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Amtech Reports Fiscal 2012 Results

December 4, 2012

TEMPE, Ariz., Dec. 4, 2012 /PRNewswire/ — Amtech Systems, Inc. (NASDAQ: ASYS), a global supplier of production and automation systems and related supplies for the manufacture of solar cells, semiconductors, and sapphire and silicon wafers, today reported results for its fiscal year ending September 30, 2012.

Fiscal Year 2012 Financial Highlights:

  • Net revenue of $81.5 million
  • Solar revenue of $44.2 million
  • Bookings of $40.9 million ($13.2 million solar)
  • Impairment charge of $5.4 million
  • Inventory write-downs and loss on firm purchase commitments of $12.8 million
  • Net loss of $23.0 million, or $2.43 per share, including $1.58 per share of non-cash charges for impairment, inventory write-downs and loss on firm purchase commitments

Fourth Quarter 2012 Financial Highlights:

  • Net revenue of $10.9 million
  • Solar revenue of $2.8 million
  • Bookings of $5.7 million ($2.1 million solar)
  • Backlog of $18.7 million ($13.8 million solar) at September 30, 2012
  • Net loss of $14.1 million, or $1.49 per share including $1.22 per diluted share of non-cash charges for impairment, inventory write-downs and loss on firm purchase commitments
  • Unrestricted cash of $46.7 million at September 30, 2012, compared to $42.3 million at June 30, 2012

Mr. Fokko Pentinga, Chief Executive Officer of Amtech, commented, “We continue to work very closely with our customers to support both their current needs as well as their ongoing pursuit of technology differentiation through lower cost and higher cell efficiency. In fiscal year 2012, we continued to advance our products and technologies including our high-end diffusion, ion implanter, new batch PECVD and N-type technologies. Visibility of a market upturn continues to be limited and we expect 2013 to be a difficult year throughout the solar value chain with only selective capacity expansions. Although the current environment is challenging, we believe the long-term opportunity in solar is favorable and believe our differentiating technologies will continue to advance and further strengthen our position in the market.”

Mr. Brad Anderson, Chief Financial Officer, added, “Our previously announced cost reduction plans are essentially complete including substantial reductions in our solar head count and corporate costs. We have eliminated non-essential research and development (“R&D”) costs and expect our R&D costs in fiscal 2013 to be substantially less than fiscal 2012 as we transition many of our key projects into production. Further cost reduction plans are in process to closely coincide with the extended downturn. We are focused on managing our cash while continuing to maintain premier customer service including the continued investment in next generation technology solutions for the solar industry. We anticipate that the current challenges in the solar market combined with our continued investment in key products and technologies will cause our cash levels to decrease during fiscal 2013, but to levels we believe are manageable beyond fiscal 2013.”

Net revenue for the fourth quarter of fiscal 2012 totaled $10.9 million compared to $24.3 million in the previous quarter and $59.9 million in the fourth quarter of fiscal 2011. The sequential change reflects the continued unfavorable market conditions within the solar industry.

Total customer orders were $5.7 million ($2.1 million solar) in the fourth quarter of fiscal 2012, compared to total orders of $6.1 million ($0.7 million solar) in the previous quarter and $16.8 million ($4.7 million solar) in the same period a year ago.

At September 30, 2012, the Company’s total order backlog was $18.7 million, including $13.8 million in solar orders and deferred revenue. The effect of foreign exchange on backlog during the September quarter was a positive $0.8 million. Backlog includes deferred revenue and customer orders that are expected to ship within the next 12 months.

Gross margin in the fourth quarter of fiscal 2012 was negative 63%, reflecting $9.2 million of inventory write-downs and losses on firm purchase commitments, compared to 20% in the prior quarter and 34% in the fourth quarter of fiscal 2011.

Selling, general and administrative (SG&A) expenses in the fourth quarter of fiscal 2012 were $4.4 million compared to $6.4 million in the preceding quarter, a 32% reduction. The decrease in SG&A expenses was primarily due to lower commissions and shipping costs related to lower revenues and also reflects company-wide cost control initiatives.

Research and Development (R&D) expense was $3.9 million in the fourth quarter compared to $3.7 million in the preceding quarter, primarily due to continued investment in the Company’s solar ion-implant project along with other on-going solar R&D projects.

The Company recorded a goodwill impairment charge in the fourth quarter of $4.7 million due primarily to the current supply / demand imbalance in the solar equipment market, the expectation that the market downturn will continue in 2013, and the decline in the market value of the shares of solar companies.

Depreciation and amortization in the fourth quarter of fiscal 2012 was $0.6 million compared to $0.7 million in the third quarter of 2012.

Income tax benefit in the fourth quarter of fiscal 2012 was $3.7 million, reflecting an effective tax rate of approximately 18%. The effective tax rate is lower than the U.S. tax rate of 34% due primarily to the company’s inability to currently recognize, for tax purposes, the losses at the Kingstone operations in China, and the 25% tax rate applicable to losses incurred at the company’s Dutch operations.

Net loss for the fourth quarter of fiscal 2012 was $14.1 million, or $1.49 per diluted share, compared to a net loss of $3.0 million, or $0.31 per share, in the preceding quarter and net income of $3.1 million or $0.31 per diluted share in the fourth quarter of fiscal 2011.

Total unrestricted cash and cash equivalents at September 30, 2012 were $46.7 million, compared to $42.3 million at June 30, 2012. The increase in cash was due primarily to strong receivable collections and other working capital efforts.

Outlook

The supply/demand imbalance for solar cells and modules continues to negatively impact the entire solar supply chain and is expected to continue in fiscal 2013. The company will not be providing quarterly or annual guidance until there is better visibility regarding forward demand.

Operating results could be impacted by the timing of system shipments, the net impact of revenue deferral on those shipments, and recognition of revenue based on customer acceptances, all of which can have a significant effect on operating results.

Conference Call

Amtech Systems will host a conference call and webcast today at 5:00pm ET to discuss fourth quarter fiscal 2012 financial results. Those in the USA wishing to participate in the live call should dial (877) 317-6789. From Canada, dial (866)-605-3852, and internationally, dial (412) 317-6789. Request “Amtech” when connected to the operator. A replay of the call will be available one hour after the end of the conference through December 12, 2012. To access the replay please dial US toll free (877) 344-7529 and enter code 10020571. Internationally, dial (412) 317-0088 and use the same code. A live and archived web cast of the conference call can be accessed in the investor relations section of Amtech’s website at www.amtechsystems.com.

About Amtech Systems, Inc.

Amtech Systems, Inc. manufactures capital equipment, including silicon wafer handling automation, thermal processing and ion implant equipment and related consumables used in fabricating solar cells, LED and semiconductor devices. Semiconductors, or semiconductor chips, are fabricated on silicon wafer substrates, sliced from ingots, and are part of the circuitry, or electronic components, of many products including solar cells, computers, telecommunications devices, automotive products, consumer goods, and industrial automation and control systems. The Company’s wafer handling, thermal processing and consumable products currently address the diffusion, oxidation, and deposition steps used in the fabrication of solar cells, LEDs, semiconductors, MEMS and the polishing of newly sliced silicon wafers.

Cautionary Note Regarding Forward-Looking Statements

Certain information contained in this press release is forward-looking in nature. All statements in this press release, or made by management of Amtech Systems, Inc. and its subsidiaries (“the Company” or “Amtech”), other than statements of historical fact, are hereby identified as “forward-looking statements” (as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “would,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. Examples of forward-looking statements include statements regarding Amtech’s future financial results, operating results, business strategies, projected costs, products under development, competitive positions and plans and objectives of the Company and its management for future operations.

We cannot guarantee that any forward-looking statement will be realized, although we believe that the expectations reflected in the forward-looking statements are reasonable. Achievement of future results is subject to risks, uncertainties and potentially inaccurate assumptions. The Form 10-K that we filed with the Securities and Exchange Commission for the year-ended September 30, 2011 listed various important factors that could affect Amtech’s future operating results and financial condition and could cause actual results to differ materially from historical results and expectations based on forward-looking statements made in this document or elsewhere by Amtech or on its behalf. These factors can be found under the heading “Risk Factors” in the Form 10-K and investors should refer to them. Because it is not possible to predict or identify all such factors, any such list cannot be considered a complete set of all potential risks or uncertainties. Except as required by law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise.

    Contacts:

    Amtech Systems, Inc.         Christensen
    Bradley C. Anderson          Investor Relations
    Chief Financial Officer      Patty Bruner
    (480) 967-5146               (480) 201-6075
    irelations@Amtechsystems.com pbruner@christensenir.com
    Condensed Consolidated Statements of Operations
    (in thousands, except per share data)
    ------------------------------------

                                                     Quarters Ended             Years Ended
                                                      September 30,            September 30,
                                                      -------------            -------------
                                                    2012 (unaudited)                          2011  2012 (unaudited)               2011
                                                     ---------------                          ----   ---------------               ----

    Revenues, net of
     returns and
     allowances                                                       $10,945              $59,868                    $81,539  $246,705
    Cost of sales                                                       8,648               39,050                     59,511   154,881
    Write-down of
     inventory                                                          6,702                  576                     10,380     1,167
    Losses on firm
     inventory purchase
     commitments                                                        2,455                    -                      2,455         -
                                                                        -----                  ---                      -----       ---
    Gross profit                                                       (6,860)              20,242                      9,193    90,657

    Selling, general
     and administrative                                                 4,354               10,059                     23,055    43,739
    Research and
     development                                                        3,947                2,067                     13,694     5,784
    Impairment charges                                                  4,745                    -                      5,428         -
    Expense related to
     reacquired shares                                                      -                2,855                          -     2,855
                                                                          ---                -----                        ---     -----
    Operating income
     (loss)                                                           (19,905)               5,261                    (32,984)   38,279

    Interest and other
     income (expense),
     net                                                                 (129)                 (88)                        66        30
                                                                         ----                  ---                        ---       ---
    Income (loss)
     before income
     taxes                                                            (20,035)               5,173                    (32,918)   38,309

    Income tax
     provision
     (benefit)                                                         (3,670)               2,600                     (5,320)   16,190
                                                                       ------                -----                     ------    ------
    Net income (loss)                                                 (16,365)               2,573                    (27,598)   22,119
                                                                      -------                -----                    -------    ------

    Add: net loss
     attributable to
     noncontrolling
     interest                                                           2,254                  502                      4,567       763
    Net income (loss)
     attributable to
     Amtech Systems,
     Inc.                                                            $(14,111)              $3,075                   $(23,031)  $22,882
                                                                     ========               ======                   ========   =======

    Earnings (Loss) Per
     Share:
    Basic income (loss)
     per share
     attributable to
     Amtech
     shareholders                                                      $(1.49)               $0.32                     $(2.43)    $2.41
    Weighted average
     shares outstanding                                                 9,479                9,581                      9,471     9,480

    Diluted income
     (loss) per share
     attributable to
     Amtech
     shareholders                                                      $(1.49)               $0.31                     $(2.43)    $2.34
    Weighted average
     shares outstanding                                                 9,479                9,778                      9,471     9,764

    Condensed Consolidated Balance Sheets
    (in thousands)
    -------------

                                                                                                                   September 30,                               September 30,
    Assets                                                                                                       2012 (Unaudited)                                                    2011
    ------                                                                                                        ---------------                                                    ----
    Current Assets
                       Cash and cash
                       equivalents                                                        $46,726                                       $67,382
                       Restricted
                       cash                                                                 4,644                                         6,571
                       Accounts
                       receivable
                       Trade (less allowance
                       for doubtful accounts
                       of $517 and $246 at
                       September 30, 2012 and
                       September 30, 2011,
                       respectively)                           7,486            14,447

                       Unbilled
                       and other                                                           10,807                                        30,822
                      Inventories                                                          25,670                                        37,162
                       Deferred
                       income taxes                                                         3,460                                         9,560
                       Prepaid income
                       taxes                                                                1,400                                         4,260
                      Other                                                                 2,650                                         4,647
                                                                                                                                         -----
                       Total
                       current
                       assets                                                             102,843                                       174,851

    Property, Plant and Equipment - Net                                                                                                  12,387                                    12,680
    Deferred Income Taxes - Long Term                                                                                                       470                                         -
    Other Assets - Long Term                                                                                                                871
    Intangible Assets - Net                                                                                                               4,096                                     5,021
    Goodwill                                                                                                                              8,355                                    13,313
                       Total
                       Assets                                                            $129,022                                      $205,865
                                                                                                                                      ========

    Liabilities and Stockholders'  Equity
    -------------------------------------
    Current Liabilities
                       Accounts
                       payable                                                             $5,780                                        $8,928
                       Accrued compensation
                       and related taxes                                         5,311    10,686
                       Accrued warranty
                       expense                                                    2,687     2,265
                       Deferred
                       profit                                                              10,236                                        27,608
                       Customer
                       deposits                                                             3,958                                         7,862
                       Other accrued
                       liabilities                                                          7,499                                         6,775
                       Income taxes
                       payable                                                              7,140                                        16,670

                       Total
                       current
                       liabilities                                                         42,611                                        80,794

    Income Taxes Payable Long-term                                                                                                        2,360                                     2,630
    Deferred Income Taxes Long-term                                                                                                           -                                       110
                       Total
                       liabilities                                                         44,971                                        83,534

    Stockholders' Equity
                       Common stock; $0.01 par
                       value; 100,000,000 shares
                       authorized;
                       shares issued and
                       outstanding: 9,483,588
                       and 9,431,393 at June
                       30, 2012 and  September
                       30, 2011, respectively
                                                                  95                94

                       Additional
                       paid-in
                       capital                                                             77,377                                        83,207
                       Accumulated other
                       comprehensive loss                                       (6,817)   (2,078)
                       Retained
                       Earnings                                                            12,065                                        35,096

                       Total Amtech
                       Systems Inc.
                       stockholders'
                       equity                                           82,720            116,319
                       Noncontrolling
                       interest                                                             1,331                                         6,012
                       Total
                       Equity                                                              84,051                                       122,331
                                                                                           ------                                       -------
                       Total Liabilities and
                       Stockholders' Equity                                             $129,022                                      $205,865
                                                                                                                                    ========

    Condensed Consolidated Statements of Cash Flows
    (in thousands)
    -------------

                                                                                                                   Year Ended
                                                                                                                  September 30,
                                                                                                                2012 (unaudited)                             2011
                                                                                                                 ---------------                             ----
    Operating Activities
                     Net income (loss)                                     (27,598)   22,119
                      Adjustments to
                      reconcile net income
                      (loss) to net
                      cash provided by
                      (used in) operating
                      activities:
                      Depreciation and
                      amortization                                  2,858     2,814
                      Write-down of
                      inventory                                    10,380     1,167
                      Loss on firm
                      inventory purchase
                      commitments                                   2,455                          -
                      Provision for
                      allowance for
                      doubtful accounts                                         300      139
                      Deferred income
                      taxes                                                            3,781      (635)
                      Impairment of
                      long-lived
                      assets                                                           5,428         -
                      Non-cash share based
                      compensation expense                          1,763     1,470
                      Changes in operating
                      assets and
                      liabilities:
                      Change in
                      restricted
                      cash                                                             1,781      (274)
                      Accounts
                      receivable                                                                23,700                           (21,399)
                     Inventories                                                                (2,130)                          (14,194)
                      Accrued
                      income
                      taxes                                                                   (12,683)                             7,834
                      Prepaid expenses
                      and other assets                                        1,817  (1,740)
                      Accounts
                      payable                                                                   (2,807)                           (3,644)
                      Accrued
                      liabilities and
                      customer deposits                                      (5,387)   5,137
                      Deferred
                      profit                                                                  (16,096)                            16,632
                                                                                               -------                            ------
                      Net cash provided by
                       (used in) operating
                       activities                                          (12,438)   15,426
                                                                            -------

    Investing Activities
                      Purchases of
                      property, plant and
                      equipment                                              (1,306) (5,183)
                      Investments in
                      acquisitions, net of
                      cash                                                                         -                            (1,055)
                     Other                                                                                                          (236)                       -
                      Net cash used in
                      investing
                      activities                                                     (1,542)    (6,238)
                                                                                      ------

    Financing Activities
                      Proceeds from
                      issuance of common
                      stock, net                                                  3    1,330
                      Purchase of common stock
                      under repurchase program                     (4,080)                         -
                      Payments on long-
                      term obligations                                                   (31)     (127)
                      Excess tax benefit
                      of stock options                                                              -                               855
                      Net cash provided by
                      (used in) financing
                      activities                                             (4,108)   2,058
                                                                             ------

    Effect of Exchange Rate Changes on Cash                                                                                       (2,568)                    (628)
                                                                                                                                  ------                     ----

    Net Increase (Decrease) in Cash and Cash Equivalents                                                                         (20,656)                  10,618
    Cash and Cash Equivalents, Beginning of Year                                                                                  67,382                   56,764
    Cash and Cash Equivalents, End of Year                                                                                       $46,726                  $67,382
                                                                                                                                 =======                  =======

SOURCE Amtech Systems, Inc.


Source: PR Newswire