Amtech Systems fourth quarter and full-years simply reflect the dire conditions any specialist equipment supplier with exposure to the PV manufacturing sector is experiencing.
Coping with the worst downturn on record as capital expenditures vanish due to massive structural overcapacity has forced many, including Amtech to reduce its workforce, cut operating expenses and reduce expenditure in R&D and other segments to better match the significant decline in revenue while hoping to weather an approaching new year that offers little comfort.
Financials FY Q4
Amtech Systems reported FYQ4 2012 revenue of US$10.9 million, down 55% sequentially and down 82% from nearly US$60 million in the same quarter a year ago.
Gross margin was a negative 63%, due to US$9.2 million of inventory write downs and losses on what the company described as ‘firm purchase commitments.’ Gross margin in the previous quarter had been 20%. The company had previously warned at the end of October that it expected heavy losses and had been impacted by equipment final acceptance delays.
The company also noted a goodwill impairment charge of $4.7 million due to PV market conditions and the expectation conditions will remain tough in 2013. Net loss for FY Q4 2012 was US$14.1 million.
Order intake in FY Q4 was US$5.7 million of which US$2.1 million was for its solar segment. Total orders were down slightly from US$6.1 million in the prior quarter.
Asia-Pacific region was responsible for 28% of solar segment sales in the quarter, while Europe was 24%, and North America was the largest market at 48%.
Amtech reported its total order backlog at the end of the quarter stood at US$18.7 million compared to total backlog of US$35.6 million at the end of FYQ2.
Solar segment order backlog stood at US$13.8 million compared to a backlog of US$26.1 million at the end of the prior quarter. Management noted that the reduction in backlog reflected an appraisal of certain customer orders that were deemed not be delivered within the next 12 months. The company said in a conference call to discuss financial results that the backlog decline was not due to any cancelled orders.
Amtech reported FY2012 net revenue of US$81.5 million compared to record revenue of US$246.7 million in 2011.
Gross margin was 11% in FY2012 compared to 37% in FY2011. Net loss for the full year was US$23 million, while net income was US$22.9 million.
Amtech has essentially no debt with total unrestricted cash and cash equivalents of US$46.7 million.
Brad Anderson, Amtech Systems CFO said in the conference call: “Further cost reduction plans are in process and are closely tied with the extended downturn. We are focused on managing our cash while continuing to maintain premier customer service including the continued investment in next-generation technology solutions for the solar industry. We anticipate that the current challenges in the solar market combined with our continued investment in key products and technologies will cause our cash levels to decrease during FY2013, but to levels we believe are manageable beyond FY2013.”
Although management did not provide details of the next phase in cost reductions they did note that R&D expenditure would be reduced, although declined to provide figures to analysts on the conference call.
Fokko Pentinga, CEO of Amtech reiterated several times that the R&D reduction was due to projects having been completed in 2012 and therefore a reduction in R&D expenditure would result
Ion implant tool development
However, Pentinga highlighted that its investment in majority owned subsidiary, Kingstone, which launched an ion implant tool dedicated to PV at SNEC earlier this year would continue. Tool evaluations were still ongoing, a key factor for such equipment due to the process changes required should implantation technology be employed in a cell line.
Pentinga also gave a glimmer of hope for recovery in orders next year: “First and foremost what is important for us is that during this FY2013 we will be successful in getting up more customers to kind of work on the entire technology.”
The executive also noted certain unidentified customers were already undertaking some further capacity expansions, without then yet publically announcing the expansions.
However, market conditions for capital equipment, whether capacity or technology based buys is expected to remain weak in 2013. Amtech said that due to the market conditions it would not provide future quarterly or full-year guidance.