Amtech Systems Inc (ASYS) 2010 Q3 法說會逐字稿

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  • Operator

  • Welcome to the third-quarter fiscal 2010 results 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 Thursday, August 5, 2010. I would now like to turn the conference over to Mr. Jim Byers with MKR Group. Please go ahead.

  • Jim Byers - IR

  • Thank you, operator. Hello, everyone, and thank you for joining us this afternoon for Amtech Systems' fiscal third-quarter conference call. On the call today are J.S. Whang, Amtech's Chief Executive Officer, and Brad Anderson, Amtech's Chief Financial Officer.

  • After the close of market trading today, Amtech released its third-quarter fiscal 2010 financial results. The release will be posted on their website 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 that could cause actual results to differ materially from those in the forward-looking statements are changes in the technologies by Amtech's customers and competitors, change in volatility and the demand for diffusion, PECVD and PSG removal equipment, success of Amtech's key technology vendors in delivering new products and confirming their technological advantage, 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 including the equity and credit markets and market acceptance risks, 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 Mr. J.S. Whang. J.S.?

  • J.S. Whang - Chairman & CEO

  • Thank you, Jim. Good afternoon, everyone. Thank you for joining this afternoon with us. Wow. We had a very successful Q3, our fiscal quarter three. That includes record revenue of $43 million, record bookings for Q3 of almost $45 million, quarter-end backlog of $81 million, tremendous gross margin improvement, reaching a record 37%, a record operating margin of 15%. All resulting in record earnings of $0.42 per diluted share. Wow.

  • For the first nine months of our fiscal 2010, we have recorded more than $138 million in total orders, surpassing all previous full fiscal year bookings, a tremendous accomplishment. This record result and the substantial increase in orders we are generating reflect our continued success in supporting our existing customers and attracting and increasing number of top-tier solar customers that recognize our market leadership in solar diffusion technology. And we continue to work hard to further extend our solar market share.

  • At the same time, we made a tremendous progress during the quarter in successfully ramping up our operational capability to manage and service this record-breaking order momentum. The substantial increase in production capacity together with higher utilization we have achieved is enabling strong, positive leverage to the bottom line as reflected in our record earnings per share. And our operations are on track to continue to produce high volume of shipments and realize continued strong positive leverage in the September quarter, our Q4.

  • Our demand visibility looks very promising well into 2011, and we continue to have a healthy order pipeline and remain focused on successful execution of our solar growth strategy.

  • As I mentioned on our call last May, the large order we received from Yingli was a direct result of our successful, high efficiency solar cell collaboration with Yingli and ECN, Energy Research Centre in the Netherlands, which is well known globally and is a respected European solar research center, and one of our strong, longtime partners.

  • Yingli has also successfully developed their next generation high-efficiency N-type solar cell under the project called PANDA, using our diffusion process know-how and ECN's technology know-how for their current 300-megawatt extension plan project. We see a very promising future for the N-type technology, which we believe offers competitive advantages over the elective immunotechnology in the marketplace, and we are actively engaging with several selected key potential customers. We fully expect a substantial revenue contribution from N-type products beginning in fiscal year 2011.

  • We remain focused on working with our key partners, consisting of top-tier customers and our strategic research partners to further enhance our solar technologies and leverage our diffusion expertise and leadership in the marketplace. In order to further increase the size of market we serve, we continue to work very hard on our multi-product solar growth strategy, which includes our new PSG and PECVD products. We are in process of order validating the capabilities of these products at ECN, our strategic partner's site, which involves certain upgrades in the existing model.

  • We realize it takes time for a new product to gain market acceptance, and we don't expect to see meaningful contribution to our revenue or bookings from this new product until the second half of calendar 2011.

  • Turning to our semiconductor segment, we are seeing a substantial improvement in 2010 over previous year 2009. Our fiscal year-to-date orders are up over 100% compared to the same period in the fiscal 2009, and our semi book-to-bill continues to be positive 1.3-to-1 in the quarter.

  • To conclude, we are very pleased with the record order momentum we are producing, and with the strong positive leverage we are achieving through successful ramp-up of our operational capabilities.

  • We continue to successfully execute our solar growth strategy through further advancement and market growth of our superior diffusion technology, which is our core competency and also our core business. We remain confident in our long-term growth opportunities in the solar market and remain on track to produce record Q4 shipments. We are well positioned to deliver on our upwardly revised revenue guidance of $112 million to $114 million for fiscal 2010.

  • Finally, I would like to express my appreciation to all of our employees worldwide for their extraordinary efforts and performed at such a high level to achieve the result we had in this Q3. I will now turn the call over to our CFO, Brad, to discuss our financial results. Brad?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • Thank you, J.S. I am very excited to discuss our financial results for the quarter. Net revenue for the third quarter was a record $43 million, up 168% sequentially and up 244% from the third quarter a year ago, driven by higher shipments to the solar industry and improved performance in our semiconductor business.

  • Even with record shipments in the quarter, our book-to-bill is still a very respectable 0.9 with solar at 0.9 and semi at 1.3. This was the result of record third-quarter bookings totaling almost $45 million, including $37 million of solar orders.

  • As J.S. mentioned earlier, for the first nine months of fiscal 2010, we have booked a record $138 million in orders, $120 million of which are from the solar industry, surpassing all previous full fiscal year bookings.

  • We enter the September quarter with total backlog of more than $81 million, which includes $74 million in solar orders. As a reminder, our backlog includes deferred revenue and customer orders that are expected to ship within the next six to 12 months.

  • Our third-quarter gross margin was a record 37%. That percentage includes a much higher deferral of revenue. This compares favorably to 29% gross margin in both the preceding quarter and third quarter a year ago. The improvement reflects more efficient capacity utilization from higher shipment volumes.

  • Our SG&A expenses in the third quarter were $8.2 million or 19% of revenue compared to SG&A in the preceding quarter of $4.1 million or 25% of revenue. Our higher SG&A costs were driven primarily by higher commissions on record revenue, along with higher incentive compensation accruals, and a valuation reserve on a note receivable.

  • During the quarter, we also recorded a $610,000 impairment charge relating to one of our license agreements. Depreciation and amortization in the third quarter was $439,000 compared to $391,000 in the prior-year third quarter. Included in the third quarter fiscal 2010 results is $187,000 stock option expense, compared to $165,000 in the third quarter a year ago.

  • Our operating margin in the third quarter was a record 14.9%, demonstrating the operating leverage that is in our business model. Income taxes in the third quarter were $2.3 million reflecting an effective tax rate of approximately 38%. This compares to a 40% effective tax rate in the previous quarter.

  • Net income for the third quarter of fiscal 2010 was a record $3.9 million or $0.42 per diluted share compared to net income of $206,000 or $0.02 per diluted share the preceding quarter. Total revenue by geographic distribution for the third quarter was Asia-Pacific region at 93%, North America at 6% and Europe at 1%.

  • We continue to maintain a solid financial position with essentially no debt and strong cash balance. At June 30, 2010, our cash balance was $42.7 million compared to $43.1 million at March 31, 2010, and we had a working capital of $56 million.

  • Now turning to our outlook, we are increasing our guidance revenue for fiscal 2010 to be in the range of $112 million to $114 million. A healthy increase over our previous guidance and representing a 111% to 115% increase from fiscal 2009 based on our strong solar backlog and continued success in ramping up operations.

  • Based on this guidance, we expect revenue in the fiscal fourth quarter to be in the range of $38 million to $40 million, an 8% increase over our previous guidance. Operating results could be impacted by the timeliness of shipments, the net impact of revenue deferral on those shipments and recognition of revenue based on customer acceptances, all of which have in the past and can in the future have a significant effect on operating results.

  • A substantial portion of our revenues is denominated in euros. The revenue outlook we have provided is based on the assumed exchange rate between the United States dollar and the euro. A significant decrease in the value of the euro in relation to the US dollar could cause our actual revenues to be lower than anticipated.

  • So to recap, we remain on track to produce shipments that will be a new record for the fourth quarter. Based on the strong momentum, we have increased our full-year and fourth-quarter revenue guidance for fiscal 2010. We have successfully ramped up our operational capabilities to manage and service our record-breaking order momentum as reflected in our strong Q3 bottom-line results, and continue to see a strong business pipeline driven by the intense effort within the solar industry to increase production capacity and cell efficiency.

  • Our substantial increase in orders reflects increasing market recognition for our superior diffusion technology, and we continue to maintain a strong cash position for our growth plan.

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

  • Operator

  • (Operator Instructions). Colin Rusch, ThinkEquity.

  • Colin Rusch - Analyst

  • Good afternoon, gentlemen, and congratulations on a fantastic quarter. Can you give us a sense of how much revenue was deferred from the June quarter in terms of the shipments that you have installed and you are waiting for approval on for that revenue that you [did recognize] after approvals?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • So, Colin, thank you. There is -- obviously, it is a high number because of the ramp-up in shipments and overall revenues for the quarter. We do disclose in the notes to our financials the -- basically the ending inventory or the amount that still needs to be recognized. And we record that as deferred profit on the balance sheet, and there's some detail of that in the balance sheet. But we don't give the specific number that is deferred each quarter.

  • Colin Rusch - Analyst

  • Great. And then can you give us an update on the product development for PSG and PECVD, and any sort of update on timing for first orders and shipments on both those products?

  • J.S. Whang - Chairman & CEO

  • As I said earlier, Colin, and we are in process of validating our capabilities (inaudible) at ECN. And we have also a PECVD and PSG machine at ECN in doing process work while trying to incorporate some upgrade requires to more effectively[rm1] increasing interest from our customers. And so once we complete that work, we expect to have a better chance for our penetration into the market. And we project that the timing of our order will be second half of next year, calendar year.

  • Colin Rusch - Analyst

  • Great. And then one final question from me. Can you talk about utilization rates and your gross margin? As we think about gross margin into the next quarter, obviously utilization rates still are going to remain high, and you've got that additional deferred revenue that you will recognize. Is it possible for us to see even a slight increase in the gross margin performance next quarter?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • Well, there's a number of factors, as you know them, that come into play with the gross margin. One thing to consider is that we -- in this quarter that just ended in June, I'd call it we hyper utilized our labor force in producing a lot of shipments, and we have quite a few still to ship out in the September quarter.

  • Can we improve? There's possibilities of that, but I'm not sure I would go there yet until we start showing this for a few more quarters. Tremendous increase from where we've been in the past.

  • Colin Rusch - Analyst

  • Absolutely. Thanks so much, and again, congratulations.

  • Operator

  • Bill Ong, Merriman Curhan Ford & Co.

  • Bill Ong - Analyst

  • Congratulations, gentlemen, for another solid quarter. Just to follow up on some of the questions that Colin raised. I know you can't talk about the percentage of deferred revenue, but maybe get a sense of what the gross margins should have been in the June quarter if you didn't have this unusually high deferred revenue.

  • I just want to get a sense of would the margins all play out in the mid-30% range, low? Just maybe give us a sense of how it should play out in the more normal business environment.

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • Sure, Bill. The gross margin -- typically, if we have a tremendous ramp-up like we did this quarter, we are deferring higher than normal amount of revenue. So typically that is going to have a dampening effect on your gross margins. So if you were to exclude that, which we don't talk about because it is really a non-GAAP measurement, but it would add a few percentage points to the gross margin if you excluded those deferrals.

  • Bill Ong - Analyst

  • Okay, that's helpful. So it seems like mid-30% type of gross margins is a much more sustainable rate in a normal environment? Is that a fair characterization?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • Well, it takes a while. Let's define what normal is first before we make that conclusion. But I think at these volumes, you see that we are able to truly come in at that mid-30% range for gross margin. I don't think that is unreasonable.

  • Bill Ong - Analyst

  • Okay, that's helpful. And now given that you have such a high exposure to the Asian-based customers, talk about your tax rate. What type of tax rate do you think you can anticipate starting in fiscal '11?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • Well, exposure to Asian customers, but we manufacture in Europe. So we are selling into Asia, but our manufacturing presence in Asia with -- I mean in Europe along with some in the US for the Company as a whole. And therefore, our effective tax rate we have this quarter is probably a reasonable one to look at going forward in the near term.

  • Having said that, we are actively engaged in developing a plan that we hope to execute in the near term in order to bring down our effective tax rate. I'm not, at this point in time, prepared to give you what those numbers are. But we should expect to see something -- improvement in lowering of our tax rate in the next year or two.

  • Bill Ong - Analyst

  • Appreciate that clarification. Then my last question is that, just given your strong and broad-based market share, maybe can you qualitatively comment on what portion of your solar customers can be viewed as Tier 1 panel providers versus Tier 2, Tier 3? And the reason I ask is because we're likely to expect to see market share shift taking place among the panel guys. So I just want to see how you are positioned among the more premier players versus the mid and maybe emerging panel guys.

  • J.S. Whang - Chairman & CEO

  • I would expect that our split will be 85% top-tier, Tier 1, and 15%, Tier 2. And I don't believe we have a Tier 3 customer base. Mostly, we are working with the top-tier customers in satisfying their existing support in future expansions.

  • Bill Ong - Analyst

  • Great. Thank you very much, and nice job, everyone.

  • Operator

  • Howard Halpern, Taglich Brothers.

  • Howard Halpern - Analyst

  • Congratulations on the quarter, guys. The new customers that you have been bringing on board, in terms of orders, how is -- what is the order backlog, I guess, for your brand-new customers?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • Well, we don't break out those numbers between new and existing customers. We give some qualitative aspect to the nature of the orders when we announce them periodically during the quarter, but we don't give specific numbers. And part of that is because of our customers and the competitive nature that they are in that they don't want that type of information to be out unless they are going to give that information themselves.

  • But I would say that it has been a nice balance between the growing capacity of our base customers and new customers that have come on board over the last nine to 12 months.

  • Howard Halpern - Analyst

  • And in terms of, I guess the N-type that will be coming online, I guess, or orders coming through and revenue coming through next year, in terms of margins are they the same as your current product?

  • J.S. Whang - Chairman & CEO

  • My expectation is we don't expect to have much higher margins, particularly in the introduction stage. And that will be our approach.

  • Howard Halpern - Analyst

  • Okay. And in terms, I guess, of -- I know the gross margin question has been asked before with this high utilization rate, but have you actually seen some dynamic to where that, even when orders at some point slow down and throughput slows down, that you're going to be able to adjust to maintain a better margin than you had in the past?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • That depends on what the volume levels are in those future quarters and how fast, if it were to decrease, how fast it would or -- and what the volumes would be. But we've demonstrated in the past our ability to manage the business effectively. And I think we should be able to do the same in the future and adjust according to market conditions.

  • Howard Halpern - Analyst

  • And I guess one last question about the N-type. Have you, at the tradeshows gone out now and started to market that product? Or is it still maybe towards the end of the year when you're going to actually market the product?

  • J.S. Whang - Chairman & CEO

  • Our official kickoff promotion is in coincide with the Valencia European Solar PV show, which is coming within a month of now, on the first week of September. However, we are selectively promoting and sharing the N-type competitive advantages with our key potential customers. And we are getting a very good interest from those customers that we introduced this N-type technology.

  • Howard Halpern - Analyst

  • Thanks, guys, and keep up the good work.

  • Operator

  • Rob Averick, Scott Investments.

  • Rob Averick - Analyst

  • Hey, guys. Congratulations on a great quarter. I wanted to push a little bit on whether or not there were any extraordinary items on the quarter and validate a little bit of thoughts here. The way I'm looking at it, you reported $6.4 million of operating income, and you had an impairment charge of over $600,000 in the quarter. When I look at the change in your deferred profit, it looks like another $3.6 million was added to that balance sheet item.

  • So when I distill everything down, it looks like what I will call on a normalized basis, you were able to generate north of $10 million in what I will call an EBITDA number, something around $11 million if you back out stock compensation as well. That is a very different model than what we've seen in the past. Is that all attributable to operating leverage, or is there something else going on?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • It is really operating leverage that is driving that. And as I said in one of the other responses, I considered Q3 to a certain extent some hyper utilization. We just really cranked out a lot of furnaces in the quarter, and really maximized the utilization of our personnel and our suppliers also.

  • Rob Averick - Analyst

  • So I know you haven't given bottom-line guidance for the next quarter, and I'm not trying to back anyone into a corner, but we would expect the same level of additions to the deferred profit line, given the guidance on revenues. Isn't that correct?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • Well, that's a possibility. Of course we haven't given any specific numbers broken out between shipments and deferral, but that could be a possibility if the acceptance levels are distant. But that depends on the customer and facilities being ready. And there is a lot of factors that come into play.

  • Rob Averick - Analyst

  • All right, fair enough. I guess what I am driving at is it appears that the business model of the Company at this level of revenue, even if there wasn't growth, at this level capacity utilization is significantly higher in terms of what we can bring to the bottom line than what I had thought at least.

  • J.S. Whang - Chairman & CEO

  • Let me add to that, Rob. In entire three months period of Q3, and when I go look at the operations, and it reminds me of a beehive and wanting it near the [10, 120 RPM.] And we had to do it because in order to satisfy customers and our commitment to customers, and we were really running at a high RPM, and I don't believe that is a consistently doable ongoing basis. And we will find there was some normality, which will bring it down to, I don't know, 90, 100 RPM, might be possible. But the overall driving was clearly evident in Q3. At the same time, provided that the revenue level stays about $40-million range, and I think we will really demonstrate respectful gross margins on those numbers.

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • And, Ron, just to add to that real quick, you are right, I mean, as far as the business model, if you recall several years ago, that business model was to get to 10% operating margin, and we've taken it down to a new level, but from an operating model standpoint.

  • Rob Averick - Analyst

  • It's great to see. Did you make any reference to capacity utilization in your comments?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • We didn't other than we were running at a very high utilization rate.

  • Rob Averick - Analyst

  • Great quarter, and congratulations.

  • Operator

  • [Mike Rogers], Gagnon.

  • Mike Rogers - Analyst

  • Thank you for taking my questions. Two questions. One on the new products, how do you see that ramping up? You said that it wouldn't contribute significantly to revenue until the back calendar half of 2011. Does that mean that we won't see sort of increments and the ramping up of revenue from the new front-end products, maybe starting in Q1 or Q2? Can you comment on that?

  • J.S. Whang - Chairman & CEO

  • We have two new products. One is N-type that we are really excited about, and N-type evolved from our core competency diffusion expertise along with ECN's technology know-how. In that, we expect contribution -- we already in 2010, receiving our benefit from that, and we expect N-type new product will contribute quite a bit in 2011.

  • Mike Rogers - Analyst

  • Yes, I understand that. I was talking more about the PECVD product and the other front-end product. I apologize, the PSG product.

  • J.S. Whang - Chairman & CEO

  • All right. That's okay. PSG and the PECVD. As I stated, and we all continue validating our new product capability with our technology partner, ECN. We have a tube -- we installed a tube machine over there, both our PECVD and PSG, and requiring technology upgrade in order to more effectively introduce and draw interest from the customers. And so we expect that our completion of that validation process second half of 2011 to see some bookings activities.

  • Mike Rogers - Analyst

  • Okay, so really no revenue before then because they are still going to be validating the product?

  • J.S. Whang - Chairman & CEO

  • Right, yes.

  • Mike Rogers - Analyst

  • Got it. And then if I could, one more question on the use of cash. You have a very strong cash balance, and you continue to generate cash, especially with your margins as strong as they are right now. What is the environment right now for acquisitions? What kind of acquisitions would you be maybe looking for? Or what other uses of cash are you considering? And if you could, describe maybe an ideal acquisition target for you guys. Thank you.

  • J.S. Whang - Chairman & CEO

  • As previously we shared our growth strategy, including -- we say multi-product strategy but actually technology turnkey consists of four processing area, and that is on texturing and diffusions and PSG removal and the PECVD. And so this four-product area, we are continue exploring and engaging and trying to bring all this core product line as of one technology turnkey product for sharing customer higher efficiency. And so those products we are looking into external activities in supporting our strategy.

  • Mike Rogers - Analyst

  • Thank you very much, and congratulations on an excellent quarter.

  • Operator

  • (Operator Instructions) Kevin Casey, Casey Capital.

  • Kevin Casey - Analyst

  • Most of my questions have been answered but can you talk about the ASP difference for the N-type, now that you might start selling that solution?

  • J.S. Whang - Chairman & CEO

  • So N-type should command higher margins. However, the introduction period which I achieve in 2011, and we like to be a bit more customer-friendly margin approach. So I don't think we will have much boosted margin would go with N-type in this promotional stage.

  • Kevin Casey - Analyst

  • But don't they need a second furnace?

  • J.S. Whang - Chairman & CEO

  • Yes, it increases the volume.

  • Kevin Casey - Analyst

  • Okay.

  • J.S. Whang - Chairman & CEO

  • But in order to make it more wider spread over new N-type competing with a selective (inaudible) and we don't want to overly make it expensive.

  • Kevin Casey - Analyst

  • Okay. Do you need two or three furnaces?

  • J.S. Whang - Chairman & CEO

  • Right now, the N-type will require a [pole] production line, which is about 30 megawatts, three furnaces. One [POCL] furnace, the other one, two [DVL3] furnace.

  • Kevin Casey - Analyst

  • All right. And then can you talk about where you are about combining, potentially combining all three products into basically the front-end solution as opposed to an individual product?

  • J.S. Whang - Chairman & CEO

  • As far as those three products, three furnaces, I mean, one POCL and the other one two DVL3, they will be already packaged in for N-type, and we are putting an effort to bring the texturing process and the PECVD anti-reflective coating process to make it more legitimate technology turnkey packaged product.

  • Kevin Casey - Analyst

  • Okay, is that like -- would you be able to get that solution maybe at the same time as when the PECVD product starts selling? Or is that like the next thing like maybe three years later?

  • J.S. Whang - Chairman & CEO

  • Our intensity of bringing all this, our four processing step products, is very high. However, the timing of bringing all those technology product is really difficult to predict because it takes [two] to work together and (inaudible). And the acquisition is tough to predict the timing of it as much as we put our effort into it.

  • Kevin Casey - Analyst

  • Is there a way to measure your market share gains?

  • J.S. Whang - Chairman & CEO

  • As far as our diffusion, solar diffusion product, we do believe that we have well north of 30% market share on that.

  • Kevin Casey - Analyst

  • And is that growing?

  • J.S. Whang - Chairman & CEO

  • Would you repeat that?

  • Kevin Casey - Analyst

  • Is that 30% market share getting bigger? Or staying the same?

  • J.S. Whang - Chairman & CEO

  • Yes, we believe we are increasing our market share.

  • Kevin Casey - Analyst

  • Okay, and then just to clarify the question on the deferred margin, the gross margins would be 2 points higher if you didn't defer.

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • We didn't say specifically how many points, but --.

  • Kevin Casey - Analyst

  • But basically, it would be higher is my question.

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • Yes, it would be higher.

  • Kevin Casey - Analyst

  • I was just confused because I wasn't sure if it was lower. Okay. That's everything. Great. Thanks.

  • Operator

  • [Joseph Lein], private investor.

  • Joseph Lein - Private Investor

  • Hello. Congratulations. I was curious as to why your cash position went down after reporting such a record quarter?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • Well, you need to invest in inventory receivables to make that happen. So that is the primary.

  • Joseph Lein - Private Investor

  • Okay.

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • You have a cash cycle where you've got to collect on the receivables, and there is such a tremendous ramp-up.

  • Joseph Lein - Private Investor

  • Okay, so a lot of the profit is really in the form of receivables still, not yet paid-off bills?

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • From a cash flow standpoint, yes.

  • Joseph Lein - Private Investor

  • All right, fair enough. Thanks.

  • Operator

  • Thank you. Ladies and gentlemen, that does conclude our question-and-answer session for today's call. Management, please continue.

  • Brad Anderson - CFO, Treasurer, Secretary, VP of Finance

  • We would like to thank all of 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.

  • Operator

  • Thank you. Ladies and gentlemen, that does conclude our conference call for today. If you would like to listen to a replay of today's conference, please dial 303-590-3030 or 1-800-406-7325 using the access code 4331873. Thank you for your participation. You may now disconnect. [rm1]I can understand why you used brackets. He's very difficult to discern and his sentence structure is not good.