Amtech Systems (ASYS) 30 Nov 222022 Q4 Earnings call transcript

Good day, and welcome to the Amtech Systems Fiscal Quarter and Fiscal Year 2022 Earning 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.

Good afternoon, and thank you for joining us for Amtech Systems fiscal fourth quarter and full year 2022 conference call. With me on the call today are Michael Whang, Chief Executive Officer; Lisa Gibbs, Chief Financial Officer, and Paul Lancaster, Vice President of Sales and Customer Service. today, quarter its and market the results of fourth fiscal full close Amtech financial released for After year XXXX. is investors release www.amtechsystems.com earnings posted company's the The website in the section. on at

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

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

worldwide pandemic. market the Whang, factors Form Chief markets detailed risks; of are future sanctions; in Officer. to risk in those customers including economic materially and a effect forward-looking call demand of the COVID-XX Executive Mike statements supply chain undue SEC statements, cautioned results today. Among now Other to Forms and XX-K on and its the performance, not volatility in statements filings, and the products; logistics, are important You are expectations. ongoing XX-Q. capital company's differ for overall results from changes guarantee over technologies current worldwide place could materially including plans; changing not conditions, could only actual differ I and and our factors of the the reliance will to forward-looking in the cause These competitors; turn and challenges; change of conditions, actual effect allocation as which the from used which equity are political the acceptance and including trade credit speak market labor by and

place much with backlog and us million everyone million a joining in in $XXX U.S. primarily year revenue million, a was backlog able strong as Fiscal QX year in and and we for of fiscal the EV-related Overall, SMT during our $XX QX. built the about Shanghai was product our Erica, we the $XXX in To in up you, for demand is advanced long strengthening to demand diversification Thank revenue, the including lockdown businesses. remain service excited ‘XX packaging over lines operations. continuing this year XX% multiple year. across the opportunities $XX Amtech million across today. growth XX% perspective, to for bookings, during Driving up challenges year-over-year and grew backlog of term year, exiting the of lockdown for in Shanghai with revenue despite our QX, all were grow. the

semi Within straight packaging quarters advanced unit, business the nearly our strong demand products. nine of following for

spending changing have and existing capital the in as conditions. We new digest evaluate customers in see of capacity market light begun orders to softening projects

In a mitigate strategy in in as applications, volume our to global addition, high shift look risks. SMT we multifaceted are customers seeing

the within in While we by battery for a the Also cooling the this EV strong our Materials thermal market. driven of applications overflow continue applications business our and products, others. module processing see feel in EV will disruptions seeing the in consumable for carbide present of high ramp substrates wafer we multiple serving we These demand and Substrate meaningful this demand driven redistribution capacity. unit, are furnaces In opportunity the semi near to causing to customer for by high the temperature now, volume increases and great include is sensors, among assemblies belt delays base unit, silicon power business future.

as a ramp multiyear digest, this individual again. the expansion wafer capacity past, in ramp then As capacity we have customers be cycle said will then

are capacity and high growth In to participation across year stabilization saw megatrend while align and megatrend phase summary, our is of EV a material hit capacity more As of fiscal in at online. bookings divisions a four-fold dealing to all quarter, brought XXXX, as markets product such believe existing is wafer we We would up creates customer applications are a to to we and next business the points EV are to In for expansions December wafer expect lines of coming strategic alignment creation intersection in years. with demand as demand value the a growth fully of the this, durable our seeing to in disruption with that strategy increase utilized this are expanded we in units. hold. subsequent related foundation while multiple multiple in confident evidence we see consumable strong our demand, step

into As will now and call shareholder value model. we as Lancaster. tailwinds business we several a the turn our with confident, well growth to in realize we leverage we profitability I to are operating positioned exposure creates current opportunity look are Paul markets ahead, accelerates over drive built to significant secular increased the the and demand

further Thank see advanced we packaging Expanding healthy SMT to you, Michael. products, and to our mid demand environment with on continue the long-term interest.

in near-term seen electric industry applications. given of with both softening cyclical the and nature macro Michael exposure this, we semiconductor to seeing strong Offsetting the are have we mentioned, products as vehicle growth headwinds. However,

of million quarter, for order products belt furnaces, growing for last these total. an company backlog received XX% approximately to $X example, our the we For initial high-temp

Within on at as to EV, in continue the stage demand increases primarily silicon consumable on capacity expansion execute we this customers see which carbide plans. our their market, focused is

of for forward, effort than that expansion going It evidence saw to that be the is additions important year-over-year longer in silicon. often As traditional though remember will of a capacity fourth growth pace the multiyear products. this fiscal we and quarter, is of this, a XXX% these revenue

consumables to stage, demand this high-temp furnaces, ability At remains capacity. internal for our Taken together, is carbide of the service very these combination namely chain robust. supply constraints belt and this a and limiting readily silicon demand products,

strengthen to reduce risk. the manufactured are and expand manufacturing times in predominantly are our products capacity further chain U.S., to executing these supply we lead As and our

While resiliency and convert and to appropriate we are to we urgently capture still over to Lisa. quickly I'll the the revenue to process, early have ensure now ahead. opportunity scale, moving more are call capability in we forward the turn the backlog

Paul. quarter the our with equipment packaging Net increases polishing of fiscal XX% revenues you, consumables. in primarily from and Thank advanced of XX% sequential fourth to XXXX, and shipments increased increase the sequentially attributable increased and equipment

our fiscal net the from to two on Selling, the of semiconductor expenses period. The quarter increased million sequentially our XXXX and million audit our $X.X to and net or closure cash $X.X timing compared prior the income equivalents $X.X sequentially offset across Approximately Gross to engineering cash third material a fourth of compared million the to of COVID locations, or provision and to to increased As June XX, in period. of due third and operating a XXXX, $XX.X were the margin Net September sequential compares was partially fiscal $X.X $X.XX of was relating of approximately the XXXX months in flat XX, product facility lines. million was for quarter in by fees. segment. fourth the in The XXXX $X.X the $X.X quarter increased million general three Unrestricted prior was $X.X primarily fiscal the fiscal was net Operating fourth the per fourth same Research, compared mandated period. prior at is of of XXXX relates million and and internal XX% income of or compared fourth the prior in in Income million a during year external its to reminder, the year administrative closed held XXXX. million primarily of basis United share September prior in the ended XXXX. $X.X income income per the increasing for for increase primarily quarter our compared for shipments $XX.X of States. of period. and $X.X a was cash $X.XX quarter relatively per same costs for $XX.X from $XX,XXX of of the operating and year revenues the year XXXX, the decreased months balance to at government $X.XX development increase provision share. primarily XXXX XXXX in from and million fiscal income income our quarter of of million to million result million fiscal same preceding to and utilization quarter share quarter tax all This increased Shanghai million XX, of policies. all due quarter $X.X

and $XX.X increase fiscal million we million we our of with our was in diluted to fiscal XXXX, from of net The million. cash in our sale an $X.XX added from income approximately share. and of annual XXXX an XX% inflow gain year, Massachusetts XXXX pleased per the million of As results a fiscal are $XX.X results in $XXX resulted benefit or of net $XX.X our conclude, building revenue, year

focus into to organic growth strategy, we to will Looking product ‘XX, on opportunities. strategic drive continue pursuing includes our ahead and development fiscal which our growth, M&A

to products and growth units backlog. the We are of readiness also our EV to for investments we business ensure and accelerate related to and of our our us capabilities services help all strengthen ahead labor the and evaluating see capacity in our servicing across

continuity risk. is Another key consideration for investments our business capacity mitigating

outlook. to turning Now our

in our as are As Advanced U.S. discussed, results, chain term the Paul disruptions impacting Packaging. business in is constraints and near softness SMT and supply our

the million our results goods and related the negative. ending ongoing be as margin quarter the of differ materially $XX in in fiscal with first impacts ahead. expected to China chain the company's U.S. outlook as months from XX, are and delays revenues XXXX, $XX our to operations. experiencing million reflects for weeks we range the the supply to in Actual and operating are For logistical The December shipped quarter delays may well

The equipment between semiconductor based actual from to inherently a United or cause the denominated exchange results financial could the in A market or United positively demand. to States and RMB. portion can States in the and provided differ impacted the the is in the system by is of orders, industries impacted changes timing relation of results Operating RMB significantly rate outlook negatively shipments the be Changes by results as RMB cyclical expectations. Amtech's on assumed value manufacturers. in be Additionally, can dollar an results dollar the Chinese and currency. of

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

be question of we At first Please you. Thank proceed your conducting with ROTH time, [Operator Capital. with Instructions] question. And session. line a will our comes the Irwin from question-and-answer this Craig

evening, thanks and Good questions. taking for my

the single belt a service a to furnace. million Can you for it clarify first silicon Is to about quarter. the And was units? this for I I site? believe whether or multiple not individual is order in $X is carbide ask is this or share silicon if So unit application? for wanted the us, can you maybe said an or you this for question fab

you Craig. some Good order. have thanks that to joining on Paul going from Hi, and us. question hear for additional that specific to details and give you answer I'm

This These It's to for Yeah. furnaces controlled related for built used Billerica multiple vehicle, are Craig. Massachusetts. they was copper making to components a in facility Asia. single bond of electric in application. site directly units. electrification going Hi, our a out direct And application are atmosphere located factory

Excellent. Okay.

it that of module sort of this packaging like the downstream So market. it's Is is for the in -- assembly? sort fair sounds

Exactly.

of I understand where. sort

little right? we next investors to you this this are obviously You is really is States, that off company United know and question cycles manage for follow you the bit issue supply because for all what say informative in a the about My Okay. guys this industry give that months carefully are this chain very a listening if you share in which well. deterioration very not couple maybe little of is right could of whether be useful? last now? on seeing are has us this the more continuity, changed color sort you components And would improvement, any Can color scarcity that or bit here dramatically the or

could one. I Hi, that take Craig.

of the challenges we've the more COVID. continuation onset at this of a So seen is that of

our new chain And electronics, motors, sounds, amongst supply comparable out as there drive from shore supply volatility The Asia, especially know, chain as as logistically, you very And better, that imperative is would away customers is geopolitically, we from a and supplier volatility we've at it I up also overall, macro traditional that even through right? our disruptions sheet not our options. that across metal. different are board that getting say ship based our and chips growing soon sustainable finding say are we supply very to try on backlog it chain we shortages an chain. strengthen and peers as current is diversify pre-COVID to areas in stabilizing. that area. that it's That is units to navigate It seen the As the source. that and have. steps supply also that to quickly looking servicing real. That's strengthen we we're the and the that's not away at eyes moment key and position strengthen rapid we is our into We're that base that to in at is diversify my the taking

this the for dollar Understood. not That producers? in the it they Amtech growth more what Coming square and of inches are ago? XXX% little with anticipated were versus other you wafers causing for you of than year last the ago, slightly sense. have given a of XXX%. growth versus to of processed correlates lagging bit year more not to inches X move X or to whether to market carbide changes numbers saw inch more growing X inches of a for the opportunity volume or and leaders years Can consumables, two and you some color, or than whether sort inches the the are of of share inch makes maybe square be per exciting X to was been X wafers all looking the inches off market or if see silicon lot different many Can today that was for us the things multifold share that's where a growth

But there. pretty we our into it's tracking was great Hi, to -- yeah, of of color is answer that give is because on your To And Craig. the first can't consumables year-over-year. Paul. detail Trying obviously. a little it is well. you growth question, configuration we This confidential, sort revenue go don't it --

what expansions they growth used. been And increase because where is step well. adding see lot always are is today carbide. the level capacity that an of side. on they where starting As to capacity expand. wafer we there's we're wafering increase plateau consumables will our a as expand, talk said the we're said sort past in relates and this areas the We've silicon And a side in they But that's those the as another we expand previously, then are it as fab about of seeing we'll on announcements of see as finally again, public to seeing

closed we of providing this demand what very So supply favorable. the sounds supply is decade. demand But of to speculate Obviously, continue. to the are environment the remainder anticipate It's plans. at let's forecasts leaders for -- these hard rate terms this of because like say, it outstrip the lot and very, will in overall, a

we well invest Lisa mentioned, we're in continuing And So positioned. as are capacity. to

ready happen. to is As continue Michael mentioned, that we're does ramp when it chain to supply to the sure service being be fortified that

And Craig, will add… I

Sure. last… One

Sorry.

the are inches. predominantly will I still consumables Mike. add is X This on

exactly want to is I ask. what That

for an Speakers], and it's fair? inches X not that's material is [Multiple opportunity yet that So

fair. that's Yeah,

We are near it's anywhere volume inch X not sampling levels. but

eyes line evaluation. So still are like my pilot

quarter. Understood. guys, last Well, look everyone congratulations you. chains forward for path hey, trajectory to the and you do supply well-executed and that being challenging Thank wrote the on you are continuing We upward resolved year. a understand for

Thank you, Craig.

you, Thank Craig.

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

the the of order throughout me the XXXX that strong going announced, my the to Getting are add quarter. fiscal the are $X year? on to first Let just what you half congratulations million for shipments back be

more fiscal half indicated of our in I ‘XX press release think back we the the Mark. it's it's --

Okay.

can just meaning more that seeing -- just changing customer interpret I the terms like base. about talking in growth you're other areas Is versus of consumables AP? that You're

Hi, there belt end belt division. our Mark. now furnaces the applications. But U.S. with that's in of packaging. did vehicle electric a BTU to year-over-year This the are the markets of we is right see out related is again, configured advanced indicated being Paul A some significant some lot our at softness built we additionally, factory Lancaster. Yeah. furnaces, growth significant growth saw And our that We driven in on consumables.

is Hey, now add of with right semiconductor there market, our portion and is EV I Mike. related will of by that what a half But our great evidenced as our Mark. to broader is also applications. is business comfort that recent backlog business flows the and ebbs excitement This portion gives and approximately a right? that greater a me of order that

We have more smooth in more flow, the order counter cyclicality natural and semiconductor megatrend growth out the could that market. in demand areas

what terms out quarter? of of percentage furnaces last they were impact break you in they what belt the sales Can were,

Unfortunately, have, not but not provide do be I that we've it provided publicly that know would we breakout. nice Mark. to

Okay.

believe any guess Just and won't one should logic the new impact impact, just on that advanced your but that's more on be had I U.S. an The impact that? I more. memory, don't U.S. restrictions? know Any to has customers restriction there have one.

Absolutely right. yes. Mark,

far, has us. the The not government impacts So from we market U.S. restricted no current been restrictions. are there to for minimal serve segments

you. Thank

Thanks, Mark.

Thanks, Mark.

Mark. Thanks,

next with question from Capital. Our proceed Garrigan WestPark your line Please comes the with Kevin of question.

speaking again. Great with everyone. Hi, you

my congrats the Let me strong echo execution. on

my on questions question. few end. a multi-part start, is a To this Just

a say think for of the repeat Can full bookings year And or times, X related something number see XXXX vehicles you give vehicles by to last slow year? for you electric would ahead to changed and this next do years? you might still that has you steam over the since increased comes next order, significant. large EV when it a are electric dollar you us kind You Amtech becoming booked of opportunity increasingly sense we're

the in will more forward it is at us year, I of capture hardening for and growth in say it last they very a exciting, EV in our related so traditional which a orders outside fiscal sufficient And participating can eyes. substrate very growth right? units. the beginning, all business that in EV fully there EV our to going was is, then is more is Lisa cycle. momentum What Well, units across we demand materials nice continue with this we but And surprise, the that that anticipate is a stern occurred is trend, became what now, than are me of looking business

that. had of lot sense your a got you've And Okay, for is Lisa, you solid a in makes you what give Thank kind can cash capital of us of terms then, it. That sense. focus allocation? position, of a

Sure.

about challenges, As and we've facing capacity do the to talked what chain. looking very that closely we up. build need supply we're in We're to that at

more talk can finding so to some us additions capacity I that possible from backlog into when we that meaningful, faster as So about well some range manufacturing shift way. that in can bring work a to current backlog partners that contract our start down workforce help as

So to if it. interested to that We’ve in. products then the and M&A, that's this and some We'll be it we development going current very have next see in opportunities cycles. the continues during might we're the part better about peak of And year. exciting something we're present saw focused than talked of some horizon product on environment

done radar. all we in on is through So ways to priorities, very shareholders. to return that as buybacks capital of past, other And the and our those at work our as look much we'll we've then

just then last one, high as worried one the or that most that next we keep electric about you're out excited level, two get what to up kind night? guys are things just vehicles most at opportunities you then about are the one -- two the or look year? spoke you at about are of And that what XXXX the And a Perfect. that or just Okay. you

at first the that. take I'll swing

that the in night the sanctions, What at since So what a all that's trade continued that comment up Is growth in substrate. we've and this chain. chain we is we're supply and was logistical this that two It So at this one keeps narrative flows, infrastructure. that, built chain XXXX than is where facing, the volatility but the experienced are latched supply just I the now investments is more And me up I'm couldn't very kind is to our that nice so made all volatilities firmly we we we broader night vehicles, invested facing. business risks current so around to need uncertainty ongoing unlike earlier that and vehicles what because around starting of fair think especially now prior I adapt to years had we're fits we storms global what area supply weather adaptation of takes stand globally mitigate one the parts. And chain just issues. that on right? under and logistical that right else. much only time one rigors in up we're our is and and supply And of electric now anything opportunities excited system, keeps geographic about to and themselves unit me participate materials have the

Now very to that unit has exciting. other swung across and business our that's

the material grow carbide a also that downstream a had And years. we our we furnaces on in then U.S. from and modules play the the the assemblies in made in for growth. And anticipate EV more the coming side to with do have I belt So play silicon

that all color congrats Yes, again. and the was That's awesome. I had. Appreciate perfect. Okay,

Thank you, Kevin.

Thank you.

Company. The And from Miller more question it Please proceed Mark one your with we question. looks Benchmark like have with

wondering Just the guidance. about

quarter wondering You it forecast what's causing to OpEx, the a operating had differing an just yet like you or XXXX I'm had operating margin? looks in you negative of margins profit. similar revenues June it -- is operating what's

lot A product it is of mix.

where that's having we're So bookings. packaging softness in in the our SMT, most that products we're advanced that our is softness and our Shanghai which seeing out now, our ship of the right facility,

heavily have margin product relying profile U.S. gross our which to mix. So build we're on products, lower more a

to with but some is we're are increases best we to driving as increases We hold increases. as as OpEx some as of levels well. cost We're which steady trying labor counteract can, our material well, seeing certainly doing some price

you. Thank

Mark. Thanks

your participation. our reached concludes disconnect at this also you we session. your time. end for question-and-answer And And today's conference. this may of the Thank And you lines have