Press release·03/03/2025 16:56:57

Overview of Amtech’s Financial Performance

Amtech Systems, Inc. is a leading global manufacturer of capital equipment and related consumables used in the semiconductor industry. The company’s fiscal year runs from October 1 to September 30. In fiscal year 2024, Amtech reported total net revenue of $101.2 million, down 11% from $113.3 million in the prior year. This decline was driven by decreases in both the Thermal Processing Solutions and Semiconductor Fabrication Solutions segments.

Gross profit for fiscal 2024 was $36.2 million, up 2% from $35.6 million in 2023. Gross margin improved to 36% in 2024 compared to 31% in 2023, primarily due to higher margins in the Semiconductor Fabrication Solutions segment. However, the Thermal Processing Solutions segment saw a decline in gross margin from 38% to 35% due to product mix changes.

Amtech reported an operating loss of 7% of revenue in fiscal 2024, an improvement from the 13% operating loss in 2023. This was driven by lower selling, general and administrative (SG&A) expenses, which decreased 19% year-over-year as the company made targeted labor reductions. Research, development and engineering (RD&E) expenses also declined 43% as the company scaled back certain development projects.

The company recorded several one-time charges in 2024, including a $6.4 million goodwill impairment and a $1.3 million intangible asset impairment in the Semiconductor Fabrication Solutions segment. Amtech also recognized a $2.2 million gain on the sale of its corporate headquarters in Arizona.

Amtech’s net loss for fiscal 2024 was $8% of revenue, an improvement from the 11% net loss in 2023. The effective tax rate was (13.0)% in 2024 compared to 17.1% in 2023, with the lower rate in 2024 impacted by non-deductible expenses and losses for which no tax benefit could be recognized.

Revenue and Profit Trends

Amtech’s revenue declined 11% in fiscal 2024 compared to the prior year, with decreases in both of its reportable segments. The Thermal Processing Solutions segment saw an 11% drop in revenue, while the Semiconductor Fabrication Solutions segment declined 10%.

The decline in Thermal Processing Solutions revenue was driven by decreases in belt furnace shipments, partially offset by increases in horizontal diffusion furnace sales. The company continued to experience softness in its advanced packaging and surface mount technology (SMT) equipment, which it attributed to a slowdown in global consumer markets.

In the Semiconductor Fabrication Solutions segment, revenue declined due to decreases in polishing equipment and wafer cleaning tool shipments, partially offset by increases in consumables sales. The company eliminated its polishing equipment product line at the end of fiscal 2023.

Despite the revenue declines, Amtech was able to improve its gross margin from 31% in 2023 to 36% in 2024. This was primarily due to the Semiconductor Fabrication Solutions segment, where gross margin increased from 18% to 37% as the prior year included impairment charges and inventory write-offs related to the polishing equipment product line.

The company’s operating expenses decreased significantly in fiscal 2024, with SG&A down 19% and RD&E down 43%. These reductions were achieved through targeted labor cuts across the organization as Amtech shifted more manufacturing to contract partners and scaled back certain development projects.

However, Amtech did record several one-time charges in 2024 that impacted profitability. The $6.4 million goodwill impairment and $1.3 million intangible asset impairment were both in the Semiconductor Fabrication Solutions segment. The company also recognized a $2.2 million gain on the sale of its corporate headquarters.

Overall, Amtech was able to improve its bottom-line performance in fiscal 2024, reducing its net loss from 11% of revenue in 2023 to 8% in 2024. This was aided by the company’s cost reduction efforts as well as the one-time gain on the real estate sale.

Analysis of Strengths and Weaknesses

Strengths:

• Diversified product portfolio spanning thermal processing and semiconductor fabrication solutions
• Improved gross margins, particularly in the Semiconductor Fabrication Solutions segment
• Successful cost reduction initiatives, including labor cuts and shift to more contract manufacturing
• Strong liquidity position with $11.1 million in cash and no outstanding debt

Weaknesses:

• Declining revenue in both reportable segments, indicating broader industry challenges
• Reliance on large system orders, leading to fluctuations in quarterly and annual results
• Significant one-time charges, including goodwill and intangible asset impairments
• Ongoing losses, though improving from prior year

Amtech’s diversified product portfolio spanning thermal processing and semiconductor fabrication solutions is a key strength. This breadth of offerings helps to mitigate the impact of cyclical swings in any one market segment. The company’s ability to improve gross margins, particularly in the Semiconductor Fabrication Solutions business, is also a positive sign.

However, the overall revenue declines in both reportable segments point to broader industry challenges that Amtech is facing. The company’s reliance on large system orders leads to significant fluctuations in quarterly and annual results, making it difficult to achieve consistent profitability.

Amtech’s cost reduction initiatives, including labor cuts and increased use of contract manufacturing, have helped to improve the bottom line. But the company still recorded significant one-time charges in fiscal 2024, including goodwill and intangible asset impairments, which weighed on profitability.

While Amtech’s liquidity position remains strong, with $11.1 million in cash and no outstanding debt, the company’s ongoing losses, though improving, are a weakness that will need to be addressed.

Outlook and Future Prospects

Looking ahead, Amtech faces a mixed outlook. On the positive side, the company’s diversified product portfolio, improved gross margins, and successful cost reduction efforts position it to weather the current industry downturn. Amtech’s strong liquidity also provides flexibility to pursue strategic growth opportunities.

However, the continued revenue declines in both reportable segments, as well as the reliance on large, cyclical system orders, suggest that Amtech may continue to experience volatility in its financial performance. The company will need to closely monitor market conditions and be prepared to further adjust its cost structure if the industry downturn persists.

Amtech’s strategy of pursuing both organic growth and strategic acquisitions appears sound, but the company will need to carefully evaluate potential M&A targets to ensure they complement its existing capabilities and can contribute to improved profitability. The successful integration of past acquisitions, such as Entrepix, will also be crucial.

Overall, Amtech has taken positive steps to strengthen its financial position and operational efficiency. But the company still faces significant headwinds in its core markets, and will need to continue executing on its strategic initiatives to return to consistent profitability and growth. Investors will be closely watching Amtech’s ability to navigate the industry’s cyclical nature and capitalize on emerging opportunities in the semiconductor capital equipment space.