Amtech Systems, Inc. reported results for its second fiscal quarter ending March 31, 2017.
Second Quarter Fiscal 2017 Financial and Operational Highlights:
- Customer orders of $68.2 million (solar $46.9 million)
- Quarter-end backlog of $87.4 million (solar $66.9 million)
- Net revenues of $32.9 million (solar $16.6 million)
- Book to bill ratio of 2.0:1 (2.7:1 solar)
- Net loss of $1.4 million, or $0.11 per share
- Unrestricted cash of $38.9 million
Mr. Fokko Pentinga, Chief Executive Officer of Amtech, commented, "Our second quarter financial results show that our three segments, solar, semi, and polishing, all contributed to the 46% increase in revenue and the significantly improved operating margin compared to one year ago."
Mr. Pentinga continued, "We are pleased with our $68 million of total bookings in the second quarter, including $47 million of solar orders, which is the highest solar bookings since the second quarter of 2011. With those bookings, our March 31, 2017 backlog is $87 million, a 67 percent increase since December 31, 2016 and the highest in six years. As announced on April 25, 2017, we received a follow-on order for the second phase of a multi-phase 1GW project, in addition to the order for the first phase announced in January 2017. The Company's total order backlog as of April 25, 2017 was approximately $125 million. We expect financial results for the second half of this fiscal year and first half of fiscal year 2018 to benefit from this activity including the initial and follow on orders received this calendar year for our bi-facial N-type technology which includes our distinguishable high throughput PECVD and diffusion systems."
At March 31, 2017, the Company's total order backlog was $87.4 million (solar $66.9 million), compared to total backlog of $51.5 million (solar $35.8 million) at December 31, 2016. Backlog includes deferred revenue and customer orders that are expected to ship within the next 12 months.
Net revenue for the second quarter of fiscal 2017 was $32.9 million compared to $ 29.1 million in the preceding quarter and $22.5 million in the second quarter of fiscal 2016. The sequential increase and the increase from the prior year quarter is due primarily to increased demand for our solar PECVD and ALD tools, as well as our semiconductor equipment.
Gross margin in the second quarter of fiscal 2017 was 25%, compared to 29% in the preceding quarter and 27% in the second quarter of fiscal 2016. Sequentially and compared to prior year, the gross margins were lower in our solar segment primarily due to a net deferral of profit compared to a net recognition of previously deferred profit, but were partially offset by higher gross margins in our semiconductor segment due to favorable product mix. Gross margins in our semiconductor segment were also higher in the second quarter of 2017 compared to prior year due higher sales volumes and higher capacity utilization.
Selling, general and administrative (SG&A) expenses in the second quarter of fiscal 2017 were $8.3 million compared to $7.0 million in the preceding quarter and $7.4 million in the second quarter of fiscal 2016. Sequentially, the increase results primarily from the collection in Q1 2017 of approximately $1.0 million of previously reserved accounts receivable. Compared to the same quarter in fiscal 2016, the increase results primarily from higher selling expenses related to higher revenues.
Research, development and engineering (RD&E) expense was $1.5 million in the second quarter of fiscal 2017 compared to $1.6 million in the preceding quarter and $2.2 million in the second quarter of fiscal 2016.
Depreciation and amortization in the second quarter of fiscal 2017 was $0.6 million, compared to $0.7 million in the preceding quarter and $0.7 million in the second quarter of fiscal 2016.
Income tax expense in the second quarter of fiscal 2017 was $0.2 million compared to $0.1 million in the preceding quarter and $1.7 million in the second quarter of fiscal 2016. Income tax expense in Q2 2016 is primarily related to tax on the $2.6 million pre-tax gain on the sale of the exclusive sales and service rights for the Kingstone ion implanter.
The net loss for the second quarter of fiscal 2017 was $1.4 million, or $0.11 per share, compared to a net loss of $53,000 or $0.00 per share in the preceding quarter and a net loss of $1.5 million, or $0.11 per share for the second quarter of fiscal 2016. The second quarter of 2017 did not benefit from any items comparable to the gain on the sale of the exclusive sales and service rights for the Kingstone ion implanter in the same quarter last year.
Unrestricted cash and cash equivalents at March 31, 2017 were $38.9 million, compared to $23.6 million at December 31, 2016. The increase in cash and cash equivalents is primarily due to customer deposits received from the turnkey order announced on January 24, 2017, and good collection on receivables for both Solar and Semi, partially offset by cash used to begin work on the turnkey order.
Revenue in the second half of fiscal 2017 is expected to be much higher than in the first half of this fiscal year and is expected to lead to an improvement in the results of operations for the second half as compared to the first half of the fiscal year due to the shipment of the equipment for the large turnkey order announced in January 2017 ("Phase I"). Even so, a meaningful portion of the revenue and profit from Phase I will be deferred until the installation and acceptance, which is expected in fiscal 2018. The large follow-on turnkey order announced in April 2017 ("Phase II") is not included in the backlog as of March 31, 2017 and is expected to ship in the first half of fiscal 2018.
The company expects revenues for the quarter ending June 30, 2017 to be in the range of $39 to $42 million. Gross margin for the quarter ending June 30, 2017 is expected to be in the low to mid 20s percent range, with operating margin slightly negative, both influenced by product mix and revenue deferrals.
Operating results could be impacted by the timing of system shipments, particularly the first shipment of equipment for the turnkey order, the net impact of revenue deferral on those shipments, and recognition of revenue based on customer acceptances, all of which can have a significant effect on operating results.
A substantial portion of Amtech's revenues are denominated in Euros. The revenue outlook provided in this press release 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 United States Dollar could cause actual revenues to be lower than anticipated.