asys-10q_20210331.htm

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.:

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 ☒

Unless otherwise indicated, the terms “Amtech,” the “Company,” “we,” “us” and “our” refer to Amtech Systems, Inc. together with its subsidiaries.

Our discussion and analysis in this Quarterly Report on Form 10-Q, our 2020 Annual Report on 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. 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. 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 efforts with respect to our silicon carbide/polishing business segment; 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 and the cybersecurity incident; the potential impacts of the COVID-19 pandemic 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; the resolution of our cybersecurity incident and related costs; and other circumstances and risks identified in this Quarterly Report or referenced from time to time in our filings with the SEC. 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 Annual Report on Form 10-K that we filed with the SEC for the year ended September 30, 2020 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 Annual Report on 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 Annual Report on 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.

	March 31, 2021			September 30, 2020
Assets	(Unaudited)
Current Assets
Cash and cash equivalents	$	40,399		$	45,070
Accounts receivable (less allowance for doubtful accounts of $194 and $159 at March 31, 2021, and September 30, 2020, respectively)		16,980			11,243
Inventories		16,389			17,277
Income taxes receivable		1,057			1,362
Other current assets		1,735			1,617
Total current assets		76,560			76,569
Property, Plant and Equipment - Net		12,025			11,995
Right-of-Use Assets - Net		6,016			5,124
Intangible Assets - Net		912			609
Goodwill - Net		11,150			6,633
Deferred Income Taxes - Net		566			566
Other Assets		707			602
Total Assets	$	107,936		$	102,098

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	5,878		$	2,676
Accrued compensation and related taxes		2,157			2,066
Accrued warranty expense		414			380
Other accrued liabilities		1,421			751
Current maturities of long-term debt		388			380
Contract liabilities		295			1,224
Total current liabilities		10,553			7,477
Long-Term Debt		4,601			4,798
Long-Term Lease Liability		5,803			5,064
Income Taxes Payable		3,471			3,240
Other Long-Term Liabilities		67			—
Total Liabilities		24,495			20,579
Commitments and Contingencies
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: 14,221,865 and 14,063,172 at March 31, 2021 and September 30, 2020, respectively		142			141
Additional paid-in capital		125,513			124,435
Accumulated other comprehensive loss		(276	)		(646	)
Retained deficit		(41,938	)		(42,411	)
Total shareholders’ equity		83,441			81,519
Total Liabilities and Shareholders’ Equity	$	107,936		$	102,098

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

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021			2020
Revenues, net of returns and allowances	$	19,790		$	14,460		$	37,765		$	35,152
Cost of sales		12,062			9,102			22,525			21,620
Gross profit		7,728			5,358			15,240			13,532

Selling, general and administrative		5,688			5,415			10,901			11,330
Research, development and engineering		1,869			915			3,114			1,537
Operating income (loss)		171			(972	)		1,225			665
Loss on sale of subsidiary		—			—			—			(2,793	)
Interest income (expense) and other, net		73			595			(182	)		525
Income (loss) from continuing operations before income taxes		244			(377	)		1,043			(1,603	)
Income tax provision		490			166			570			207
(Loss) income from continuing operations, net of tax		(246	)		(543	)		473			(1,810	)
Loss from discontinued operations, net of tax		—			(11,151	)		—			(11,816	)
Net (loss) income	$	(246	)	$	(11,694	)	$	473		$	(13,626	)

(Loss) Income Per Basic Share:
Basic (loss) income per share from continuing operations	$	(0.02	)	$	(0.04	)	$	0.03		$	(0.13	)
Basic loss per share from discontinued operations	$	—		$	(0.79	)	$	—		$	(0.83	)
Net (loss) income per basic share	$	(0.02	)	$	(0.83	)	$	0.03		$	(0.96	)

(Loss) Income Per Diluted Share:
Diluted (loss) income per share from continuing operations	$	(0.02	)	$	(0.04	)	$	0.03		$	(0.13	)
Diluted loss per share from discontinued operations	$	—		$	(0.79	)	$	—		$	(0.83	)
Net (loss) income per diluted share	$	(0.02	)	$	(0.83	)	$	0.03		$	(0.96	)

Weighted average shares outstanding - basic		14,151			14,150			14,121			14,193
Weighted average shares outstanding - diluted		14,151			14,150			14,217			14,193

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

	Common Stock						Treasury Stock									Accumulated Other			Retained Earnings			Total
	Shares			Par Value			Shares			Par Value			Additional Paid- In Capital			Comprehensive Income (Loss)			(Accumulated Deficit)			Shareholders' Equity
Balance at September 30, 2019		14,269		$	143			—		$	—		$	125,098		$	(11,233	)	$	(26,556	)	$	87,452
Net loss		—			—			—			—			—			—			(1,932	)		(1,932	)
Translation adjustment		—			—			—			—			—			2,673			—			2,673
Stock compensation expense		—			—			—			—			68			—			—			68
Stock options exercised		117			1			—			—			700			—			—			701
Balance at December 31, 2019		14,386			144			—			—			125,866			(8,560	)		(28,488	)		88,962
Net loss		—			—			—			—			—			—			(11,694	)		(11,694	)
Translation adjustment		—			—			—			—			—			6,746			—			6,746
Stock compensation expense		—			—			—			—			65			—			—			65
Stock repurchases		—			—			(366	)		(2,000	)		—			—			—			(2,000	)
Retirement of stock repurchases		(366	)		(4	)		366			2,000			(1,864	)		—			(132	)		—
Stock options exercised		21			—			—			—			78			—			—			78
Balance at March 31, 2020		14,041		$	140			—		$	—		$	124,145		$	(1,814	)	$	(40,314	)	$	82,157

Balance at September 30, 2020		14,063		$	141			—		$	—		$	124,435		$	(646	)	$	(42,411	)	$	81,519
Net income		—			—			—			—			—			—			719			719
Translation adjustment		—			—			—			—			—			595			—			595
Stock compensation expense		—			—			—			—			65			—			—			65
Stock options exercised		28			—			—			—			135			—			—			135
Balance at December 31, 2020		14,091			141			—			—			124,635			(51	)		(41,692	)		83,033
Net loss		—			—			—			—			—			—			(246	)		(246	)
Translation adjustment		—			—			—			—			—			(225	)		—			(225	)
Stock compensation expense		—			—			—			—			84			—			—			84
Stock options exercised		131			1			—			—			794			—			—			795
Balance at March 31, 2021		14,222		$	142			—		$	—		$	125,513		$	(276	)	$	(41,938	)	$	83,441

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

	Six Months Ended March 31,
	2021			2020
Operating Activities
Net income (loss)	$	473		$	(13,626	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization		644			694
Write-down of inventory		230			330
Deferred income taxes		—			784
Non-cash share-based compensation expense		149			133
Loss on sales of subsidiaries		—			13,709
Provision for (reversal of) allowance for doubtful accounts, net		28			(32	)
Other, net		8			4
Changes in operating assets and liabilities:
Accounts receivable		(5,485	)		1,374
Inventories		859			(527	)
Other assets		(1,132	)		3,667
Accounts payable		3,122			(1,849	)
Accrued income taxes		536			(2,094	)
Accrued and other liabilities		1,232			(228	)
Contract liabilities		(929	)		(1,063	)
Net cash (used in) provided by operating activities		(265	)		1,276
Investing Activities
Purchases of property, plant and equipment		(433	)

Arizona		86-0411215
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

131 South Clark Drive, Tempe, Arizona		85281
(Address of principal executive offices)		(Zip Code)

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

	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, 2021 (Unaudited) and September 30, 2020	4
Condensed Consolidated Statements of Operations (Unaudited) Three and Six Months Ended March 31, 2021 and 2020	5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three and Six Months Ended March 31, 2021 and 2020	6
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) Three and Six Months Ended March 31, 2021 and 2020	7
Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended March 31, 2021 and 2020	8
Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Overview	20
Results of Operations	22
Liquidity and Capital Resources	25
Off-Balance Sheet Arrangements	26
Contractual Obligations	26
Critical Accounting Policies	27
Impact of Recently Issued Accounting Pronouncements	27
Item 3. Quantitative and Qualitative Disclosures About Market Risk	27
Item 4. Controls and Procedures	27
PART II. OTHER INFORMATION	28
Item 1. Legal Proceedings	28
Item 1A. Risk Factors	28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3. Defaults Upon Senior Securities	29
Item 4. Mine Safety Disclosures	29
Item 5. Other Information	29
Item 6. Exhibits	30
SIGNATURES	31

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☐