AMTECH SYSTEMS, INC. AND SUBSIDIARIES FORM 10-Q

Press release·03/02/2025 22:40:25

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Amtech Systems, Inc. (ASYS) reported its quarterly financial results for the period ended December 31, 2024. The company’s revenue decreased by 15% to $23.1 million compared to the same period last year, primarily due to a decline in sales of its semiconductor equipment. Net loss for the quarter was $2.3 million, or $0.16 per share, compared to a net loss of $1.4 million, or $0.10 per share, in the same period last year. The company’s cash and cash equivalents decreased to $14.1 million as of December 31, 2024, from $17.3 million as of September 30, 2024. Amtech’s management attributed the decline in revenue to the ongoing semiconductor industry downturn and the company’s efforts to reduce costs and improve operational efficiency. Despite the challenges, the company remains committed to its long-term strategy and is focused on driving growth and profitability in the future.

Summary and Analysis of Key Financial Report Points

Overview of the Company’s Financial Performance

The company reported total net revenue of $24.4 million for the three months ended December 31, 2024, a decrease of 2% compared to the same period in the prior year. This was driven by a 23% decrease in revenue from the Semiconductor Fabrication Solutions segment, partially offset by a 7% increase in the Thermal Processing Solutions segment.

Gross profit increased by $1.1 million to $9.4 million, with gross margins improving from 33% to 38%. This was due to changes in product mix and lower costs in the Thermal Processing Solutions segment, as well as a $0.8 million intangible asset impairment in the Semiconductor Fabrication Solutions segment in the prior year period.

Selling, general and administrative (SG&A) expenses decreased by $0.5 million compared to the prior year quarter, primarily due to fixed cost reductions. Research, development and engineering (RD&E) expenses also decreased by $0.7 million, driven by the timing of strategic development projects.

The company recognized no goodwill or intangible asset impairments during the current quarter, compared to $6.4 million and $1.3 million, respectively, in the prior year period.

Revenue and Profit Trends

As shown in the tables below, the Thermal Processing Solutions segment saw an increase in revenue and gross profit, while the Semiconductor Fabrication Solutions segment experienced declines in both:

Revenue by Segment (in thousands):

Segment	Q1 2025	Q1 2024	Change	% Change
Thermal Processing Solutions	$18,684	$17,527	$1,157	7%
Semiconductor Fabrication Solutions	$5,701	$7,393	$(1,692)	(23%)
Total Net Revenue	$24,385	$24,920	$(535)	(2%)

Gross Profit by Segment (in thousands):

Segment	Q1 2025	Q1 2024	Gross Margin	Gross Margin
Thermal Processing Solutions	$7,329	$6,159	39%	35%
Semiconductor Fabrication Solutions	$2,034	$2,060	36%	28%
Total Gross Profit	$9,363	$8,219	38%	33%

The decrease in Semiconductor Fabrication Solutions revenue was due primarily to lower sales of wafer cleaning equipment. The improvement in Thermal Processing Solutions gross margins was attributed to changes in product mix and lower costs.

Strengths and Weaknesses

Strengths:

Improved gross margins, particularly in the Thermal Processing Solutions segment
Reduced SG&A and RD&E expenses through cost-cutting measures
Avoided goodwill and intangible asset impairments that impacted the prior year period

Weaknesses:

Overall revenue decline of 2%, driven by a 23% drop in Semiconductor Fabrication Solutions
Significant decline in backlog, down 62% year-over-year

Outlook

The company is evaluating its business continuity, management information systems, and infrastructure to drive future growth as a capital equipment manufacturer. It will continue to invest in the business, while also working with contract manufacturers to reduce costs.

The company’s effective tax rate was 58.8% for the quarter, significantly higher than the 21% U.S. statutory rate, due to factors like foreign income taxes and changes in valuation allowances.

Cash flow from operations remained positive at $2.9 million for the quarter, though down from $5.0 million in the prior year period. The company ended the quarter with $13.2 million in cash and cash equivalents and a current ratio of 3.4:1, indicating a strong liquidity position.

Overall, the company appears to be navigating a challenging market environment, with declines in the Semiconductor Fabrication Solutions segment offset by improvements in the Thermal Processing Solutions business and ongoing cost management efforts. The outlook will depend on the company’s ability to drive growth while maintaining operational efficiency.