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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended: March 31, 2023

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission File Number: 0-11412

img250480385_0.jpg 

 

AMTECH SYSTEMS, INC.

 

(Exact name of registrant as specified in its charter)

 

Arizona

 

86-0411215

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification No.)

 

 

 

131 South Clark Drive, Tempe, Arizona

 

85288

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: 480-967-5146

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

ASYS

NASDAQ Global Select Market

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

 

Large Accelerated Filer

 

 

Accelerated Filer

Non-Accelerated Filer

 

 

Smaller Reporting Company

 

 

 

 

Emerging Growth Company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

At May 5, 2023, there were outstanding 14,046,535 shares of Common Stock.

 


AMTECH SYSTEMS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

 

 

Page

Cautionary Statement Regarding Forward-Looking Statements

3

PART I. FINANCIAL INFORMATION

4

Item 1. Condensed Consolidated Financial Statements

4

Condensed Consolidated Balance Sheets March 31, 2023 (Unaudited) and September 30, 2022

4

Condensed Consolidated Statements of Operations (Unaudited) Three and Six Months Ended March 31, 2023 and 2022

5

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) Three and Six Months Ended March 31, 2023 and 2022

6

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) Three and Six Months Ended March 31, 2023 and 2022

7

Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended March 31, 2023 and 2022

8

Notes to Condensed Consolidated Financial Statements (Unaudited)

9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

Overview

22

Results of Operations

24

Liquidity and Capital Resources

27

Off-Balance Sheet Arrangements

28

Contractual Obligations

28

Critical Accounting Estimates

29

Impact of Recently Issued Accounting Pronouncements

29

Item 3. Quantitative and Qualitative Disclosures About Market Risk

29

Item 4. Controls and Procedures

30

PART II. OTHER INFORMATION

31

Item 1. Legal Proceedings

31

Item 1A. Risk Factors

31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

32

Item 3. Defaults Upon Senior Securities

33

Item 4. Mine Safety Disclosures

33

Item 5. Other Information

33

Item 6. Exhibits

34

SIGNATURES

35

 

2


 

Cautionary Statement Regarding Forward-Looking Statements

 

Our discussion and analysis in this Quarterly Report on Form 10-Q ("Quarterly Report"), our Annual Report on Form 10-K for the fiscal year ended September 30, 2022 (the “2022 Form 10-K”), our other reports that we file with the Securities and Exchange Commission (the “SEC”), our press releases and in public statements of our officers and corporate spokespersons contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our or our officers’ current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current events. You can also identify forward-looking statements by discussions of strategy, plans or intentions of management. We have tried, wherever possible, to identify such statements by using words such as “may,” “plan,” “anticipate,” “seek,” “will,” “expect,” “intend,” “estimate,” “believe,” “continue,” “predict,” “potential,” “project,” “should,” “would,” “could,” “likely,” “future,” “target,” “forecast,” “goal,” “observe,” and “strategy” or the negative thereof or variations thereon or similar terminology relating to the uncertainty of future events or outcomes. Any expectations based on these forward-looking statements are subject to risks and uncertainties and other important factors. Some factors that could cause actual results to differ materially from those anticipated include, among others, future economic conditions, including changes in the markets in which we operate; changes in demand for our services and products; our revenue and operating performance; difficulties in successfully executing our growth initiatives; difficulties in executing on our strategic initiatives with respect to our material and substrate business segment; our ability to effectively integrate our acquisition of Entrepix, Inc., which we acquired in January 2023; the effects of competition in the markets in which we operate, including the adverse impact of competitive product announcements or new entrants into our markets and transfers of resources by competitors into our markets; the cyclical nature of the semiconductor industry; pricing and gross profit pressures; control of costs and expenses; risks associated with new technologies and the impact on our business; legislative, regulatory, and competitive developments in markets in which we operate; possible future claims, litigation or enforcement actions and the results of any such claim, litigation proceeding, or enforcement action; business interruptions, including those related to the COVID-19 pandemic, the potential impacts of the COVID-19 pandemic, including ongoing logistical and supply chain challenges, and any future pandemic on our business operations, financial results and financial position; the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel, including any future Chinese government mandated shutdown in Shanghai; risks of future cybersecurity incidents; adverse developments affecting financial institutions, including bank failures; and other circumstances and risks identified in this Quarterly Report or referenced from time to time in our filings with the SEC. The occurrence of the events described, and the achievement of expected results, depend on many events, some or all of which are not predictable or within our control. These and many other factors could affect Amtech’s future operating results and financial condition and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by Amtech or on its behalf.

 

You should not place undue reliance on these forward-looking statements. We cannot guarantee that any forward-looking statement will be realized, although we believe that the expectations reflected in the forward-looking statements are reasonable as of the date of this Quarterly Report. Achievement of future results is subject to events out of our control, risks, uncertainties and potentially inaccurate assumptions. The 2022 Form 10-K listed various important factors that could affect Amtech’s future operating results and financial condition and could cause actual results to differ materially from historical results and expectations based on forward-looking statements made in this document or elsewhere by Amtech or on its behalf. These factors can be found under the heading “Item 1A. Risk Factors” in our 2022 Form 10-K and investors should refer to them as well as the additional risk factors identified in this Quarterly Report. Because it is not possible to predict or identify all such factors, any such list cannot be considered a complete set of all potential risks or uncertainties.

 

The Company undertakes no obligation to update or publicly revise any forward-looking statement whether as a result of new information, future developments or otherwise. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this paragraph. You are advised, however, to consult any further disclosures we make on related subjects in our subsequently filed Form 10-Q and Form 8-K reports and our other filings with the SEC. As noted above, we provide a cautionary discussion of risks, uncertainties and possibly inaccurate assumptions relevant to our business under “Item 1A. Risk Factors” of our 2022 Form 10-K. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand it is not possible to predict or identify all such factors.

 

Unless the context indicates otherwise, the terms “Amtech,” the “Company,” “we,” “us” and “our” refer to Amtech Systems, Inc., an Arizona corporation, together with its subsidiaries.

3


 

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share data)

 

 

 

March 31,
2023

 

 

September 30,
2022

 

Assets

 

(Unaudited)

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

17,733

 

 

$

46,874

 

Accounts receivable (less allowance for doubtful accounts of $314 and $114 at
   March 31, 2023 and September 30, 2022, respectively)

 

 

29,427

 

 

 

25,013

 

Inventories

 

 

35,285

 

 

 

25,488

 

Other current assets

 

 

4,416

 

 

 

5,561

 

Total current assets

 

 

86,861

 

 

 

102,936

 

Property, Plant and Equipment - Net

 

 

8,740

 

 

 

6,552

 

Right-of-Use Assets - Net

 

 

12,448

 

 

 

11,258

 

Intangible Assets - Net

 

 

12,563

 

 

 

758

 

Goodwill

 

 

29,257

 

 

 

11,168

 

Deferred Income Taxes - Net

 

 

87

 

 

 

79

 

Other Assets

 

 

1,046

 

 

 

783

 

Total Assets

 

$

151,002

 

 

$

133,534

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Accounts payable

 

$

7,556

 

 

$

7,301

 

Accrued compensation and related taxes

 

 

2,949

 

 

 

4,109

 

Other accrued liabilities

 

 

2,815

 

 

 

1,771

 

Current maturities of finance lease liabilities and long-term debt

 

 

2,202

 

 

 

107

 

Current portion of long-term operating lease liabilities

 

 

2,771

 

 

 

2,101

 

Contract liabilities

 

 

9,661

 

 

 

7,231

 

Income taxes payable

 

 

712

 

 

 

6

 

Total current liabilities

 

 

28,666

 

 

 

22,626

 

Finance Lease Liabilities and Long-Term Debt

 

 

9,530

 

 

 

220

 

Long-Term Operating Lease Liabilities

 

 

9,953

 

 

 

9,395

 

Income Taxes Payable

 

 

2,445

 

 

 

2,849

 

Other Long-Term Liabilities

 

 

111

 

 

 

76

 

Total Liabilities

 

 

50,705

 

 

 

35,166

 

Commitments and Contingencies (Note 9)

 

 

 

 

 

 

Shareholders’ Equity

 

 

 

 

 

 

Preferred stock; 100,000,000 shares authorized; none issued

 

 

 

 

 

 

Common stock; $0.01 par value; 100,000,000 shares authorized; shares
   issued and outstanding:
14,039,334 and 13,994,154 at March 31, 2023
   and September 30, 2022, respectively

 

 

140

 

 

 

140

 

Additional paid-in capital

 

 

125,127

 

 

 

124,458

 

Accumulated other comprehensive loss

 

 

(967

)

 

 

(1,767

)

Retained deficit

 

 

(24,003

)

 

 

(24,463

)

Total Shareholders’ Equity

 

 

100,297

 

 

 

98,368

 

Total Liabilities and Shareholders’ Equity

 

$

151,002

 

 

$

133,534

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except per share data)

 

 

 

Three Months Ended March 31,

 

 

Six Months Ended March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues, net

 

$

33,310

 

 

$

27,556

 

 

$

54,868

 

 

$

54,019

 

Cost of sales

 

 

19,840

 

 

 

16,396

 

 

 

33,095

 

 

 

32,961

 

Gross profit

 

 

13,470

 

 

 

11,160

 

 

 

21,773

 

 

 

21,058

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

11,434

 

 

 

6,765

 

 

 

20,624

 

 

 

13,851

 

Research, development and engineering

 

 

1,517

 

 

 

1,800

 

 

 

2,910

 

 

 

3,372

 

Severance expense

 

 

 

 

 

 

 

 

400

 

 

 

 

Operating income (loss)

 

 

519

 

 

 

2,595

 

 

 

(2,161

)

 

 

3,835

 

Interest (expense) income and other, net

 

 

(261

)

 

 

30

 

 

 

(329

)

 

 

(53

)

Income (loss) before income tax provision

 

 

258

 

 

 

2,625

 

 

 

(2,490

)

 

 

3,782

 

Income tax (benefit) provision

 

 

(2,946

)

 

 

660

 

 

 

(2,950

)

 

 

820

 

Net income

 

$

3,204

 

 

$

1,965

 

 

$

460

 

 

$

2,962

 

Income Per Share:

 

 

 

 

 

 

 

 

 

 

 

 

Net income per basic share

 

$

0.23

 

 

$

0.14

 

 

$

0.03

 

 

$

0.21

 

Net income per diluted share

 

$

0.23

 

 

$

0.14

 

 

$

0.03

 

 

$

0.21

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

14,028

 

 

 

13,979

 

 

 

14,018

 

 

 

14,118

 

Diluted

 

 

14,157

 

 

 

14,144

 

 

 

14,142

 

 

 

14,318

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

5


 

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands)

 

 

 

Three Months Ended March 31,

 

 

Six Months Ended March 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income

 

$

3,204

 

 

$

1,965

 

 

$

460

 

 

$

2,962

 

Foreign currency translation adjustment

 

 

384

 

 

 

102

 

 

 

800

 

 

 

339

 

Comprehensive income

 

$

3,588

 

 

$

2,067

 

 

$

1,260

 

 

$

3,301

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


 

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)

(in thousands)

 

 

 

Common Stock

 

 

Treasury Stock

 

 

 

 

 

Accumulated
Other

 

 

 

 

 

Total

 

 

 

Shares

 

 

Par Value

 

 

Shares

 

 

Cost

 

 

Additional Paid-
In Capital

 

 

Comprehensive
Income (Loss)

 

 

Retained
 Deficit

 

 

Shareholders'
Equity

 

Balance at September 30, 2021

 

 

14,304

 

 

$

143

 

 

 

 

 

$

 

 

$

126,380

 

 

$

14

 

 

$

(40,903

)

 

$

85,634

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

997

 

 

 

997

 

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

237

 

 

 

 

 

 

237

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

103

 

 

 

 

 

 

 

 

 

103

 

Repurchase of treasury stock

 

 

 

 

 

 

 

 

(291

)

 

 

(2,713

)

 

 

 

 

 

 

 

 

 

 

 

(2,713

)

Retirement of treasury stock

 

 

(291

)

 

 

(3

)

 

 

291

 

 

 

2,713

 

 

 

(2,122

)

 

 

 

 

 

(588

)

 

 

 

Stock options exercised

 

 

12

 

 

 

 

 

 

 

 

 

 

 

 

69

 

 

 

 

 

 

 

 

 

69

 

Balance at December 31, 2021

 

 

14,025

 

 

 

140

 

 

 

 

 

 

 

 

 

124,430

 

 

 

251

 

 

 

(40,494

)

 

 

84,327

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,965

 

 

 

1,965

 

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

102

 

 

 

 

 

 

102

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

137

 

 

 

 

 

 

 

 

 

137

 

Repurchase of treasury stock

 

 

 

 

 

 

 

 

(143

)

 

 

(1,402

)

 

 

 

 

 

 

 

 

 

 

 

(1,402

)

Retirement of treasury stock

 

 

(143

)

 

 

(1

)

 

 

143

 

 

 

1,402

 

 

 

(1,062

)

 

 

 

 

 

(339

)

 

 

 

Stock options exercised

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

29

 

 

 

 

 

 

 

 

 

29

 

Balance at March 31, 2022

 

 

13,887

 

 

$

139

 

 

 

 

 

$

 

 

$

123,534

 

 

$

353

 

 

$

(38,868

)

 

$

85,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at September 30, 2022

 

 

13,994

 

 

$

140

 

 

 

 

 

$

 

 

$

124,458

 

 

$

(1,767

)

 

$

(24,463

)

 

$

98,368

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,744

)

 

 

(2,744

)

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

416

 

 

 

 

 

 

416

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

164

 

 

 

 

 

 

 

 

 

164

 

Stock options exercised

 

 

9

 

 

 

 

 

 

 

 

 

 

 

 

34

 

 

 

 

 

 

 

 

 

34

 

Balance at December 31, 2022

 

 

14,003

 

 

 

140

 

 

 

 

 

 

 

 

 

124,656

 

 

 

(1,351

)

 

 

(27,207

)

 

 

96,238

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,204

 

 

 

3,204

 

Translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

384

 

 

 

 

 

 

384

 

Stock compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

174

 

 

 

 

 

 

 

 

 

174

 

Stock options exercised

 

 

36

 

 

 

 

 

 

 

 

 

 

 

 

297

 

 

 

 

 

 

 

 

 

297

 

Balance at March 31, 2023

 

 

14,039

 

 

$

140

 

 

 

 

 

$

 

 

$

125,127

 

 

$

(967

)

 

$

(24,003

)

 

$

100,297

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

7


 

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

 

 

 

Six Months Ended March 31,

 

 

 

2023

 

 

2022

 

Operating Activities

 

 

 

 

 

 

Net income

 

$

460

 

 

$

2,962

 

Adjustments to reconcile net income to net cash used in
   operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

1,887

 

 

 

864

 

Write-down of inventory

 

 

517

 

 

 

115

 

Deferred income taxes

 

 

(3,172

)

 

 

 

Non-cash share-based compensation expense