Amtech Reports Record Revenue of $61 Million for Q2 Fiscal 2011; Record EPS of $0.77; Raises FY2011 Annual Revenue Guidance
Record Quarter-End Backlog of $195 million
TEMPE, Arizona – May 10, 2011 – 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 record financial results for its second quarter fiscal 2011 ended March 31, 2011.
Second Quarter Financial Highlights:
- Record net revenue of $61.3 million, up 14% sequentially from $53.7 million in Q1 2011
- Record solar revenue of $53.2 million, up 16% sequentially from $45.9 million in Q1 2011
- Quarterly bookings of $73 million ($60 million solar); fiscal year-to-date bookings of $210 million ($189 million solar)
- Record quarter-end backlog of $195 million ($180 million solar), up 13% sequentially from $173 million ($162 million solar) at December 31, 2010
- Gross margin improved to 40%, compared to 36% sequentially
- Operating income of $12.5 million, up 50% from $8.4 million sequentially
- Record net income of $7.5 million, or $0.77 per diluted share, compared to net income of $5.0 million, or $0.52 per diluted share, sequentially
- Second quarter book-to-bill of 1.1:1 (Solar 1.1, Semi 1.5)
J.S. Whang, Chief Executive Officer of Amtech, commented, “Our record revenue and profit for the second quarter further demonstrate our technology leadership in high efficiency solar diffusion and our operational capability to manage and service this high-end growth market. During the quarter we acquired a controlling interest in a China-based solar ion implant technology company, demonstrating our commitment to technology leadership in meeting the ever increasing demand for higher solar cell efficiency. As a result of the acquisition, we immediately established a technology beachhead in a strategically key region of the world, increased our technology expertise, and laid the foundation for future opportunities for our solar business.
“Because of our record backlog and successful ramp up of our operations, we have increased our full-year revenue guidance for fiscal 2011 as we remain on track to continue to produce and ship at a high volume in the June and September quarters. We remain focused on successful execution of our solar growth strategy, and while the order pipeline has slowed recently, the volume of our order pipeline remains healthy.
“We are also pleased to see growth in the sale of our polishing consumables to manufacturers of sapphire and silicon carbide wafers used in the LED market, and while these revenues are a small part of our consolidated revenues, they provide us a base for formulating our growth strategy in this fast growing market,” Mr. Whang concluded.
Net revenue for the second quarter of fiscal 2011 was a record $61.3 million, up 14% sequentially from $53.7 million for the preceding quarter, and up 281% from $16.1 million for the second quarter of fiscal 2010. The increase was driven primarily by higher system shipments to customers in the solar industry, partially offset by an increase in the amount of revenue deferred.
Total orders in the second quarter of fiscal 2011 were $73 million ($60 million solar), compared to total orders of $137 million ($127 million solar) in the preceding quarter. At March 31, 2011, the Company’s total order backlog was a record $195 million, compared to total backlog of $173 million at December 31, 2010. Total backlog at March 31, 2011 includes $180 million in solar orders, compared to solar backlog of $162 million at December 31, 2010. The effect of foreign exchange on backlog was a positive $10.9 million in the second quarter. Backlog includes deferred revenue and customer orders that are expected to ship within the next 12 months.
Gross margin in the second quarter of fiscal 2010 improved to 40%, compared to 36% sequentially and 29% in the second quarter of fiscal 2010. The increase in gross margin is primarily due to more efficient capacity utilization from higher shipment volumes, partially offset by higher deferred profit.
Selling, general and administrative (SG&A) expenses in the second quarter of fiscal 2011 were $11.2 million, or 18% of revenue, compared to $10.4 million, or 19% of revenue, in the preceding quarter and $4.1 million, or 25% of revenue, in the second quarter of fiscal 2010. The increase in SG&A expenses was primarily due to increased commissions and shipping costs related to higher revenues, higher incentive compensation expense, and higher legal and consulting fees, primarily related to acquisition activity.
Depreciation and amortization in the second quarter of fiscal 2011 was $575,000, compared to $420,000 in the second quarter of fiscal 2010. Included in the second quarter fiscal 2011 results is $369,000 of stock option expense, compared to $193,000 in the fiscal second quarter a year ago.
Income taxes in the second quarter of fiscal 2011 were $5.1 million, reflecting an effective tax rate of approximately 40%.
Net income for the second quarter of fiscal 2011 was $7.5 million, or $0.77 per diluted share, compared to net income of $206,000, or $0.02 per share, for the second quarter of fiscal 2010, and net income of $5.0 million, or $0.52 per diluted share, in the preceding quarter.
Amtech is increasing its financial guidance for fiscal 2011 full year revenue to surpass $240 million, a 100% increase from fiscal 2010. For its fiscal 2011 third quarter, Amtech expects revenues in the range of $63 to $66 million. Operating margins in the third quarter could be negatively impacted by: (i) higher revenue deferral due to expected continued ramp up of shipments; (ii) expected higher material costs; and (iii) increased research and development costs resulting from the Company’s acquisition of Kingstone Technology Hong Kong Limited.
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.
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.
Amtech Systems will host a conference call and webcast today at 2:00 p.m. Pacific Time (5:00 p.m. ET) to discuss its second quarter fiscal 2011 results. Those wishing to participate in the live call should dial (877) 941-2333 and request the “Amtech” call. From international locations, dial (480) 629-9678. A replay of the call will be available for one week beginning approximately one hour after the call’s conclusion by dialing (800) 406-7325 and entering 4437924 followed by the “#” key when prompted for a code. To access the replay from international locations, dial (303) 590-3030 using the same code. A live and archived web cast of the conference call can be accessed from the investors 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 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.
Statements contained in this press release that are not historical facts may be forward-looking statements within the meaning of the Private Litigation Reform Act. Such statements may use words such as “proposed,” "anticipate," "believe," "estimate," "expect," “goal,” “guidance,” "intend," ”outlook,” "predict," "project" and similar expressions as they relate to Amtech Systems, Inc. or our management. When we make forward-looking statements, we are basing them on our management's beliefs and assumptions, using information currently available to us. Although we believe that the expectations reflected in the forward looking statements are reasonable, these forward-looking statements are subject to risks, uncertainties and assumptions including the risks discussed in our 10-K and !0-Q reports and our other filings with the Securities and Exchange Commission. If one or more of these risks materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements contained in this press release reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.
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Bradley C. Anderson
Chief Financial Officer
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Todd Kehrli or Jim Byers
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