Amtech Systems(US:ASYS)2019-05-10 01:44Financial Data and Key Metrics Changes - Net revenue for Q2 2019 was $20.6 million, down from $23.2 million in the previous quarter and $21.1 million in Q2 2018 [11] - Gross margin decreased to 38% from 39% in the previous quarter and 41% in Q2 2018, primarily due to product mix [12] - Unrestricted cash and cash equivalents increased to $47.9 million from $45.9 million at the end of September 2018 [12] Business Line Data and Key Metrics Changes - Semiconductor revenue decreased by approximately $2.9 million sequentially, attributed to variability in orders and delivery schedules from one customer [11] - Silicon carbide LED revenue increased by approximately $0.3 million due to increased machine sales [11] - Compared to the prior year, semiconductor net revenue decreased by approximately $0.5 million due to weakness in the China market [11] Market Data and Key Metrics Changes - The company noted a softer semiconductor market impacted by trade tariff uncertainties, particularly affecting the Asian market [8] - The U.S. market remains robust, helping to mitigate softness from Asia [8] - Backlog at March 31, 2019, was $22 million, down from $23.7 million at December 31, 2018 [12] Company Strategy and Development Direction - The company announced plans to divest the majority of its solar business to focus on semiconductor and silicon carbide power business opportunities [6] - The strategy includes timely product innovations and capitalizing on external opportunities to enhance growth [7] - The company aims to make organic investments to support growth in the power chip and RF markets [10] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term industry growth fundamentals despite current market softness [8] - The company expects continuing softness in the semiconductor equipment industry, forecasting revenue for the next quarter to be in the range of $19 million to $21 million [14] - Management highlighted the importance of acquisitions as part of the growth strategy [29] Other Important Information - The loss from discontinued operations for Q2 2019 was $6.6 million, primarily due to inventory and receivables write-offs [16] - The company is working with advisors to divest its solar business and hopes to complete the sale by the end of the calendar year [16] Q&A Session Summary Question: Can you talk about the silicon carbide market and revenue mix? - Management indicated that the silicon carbide segment's revenue is growing at the same rate as the industry, with a slight bias towards recurring revenue streams [20][22] Question: What are the plans for the automation segment? - Management is evaluating the automation segment, which has been operating at a loss, to determine if it fits into the new strategy [37] Question: Can you provide details on the sales and marketing organization? - The company has an internal sales force and a global agent network, with shared responsibilities for managing customer interactions [32][34] Question: What is the outlook for operating expenses going forward? - Management indicated that the current quarter's operating expenses represent a good run rate, with potential for internal investments as decisions are made [40] Question: What is the exposure to RMB in terms of revenue and costs? - Management noted that while some operations are in RMB, most sales are in U.S. dollars, and they do not break down the exposure granularly [26][27]