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Amtech Systems Inc. Reports Operating Results (10-Q)

February 09, 2012 | About:
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10qk

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Amtech Systems Inc. (ASYS) filed Quarterly Report for the period ended 2011-12-31.

Amtech Systems Inc. has a market cap of $104 million; its shares were traded at around $11.18 with a P/E ratio of 4.3 and P/S ratio of 0.4.

Highlight of Business Operations:

Net revenue for the quarters ended December 31, 2011 and 2010 was $24.7 million and $53.7 million, respectively, a decrease of $29.0 million or 54%. Revenue decreased primarily due to significantly lower shipments of our equipment to the solar industry, partially offset by higher shipments to the semiconductor industry and increased recognition of previously-deferred revenue. Net revenue from the solar market was $15.6 million and $45.9 million for the three months ended December 31, 2011 and 2010, respectively; a $30.3 million or 66% decrease. The current supply / demand imbalance and global economic conditions have negatively impacted the growth of the solar equipment market and have caused our customers to significantly slow or push out their capacity expansion plans. While the duration of this down cycle in the solar industry is difficult to predict, we continue to have a long-term positive outlook.

Our order backlog as of December 31, 2011 and 2010 was $69.2 million and $172.9 million, respectively. Our backlog as of December 31, 2011 includes approximately $55.8 million of orders and deferred revenue from our solar industry customers, compared to $162.0 million at December 31, 2010. New orders booked in the quarter ended December 31, 2011 decreased to $11.1 million compared to $137.0 million in the quarter ended December 31, 2010 and $16.8 million sequentially. As the majority of the backlog is denominated in Euros, the strengthening of the dollar during the first three months of fiscal 2012 resulted in a decrease in backlog of approximately $3.1 million. As of December 31, 2011, one customer accounted for 26% of our order backlog. Our order pipeline has slowed significantly, due mainly to the worldwide, overcapacity of solar cell production. The pipeline is also negatively influenced by slower growth in demand for solar modules caused by the frequently-fluctuating government subsidies for solar energy installations.

Gross profit for the three months ended December 31, 2011 and 2010 was $7.2 million and $19.6 million, respectively; a decrease of $12.4 million or 63%. Gross margins decreased to 29% in the quarter ended December 31, 2011 from 36% in the quarter ended December 31, 2010. Gross margins were negatively impacted primarily by lower sales volumes, resulting in less efficient capacity utilization, and lower average selling prices primarily due to product mix that includes research and development systems shipped to leading solar research institutes. The lower margins were significantly offset by increases in recognition of previously-deferred profit. In the quarter ended December 31, 2011, we had net profit recognition of $4.9 million compared to net profit deferral of $5.1 million in the quarter ended December 31, 2010.

Selling, general and administrative (SG&A) expenses for the three months ended December 31, 2011 were $6.3 million or 25% of revenue. For the three months ended December 31, 2010, SG&A expenses were $10.4 million or 19% of revenue. SG&A expenses include $0.5 million and $0.4 million of stock-based compensation expense, respectively, for the quarters ended December 31, 2011 and 2010. The decrease in SG&A expenses was due primarily to lower commissions and shipping expenses related to lower revenues. In addition, SG&A decreased due to lower legal and consulting fees associated with our acquisition activities.

Cash used in our operating activities was $6.1 million for the three months ended December 31, 2011, compared to $4.3 million used in such activities for the three months ended December 31, 2010. During the three months ended December 31, 2011, $0.3 million of cash was used as a result of the net loss from operations, adjusted for non-cash charges. Additional cash was used reduce current liabilities, such as customer deposits, accounts payable, accrued compensation and deferred profit. These decreases in cash were partially offset by collections of accounts receivable.

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