Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Amtech Systems Inc (ASYS, Financial) reported revenue of $26.7 million, exceeding the high end of their guidance range.
- The company achieved its third consecutive quarter of positive adjusted EBITDA and operating cash flow.
- Amtech Systems Inc (ASYS) completed the relocation of its US BTU facility to a smaller, more cost-effective location, reducing fixed costs by about $1 million annually.
- The company has implemented strategic initiatives resulting in approximately $7 million in annualized cost savings.
- Amtech Systems Inc (ASYS) is well-positioned to capitalize on secular trends in the automotive and semiconductor markets, particularly in power electronics and advanced packaging applications.
Negative Points
- Net revenues decreased by 13% compared to the third quarter of fiscal 2023, primarily due to a slowdown in the broader semiconductor market.
- Demand for horizontal diffusion furnaces has softened, impacting backlog and future revenue in the near term.
- The materials and substrates segment experienced a decrease in GAAP gross margin due to a less favorable product mix.
- The book-to-bill ratio in the semiconductor segment is expected to stay below one in the near term.
- The near-term outlook for revenue and earnings remains challenging, with expected revenues for the fourth quarter in the range of $22 million to $25 million.
Q & A Highlights
Q: What areas were the pricing actions taken by Amtech Systems?
A: Robert Daigle, CEO, explained that pricing actions were broad across most parts of the business to address inflationary pressures over the past 18-24 months. The actions were particularly significant in the equipment manufacturing segment due to inflationary pressures on parts and components.
Q: Have recent strong EV sales by General Motors and Ford impacted Amtech's quoting activity or future outlook?
A: Robert Daigle, CEO, noted that while EV sales have positive tailwinds, improved results from traditional automakers are offset by weakness in the power electronics market. However, there is a stronger push towards hybrid vehicles, which is favorable for Amtech as they play broadly in the power electronics equipment and consumables area.
Q: Is there increased quoting activity in the reflow business, and will this trend continue?
A: Robert Daigle, CEO, confirmed increased quoting activity and an improved mix in the reflow business, particularly in the packaging side, which has higher margins and ASPs. This trend is expected to continue.
Q: What were the cash from operations and CapEx for the quarter?
A: Lisa Gibbs, CFO, reported year-to-date cash provided by operations of $9 million and CapEx of over $5 million, primarily due to the build-out of a facility in Massachusetts. Future CapEx is expected to be more maintenance-focused.
Q: Has the market improved or worsened in the last three months, and what is Amtech's strategy in this environment?
A: Robert Daigle, CEO, stated that the market has generally improved, with incremental improvements in parts and reflow equipment demand. Amtech's strategy focuses on optimizing cost structure and operational performance to drive EBITDA while waiting for a more substantial market recovery.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
