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Operator
Ladies and gentlemen, welcome to the fiscal 2010 fourth-quarter and year-end financial results conference call on the 15th of November, 2010. Throughout today's recorded presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. (Operator Instructions).
I will now hand the conference over to Mr. Jim Byers of the MKR Group. Please go ahead, sir.
Jim Byers - IR
Thank you, operator. Hello, everyone, and thank you for joining us this morning for Amtech Systems fourth-quarter conference call. On the call today are J.S. Whang, Amtech's Chief Executive Officer, and Brad Anderson, Amtech's Chief Financial Officer. Earlier this morning, Amtech released its fourth 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 remain 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 and competitors; change and volatility in the demand for diffusion, PECVD and PSG removal equipment; success of our 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 risks factors that are 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. Whang - Chairman and CEO
Thank you, Jim. Good morning, everyone. Thank you for joining us at this early hour. We are having this call in the morning because we are presenting at two investor conferences this week, the one in New York tomorrow and another one in London on Wednesday.
We are very pleased to report another very strong record-breaking quarter, which includes record revenue, record bookings and record bottom-line results in Q4. These are all improvements over the record results we achieved in Q3. Our record Q4 revenue of $45 million is up 5% sequentially and 288% year-over-year. And we indeed our most successful year ever with fiscal 2010 record quartile revenue of $120 million. Record total orders $188 million and very strong $94 million in backlog.
For the Q4, we also achieved continued improvement in gross margins, reaching a record 39% and record operating margins of 20% resulting in earnings of $0.58 per share for the Q4 and $1.04 per share for the fiscal 2010. These strong results demonstrate the tremendous progress we made this year in ramping up our operational capability to manage and service the record-breaking order momentum we are generating and our ability to profitably managing our rapid growth.
The substantially increased production capacity and improved efficiency with the higher shipment volume is providing a strong positive bottom line. We remain on track to continue to produce and ship at high volume in the current December quarter. We are focused on generating continued strong order momentum within our core competency solar division systems and further expanding our market share. This includes supporting and expanding with our large and growing solar customer base as well as checking additional new top-tier customers.
The order pipeline continued to be very healthy as evidenced by the $33 million of solar orders booked in the month of October. We are also remain focused on working with our key partners to further enhance our solar technologies and leverage our diffusion expertise as a part of our solar growth strategy, which includes transforming Amtech as a technology company in addition to already being a leading diffusion company.
To update you on the progress of our [N-type] product, we have selectively introducing and promoting the competitive advantages of this new, exciting technology with our key potential customers. We are engaged with several customers and have received very good interest from them and look forward to continued progress in 2011.
To conclude, we are very pleased with the tremendous accomplishments we have achieved the near, enabling us to deliver record results and further strengthen our leadership position in diffusion furnace and we move into fiscal 2011. We continue to have a healthy order pipelines and remain focused on continued successful execution of our solar growth strategy.
As I noted before, we remain on track to continue to produce and ship at high volume in the current quarter and with $94 million in backlog and continued strong order momentum, we believe we are poised to achieve another record year for Amtech in fiscal 2011.
Finally, I would like to express my sincere appreciation to all of our employees across the world that have put forth extraordinary effort and performed at such a high level to achieve outstanding result we have in Q4 and for our fiscal year 2010.
I will now turn the call over to Brad to discuss our financial results. Brad?
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Thank you, J.S. I am very excited to report record financial results for our fiscal 2010 fourth quarter and full year. Fourth-quarter net revenue was a record $45.4 million, up 5% sequentially from the preceding quarter's record revenue and up 288% from the fourth quarter last year, again driven primarily by higher system shipments to customers in the solar industry. Our book to bill was 1.0 with solar and at semi, we were 1.3.
Our record bookings in the fourth quarter ended September 30 totaled $49.6 million including $41 million in solar orders. As we announced last month, total orders for fiscal 2010 reached a record $188 million which include a record $162 million in solar orders.
We entered the December quarter with total backlog of more than $94 million which includes $85 million in solar orders. As a reminder, our backlog includes deferred revenue and customer orders that are expected to ship within the next 12 months.
Fourth-quarter gross margin was a record 39% which includes a significant deferral of revenue. This compares to a gross margins of 37% in the preceding quarter and 26% in the fourth quarter a year ago. The improvement is primarily due to more efficient capacity utilization from higher shipment volumes.
Our selling, general and administrative expenses in the fourth quarter were $7.9 million or 17% of revenue, down from $8.2 million or 19% of revenue in the preceding quarter. The decrease in SG&A expense as a percentage of revenue is primarily due to fixed expenses on higher shipment volumes.
Depreciation and amortization in the fourth quarter was $480,000 compared to $421,000 in the prior year fourth quarter. Included in the fourth quarter fiscal 2010 results is $230,000 of stock option expense compared to $206,000 in the fourth quarter a year ago.
Income taxes in the fourth quarter were $3.6 million reflecting an effective tax rate of approximately 39%. This compares to a 38% effective tax rate the preceding quarter.
Net income for the fourth quarter of fiscal 2010 was a record $5.4 million or $0.58 per diluted share, an increase over net income of $3.9 million or $0.42 per diluted share in the preceding quarter and compared to a net loss of $200,000 or $0.02 per share for the fourth quarter last year.
For the full 2010 fiscal year, net revenue was a record $120 million compared to $53 million in fiscal 2009. Total revenue by geographic region for fiscal 2010 was Asia/Pacific at 84%, Europe at 9%, and North America at 7%.
Gross margin was 36% in fiscal 2010 compared to 28% in fiscal 2009. For the full year, our SG&A expenses were $24.1 million or 20% of revenue, a decrease as a percentage of revenue from fiscal 2009 which was at 28% of revenue. The decrease in our SG&A expense as a percentage of revenue was primarily due to fixed expenses on higher shipment volumes.
Net income for the full year was $9.6 million or $1.04 per diluted share which compares to a net loss of $1.6 million or a loss of $0.18 per share for fiscal 2009.
We continue to maintain a solid financial position with essentially no debt and a strong balance sheet. At September 30, 2010, our cash balance increased to $56.8 million compared to $42.7 million at June 30 and we had working capital of approximately $66 million.
Now turning to our outlook. We expect fiscal 2011 full-year revenue to be in access of $200 million, a greater than 67% increase from fiscal 2010 with first-quarter fiscal 2011 revenue in the range of $44 million to $46 million.
Due to the high level of shipments in the last two quarters and expected high level of shipments in the December quarter, we expect the amount of net revenue deferral in the December quarter to increase which will result in lower margins for the quarter. However, we do see margins improving as we progress through fiscal 2011.
As a reminder, our operating results could be impacted by the timing of system shipments, the net impact of revenue deferral on those shipments, and the 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.
In addition, a substantial portion of our revenues is denominated in euros. The revenue outlook we have provided is based on an 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 had another record quarter in bookings, revenues and earnings. We remain on track to continue to produce and ship at a high volume in the December quarter. We continue to see a healthy order pipeline driven by the intense effort within the solar industry to increase production capacity and cell efficiency. With $94 million in backlog and continued strong order momentum, we expect 2011 to be another record year for Amtech. We continue to maintain a strong cash position to support our growth plans.
On the investor relations front, Amtech will be presenting at two investor conferences this week. Tomorrow we will be presenting at the Merriman Capital Investor Summit in New York City, and this Wednesday, we will be in London to present at the Jefferies Global Clean Technology Conference.
This concludes the prepared remarks for our conference call. Operator, please open the call to questions.
Operator
Thank you, sir. (Operator Instructions) Colin Rusch, ThinkEquity.
Colin Rusch - Analyst
Congratulations, guys, on a fantastic quarter. Can you talk a little bit about your capacity right now, your expected run rate through the December quarter? And are you going to need to add additional shifts, additional capacity to your guidance? It sure looks like you would.
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Yes, Colin, our capacity continues to ramp up from both the labor and the physical layout of our facilities, but we feel very, very confident in our abilities to take care of the blocking and tackling that needs to be done to meet this guidance.
We always look at whether we need another shift and how effective that shift will be with the furnaces that we put together. So we continue to take that under evaluation. But based on our current facilities and our expectations of being able to add the appropriate labor, we feel very confident.
Colin Rusch - Analyst
Great, and can you give us a breakdown on revenue amongst Asian countries, notably from China, Korea and Taiwan?
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Well, between China and Taiwan, I don't have specific breakdowns but obviously it is heavily weighted towards China especially since we have been shipping most of the Yingli tools in the June and September quarters.
Colin Rusch - Analyst
Great, and then what is your expectation for working capital needs going forward? How much more working capital are you going to need to meet this guidance?
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Well, the -- of course we did a great job generating cash in the last quarter and we continue to look at where that needs to be deployed. From the standpoint of being able to meet this new guidance that we have given, we think we have sufficient working capital to meet that guidance and then we continue to look at what is the next step as we make this transformation from being historically just a furnace company to really being a technology provider to the solar market.
Colin Rusch - Analyst
Great, that is a great segue for my next question. You know, you have talked a lot about developing a technology turnkey and adding in a handful of additional pieces of technology. Where are you on those roadmaps? Are you -- with the strong cash generation and obviously the nice movement in the stock from an acquisition standpoint, are there targets out there that you guys are evaluating?
J.S. Whang - Chairman and CEO
Colin, good question. J.S. here. We, as you can imagine an entire organization is much consumed responding to [diffusion] of our core competency business, and we continue to put our effort into multiproduct growth effort. What we are doing is growing our competency for those additional product lines, PECVD and PSG. The reason we are successful -- so successful with our solar division is because it is our core competency. We have in-depth expertise and the entire organization is well trained to respond to rapid growth.
Where new product PECVD and the PSG, we are in development over those competency while we are validating the technology at ECN. So while it seems slow coming, we are, I feel that we are doing all the right things.
In responding to the capital issues, we are a technology company and we are increasing our intensity to transforming this company as a technology company to add more value to our customers. And if you look at any successful technology company historically or in present level, their cash requirement for capitalizing as a rapid growth industry is much higher than our average industry, mature industry. So we will [lower] evaluate and look into whether our current cash position is sufficient or not, possibly we would quickly come to some sort of a conclusion soon.
Colin Rusch - Analyst
Perfect. Thank you so much, J.S. And just one final one from me. Do you have any plans to reduce the tax rate? Obviously running at a high 30s tax rate hurts profitability a little bit. But is there anything you guys can do to lower that going forward?
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Well, we are trying to do our best to reduce the national deficit. So -- but yes, we are. We are involved in a -- right now a tax restructuring strategy that we hope to be able to get that employed during fiscal the 2011. We won't see the immediate effects -- benefits of it in 2011 but we will going forward.
Colin Rusch - Analyst
All right. Thanks a lot, guys.
Operator
Bill Ong, Merriman Capital.
Bill Ong - Analyst
Yes, good morning. Congratulations. Solid quarter, record here. Given the guidance that you have given for next year of $20 million plus, maybe can you offer some color how the revenue mix is going to look like first half versus second half. Is it 50-50, 40-60?
And also just given the concerns about overcapacity and lack of visibility on the second half of next year, maybe you can talk about what type indication are you getting that gives you the confidence to offer a full year revenue outlook.
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Yes, Bill, thank you. How is this going to ramp up? I think based on the guidance that we have already given for the December quarter, fiscal 2011 is probably going to look a little different than what we have seen in the past fiscal years. Meaning usually we start out the gate with a little lower or weaker revenues in the December quarter, but now we will continue to show pretty consistent revenue levels from what we just finished the year with.
So we continue to see pretty good ramp up in revenues for the year. The basis for our guidance is really the backlog, the orders received to date and the order momentum that we see in the pipeline right now for us. They will be able to fuel the production through the June and September quarters.
Bill Ong - Analyst
What is the risk of cancellations? How firm are these bookings and backlog that you have?
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Well, all the orders that we have received and the industry works with have ability for customers to push out or even to cancel. These are not take-or-pay contracts. So is the possibility there for that to happen? There always has been and will continue to be that possibility.
Bill Ong - Analyst
Okay, and then my last question is perhaps you can give me some color on the gross margins? You all know we are running at a much higher threshold in the mid to high 30% versus your historical past. So maybe some color what type of range we can expect, just given deferred revenue is a variability?
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Sure, the gross margin has been and will continue to be heavily dependent, one on volume, so we continue to see high volumes. That should be a positive. But also on the amount of revenue that is deferred in a quarter, net revenue that is deferred. Just as a reminder to everyone who is listening, typically on our contracts we have a 10% to 15% hold back provision. That is when we ship we are able to record 85% to 90% of the revenue upon shipment. But then there is a 10% to 15% hold back by the customer until the product is installed and signed off by the customer.
That, with the tremendous ramp up we have had, we continue to work on building up our service and installation infrastructure to support that growth. And as I mentioned in the guidance outlook language that I said in the prepared remarks that we expect to see even a much higher level of net deferrals in the December quarter which will have an impact on our margins, gross margins and therefore operating margins and lowering them from and we were in the September and June quarter. But that we see that picking back up positively as we proceed throughout the year.
Bill Ong - Analyst
Thank you so much and great job, gentlemen.
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Thanks, Bill.
Operator
Jesse Pichel, Jefferies.
Min Xu - Analyst
Hey, this is Min Xu for Jesse Pichel. Thanks for taking my question and congratulations for a strong quarter. Two questions.
First, how many customers do you have for your N-type-diffusion? And second, what percentage is Yingli of your Q4 revenue and of your current backlog?
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Yes, right now from an N-type perspective, Yingli is the one customer, main customer that we have for that product right now. Yingli was a significant part of our Q4 revenues. I don't have the specific numbers in front of me, but definitely were a significant portion as they were in the June quarter. That is the main quarters that we shipped essentially all of the N-type furnaces to them.
Min Xu - Analyst
A quick follow-up. What is your CapEx expectation in 2011?
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
If you look historically at our numbers, we haven't been CapEx intensive. There are times when it is a little bit what I call lumpy and that is mainly because either we are adding a facility. The actual equipment we use to manufacture our equipment is relatively inexpensive. We are primarily doing what I call final assembly. So from time to time, we need to add physical facilities and from that standpoint, 2011 probably looks like a CapEx that will be in the range of say $4 million to $6 million.
Min Xu - Analyst
Great. Thank you, guys. Congratulations again and I'll see you in London.
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Thank you. Look forward to it.
Operator
Howard Halpern, Taglich Brothers.
Howard Halpern - Analyst
Congratulations, guys. Great year. When do you anticipate the validation process to conclude I guess on the PS and PE technologies? When do you expect to take orders and start shipping?
J.S. Whang - Chairman and CEO
As I indicated earlier, for any new technology product of any company adapts, it really requires to also have a deeper expertise within the organization, not just one or two people. So we are in the process of making good progress towards obtaining competency whether those two new products and as we are same time going through validation process, technology validation process with our partner in the ECN in the Netherlands.
And so rather then we rush into forecasting any revenue from these two new products, we are focused on doing all of these basic things right, while we are much consumed with growing our core competency diffusion business.
Howard Halpern - Analyst
And with those two technologies in the pipeline, what additional technologies are you looking for? What type of relationships or small companies are you looking at to move forward and gain additional technologies for the future?
J.S. Whang - Chairman and CEO
I think this is the first time that we have introduced with transforming -- a transformation of Amtech as a technology company from a diffusion equipment company. And so we are looking at some compelling new technologies, whether to incorporate them into our solar growth strategy, and so we always have multiple cases at hand evaluating and I'm sure given time and we will (inaudible) shareholders with investors.
Howard Halpern - Analyst
Okay, and at this point, has there been any issues with regard to shipping the product?
J.S. Whang - Chairman and CEO
Not at all.
Howard Halpern - Analyst
Okay. And at this point, the new customers that you have gained in this fiscal year, have you seen inquiries I guess for them to start ordering again later on this year?
J.S. Whang - Chairman and CEO
Yes, we already have seen new customer, good top-tier customers place in semi industry coming into solar and there was an initial order to begin with. However, follow-up order has been happening since then, and looking forward to continuously put their solar growth in coming years.
Howard Halpern - Analyst
Okay. Thanks, guys. Keep up the great work.
J.S. Whang - Chairman and CEO
Thanks a lot. Thank you.
Operator
Tom Claugus, Graham Partners.
Tom Claugus - Analyst
Yes, hi. The only question I have is, we saw Yingli announce 600 megawatts added by June of 2011. Have you guys seen those order yet? Have you booked them? Can you just give us some clarity on that, please?
J.S. Whang - Chairman and CEO
We are engaged on that project, additional increase in the N-type. I believe we are making good progress. We don't have a precise time, but I believe we are making good progress.
Tom Claugus - Analyst
But they are not in the bookings or backlog today?
J.S. Whang - Chairman and CEO
No, not yet.
Tom Claugus - Analyst
Okay. Thank you.
Operator
Mark Rogers, Gagnon Securities.
Mark Rogers - Analyst
Thank you. I was just wondering two things. The linearity of revenues in 2011, it sounds like we should see the deferred profit really not pulling down the bottom line significantly in the back half of the year. Is that correct?
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Hi, Mark. It's Brad. Yes, I think that is a reasonable assumption as we are able to gear up our service installation team to support the rapid growth that has occurred and be able to -- for lack of a better word, catch up on some of that deferred profit inventory.
Mark Rogers - Analyst
Okay. One other question. The recent orders that were booked in the October month, can you just remind me again -- was that -- how -- what shows you that was your for largest customer, Yingli -- what percentage of that were non-Yingli orders?
J.S. Whang - Chairman and CEO
It was 100% not Yingli orders.
Mark Rogers - Analyst
Okay. So going forward, we should see even greater diversification in your customer base?
J.S. Whang - Chairman and CEO
I believe so, yes.
Mark Rogers - Analyst
Great. Thank you very much.
Operator
(Operator Instructions). Okay, there appear to be no further questions. I will now hand the conference over back to the management.
Brad Anderson - VP of Finance, Secretary, Treasurer and CFO
Well, we thank all of you for joining us today and we look forward to reporting to you again on our progress and really appreciate your continued interest in Amtech. This concludes today's call.
Operator
This concludes the fiscal 2010 fourth quarter and year-end financial results conference call. Thank you for participating. You may now disconnect.