Amtech Systems Inc (ASYS) 2007 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to the fiscal 2007 fourth quarter and year-end results conference call.

During today's presentation, all lines will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (OPERATOR INSTRUCTIONS) This conference is being recorded today, Wednesday, December 12, 2007.

I would now like to turn the conference over to Mr. Jim Byers. Please go ahead, sir.

Hello, everyone, and thank you for joining us this afternoon for Amtech Systems fourth quarter conference call.

On the call today are J.S. Whang, Amtech's President and Chief Executive Officer, and Brad Anderson, Amtech's Chief Financial Officer.

After the close of market trading today Amtech released its fiscal 2007 fourth quarter and year-end financial results. The release will be posted on their Web site at www.amtechsystems.com. In addition, a phone replay of today's call will be available beginning approximately two hours after the call's conclusion and remaining in effect for one week. The call replay information is included in the earnings press release.

Before we begin, let me note that during today's call management will make forward-looking statements. All such forward-looking statements are based on information available to Amtech as of this date and they assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from current expectations.

Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are changes in the technologies used by Amtech's customers, change and volatility in the demand for diffusion equipment, the effect of changing worldwide political and economic conditions on government funded solar initiatives, capital expenditures production levels including those in Europe and Asia, the effect of overall market conditions, market acceptance risks, risks associated with dependence on suppliers, the impact of competitive products and pricing, technological and product development risks including the risks inherent in launching new products such as Amtech's vertical furnace, and other risk factors detailed in the Company's Securities and Exchange Commission filings including its Forms 10-K and Forms 10-Q.

With that said, I will now turn the call over to J.S. Whang.

Good afternoon, everyone, and thank you for joining us today to discuss our fiscal 2007 Q4 and year-end financial results. Brad will review financials in just a moment but first I will review some highlights from the fiscal year and disclose recent business developments and strategy going forward.

Fiscal year 2007 was a year of transformation for Amtech from being semiconductor dominant to becoming solar dominant. We are very pleased with our operating results during this year of transitions. And our solar revenue grew 300% and this was 27% of the total revenue in fiscal 2007 compared to only 7% solar in fiscal year 2006.

With our contribution from our R2D automations, the wholly owned subsidiary product, we generated strong growth in solar orders. For fiscal 2007 solar orders totaled more than $21 million compared to only $8 million in fiscal 2006 and, more importantly, the number of solar customers we serve nearly doubled from just eight customers in 2006.

For fiscal 2008 year-to-date for the past about two-and-a-half months, we have already produced approximately $19 million in solar orders bookings which is further evidence of increasing market acceptance of our products. We remain very focused on successful execution of our solar growth strategies and we continue to make solid progress leveraging our technology, our strong brand recognition and our global presence to further penetrate the rapidly growing solar cell market.

To better support our growth and initiatives going forward we recently completed a successful follow-on public offering generating net proceeds to Amtech of approximately $33 million. In the near-term we intend to use these proceeds for working capital to fulfill the orders that we continue to generate. In the longer-term they provide added resources and strength to pursue our solar growth strategy and further expand our product portfolio.

As a part of our strategy to expand our solar product portfolio we have targeted specific additional steps in the solar cell manufacturing process that builds on our existing competencies and leverage our front-end manufacturing experience. We have added a second step in the manufacturing of our solar cells with our exclusive licensing agreement to provide front-end manufacturing for the PECVD process. This is the application of anti-reflective coating on the solar wafers which affects one of the most important steps in solar cell production.

Our PECVD product is currently scheduled to be launched toward the end of the March 2008. At that time, we expect our system to be ready for customers to bring their wafers and test the wafers through our PECVD machine. This process will take time as we validate the wafer production, receive orders and ship the product.

As this ramp up progresses we expect PECVD to begin contributing to our order bookings in fiscal 2008. We are excited to produce and introduce this additional product and as it provides entry into a significant segment of the solar market that could double our total available market we currently serve.

As a part of our longer-term strategy we are actively seeking to add additional front-end manufacturing steps to the solar product portfolio we provide so that we can more fully participate in the rapidly growing solar market.

We continue to make good progress on our strategic plan and believe we are well positioned to capitalize on the growth opportunities ahead. With the continued successful execution of our solar product strategy, we believe we can increase our total available solar market size significantly over the next three years.

I will now turn the call over to Brad to review our financial results and financial outlook going forward. Brad?

Thank you, J.S.

I would like to discuss with you some of the highlights of our successful year in 2007. For the fourth quarter net revenue reached a record $13.4 million, reflecting continuing increase in demand for our solar products. This represents a 16% increase in net revenue over last year's Q4.

Solar revenue during the fourth quarter was $4.4 million compared to $0.5 million in solar revenue for the fourth quarter of last year. For the full fiscal year 2007 solar revenue totaled $12.5 million, up more than 300% over fiscal 2006.

Total order backlog as of September 30, 2007 reached a very strong $23.2 million, or up 70% from a backlog of $13.6 million a year ago. This total includes approximately $17.4 million in orders from our solar industry customers which represents a 128% increase over the prior year but does not include an additional $15 million solar order received shortly after our September 30 fiscal year-end.

Backlog includes deferred revenue and customer orders that are expected to ship within the next six to 12 months. Fourth quarter gross margin was 31% compared to 24% in the fourth quarter of fiscal 2006.

The most recent quarter benefited from a favorable product mix and capacity utilization primarily at our Tempress facilities. Through the fourth quarter Tempress continued to operate at its older facilities and just recently in the first quarter of fiscal 2008 moved production and office personnel to the new expanded facility.

Operating margin for the quarter was 6% compared to 4.7% in the same quarter a year ago reflecting improved gross margins and higher revenues.

Net income for the fourth quarter was $1.1 million, or $0.17 per diluted share compared to net income of $497,000, or $0.14 per diluted share for the fourth quarter of fiscal 2006. Net income was positively impacted in the quarter by the recording of a net tax benefit of approximately $300,000 resulting from a reduction in the valuation allowance on deferred tax assets of approximately $600,000 compared to zero tax expense in the same period a year ago.

For the full fiscal 2007 year we generated record net revenue of $46.4 million, an increase of 14% from $40.4 million in fiscal 2006. We continue to build on our broad and diverse base of customers both within the solar industry and the leading semiconductor and wafer manufacturing companies.

In fiscal 2007 only one customer accounted for more than 10% of our total revenue and that customer was approximately 13%. Total revenue by geographic distribution was Asia at 52%, North America at 28% and Europe at 20%, evidencing our continued success in pursuing and penetrating the Asian market.

Gross profit for the year of $12.8 million increased by $2.2 million, or 21% of our fiscal 2006 driven by higher shipments during the year. Gross margin was 28% in fiscal 2007 compared to 26% in fiscal 2006, reflecting higher capacity utilization in both segments of our business, the semiconductor and solar equipment segment and the polishing supply segment.

Operating margin for fiscal 2007 was 3.8% compared to 4% in fiscal 2006. This reflects continued investment in financial and operational resources to support our future solar growth and compliance obligations.

Net income for the 2007 fiscal year was $2.4 million, or $0.44 per diluted share compared to net income of $1.3 million, or $0.38 per diluted share in fiscal 2006.

Turning to the balance sheet for a moment. As of September 30, 2007 we had a cash balance of $18.4 million, long-term debt of less than $1 million and working capital of $30.5 million compared to working capital of $11.9 million at the end of fiscal 2006. Our September 30 balance sheet does not include the assets and liabilities of R2D, nor the use of cash to purchase R2D which was acquired at the beginning of fiscal 2008.

As many of you know, to better support our strategic initiatives going forward we recently closed a successful follow-on public offering generating net proceeds to the Company of approximately $33 million. We would like to welcome many new investors to Amtech and express appreciation for the support of our exiting investors, many of who participated in the financing.

Turning a bit to the outlook for fiscal 2008. For the full-year fiscal 2008 we anticipate revenue to be in the range of $65 million to $75 million, representing growth of approximately 40 to 60% over fiscal 2007. Total revenues are expected to be the primary growth driver, while semiconductor revenues relative to last fiscal year and consistent with overall industry trends are expected to be flat or slightly down.

Gross margins are expected to remain at their annual historical rates through the first half of fiscal 2008 with improvement occurring in the second half of fiscal 2008. Overall for fiscal 2008 we expect gross margin to be in the range of 28 to 30%.

We expect selling, general, administrative expenses, or SG&A, in fiscal 2008 to continue at their historical rates or be slightly down as a percentage of revenues. The total dollar amount of SG&A will continue to increase as a result of increased activity in the Asia Pacific region where we utilize third party sales organizations, Sarbanes-Oxley compliance costs, and increased depreciation and amortization primarily as a result of the R2D acquisition and the new manufacturing facility in The Netherlands.

Fiscal 2008 is the first year that Amtech will be required to comply with Section 404 of the Sarbanes-Oxley Act which requires management's assessment of its internal controls over financial reporting and an additional assessment by the Company's external auditors. Operating income for fiscal 2008 is expected to more than double compared to fiscal 2007 as a result of higher revenues and improved gross margin.

Turning to the first quarter of fiscal 2008, we anticipate revenues to be in the range of $11 million to $12 million representing growth of approximately 16 to 27% over the first quarter of fiscal 2007. Revenues are expected to be down sequentially due to the timing of shipment and acceptances of several systems moving into the second quarter of fiscal 2008.

Operating results for the first quarter of fiscal 2008 are expected to be breakeven to negative due to lower revenues, higher operating costs discussed above, and increased production personnel.

This concludes the prepared remarks section of our conference call. Operator, please open the call to questions.

Thank you. (OPERATOR INSTRUCTIONS) Our first question comes from the line of Ramesh Misra with Collins Stewart. Please go ahead.

Good afternoon, guys.

I have not seen your Q yet so can you tell us what the actual shipment dollars were in Q4?

Sure. That was shipments in Q4 were $13.5 million.

Okay. And can you provide an estimate of where shipments could be in the first quarter?

The shipments, we do not give a breakdown between shipments and recognition from deferrals whether we have net deferrals or recognition in the quarter.

Okay.

I'm trying to get a gauge, Brad, of the revenue recognition deferment. Can you help us someway to get a better feel for that?

Sure. Well, in our prepared remarks and also in the press release we did talk about several shipments slipping or moving into the second quarter. That in addition to some acceptances. The majority of the -- if you look at significance of the two it would be more on the shipment side than on the revenue recognition side.

I'm sorry, say that again?

If you look at the significance between the two, it's more on the movement of shipments into the Q2 than acceptances.

Okay.

Again, when you look at some of our solar furnaces, as we've said before in various investor conferences on the road show, they can range anywhere from $600,000 to over $1 million depending on the level of automation, the number of reactor tubes that are requested by the customer.

And to the extent you have systems that are towards that higher end of the range and you get one or two, as I've mentioned before, either because of customer desire or you just don't have all the parts in to assemble it or however that may come about, and that shifts into the next quarter a week or two, that can have a significant impact. And that's what's happening in Q1.

I see. In regards to your R2D acquisition, can you provide an estimate of where that 2007 revenues are shaping up to be and their contribution in the December quarter?

The R2D, as you recall, was a vendor, key supplier to us of automation equipment for our solar furnaces and strategically we wanted to secure that channel, supplier channel and lock it up to be only for us and we did that through the acquisition.

Historically their revenues have come traditionally from the semiconductor market. As they have expanded their relationship with us and as our orders have grown, as you've seen in our announcements, their revenues will heavily shift from being semi to solar dominant.

On the semi side, they're selling automation type tools to primarily in the European and some of the North American markets. And those markets in 2007 have been soft and also going into 2008.

So there we have not given specific individual contribution by any of our various subsidiaries whether it be R2D or Tempress. But overall they are making a significant contribution to our ability to generate the solar orders that we have to date.

So will you be pursuing the standalone semiconductor business that the Company had prior to this acquisition?

We will continue to do that, however, we continue to grow that business and bring in people as quickly as we can and the focus will be on growing the business overall with an emphasis on solar.

The semi business will still be there. We'll continue to pursue opportunities that come our way. But the main reason for that acquisition was the solar technology and products of R2D.

Okay.

Switching back again to the deferment of some shipments, obviously, trying to get a better understanding of that, clearly, your orders have been very, very strong. So is this deferment on account of request by customers or is it on account of tooling issues or ramp up issues at Amtech's internal facilities?

Well, it's a combination of that, really.

Okay. And so like as you mentioned in the shipment versus acceptances part can you give us a sense of which was the dominant aspect of it?

Yes, well, between the shipments and acceptances the dominant aspect is shipments.

Right. But in terms of shipments whether it was the dominant part was customer deferment or your ability to get those parts over to them?

I believe there was one customer. Ramesh, this is J.S. [There was] two systems and it was supposed to be shipped to the newly expanding locations in Europe and that (inaudible) a shift in our plan by [a] customer and requesting that product to be shipped to Asia rather than our designated Europe.

As far as I understand and they no longer want to establish this particular European location for their solar cell manufacturing and so they're taking it back to Asia. So it's a shifting in their facility plan from Europe to Asia probably is what is contributing to that.

I see. So that is actually fairly significant. I mean, two systems could be on the order of anywhere from $1.2 million to as much as about $2 million and so the delivery of that got relocated basically?

Right. I believe (inaudible) what was causing that. And as you see that we are giving our 2008 guidance, revenue guidance between $65 million to $75 million. And so from Q2 the average shipment has to be above $80 million to really meet and surpass that.

Right. Okay.

So whatever this -- by the way, before I can get into that part, J.S., any other factors other than this, besides for this roughly $1.5 million to $2 million deferment due to a relocation of delivery, what was the other components? Were the other components all just acceptance?

Let's see, no, I think acceptance was part, probably is a lesser degree although I cannot precisely quantify. In the process of moving into newly expanded building from three different smaller manufacturing sites we've been operating for many years and that probably has a -- did not help our overall productivity so that probably has also something in a small way contributed to that.

But as Brad said, all of our productions are now quite functional into new extended buildings. And so we will just (inaudible) here on out in meeting our 2008 guidance numbers.

Okay. So all of these three sites which were consolidated into one central facility, was this -- were these facilities in your Tempress business?

That's correct. That's our Netherlands operation was in three fairly -- they're fairly close to each other, into one facility a couple months (inaudible).

So this is that one facility where you had the roughly 28,000 square-foot expansion recently. Is that right?

Correct.

Okay. Okay.

Now, these shipments which basically got relocated, well, clearly you should be, I mean, it's probably like just a few days delayed so is there any reason why you think that that should not kind of spike back into the March quarter?

No reason to not expect that.

Okay. Okay.

So then March might be, March would be, well, I guess, I hate to use the word abnormally but, I guess, it would be abnormally high from Q1 levels, at least on a sequential quarter-over-quarter basis?

Yes, we can't give any specific guidance but we've given overall guidance and essentially if you do the math and look at what's left to come in based on our range, there definitely would indicate that is going to happen.

Okay. All right. That definitely clarifies the Q1 revenue situation quite significantly.

Next, in regards to orders from your semiconductor customers, can you qualitatively address that? What are the trends over there basically?

The trends overall from a going forward -- 2007 actually overall for us was a decent year with basically a book-to-bill of essentially 1 for the semi side of the business in 2007. Going into 2008 we'd love to have the same visibility that we do with the solar orders.

It just doesn't happen because a lot of our business on the semi side is parts and recurring type revenue, consumable types through our PR Hoffman and parts at BTU -- BTI, along with some systems sales. From that standpoint we continue to see business being relatively flat, a possibility of it being down slightly depending if the negativity continues on the semi side into 2008 that that could happen.

Order pipeline is okay. I mean, it's pretty stable and that's why we gave the type of guidance that we did in our press release. Okay.

Switching over into the consumables business that you briefly touched on. Over there -- well, historically semiconductor wafer volume tends to be consistently growing. Can you address, can you talk about what the short-term, near-term trends are on the consumable business?

And I recognize, I mean that that is more of a turns related business, but if you can talk about the environment over there that would be very helpful.

Right. We experienced some slower bookings similar to early fall but we saw somewhat small spike in past about a month or two and I think wafer usages by our semi customers the volume-wise and they show single-digit increase or average increase each year. And so we look at that market doesn't have any -- much variance and it will be steady to growth much in line with the volume growth in solar wafer supply chains.

Okay. Okay. I'll just add one more brief question.

Can you talk about your efforts potentially into expanding your product line into the inline space rather than the batch furnace?

There's no question that Amtech needs to have and wants to have inline diffusion product besides batch and we, as the management, estimate that the inline market will grow significantly in 2010, the year 2010. So we're gearing toward a 2010 timing for our inline product to be ready for market.

Okay. So is this through internal development primarily or are you even looking at nonorganic?

I think right now we're looking at internal and external. The partners are coming together to really address the inline diffusion performance to match our current batch processing -- the qualities. And so it is a combination of both internal expertise and also external partner coming together as a really stronger team to address that development work.

Okay.

And then just a brief clarification on this. So you expect inline to be a meaningful portion of the diffusion market in 2010. Where do you see inline diffusion as an overall proportion of the diffusion market, say, in the early part of 2008 or even 2007?

2008, I think the split will be very marginal and it will be [batched] horizontal dominant scenario will play out for 2008 and I also expect that 2009 the batch will be strong. But for 2010 and I am prepared to face 50/50 split on 2010.

If we look at the announcement we made for in the 200-megawatt expansion plan that we received a $15 million order, (inaudible) being respectful and well recognized solar cell player, and we were not competing with the inline product. It was an old batch (inaudible) the bidding process. And so the inline has some, I think, hiccup. I will call it a hiccup, but I believe they are working -- all inline people are working very hard to continue to present the case and trying to make a stronger inroad and it is an ideal manufacturing set up. That's why we believe that the inline diffusion product has to be part of our portfolio going into 2010.

Okay. All right. Thanks for your generosity in the time that you allocated to me. I'll jump off and let others to come on, too. Thanks. Thanks, J.S. and Brad.

Thank you. Our next question comes from the line of Colin Rusch with Broadpoint Capital. Please go ahead.

Good afternoon.

I just want to clarify the backlog briefly. So you've got the $17.4 million that you ended the year with plus the additional $19 million that you've announced since September 30th. So I'm looking at a little over $36 million in solar orders for '08. Is that correct?

Yes, if you take $17 million plus the -- yes, you're right.

Okay. And you're expecting to ship all of that in fiscal '08, correct?

That's correct.

Okay.

And then on the sales process with the customers, really what are the critical variables that your customers are asking you about or concerned with when they're looking at an inline tool versus a batch tool at this point?

I think most important the criteria and specification they're looking for is two things, processing quality that directly leads into affecting the higher conversion rate, efficiency rate, and also throughput. And I believe throughput probably the inline will have an edge over the batch.

That's the ideal set up. And my experience when it comes to diffusion process itself that goes on to solar wafers and I just happen to believe that the batch processing product that we offer has a more consistent processing quality and then eventually leads into higher efficiency rate the customer is looking for.

Okay. Great.

How do you kind of quantify that trade-off at this point? Because obviously at the end you're looking at how many watts come off those lines in a given year. Is there a simple rule that you typically use or are able to share with us or for investors to understand that kind of trade-off that customers are looking at?

We are not able to do that and we'd love to do it but we don't have our internal laboratory to have a comparison and the data. What we depend on is the customer's feedback and customer's actions. And what we see is they are more than one case that we experience the customer is coming back to batch from the inline set up they previously had.

And so just based on the customers' actions to our batch horizontal furnace is an indication and actually tangible the bookings that they're providing us that sense of what the customer is really desiring.

Excellent.

And then looking at the life cycle for this equipment, I mean if you look at the return on investment for some of these solar cell lines the return can be in a year or two, it's pretty quick. So what are you expecting the life cycle to be, or the lifetime for these lines to be before you might be able to sell a new tool into those customers to replace old tools?

You're talking about the life span for our batch furnace?

Exactly, yes.

Well, typically through the long history in our semi market that we are serving and our equipment typically stays there continue performing for more than ten years. In some case a lot more than ten years.

But do you see the technology moving quickly enough and significantly enough as there -- as the solar industry becomes more commoditized that having 0.5% or a single point of efficiency improvement would warrant replacing a tool?

I think the batch horizontal furnace will be really stable workhorse for a long time and I believe a customer will be happy for quite a long time. And I'm sure the expectation is to use it for ten years or so, like what they saw in semi experience.

However, the solar is -- we are putting through many, many times more wafers through the same type of a machine and so I think the jury is still out there since the solar is a fairly new industry and whether it will last ten years and the customer will be happy with. But my expectation is that it definitely is (inaudible) a life of over five years, close to ten years.

Okay.

And then a couple of your customers have recently completed financing and have announced pretty big capacity additions in China. What can you tell us about the pipeline of potential new contracts that we might see over the next quarter or so?

Without going into specifics and we are continue to be encouraged and excited about the pipelines that we see daily basis and very healthy and what's in the pipeline and what is outside of the pipelines.

As to this big expansion program that customers are announcing, I'm hoping that they will all be able to meet their time lines that they are desiring. However, that will be limited by silicon allocations (inaudible) that they will receive since there is really limited solar -- the silicon being produced. So it depends on what allocation they will be able to secure from the total part and actual expansion will be dependent on that.

Excellent. I think that's it for now. Thanks so much.

Thank you.

Thank you, Colin.

Thank you. Our next question comes from the line of Rob Averick with Scott Investments. Please go ahead.

J.S. and Brad, how are you?

Hi, Rob.

I'm doing very well, thank you.

I'd like to get a sense for your guidance for next year and put it in the context of what the Company has accomplished over the last two quarters. From where I sit it looks like over the last two quarters Amtech has generated about $26 million in revenues.

And on that $26 million, if you back out stock-based compensation and the change in your deferred profit and think about that in terms of kind of a pretax operating cash flow number, it looks like about $3.2 million on those $26 million in revenues which is north of 12%. When I look at your guidance it would suggest that there's some deleverage to the SG&A line.

What I'd like to get a sense for is what's causing that? Is it accounting convention, is it the increase in depreciation and amortization, is it an increase in stock-based compensation?

Because if you look at the last two quarters as a proxy you had a company on a run rate of, let's call it, $52 million that was generating kind of a normalized EBITDA number of $6.4 million. And on the incremental $15 million to $20 million of what you guys are projecting for next year, I'm not seeing that same kind of marginal drop to the pretax line. So I just would like to hear some comment on that.

Sure, Rob, and appreciate the kind of insight looking at the Company.

A couple things there. In 2008 we are expecting additional costs related to the Sarbanes-Oxley compliance. 2008 is the first year for us to do management's assessment but the SEC in their kind way made it so that we have to do both our assessment and the auditors have to do their assessment the same year, so we're getting hit with basically both sides of the SOX cost in one year in 2008. So that's part of that.

There is depreciation, increased depreciation and amortization related to primarily the R2D acquisition and to a lesser extent the new facility in The Netherlands. Just to kind of give a flavor for that, it used to be when you bought a company you just allocated your purchase price to -- the excess purchase price to goodwill.

This day and age you've got to allocate purchase price to everything down to backlog and you've got fair value assigned to backlog that you have to amortize and that has a very short life on it, the backlog piece. So that does have some negative impact on the leverage model going into 2008.

So just to put a little bit of detail on it, Brad, and I'm not trying to back you into a corner, but if you looked at stock-based compensation and projected depreciation and amortization for next year, what does that look like?

I think overall the amortization, I think, you could get to these numbers based on last look at the cash flow statement, I think we had $700,000, $800,000 of amortization-depreciation. And if you look at the preliminary purchase price allocation in our notes to the financials and assume some kind of depreciation rate on the new building, you can get to the point where depreciation and amortization could increase another $800,000 in 2008.

Okay. And stock-based compensation, how would '08 look relative to '07?

Yes, that one's without -- that one's a little more difficult from the standpoint of there really isn't any public information out there but with, obviously, the additional options outstanding and other stock compensation, there'll be, again, a significant increase on that side, too.

How about these non-recurring Sarbanes type expenses?

Well, unfortunately, I wish they were non-recurring. I think, hopefully, they'll be more efficient. We will be more efficient going into the year two but year one, there's a lot of ranges out there of people that have given -- and surveys that have been done on expenses that range anywhere from, I'd say, the low end that people have said publicly out there in surveys that I've seen has been about $0.5 million at the low end.

Yes. And typically year two and out it's half if not less than that.

No, it didn't go down 50%. I think I've seen maybe one-third in year two.

I guess the point of going through this exercise is the Company is clearly a robust company at this point and I think -- I guess, from an accounting standpoint what you're projecting probably masks some of the true health of the underlying business in terms of operating performance because of some of these accounting and somewhat non-recurring expense items.

Yes, and I appreciate that, having that insight of our operations. I guess there are several components in there in the SG&A.

Okay. Thank you.

Thank you, Rob.

Thanks, Rob.

Thank you. Our next question comes from the line of Tom Schwartz with Collins Stewart. Please go ahead.

Hi, guys. I think Ramesh's many questions and the other fellow's basically took care of what I wanted to find out about so I'll pass to the next person. Thank you.

Thanks, Tom.

Thank you. (OPERATOR INSTRUCTIONS) And there are no further questions. I'd like to turn it back to management for closing remarks.

Thank you for joining us today. We look forward to reporting to you on our progress and appreciate your continued interest in Amtech. This concludes today's call.

Thank you. Ladies and gentlemen, that does conclude today's conference. Thank you for your participation, and for using ACT. You may now disconnect.