Amtech Systems(US:ASYS)2023-02-09 02:10Financial Data and Key Metrics Changes - In Q1 2023, the company generated $21.6 million in revenue, representing a year-over-year decrease of 19% and a sequential decrease of 33% [6][24] - The operating loss was $2.7 million compared to operating income of $3.9 million in Q4 2022 and $1.2 million in Q1 2022 [25] - Net loss for Q1 2023 was $2.7 million or $0.20 per share, compared to net income of $4.2 million or $0.30 per share in the previous quarter and net income of $1 million or $0.07 per share in the same quarter last year [25] Business Line Data and Key Metrics Changes - The semiconductor and polishing equipment shipments decreased, while there was an increase in consumable shipments compared to the prior year [24] - Demand for high-temperature belt furnaces for EV applications remained strong, with repeat orders indicating a robust market opportunity [7][19] - The Materials and Substrate segment saw healthy demand for consumable products, particularly for silicon carbide applications, which increased over 100% year-over-year [21][22] Market Data and Key Metrics Changes - The company experienced softness in orders for advanced packaging and SMT products, which is expected to continue into Q2 2023 [16] - The demand for silicon carbide consumables is anticipated to stabilize until additional wafer capacity comes online towards the end of the calendar year [21] - The company noted that the semiconductor equipment industry is cyclical and can be significantly impacted by changes in market demand [30] Company Strategy and Development Direction - The acquisition of Entrepix is expected to enhance the company's substrate processing solutions and create cross-selling opportunities [8][14] - The company aims to align its divisions with high-growth megatrend markets such as EV and energy efficiency [15] - Strategic investments are being made to improve manufacturing operations and increase capacity and profitability [20][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current downturn in the spending cycle for some products but remains optimistic about long-term opportunities [7] - The company expects Q1 2023 to represent the trough in new orders for advanced packaging and SMT products, with a recovery anticipated as market conditions improve [16] - The outlook for Q2 2023 includes expected revenues in the range of $30 million to $32 million, reflecting ongoing logistical impacts and supply chain delays [29] Other Important Information - Unrestricted cash and cash equivalents were $44.5 million as of December 31, 2022, down from $46.9 million at the end of Q4 2022 [26] - The company has access to an $8 million revolving line of credit for working capital needs following the acquisition of Entrepix [27] Q&A Session Summary Question: Can you talk about the $8 million booking for high-volume thermal systems for the EV supply chain? - The booking involves around 8 systems for various applications including silicon carbide and battery cooling modules, across multiple customers in North America, Europe, and Asia [32][35] Question: How does the Entrepix acquisition overlap with the existing customer base? - There is a significant overlap with existing customers, providing strong synergies across wafering and fab sides of the market [40] Question: What updates can you share about supply chain management? - The company has made adjustments to its supply chain, including adding suppliers and terminating certain ones, to improve efficiency and reduce lead times [42] Question: What is the margin outlook for the belt furnaces? - The margins for the belt furnaces are in the 30s, and improvements are expected as the company works on various initiatives [46] Question: How does the backlog compare with recent margins? - The margins in the backlog are expected to be flattish due to softness in shipments from Shanghai [49] Question: What is the focus for capital allocation in 2023 after the Entrepix acquisition? - The focus is evolving, with a close evaluation of cash flows and potential investments, including a renewed share repurchase program [58]