thank you. So for our margin outlook, given the guidance for Q1 coming into fiscal year 2025 is going to be slightly close, just under that Q4 performance, given what we're shipping out that quarter. But going in after that, we expect to be right in that range of 40%. Yes. Speaker 300:26:46So a Speaker 200:26:46lot of the restructuring we did, Mark, was really aimed at that, right, is at similar volume revenue numbers, similar mix, being in that 40 ish or better. And then hopefully with, again, revenue should help that. Right. Speaker 300:27:06When revenue and more volume comes in, we'll get more operating leverage and feed into some of that overhead at that cost of goods sold level and we'll be able to enhance our margins. And part of that contract manufacturing strategy that Amtech has put in place will help yield even more results in the future. Speaker 500:27:34Okay. R and D kicked up last quarter. Do you expect that to come back down to Q3 for in terms of average for 2025? Speaker 200:27:44Do you know R and D this quarter was up a little bit? Yes, it was a Speaker 300:27:48little bit offset from last quarter honestly. Some of our R and D costs pushed out into the Q4 from the Q3. So we're going to go pretty much back to our normal run rate if you average the 2 quarters. Speaker 500:28:05Can you tell me relate what that is, please? Normal run rate. Speaker 300:28:16We should be right around $1,000,000 for the quarter. Speaker 500:28:20Okay. All right. Thank you. Thank you. Speaker 300:28:23Yes, you're welcome. Speaker 400:28:26Thanks Mark. Operator00:28:28There are no further questions at this time. I will now turn the call back to Bob Daigle. Please continue. Speaker 200:28:34All right. Well, thank you for joining our conference call today and I'm looking forward to updating everybody on the progress we're making in the months to come. Thank you and have a good evening. Operator00:28:47Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.Read morePowered by