Amtech Systems Inc. Reports Operating Results (10-Q)
Amtech Systems, Inc. has a market cap of $37.68 million; its shares were traded at around $3.95 with and P/S ratio of 0.5661.
Highlight of Business Operations:Net revenue for the quarters ended December 31, 2012 and 2011 was $9.4 million and $24.7 million, respectively, a decrease of $15.4 million or 62%. Revenue decreased primarily due to significantly lower shipments of our equipment to the solar and semiconductor industries, as well as decreased recognition of previously-deferred revenue. Net revenue from the solar market was $4.3 million and $15.6 million for the three months ended December 31, 2012 and 2011, respectively. The current supply / demand imbalance and global economic conditions have negatively impacted growth in the solar equipment market and have caused our customers to significantly slow or push out their capacity expansion plans. It is difficult to predict when the market will improve, and we expect this downturn to continue for into 2013.
Our order backlog as of December 31, 2012 and 2011 was $14.7 million and $69.2 million, respectively. Our backlog as of December 31, 2012 includes approximately $10.1 million of orders and deferred revenue from our solar industry customers, compared to $55.8 million at December 31, 2011. New orders booked in the quarter ended December 31, 2012 were $5.0 million compared to $11.1 million in the quarter ended December 31, 2011. As the majority of the backlog is denominated in Euros, the strengthening of the Euro during the first quarter of fiscal 2013 resulted in an increase in backlog of approximately $0.4 million. As of December 31, 2012, two customers individually accounted for 11% of our order backlog. Our order pipeline is slow, due to the worldwide overcapacity of solar cell production as well as a slowdown in orders from our customers serving the semiconductor industry. 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, 2012 and 2011 was $1.4 million and $7.2 million, respectively; a decrease of $5.8 million or 81%. Gross margin was 15% in the quarter ended December 31, 2012 compared to 29% in the quarter ended December 31, 2011. Lower gross margin was caused primarily by lower sales volumes, resulting in lower capacity utilization, partially offset by lower spending resulting from company-wide cost cutting initiatives. In the quarters ended December 31, 2012 and 2011, we had a net recognition of deferred profit of $2.5 million and $4.9 million, respectively.
Selling, general and administrative (SG&A) expenses for the three months ended December 31, 2012 and 2011 were $4.3 million and $6.3 million, respectively. SG&A expenses include $0.4 million and $0.5 million of stock-based compensation expense for the quarters ended December 31, 2012 and 2011, respectively. The decrease in SG&A expenses was due primarily to lower commissions and shipping expenses related to lower revenues and also reflects company-wide cost control initiatives.
For the three months ended December 31, 2012 and 2011, we recorded an income tax benefit of $0.5 million and $0.3 million for effective tax rates of 10% and 18%, respectively. The effective tax rate is the ratio of total income tax expense (benefit) to pre-tax income (loss). The tax benefit for the first quarter of fiscal 2012 includes the benefit realized from the favorable resolution of an uncertain tax position. The income tax provisions for the three months ended December 31, 2012 and 2011 are based upon estimates of annual income, annual permanent differences and statutory tax rates in the various jurisdictions in which we operate, except that certain loss jurisdictions and discrete items, such as the resolution of uncertain tax positions, are treated separately. No tax benefit has been recognized for losses related to Kingstone's ion implant development project, because it does not have a sufficient history of earnings to support a determination that realization of the tax benefit is more likely than not.
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