Amtech Systems Inc (ASYS) 2009 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Amtech fiscal 2009 first quarter conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. (Operator Instructions)

This conference is being recorded today Monday February 9, 2009. I would now like to turn the conference over to Jim Byers of MKR Group. Please go ahead sir.

Thank you operator and hello everyone and thank you for joining us this afternoon for Amtech Systems first-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 2009 first quarter financial results. The release will be posted on their website at www.Amtechsystems.com.

In addition, a phone replace 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 technology used by Amtech customers, change in volatility and 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, and the effect of overall market conditions and market acceptance risks.

Other risks include those associated with dependence on suppliers, the impact of competitive products and pricing, technological and product development risks and other risks factors detailed in the Company's Securities and Exchange Commission filings including its Forms 10-K and Form 10-Q. With that, I will now turn the call over to J.S. Whang.

Thank you Jim. Good afternoon everyone. Thank you for joining us today. Our CFO, Brad, will review financial results in a moment. But first, I will provide some highlights for our Q1 and update on recent business developments.

We are pleased that we were able to produce solid financial results for Q1. Q1 revenue increased 52% over the prior year quarter, reflecting higher sales to the solar industry and we improved gross margin on both a sequential and year-over-year basis, reflecting higher volume shipments of our solar furnace and automation system to existing customers and the operational improvement we have made at our R2D automation division in France.

We continue to maintain a longer-term positive outlook for growth in the solar industry and an eventual upturn in activity within the semiconductor industry. However, the current global economic crisis is impacting our customers' (inaudible) trends and dampening demand for our products.

We expect quarter bookings for the next several quarters to be significantly reduced from prior year quarters as a result of the lingering global economic downturns. Also, these trend conditions are negatively impacting our new product effort to penetrate the market with our new solar PECVD preposition systems.

While the current economic condition is difficult, we continue to remain focused on executing our solar growth plan including continued growth in the market share of our existing products and promoting our new solar products to expand the total available markets we serve. As we previously announced, we expect to launch our new solar [dry PSG etching system in the first half of calendar 2009. PSG stands phosphorus silicate glass.

Over the last few (technical difficulty)

Ladies and gentlemen we are experiencing some technical difficulties. Please do not disconnect. The conference will resume shortly.

Ladies and gentlemen, please continue to stand by. The conference will resume shortly. We are back on. Mr. Anderson you may continue.

This is Brad Anderson. We apologize for the technical difficulties that occurred. We're going to continue back in with Mr. J.S. Whang finishing his remarks.

Okay so I will continue. In addition, we have a strong balance sheet that includes heavy cash positions. We continue to carefully manage our operations with a continued to focus on reducing cost and the goal of receiving positive EBITDA in fiscal 2009.

With our extended offering of the solar products, our strong presence in global markets and our improved operational capabilities, we believe we are well-positioned to weather the current economic storm and intend to emerge as a stronger player in the solar equipment market. With that, I will turn over the call to Brad and discuss our financial results. Brad?

Thank you J.S.. Appreciate it. Hopefully that economic storm doesn't effect our telecommunications again as we finish this call.

Net revenue for the first quarter of fiscal 2009 was $17.9 million. This represents a 52% increase over the first quarter last year and a 33% decrease sequentially.

The increase in revenue over the prior year quarter primarily reflects higher sales to the solar industry. Solar revenue for the first quarter was $11.1 million, a 113% increase over $5.2 million in the first quarter a year ago.

Total revenue by geographic distribution for the first quarter was as follows. Asia was 69%, North America was 18% and Europe was 13%, reflecting our continued success pursuing and penetrating the critical Asian market.

Total orders for the quarter ended December 31, 2008 were $9.3 million including $5.9 million from solar and our book to bill ratio was 0.5. Due to the effect of foreign currency exchange on our backlog and fluctuations during the quarter, our orders would have been higher by $2.2 million.

Total order backlog as of December 31, 2008 was approximately $42 million compared to backlog of approximately $47 million at September 30, 2008. Total backlog includes approximately $36 million in orders from our solar industry customers at quarter end compared to approximately $37 million at September 30, 2008.

The reason for the relatively small decrease is the fact that approximately $4 million of solar orders that were excluded at September 30 because their expected shift date was beyond twelve months are now included in the backlog at 12-31. While we do have some pushouts in the quarters, our current expectations are that they will all ship within the twelve month time frame.

Gross margin in the first quarter increased to 34% compared to 30% in the first quarter of fiscal 2008 and 31% sequentially. The improvement in gross margin as compared to the prior year primarily reflects higher volume of solar furnace system shipments to existing customers, improved capacity utilization and improved operations at our R2D automation division.

Deferred profit for the quarter ended December 31, 2008 was $0.8 million net of acceptances as compared to a net recognition of $0.8 million for the quarter ended December 31, 2007. Selling, general and administrative expenses in the first quarter were $4.5 million or 25% of revenue compared to $3.3 million or 28% of revenue in the first year -- first quarter a year ago.

The increase in SG&A expense is due to increased selling expense related to commissions on higher revenues, stock based compensation expense and professional fees including costs related to compliance of the provisions of the Sarbanes-Oxley Act. Operating margin in the first quarter was 7.7% compared to 0.2% a year ago reflecting higher gross margins.

Depreciation and amortization in the first quarter was $363,000 compared to $313,000 in the prior year quarter. Included in the first quarter 2009 results is $166,000 of stock option expense compared to $102,000 in the first quarter a year ago. Income taxes in the first quarter were $580,000 reflecting an effective tax rate of approximately (technical difficulty)

Ladies and gentlemen, please continue to stand by. The conference over resume shortly. You are on Mr. Anderson. Please continue.

Okay, thank you. As we turn to the outlook -- and again, apologize for the technical difficulties we are incurring.

While the current global economic and credit crisis has negatively impacted growth in the solar market in the near-term, along with the downturn in the semiconductor market, Amtech continues to have a long-term positive outlook on both industries. With a strong balance sheet and cash position, Amtech plans to emerge from this down cycle even stronger with its multi-product solar offering.

However, fiscal 2009 visibility is currently unclear as the continuing global economic downturn has caused solar cell manufacturers, our principal solar customer base, to slow or push out their capacity expansion plans. Despite the anticipated downturn in revenues, Amtech expects to generate positive EBITDA in fiscal 2009.

For the second quarter of fiscal 2009, Amtech anticipates revenues to be in the range of 12 to $14 million and gross margin percentage could be in the mid-20s as a result of lower shipment volumes, lower margin product mix and pushout of some equipment acceptances into future quarters. With the anticipated lower revenues and gross margin, Amtech anticipates an operating loss and near breakeven EBITDA in the second quarter of fiscal 2009.

Operating results for the quarter could be impacted by the timing of system shipments, the net impact of revenue deferral on those shipments, the recognition of revenue based on customer acceptances, all of which can have a significant effect on operating results. To recap, we delivered excellent operating results in our first fiscal quarter, further validating our ability to generate profits given favorable product mix and volumes.

We continue to believe in the long-term growth opportunities in the solar market and in our ability to emerge in the global economic downturn as a stronger player in the solar equipment market. This concludes the prepared remarks section of our conference call. Operator, please open the call to questions.

(Operator Instructions) There no questions on the phone sir.

Is there anybody left on the call after what we have gone through?

Yes there is sir.

Okay. All right. Well we appreciate everyone for your patience with our technical difficulties and also your continued interest in Amtech as we continue through these difficult economic times and continue to execute on our strategy to be a multi-product solar capital equipment company. I look forward to reporting to you on our updates as we continue throughout the year. Thank you very much.

Ladies and gentlemen, this concludes the Amtech fiscal 2009 first-quarter conference call. You may now disconnect and thank you for using ACT Conferencing.