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Amtech Reports First Quarter Fiscal 2018 Results

Published on 13 Feb 2018
Amtech Systems 
Amtech Systems, Inc. reported results for its first quarter ended December 31, 2017.

First Quarter Fiscal 2018 Financial and Operational Highlights:

- Net revenues of $73.6 million (solar $49.2 million)

- Net income of $6.5 million

- Diluted earnings per share of $0.42

- Customer orders of $37.3 million (solar $7.3 million)

- Quarter-end backlog of $65.9 million (solar $39.3 million)

- Book to bill ratio of 0.5:1 (0.1:1 solar)

- Unrestricted cash of $52.7 million

Mr. Fokko Pentinga, Chief Executive Officer of Amtech, commented, "As anticipated, we had a very good start to our fiscal 2018. In the December quarter we had record revenues with an even higher record level of shipments, along with solid profitability. All three of our reporting segments, solar, semiconductor, and polishing, performed well, with our semiconductor and polishing segments outperforming our expectations. Our financial position is strong and we continue to make strategic investments in our businesses and to focus on operational excellence."

Net revenue for the first quarter of fiscal 2018 was $73.6 million compared to $54.7 million in the preceding quarter and $29.1 million in the first quarter of fiscal 2017. The sequential increase is due primarily to the shipment of all of the equipment for Phase II of the solar turnkey order and increased sales of our polishing templates. The increase from the prior year quarter is due primarily to shipments relating to Phase II of the solar turnkey order, as well as increased shipments of our semiconductor equipment and sales of our polishing templates.

Net income for the first quarter of fiscal 2018 was $6.5 million, or $0.42 per diluted share, compared to a net loss of $0.1 million, or $0.00 per share for the first quarter of fiscal 2017 and net income of $7.3 million or $0.51 per diluted share in the preceding quarter.

Unrestricted cash and cash equivalents at December 31, 2017 were $52.7 million, compared to $51.1 million at September 30, 2017.

At December 31, 2017, our total order backlog was $65.9 million (solar $39.3 million), compared to total backlog of $102.4 million (solar $81.4 million) at September 30, 2017. Backlog includes deferred revenue and customer orders that are expected to ship within the next 12 months. 

Gross margin in the first quarter of fiscal 2018 was 28%, compared to 36% in the preceding quarter and 29% in the first quarter of fiscal 2017. Sequentially, gross margin decreased primarily due to $2.1 million in revenue deferrals in the first quarter of fiscal 2018, compared to the recognition of $1.5 million of previously deferred profit in the fourth quarter of fiscal 2017. Additionally, less utilization of previously reserved inventory and sales of lower-margin products in our semiconductor segment contributed to the sequential decrease in gross margin. Compared to the prior year quarter, gross margin decreased slightly on higher sales volumes due to a lower-margin product mix and a deferral of profit in the first quarter of fiscal 2018, compared to recognition of previously deferred profit in the first quarter of fiscal 2017.

Selling, general and administrative expense ("SG&A") in the first quarter of fiscal 2018 were $10.6 million, compared to $9.8 million in the preceding quarter and $7.0 million in the first quarter of fiscal 2017. Sequentially, the SG&A increase was due primarily to increased commissions and freight related to the higher revenues, partially offset by lower employee-related expenses. The increase in SG&A from the prior year quarter is due primarily to higher commissions, freight, and other selling expenses. For the three months ended December 31, 2016, SG&A expenses include the collection of previously reserved accounts receivable of approximately $1.0 million which contributed to the year-over-year increase.

Research, development and engineering (RD&E) expense was $2.0 million in the first quarter of fiscal 2018 compared to $1.8 million in the preceding quarter and $1.6 million in the first quarter of fiscal 2017. 

Income tax expense in the first quarter of fiscal 2018 was $1.2 million compared to $0.5 million in the preceding quarter and $0.1 million in the first quarter of fiscal 2017.

Outlook

The company expects revenues for the quarter ending March 31, 2018 to be in the range of $26 to $29 million. Gross margin for the quarter ending March 31, 2018 is expected to be in the mid 20 percent range, with operating margin slightly negative.

The solar and semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Additionally, operating results can be impacted by the timing of orders, system shipments and the financial results of the solar and semiconductor businesses. The results for the second half of fiscal 2018 will be significantly influenced by the timing of the Phase III order of the 1GW turnkey project. Operating results could also be affected by the net impact of revenue deferral on shipments, and recognition of revenue based on customer acceptances, and progress on the start-up of the turnkey production lines, all of which can have a significant effect on operating results.

A substantial portion of Amtech's revenues are denominated in Euros. The revenue outlook provided in this press release is based on an assumed exchange rate between the United States Dollar and the Euro. A significant decrease in the value of the Euro in relation to the United States Dollar could cause actual revenues to be lower than anticipated.


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Amtech Systems (Production Equipment): https://www.enfsolar.com/amtech-systems
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