Release Date: December 09, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Amtech Systems Inc (NASDAQ:ASYS) achieved $4 million in adjusted EBITDA profit in fiscal year 2024, up from $1.8 million in fiscal year 2023.
• The company implemented a restructuring plan resulting in $7 million of annualized operating savings.
• Sales of consumable products at PR Hoffman surged by 28% year over year.
• Amtech Systems Inc (NASDAQ:ASYS) paid off its debt, ending the year with a cash balance exceeding $11 million.
• The company is focusing on sustainable long-term growth with recurring revenue streams such as consumables, parts, and services.

Negative Points

• Overall revenue was down 11% year over year in fiscal year 2024.
• Net revenues for the fourth quarter decreased 10% sequentially and 13% from the fourth quarter of fiscal 2023.
• The semiconductor market slowdown led to lower sales across most of the product portfolio.
• GAAP net loss for the fourth quarter of fiscal 2024 was $0.5 million, compared to a net income of $0.4 million in the preceding quarter.
• The near-term outlook for revenue and earnings remains challenging due to market demand fluctuations and logistical challenges.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with ASYS.

Q: Can you elaborate on the strategic focus behind renaming your business segments and how Amtech plans to participate in AI and data center growth? A: Bob Dle, CEO: The renaming of our segments aims to provide clearer definitions and align with our strategic focus. Our semiconductor fabrication solutions business will focus on consumables, parts, and services for semiconductor wafer and device fabrication, while our thermal processing solutions business will focus on capital equipment for advanced packaging. We see opportunities in AI, particularly in advanced packaging applications and thermal management solutions. Our goal is to transform Amtech into a business with more recurring revenue streams, reducing reliance on equipment sales and enhancing margins.

Q: How is Amtech positioned in the silicon carbide industry, and what growth have you seen in consumables for this market? A: Bob Dle, CEO: We have seen substantial growth in our consumables business, particularly in silicon carbide wafer production, with a 28% year-over-year increase in sales from our PR Hoffman division. While the EV market has tempered expectations, we remain optimistic about silicon carbide's growth potential due to expanding applications beyond EVs.

Q: What is your outlook for cash flow generation over the next six months, considering the recent cash decrease? A: Wade Jany, CFO: Our cash flow will be supported by operational activities and inventory reduction. The recent cash decrease was due to paying off $4 million in debt, leaving us debt-free. We aim to maintain positive cash flow even during downturns by focusing on cost control and growth initiatives.

Q: What is your margin outlook, given the recent increase in margins? A: Wade Jany, CFO: We expect margins to be slightly below the fourth quarter's performance in the first quarter of fiscal 2025, but we aim to maintain around 40% margins. Our restructuring efforts and contract manufacturing strategy are designed to enhance margins as revenue and volume increase.

Q: Will R&D expenses return to previous levels after the recent increase? A: Wade Jany, CFO: The recent increase in R&D expenses was due to timing shifts, and we expect to return to a normal run rate of around $1 million per quarter.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.