Amtech Systems (ASYS) 10 May 232023 Q2 Earnings call transcript

Good day and welcome to the Amtech Systems Fiscal Second Quarter 2023 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.

Good afternoon and thank you for joining us for Amtech Systems’ fiscal second quarter 2023 conference call. Service. call Chief Michael Lancaster, Financial of and the Officer; Chief Vice on Sales Gibbs, Lisa Officer; Customer me today Whang, are Executive President With and Paul

its After financial quarter close XXXX. release website the earnings posted The today, the at of Amtech www.amtechsystems.com of results the in fiscal market for second on company’s is released Investors section.

public our like to Safe in our the webcast. remind Harbor and call that I’d filings everyone begin, this we Before covers disclaimer

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

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

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

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

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

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

Chief Executive Michael Officer. the turn over like would I call Now, Wang, to to

you, second a joining $XX.X us today. of of Thank the revenue, for representing increase Erica, year-over-year XX%, acquisition In achieved inclusive we Entrepix. in recent quarter, of everyone, and million our

as growth offset an revenue temperature and broader SIC On basis, demand consumables in application built in roughly our for continued high contribution our for semi short-term. furnaces strong softness in EV the advanced was was and our impacting by industry, packaging the SMT organic flat

excited long-term all across remain of we Overall, opportunities our about the businesses.

in our Within to upside create which semi an division, in downturn strong, cycle. we in additional the are remains next our through industry semi the capture opportunity cycle competitive currently the products, while for transitioning a position spending the investment

applications. for we belt to Fortunately, furnaces temperature demand for continue experience EV high strong our

the the ahead. Moving the remains to and immense & a gradually opportunity on builds driver wafer demand industry Materials division. key serve to SIC Substrate capacity as out

sorry -- equipment cleaning is Entrepix that. about

demand. we to strong Fortunately, continue experience

I'm sorry, back me me Let but let up. --

Within ahead. the capacity the driver as industry key gradually opportunity Materials immense wafering substrate and division, out serve demand the SiC to a builds remains

overall below represented division second SiC the which their cleaning of of XXX-millimeter wafer With the exposure of continue and the revenue. CMP material approximately tools, to and expertise our processing on the Entrepix addition focus and substrate we XX% total quarter to expand and market, as

market. the offerings synergistic Amtech multiplier share gain slurries chemicals markets, a meaningful wafer with market into cleaning CMP as historically customers both of our has market with leadership believe IDI, comprehensive we SiC value of to the force as of the individual unique Entrepix's our these share which create acquisition offering our of in potential coupled SiC market, for overall which The will solutions share across capabilities has combination supplied range creates wide consumables and in expertise create in and a a our these well to

are tracking our and various we the into quarter results have the one efforts very positive seen only While to of businesses. with across thus plan far, SiC integration -- collaborative Entrepix

across new and encouraged dialogue level both existing of and We customers the opportunities and with are engagement they the represent. long-term

are an demand in first strong while divisions the our in summary, SiC of reached Entrepix’s semi and the interest and remain materials the overall increasingly equipment. that consumables the quarter fiscal division our trough In we substrate in demand optimistic health broad-based given cleaning

megatrend a durable across divisions the We coming believe for align gain years. our multiple value foundation growth touch areas creation of product our traction creates and to to and strategy these strong high-growth to and markets alignment the customer in continues points

I will markets. detail now Paul on the turn call our more over to end into go to

to the on further our Expanding advanced for products. for continued continue demand SMT high-temp belt EV higher in this Michael. overall used primarily demand we is in Offsetting applications. environment, you, remain in furnaces Thank packaging demand trough this

macroeconomic While industry. of additional we uncertainty new advanced demand received we equipment customer, cautious orders the timing a a for outlook, have the within for about specifically the OSAT from packaging semiconductor remain these products, the leading around given rebound

grow division, demand continue Substrate see and for a estimates Materials consumable to for our our carbide, strong with line products overall we for silicon capacity. to in wafer Specific continue products. Within our to demand industry

entrants. portion reminder, been market, relationships Amtech has this a existing with of a both leaders across many years industry the and As leader in for newer

our superior improvement to volumes ownership, solutions, of the Xx total to translates a as tend performance of in to gravitate customers roughly our particularly increase. attributes Given cost which consumables,

longer of wafer to the take robust industry pace the are said, will that it silicon the silicon, in carbide traditional that output growth wafer time for forecasted. and that wafer capacity realize additions With than of of the starts is currently often

our these of silicon strong were in as existing customers CMP carbide acquired expansion orders. machines wafers. fabs. silicon mover new And for By market with was our to leveraging booked which to cleaning future the legacy into demand for for execute suited starting capacity servicing configurations systems carbide an of continue for XXX developed Entrepix, market, customers early engage their a to plans. into Entrepix XXth know-how including existing customers applications We on silicon we Entrepix recently to As and scrubber see to double-sided cleaning the refurbished it the tools, shipment and which millimeter cleaning compound the system new ideally part and continue and as XXX semiconductor relates on-track wafer experience tools, develop from carbide is with wafer

We believe this ongoing success the of market new position the shows Entrepix important tool this in of strength segment.

including furnaces growing supply strengthening templates chain steps As discussed optimization the taken carbide quarter, partners. manufacturing we towards have for high-temp manufacturing with our initial supply efficiency, utilization we greater outsourced of resiliency last silicon chain manufactured products, consumables America our internal for namely demand belt capacity, and and and expand to greater North and

of with America parties backlog working for example began bell we throughout growing service an As the this, furnaces. tent North third that helps high

our our to fully to capacity better continuity. these geographic both will serve While footprint time new goal to is orders our current manufacturing backlog while initiatives for ramp times take to ensure lead diversifying and implement, reduce business

near-term our carbide robust. The very applications furnaces silicon for products, demand temp namely and high remains

are over long we of positioned and mid- the we return. believe While a in industries investment growth to well to cycles both the capacity when participate term, carbide the semiconductor silicon

call to results. to the turn Lisa financial now review our I'll over

increased quarter and were million Thank high-temperature XX% from an We you, an additional revenue second -- of quarter of increase of million, from fiscal belt Paul. the shipments the primarily Entrepix $XX.X revenues of increase and XXXX. attributable furnaces. the sequentially $X.X is our Net of XX% for to increase

on in due million margin driving expenses consistent increased second million SG&A consulting well Gross utilization. when of $X.X million Selling, of expenses. revenues and prior a to or sequentially ERP basis increased costs, Tropic increased margin compared million, $X.X in expenses Gross year assets administrative, the as primarily million to project $X.X compared due fiscal $X.X increased was SG&A the $X.X and capacity in to and XXXX. acquisition improved to amortization primarily added including as relatively period quarter of general sequential intangible

in increase prior added million to of year to and transaction from to due related primarily $X.X Compared the SG&A of the acquisition. million SG&A is period, $X.X Entropic expenses the

million of assets to amortization XX, incur assets reflected $X.X loss is amortization quarter preliminary. the financial purchase in intangible $XXX,XXX acquired intangible approximately the to and to its Entrepix. of to GAAP related GAAP acquisition its year and price the amortization approximately the of development allocation related through operating GAAP assets period. million of thereafter. included $X.X statements December amortization can per intangible to has same decreased of GAAP allocated $X.X compared acquisitions of The income purchase same of prior Entrepix income amount quarter relating $XXX,XXX compared to an in per quarter year XXXX, operating term of GAAP sequentially first company and million financial statements Research, of $X.X increased the engineering in $X.X million was prior and period. in The operating our expects the fiscal XXXX price significantly, Company is and and non-cash. million vary incurred The

prior certain severance, acquisition non-GAAP $X.X of million in period. Entrepix XXXX which acquired and same to expenses for operating first intangible year loss related million was quarter in and of compared non-GAAP our income, transaction expense operating adjustments excludes $X.X $X.X and operating fiscal Non-GAAP the of million stock-based to restructuring amortization compensation the income and of

months for $X.X resulting and million of was XXXX, tax XX, million one-time a prior in benefit benefit with a assets. of a includes the to in quarter than benefit allowance the a three recorded as our connection compared period. income same result March the deferred to expense liability tax tax in the XXXX, Income of three preceding ended relating months Entrepix March tax benefit $X.X acquisition, valuation $X.X portion in XX, million the of million ended deferred year The less of of of previously release $X.X the recognition in the

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

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

cash of cash to as United the XX, December XXXX, States. our XX, decrease, with were $XX.X at March balance acquisition XXXX, Approximately of XX, $XX.X to XX% our compared and million at is the million attributed primarily cash of in held Unrestricted equivalents March Entrepix. XXXX,

fund but are revolving revolver. comfortable of we our the to are With the cash Entrepix, a our million. our we to fuel growth, we not to up borrowed of levels line any have including capital credit the of acquisition lower, under To date, access $X and have available our operations that amounts future

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

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

outlook XX, expected results is in for our $XX A the So the RMB quarter, in exchange between The XXXX, fiscal Amtech's million a based in RMB. portion be June from slightly to provided to could the and $XX third to results dollar on revenues the margins ending dollar of million are range the an operating the Chinese assumed relation of positive. with United expectations. rate to denominated RMBs, States quarter currency. of Changes is in United cause the actual differ States value

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

you. Thank

Benchmark from a Mark session. Our now is Please question will go Company. question-and-answer ahead. be We The [Operator conducting Miller of Instructions] first

semiconductor Thank you equipment quarter, of feel trial this those firms, business. of you your questions. is you in on have the I'm wondering you just share the cycle? Several feeling quarter I talked Do congratulations couple do believing I a business much. semi this Entrepix. where are are Give you more that to acquisition you? -- for very my

that we for movement direction. we visibility, joining upward Thanks rebound given and of our what into hard feel what say of Mark. to occur. From our hope more are There the cycle. from do hear Hi, will customers, see a of the us it’s when we bottom we're at But lights today. little

based you remember from a hoping lead order if -- the And later hearing. something what OSATs. we the end could last of we're we're into year nice at this So is quarter, had on that what

that on I'm sequentially. or They other and some your year-over-year Entrepix Is looking just the margins. at to mix? material also product gross significantly down acquisition, were related substrate

their in Mark, bringing Adding has correct. is an product equipment we've of down who margin Entrepix, added in more that them as capital this that is line, quarter. the gross

consumable Is your equipment margins But higher than are significantly the that margin. correct?

those And point. this correct. stable at is That are

and $XXX,XXX over go more once you figure your another schedule think -- I amortization. just the you Could amortization, for somewhat Okay. said what's later,

incur calendar what So -- to the yes, Again, preliminary so the are of these is $XXX,XXX numbers. end a expect this preliminary year. this through is we

this have on expect We calendar obviously, some then calendar the starting And year, we finalize. after XXXX. with of to end time, $XXX,XXX approximately

you. Thank

welcome. You're

[Operator we Thank very have queue. and further Instructions] today's no then concludes you additions That the much. Ladies gentlemen, in teleconference.

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