Q3 2024 Amtech Systems Inc Earnings Call

August 7, 2024

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Operator: Good day, and welcome to the Amtech Systems fiscal third quarter 2024 earnings conference call. Please note that this call is being recorded and simultaneously webcast. I would now like to turn the call over to Erica Mannion of Sapphire Investor Relations. Please go ahead.

Operator: Good day and welcome to the Amtech Systems fiscal third quarter 2024 earnings conference call. Please note that this call is being recorded and simultaneously webcast.

Operator: Good day, and welcome to the Amtech Systems Fiscal Third Quarter 2024 earnings conference call. Please note that this call is being recorded and simultaneously webcast. I would now like to turn the call over to Erica Mannion of Sapphire Investor Relations. Please go ahead.

Erica Mannion: Good day and welcome to the Amtech Systems fiscal third quarter 2024 earnings conference call. Please note that this call is being recorded and simultaneously webcast. I would now like to turn the call over to Erica Mannion of Sapphire Investor Relations. Please go ahead.

Erica Mannion: I would now like to turn the call over to Erica Mannion of Sapphire Investor Relations. Please go ahead.

Erica Mannion: Good afternoon and thank you for joining us for Amtech Systems' fiscal third quarter 2024 conference call. With me on the call today are Bob Daigle, Chairman and Chief Executive Officer, Lisa Gibbs, Chief Financial Officer, and Wade Jenke, Incoming Financial Officer.

Erica Mannion: Good afternoon, and thank you for joining us for Amtech Systems' fiscal third quarter 2024 conference call. With me on the call today are Bob Daigle, Chairman and Chief Executive Officer, Lisa Gibbs, Chief Financial Officer, and Wade Jahnke, Incoming Financial Officer. After the close of market today, Amtech released its financial results for the fiscal third quarter of 2024. The earnings release is posted on the company's website at www.amtechsystems.com in the investor section.

Speaker Change: Good afternoon and thank you for joining us for Amtech Systems Fiscal Third Quarter 2024 Conference Call. With me on the call today are Bob Daigle, Chairman and Chief Executive Officer, Lisa Gibbs, Chief Financial Officer, and Wade Jahnke, Incoming Financial Officer.

Lisa Gibbs: Chief Financial Officer.

Lisa Gibbs: After close of market today, Amtech released its financial results for the fiscal third quarter of 2024. The earnings release is posted on the company's website at www.amtechsystems.com in the Investors section.

Erica Mannion: After the close of market today, Amtech released its financial results for the fiscal third quarter of 2024. The earnings release is posted on the company's website at www.amtechsystems.com in the investor section. Before we begin, I'd like to remind everyone that the Safe Harbor disclaimer in our public filings covers this call and our webcast. Some of the comments to be made on today's call will contain forward-looking statements and assumptions that are subject to risks and uncertainties, including but not limited to those contained in our SEC filings, all of which are posted within the investor section of our corporate website.

Speaker Change: Chief Financial Officer.

Speaker Change: After close of market today, Amtech released its financial results for the fiscal third quarter of 2024. The earnings release is posted on the company's website at www.amtechsystems.com in the investor section.

Lisa Gibbs: Before we begin, I'd like to remind everyone that the safe harvest disclaimer in our public filing covers its call and our webcast. Some of the comments to be made on today's call will contain forward-looking statements and assumptions that are subject to risks and uncertainties, including but not limited to those contained in our SEC filings, all of which are posted within the Investors section of our corporate website. The company assumes no obligation to update any such forward-looking statements. Your caution is not placed under reliance on forward-looking statements, which speak only as of today. These statements are not a guarantee of future performance, and actual results could differ materially from current expectations.

Erica Mannion: Before we begin, I'd like to remind everyone that the Safe Harbor disclaimer in our public filings covers this call and our webcast. Some of the comments to be made on today's call will contain forward-looking statements and assumptions that are subject to risks and uncertainties, including but not limited to those contained in our SEC filings, all of which are posted within the investor section of our corporate website. The company assumes no obligation to update any such forward-looking statement. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of today. Other risk factors are detailed in our SEC filings, including our Form 10-K and Form 10-Q.

Erica Mannion: The company assumes no obligation to update any such forward-looking statement. You are cautioned not to place undue reliance on forward-looking statements which speak only as of today. These statements are not a guarantee of future performance, and actual results could differ materially from current expectations. Among the important factors which could cause actual results to differ materially from those in the forklift constatements are changes in the technologies used by customers and competitors, changes in volatility and the demand for products, the effect of changing worldwide political and economic conditions, including trade sanctions, the effect of overall market conditions, including the equity and credit markets and market acceptance risks, ongoing logistics, supply chain, and labor challenges, and capital allocation plans.

Speaker Change: Before we begin, I'd like to remind everyone that the Safe Harbor disclaimer in our public filings covers this call and our webcast.

Bob Daigle: Other risk factors are detailed in our SEC filings, including our Form 10-K and Form 10-Q. Additionally, in today's conference call, we will be referring to non-GAAP financial measures as we discuss the third quarter financial results. You'll find a reconciliation of these non-GAAP measures to our actual GAAP results included in the press release issued today. Now, I would like to turn the call over to Amtech's Chief Executive Officer, Bob

Speaker Change: some of the comments to be made on today's call will contain forward-looking statements and assumptions that are subject to risks and uncertainties including but not limited to those contained in our sec filings all of which are posted within the investors section of our corporate website

Speaker Change: The company assumes no obligation to update any such forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements which speak only as of today. These statements are not a guarantee of future performance and actual results could differ materially from current expectations.

Lisa Gibbs: Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are changes in the technologies used by customers and competitors, change in volatility and the demand for products, the effect of changing worldwide political and economic conditions, including trade sanctions, the effect of overall market conditions, including the equity and credit markets, and market acceptance risks, ongoing logistics, supply chain and labor challenges, and capital allocations plans.

Speaker Change: Among the important factors which could cause actual results to differ materially from those in the forklift constatements are changes in the technologies used by customers and competitors.

Speaker Change: Change in Volatility and the Demand for Products.

Speaker Change: The effect of changing worldwide political and economic conditions, including trade sanctions. The effect of overall market conditions, including the equity and credit markets, and market acceptance risks. Ongoing logistics, supply chain, and labor challenges, and capital allocation plans.

Lisa Gibbs: Other risk factors are detailed in our SEC filing, including our Form 10-K and Forms 10-Q.

Speaker Change: Other risk factors are detailed in our SEC filings, including our Form 10-K and Form 10-Q . Additionally, in today's conference call, we will be referring to non-GAAP financial measures as we discuss the third quarter financial results.

Lisa Gibbs: Additionally, in today's conference call, we will be referring to non-GAAP financial measures as we discuss the third quarter financial results. You'll find a reconciliation of these non-GAAP measures to our actual GAAP results included in the press release issued to this.

Speaker Change: You'll find a reconciliation of these non-GAAP measures to our actual GAAP results included in the press release issued today.

Robert Daigle: Now, I would like to turn the call over to Amtex Chief Executive Officer Bob Gagel. Good afternoon, everyone. Thank you for joining Amtex Quarterly Conference Call. In the third quarter, we continue to optimize our cost structure to match the current demand environment and lay the foundation for meaningful operating leverages as the markets we serve recover. Revenue of 26.7 million exceeded the high end of our guidance range, and our adjusted EBITDA was $2.3 million. I'm pleased that we're beginning to see the financial benefits of the actions we've taken over the past few quarters. The macroeconomic landscape for our end markets remains somewhat next.

Speaker Change: Now, I would like to turn the call over to Amtech's Chief Executive Officer, Bob Daigle.

Bob Daigle: Good afternoon, everyone. Thank you for joining Amtech's quarterly conference call. In the third quarter, we continued to optimize our cost structure to match the current demand environment and lay the foundation for meaningful operating leverage as the markets we serve recover. Revenue of $26.7 million exceeded the high end of our guidance range, and our adjusted EBITDA was $2.3 million.

Bob Daigle: good afternoon everyone thank you for joining ansex quarterly conference call

Bob Daigle: In the third quarter, we continue to optimize our cost structure to match the current demand environment and lay the foundation for meaningful operating leverage as the markets we serve recover.

Speaker Change: Revenue of $26.7 million exceeded the high end of our guidance range, and our adjusted EBITDA was $2.3 million.

Bob Daigle: I'm pleased that we're beginning to see the financial benefits of the actions we've taken over the past few quarters. However, the macroeconomic landscape for our end markets remains somewhat mixed. Within the semiconductor industry, we have begun to see incremental improvement in demand for advanced packaging applications. While we have not seen a sharp recovery, we are seeing a gradual increase in demand from the cyclical lows of the past few quarters. Based on quoting activity and discussions with our customers, we expect to see continued improvement.

Lisa Gibbs: I'm pleased that we're beginning to see the financial benefits of the actions we've taken over the past few quarters. However, the macroeconomic landscape for our end markets remains somewhat mixed. Offsetting this incremental tailwind, we have experienced a softening of demand for our horizontal diffusion furnaces since these tools are primarily targeted for power electronic semiconductor applications in automotive and industrial markets. However, although demand for consumables used for semiconductor fabrication remains somewhat lumpy, the demand for replacement parts continues to improve. The smaller facility reduces our fixed costs by about $1 million a year without impacting production capacity.

Speaker Change: I'm pleased that we're beginning to see the financial benefits of the actions we've taken over the past few quarters.

Speaker Change: The macroeconomic landscape for our end markets remains somewhat mixed. Within the semiconductor industry, we have begun to see incremental improvement in demand for advanced packaging applications.

Robert Daigle: Within the semiconductor industry, we have begun to see incremental improvement in demand for advanced packaging applications. While we have not seen a sharp recovery, we are seeing a gradual increase in demand from the cyclical lows of the past few quarters. Based on quoting activity and discussions with our customers, we expect to see continued improvement. Offsetting this incremental tailwind, we have experienced a softening of demand for our horizontal diffusion furnaces since these tools are primarily targeted for power electronics, semiconductor applications in automotive and industrial markets. While this impacts both our backlog and the future revenue in the near term, our overall profit levels remain neutral as the contribution margin from these products was significantly lower than our corporate average.

Speaker Change: While we have not seen a sharp recovery, we are seeing a gradual increase in demand from the cyclical lows of the past few quarters.

Speaker Change: Based on quoting activity and discussions with our customers, we expect to see continued improvement.

Bob Daigle: Offsetting this incremental tailwind, we have experienced a softening of demand for our horizontal diffusion furnaces since these tools are primarily targeted for power electronic semiconductor applications in automotive and industrial markets. While this impacts both our backlog and future revenue in the near term, our overall profit levels remain unchanged as the contribution margin from these products was significantly lower than our corporate average.

Speaker Change: Offsetting this incremental tailwind, we have experienced a softening of demand for our horizontal diffusion furnaces, since these tools are primarily targeted for power electronic semiconductor applications in automotive and industrial markets.

Speaker Change: While this impacts both our backlog and the future revenue in the near term, our overall profit levels remain mutual as the contribution margin from these products was significantly lower than our corporate average.

Bob Daigle: Within our materials and substrates and markets, we are seeing a stabilization in overall demand. Although demand for consumables used for semiconductor fabrication remains somewhat volatile, demand for replacement parts continues to improve. Together, we believe we've passed the trough in demand for this segment, although we do not expect a sharp recovery in the near term. While we await the rebound and demand across broader markets, we are continuing to focus on optimizing our operations.

Speaker Change: Within our materials and substrates and markets, we are seeing a stabilization in overall demand.

Robert Daigle: Within, although demand for consumables used for semiconductor fabrication remains somewhat lumpy, the demand for replacement parts continues to improve. Taken together, we believe we've passed the trot in demand for the segment, although we do not expect a sharp recovery in the near term. While we await the rebound in demand across broader markets, we are continuing to focus on optimizing our operations. In the third quarter, we completed the relocation of our US BTU facility to a smaller, more cost-effective facility in Massachusetts and expanded our partnership with contract manufacturers to improve operational efficiency and manufacturing flexibility. The smaller facility reduces our fixed costs by about $1 million a year without impacting the production capacity.

Speaker Change: although demand for consumables used for semiconductor fabrication remains somewhat lumpy the demand for replacement parts continues to improve

Speaker Change: taking together we believe we've passed the truroth and demand for this segment although we do not expect a sharp recoveringin the near term

Speaker Change: While we await the rebound in demand across broader markets, we are continuing to focus on optimizing our operations.

Bob Daigle: In the third quarter, we completed the relocation of our U.S. BTU facility to a smaller, more cost-effective facility in Massachusetts and expanded our partnership with contract manufacturers to improve operational efficiency and manufacturing flexibility. A smaller facility reduces our fixed costs by about $1 million a year without impacting production capacity.

Speaker Change: In the third quarter, we completed the relocation of our U.S. BTU facility to a smaller, more cost-effective facility in Massachusetts and expanded our partnership with contract manufacturers to improve operational efficiency and manufacturing flexibility.

Speaker Change: The smaller facility reduces our fixed costs by about $1 million a year without impacting the production capacity.

Robert Daigle: In addition, we are beginning to see the benefits of pricing actions we've taken over the last several quarters. That said, it will still be a few quarters before we see the full impact due to existing backlog in parts of our business. Overall, we believe the measures we've implemented over the past few quarters have better aligned our organization to support current market demand while delivering positive near-term adjusted evita profitability. The success of our initiatives has resulted in approximately $7 million in annualized cost savings and allowed us to deliver our third consecutive quarter positive adjusted EBITDA and operating cash flow despite the ongoing softness in the markets we serve.

Bob Daigle: In addition, we are beginning to see the benefits of pricing actions we've taken over the last several quarters. That said, it will still be a few quarters before we see the full impact due to existing backlog in parts of our business. Overall, we believe the measures we've implemented over the past few quarters have better aligned our organization to support current market demand while delivering positive near-term adjusted EBITDA profitability. The success of our initiatives has resulted in approximately $7 million in annualized cost savings and allowed us to deliver our third consecutive quarter of positive adjusted EBITDA and operating cash flow, despite the ongoing softness in the markets we serve.

Speaker Change: In addition, we are beginning to see the benefits of pricing actions we've taken over the last several quarters.

Lisa Gibbs: That said, it will still be a few quarters before we see the full impact. Overall, we believe the measures we've implemented over the past few quarters have better aligned our organization to support current market demand while delivering positive near-term adjusted EBITDA profitability. Looking ahead, we believe Amtech is well-positioned to capitalize on several secular trends that will drive demand for our products. Within the automotive market, we expect continued growth of power electronic applications in hybrid and full electric vehicles that will generate strong demand for our consumables and equipment. As OSAT and OEM utilization rates increase, we expect to see a stronger rebound in demand for our reflow equipment.

Speaker Change: That said, it will still be a few quarters before we see the full impact due to existing backlog in parts of our business.

Speaker Change: Overall, we believe the measures we've implemented over the past few quarters have better aligned our organization to support current market demand while delivering positive near-term adjusted EBITDA profitability.

Speaker Change: The success of our initiatives has resulted in approximately seven million dollars in annualized cost savings and allowed us to deliver our third consecutive quarter positive adjusted EBITDA and operating cash flow despite the ongoing softness in the markets we serve.

Robert Daigle: Looking ahead, we believe AMTEC is well positioned to capitalize on several secular trends that will drive demand for our products. Within the automotive market, we expect continued growth of power electronic applications and hybrid and full electric vehicles that will generate strong demand for our consumables and equipment. Within the broader semiconductor market, our tools play a critical role in the advanced packaging of processors, used in high performance computing. As OSAT and OEM utilization rates increase, we expect to see a stronger rebound in demand for our reflow equipment. In addition, we expect the benefit from the near-shoring investments being made by government and industry players to build more resilient and secure semiconductor and electronic assembly supply chain.

Bob Daigle: Looking ahead, we believe Amtech is well-positioned to capitalize on several secular trends that will drive demand for our products. Within the automotive market, we expect continued growth of power electronic applications in hybrid and full electric vehicles that will generate strong demand for our consumables and equipment. Within the broader semiconductor market, our tools play a critical role in the advanced packaging of processors used in high-performance computing. As OSAT and OEM utilization rates increase, we expect to see a stronger rebound in demand for our reflow equipment.

Speaker Change: Looking ahead, we believe Amtech is well-positioned to capitalize on several secular trends that will drive demand for our products.

Speaker Change: Within the automotive market, we expect continued growth of power electronic applications in hybrid and full electric vehicles that will generate strong demand for our consumables and equipment.

Speaker Change: Within the broader semiconductor market, our tools play a critical role in the advanced packaging of processors used in high-performance computing.

Speaker Change: As OSAT and OEM utilization rates increase, we expect to see a stronger rebound in demand for our reflow equipment.

Bob Daigle: In addition, we expect to benefit from the near-shoring investments being made by government and industry players to build more resilient and secure semiconductor and electronic assembly supply chains. In summary, we remain confident that the strategic initiatives we are implementing to enhance operational efficiency and reduce working capital will generate significant shareholder value as our target markets regain momentum. With that, I'll turn it over to Lisa for further details on the third quarter.

Speaker Change: In addition, we expect the benefit from the near-shoring investments being made by government and industry players to build more resilient and secure semiconductor and electronic assembly supply chains.

Robert Daigle: In summary, we remain confident that the strategic initiatives we are implementing to enhance operational efficiency and reducing working capital will generate significant shareholder value as our target markets regain momentum.

Speaker Change: in summary we remain confident that the strategic initiatives we are implementing to enhance operational efficiency and reducing working capital will generate significant shareholder value as our target markets regain momentum

Lisa Gibbs: With that, I'll turn it over to Lisa for further details on the third quarter. Thank you, Bob. Net revenues increase 5% sequentially and decrease 13% from the third quarter of fiscal 2023. The sequential increase is primarily due to increased sales of our reflow and wafer cleaning equipment and higher parts in services revenue. The decrease from prior year is primarily attributable to lower sales across most of our product portfolio due to a slowdown in the third quarter of fiscal 2024. Gap growth margin increased sequentially compared to the same prior year periods. On the sequential basis, gap growth margin and our semi-conductor segment was positively affected by product mix, attributed to increased revenues for reflow equipment, parts, and services.

Speaker Change: With that, I'll turn it over to Lisa for further details on the third quarter.

Lisa Gibbs: Net revenues increased 5 percent sequentially and decreased 13 percent from the third quarter of fiscal 2023. The sequential increase is primarily due to increased sales of our reflow and wafer cleaning equipment and higher parts and services revenue.

Speaker Change: Thank you, Bob.

Lisa: net revenues increased five percent sequentially and decrease thirteen percent from the third quarter of fiscal two thousand and twenty three the sequential increase is primarily due to increas sales of our reflow and waaffor clean equipment and higher parts and services revenue

Lisa Gibbs: The decrease from the prior year is primarily attributable to lower sales across most of our product portfolio due to a slowdown in the broader semiconductor market. In the third quarter of fiscal 2024, GAAP gross margin increased sequentially compared to the same prior year period. On a sequential basis, gap growth margin in our semiconductor segment was positively affected by product MIPS, contributing to increased revenues for reflow equipment, parts, and services. Gap gross margin in our materials and substrates segment decreased on a sequential basis due primarily to a less favorable product mix of consumables and equipment.

Lisa: The decrease from prior year is primarily attributable to lower sales across most of our product portfolio due to a slowdown in the broader semiconductor market.

Speaker Change: In the third quarter of fiscal 2024, GAAP gross margin increased sequentially compared to the same prior year period.

Speaker Change: On a sequential basis, gap gross margin in our semiconductor segment was positively affected by product mix, attributed to increased revenues for reflow equipment, parts, and services.

Lisa Gibbs: contributed to increased revenues for reflow equipment, parts, and services. Gap gross margin in our materials and substrates segment decreased on a sequential basis due primarily to a less favorable product mix of consumables and equipment. However, compared to the same prior year period, gap gross margin was relatively consistent between periods.

Lisa Gibbs: Gap growth margin in our materials and substrate segment decreased on a sequential basis due primarily to a less favorable product mix of consumables and equipment. Compared to same prior year period, gap growth margins was relatively consistent between periods. Selling, general, and administrative expenses decreased approximately $40,000 on a sequential basis and decreased $2.1 million compared to the same prior year period. The sequential decrease is due primarily to reductions in labor-related expenses, partially offset by increased commissions and shipping expenses on higher sales. Compared to the same prior year period, the decrease is due primarily to lower labor and labor-related expenses as a result of our cost reduction initiatives, as well as lower shipping expenses on lower revenues.

Speaker Change: Gap gross margin in our materials and substrates segment decreased on a sequential basis due primarily to a less favorable product mix of consumables and equipment.

Lisa Gibbs: Compared to the same prior year period, gap gross margin was relatively consistent between periods. Selling, general, and administrative expenses decreased approximately $40,000 on a sequential basis and decreased $2.1 million compared to the same prior year period. The sequential decrease is due primarily to reductions in labor-related expenses partially offset by increased commissions and shipping expenses on higher sales. Compared to the same prior year period, the decrease is due primarily to lower labor and labor-related expenses as a result of our cost reduction initiatives, as well as lower shipping expenses on lower revenues.

Speaker Change: Compared to same prior year period, gap gross margin was relatively consistent between periods.

Speaker Change: Selling, general, and administrative expenses decreased approximately $40,000 on a sequential basis and decreased $2.1 million compared to the same prior year period.

Speaker Change: The sequential decrease is due primarily to reductions in labor-related expenses partially offset by increased commissions and shipping expenses on higher sales.

Speaker Change: Compared to the same prior year period, the decrease is due primarily to lower labor and labor-related expenses as a result of our cost reduction initiatives, as well as lower shipping expenses on lower revenue.

Lisa Gibbs: Research development and engineering expenses decreased $2 million sequentially and decreased $1.1 million compared to the same prior year period. Sequential decrease due primarily to the timing of purchases related to specific projects in both segments and the decrease from prior year attributable to development efforts in our material and substrate segment that did not recur. Gap operating income was $0.8 million compared to Gap operating income of $1.4 million in the second quarter of fiscal 2024 and Gap operating loss of $1.1 million in the same prior year period. Non-GAAP operating income was $1.5 million compared to non-GAAP operating income of $0.2 million in the second quarter of fiscal 2024 and non-GAAP operating income of $0.4 million in the same prior year period.

Lisa Gibbs: Research, development, and engineering expenses decreased $2 million sequentially and decreased $1.1 million compared to the same prior year period, with a sequential decrease due primarily to the timing of purchases related to specific projects in both segments, and the decrease from the prior year attributable to development efforts in our material and substrate segment that did not recur.

Speaker Change: Research, development, and engineering expenses decreased $2 million sequentially and decreased $1.1 million compared to the same prior year period, with a sequential decrease due primarily to the timing of purchases related to specific projects in both segments.

Speaker Change: and the decrease from prior year attributable to development efforts in our material and substrate segment that did not recur.

Lisa Gibbs: GAAP operating income was $0.8 million compared to GAAP operating income of $1.4 million in the second quarter of fiscal 2024 and GAAP operating loss of $1.1 million in the same prior year period. Non-GAAP operating income was $1.5 million compared to non-GAAP operating income of $0.2 million in the second quarter of fiscal 2024 and non-GAAP operating income of $0.4 million in the same prior year period. Gap net income for the third quarter of fiscal 2024 was $0.4 million, or $0.03 per share.

Lisa Gibbs: GAAP operating income was $0.8 million compared to GAAP operating income of $1.4 million in the second quarter of fiscal 2024 and GAAP operating loss of $1.1 million in the same prior year period. Unrestricted cash and cash equivalents at June 30, 2024 were $13.2 million compared to $13.1 million at September 30, 2023. Debt payments during the three months into June 30, 2024 were $0.3 million.

Speaker Change: GAAP operating income was $0.8 million compared to GAAP operating income of $1.4 million in the second quarter of fiscal 2024 and GAAP operating loss of $1.1 million in the same prior year period.

Speaker Change: non-gaap operating income with one point five million dollars compared to non-gaap operating income of point two million dollars in the second quarter of fiscal two thousand and twenty four and non-gaap operating income of point fourmillion dollars in the same prior year period

Lisa Gibbs: Gap net income for the third quarter of fiscal 2024 was $0.4 million, or $0.03 per share. This compares to Gap net income of $1 million or $0.07 per share for the preceding quarter and Gap net loss of $1 million or $0.07 per share for the third quarter of fiscal 2023. Non-gap net income for the third quarter of fiscal 2024 was $1.1 million or $8 cents per share. This compares to non-GAAP net loss of $0.2 million or $1 cents per share for the preceding quarter and non-GAAP net income of $0.3 million or $2 cents per share for the third quarter of fiscal 2023.

Speaker Change: gaap net income for the third quarter of fiscal two thousand and twenty four was point four million dollars or three cents per share this compares to gapnet income of one million dollars or seven since per share for the preceding quarter and gaap net loss of one million dollars or seven since per sref for the third quarter of fiscal two thousand and twenty three

Lisa Gibbs: This compares to gap net income of $1 million, or $0.07 per share, for the preceding quarter and gap net loss of $1 million, or $0.07 per share, for the third quarter of fiscal 2023. Non-GAAP net income for the third quarter of fiscal 2024 was $1.1 million, or $0.08 per share. This compares to a non-GAAP net loss of $0.2 million, or $0.01 per share, for the preceding quarter and a non-GAAP net income of $0.3 million, or $0.02 per share, for the third quarter of fiscal 2023. Unrestricted cash and cash equivalents at June 30, 2024 were $13.2 million compared to $13.1 million at September 30, 2023. Debt payments during the three months before June 30, 2024 were $0.3 million.

Speaker Change: non-GAAP net income for the third quarter of fiscal 2024 was $1.1 million, or $0.08 per share.

Speaker Change: This compares to non-GAAP net loss of $0.2 million or $0.01 per share for the preceding quarter and non-GAAP net income of $0.3 million or $0.02 per share for the third quarter of fiscal 2023.

Lisa Gibbs: Unrestorted cash and cash equivalence at June 30, 2024, for $13.2 million, compared to $13.1 million at September 30, 2023. Debt payments during the three months into June 30, 2024, were $0.3 million. Net cash as of June 30, 2024, was $8.9 million, compared to $2.4 million as of September 30, 2023. As Bob touched on, we are seeing differences in the order values and margins for new orders booked compared to some of the products shipping from older backlogs. Our shipments for the third quarter, third fiscal quarter of 2024, including a mix of larger furnaces whose profit levels are below our current expectations and corporate average.

Speaker Change: Unrestricted cash and cash equivalents at June 30, 2024 were $13.2 million, compared to $13.1 million at September 30, 2023. Debt payments during the three months into June 30, 2024 were $0.3 million.

Lisa Gibbs: Net cash as of June 30, 2024 was $8.9 million compared to $2.4 million as of September 30, 2023. And as the semi-market recovers, we will have higher volumes of these types of bookings. As we've discussed previously, we expect the growth margin of our backlog and our future growth margins to improve, but it will take another two to three quarters for this to work its way through. Although the near-term outlook for revenue and earnings remains challenging, we remain confident that the future prospects are strong for both our consumables and equipment serving advanced mobility and advanced packaging applications.

Lisa Gibbs: Net cash as of June 30, 2024 was $8.9 million compared to $2.4 million as of September 30, 2023. As Bob touched on, we are seeing differences in order values and margins for new orders booked compared to some of the products shipping from older backlogs. Our shipments for the third quarter, the third fiscal quarter of 2024, include a mix of larger furnaces whose profit levels are below our current expectations and corporate average.

Speaker Change: Net cash as of June 30, 2024 was $8.9 million, compared to $2.4 million as of September 30, 2023.

Speaker Change: As Bob touched on, we are seeing differences in the order values and margins for new orders booked compared to some of the products shipping from older backlogs.

Lisa Gibbs: Our shipments for the third fiscal quarter of 2024 include a mix of larger furnaces whose profit levels are below our current expectations and corporate average.

Lisa Gibbs: New orders are trending towards lower order values, but higher margin products. And as the semi-market recovers, we will have higher volumes of these types of bookings. As we continue to work down this backlog, we expect our book-to-bill, especially in the semi-segment, to stay below one. But over time, our book-to-bill should be closer to or exceed one to one as a higher portion of our business trends towards book and ship orders. As we discussed previously, we expect the gross margin of our backlog and our future gross margins to improve, but it will take another two to three quarters for this to work its way through.

Lisa Gibbs: New orders are trending towards lower order values but higher margin products. And as the semi-market recovers, we will have higher volumes of these types of orders. As we continue to work down this backlog, we expect our book to build, and the Semi-Segment to stay below 1.

Lisa Gibbs: New orders are trending towards lower order values, but higher margin products. And as the semi-market recovers, we will have higher volumes of these types of bookings.

Lisa Gibbs: But over time, our book-to-bill should be closer to or exceed 1-to-1 as a higher portion of our business trends towards book and ship orders. As we've discussed previously, we expect the gross margin of our backlog and our future gross margins to improve, but it will take another two to three quarters for this to work its way through. Now turning to our outlook, for the fourth fiscal quarter ending September 30, 2024, we expect revenues in the range of $22 to $25 million, with adjusted EBITDA nominally positive.

Lisa Gibbs: As we continue to work down this backlog, we expect our book-to-bill, especially in the semi-segment, to stay below 1, but over time, our book-to-bill should be closer or exceed 1-to-1 as a higher portion of our business trends towards book and ship orders.

Lisa Gibbs: as we've discussed previously we expect the gross margin of our backlog and our future growth margins to improve but it will take another two three quarters for this to work at swaye through

Lisa Gibbs: Now turning to our outlook. For the fourth quarter of this fourth fiscal quarter ending September 30, 2024, we expect revenues in the range of $22 to $25 million, with adjusted EBITDA and nominally positive. Although the near-term outlook for revenue and earnings remains challenging, we remain confident with the future prospects are strong for both our consumables and equipment serving advanced mobility and advanced packaging applications. We took actions during the first and second quarters of fiscal 2024, which will reduce antextructural cost by approximately $7 million annually and better align products pricing with value. These sets should significantly improve results and enhance profitability through market cycles.

Lisa Gibbs: Now turning to our outlook. For the fourth fiscal quarter ending September 30, 2024, we expect revenues in the range of $22 to $25 million with adjusted EBITDA nominally positive.

Lisa Gibbs: Although the near-term outlook for revenue and earnings remains challenging, we remain confident that the future prospects are strong for both our consumables and equipment serving advanced mobility and advanced packaging applications. We took actions during the first and second quarters of fiscal 2024, which will reduce Amtech's structural costs by approximately $7 million annually and Better Align Products Pricing with Value. These statistics should significantly improve results and enhance profitability through market cycles. However, operating results can be significantly impacted, positively or negatively, by the timing of orders, system shipments, logistical challenges, and the financial results of semiconductor manufacturers.

Lisa Gibbs: We took actions during the first and second quarters of fiscal 2024, which will reduce Amtech's structural costs by approximately $7 million annually and Better Align Products Pricing with Value. Additionally, the semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Actual results may differ materially in the weeks and months ahead. The outlook provided is based on an assumed exchange rate between the United States dollar and the Canadian dollar. Changes in the value of the RMB in relation to the United States dollar could cause actual results to differ from expectations. Bob, I will turn the call back over to you.

Lisa Gibbs: We took action during the first and second quarters of fiscal 2024, which will reduce Amtech's structural costs by approximately $7 million annually and better align product pricing with value.

Bob: These stats should significantly improve results and enhance profitability through market cycles.

Lisa Gibbs: Operating results can be significantly impacted positively or negatively by the timing of orders to some shipments, logistical challenges, and the financial results of semiconductor manufacturers. Additionally, the semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Actual results may differ materially in the weeks and months ahead. The portion of Amtex results is denominated in R&B's, a Chinese currency. The outlook provided is based on an assumed exchange rate between the United States dollar and the R&B. Changes in the value of the R&B in relation to the United States dollar could cause actual results to differ from expectations.

Bob: Operating results can be significantly impacted, positively or negatively, by the timing of orders, system shipments, logistical challenges, and the financial results of semiconductor manufacturers.

Lisa Gibbs: Additionally, the semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Therefore, actual results may differ materially in the weeks and months ahead. A portion of Amtech's results is denominated in RMBs, a Chinese currency. The outlook provided is based on an assumed exchange rate between the United States dollar and the R&D. Changes in the value of the RMB in relation to the United States dollar could cause actual results to differ from expectations.

Lisa Gibbs: Additionally, the semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand. Actual results may differ materially in the weeks and months ahead.

Bob: A portion of Amtech's results is denominated in RMBs, a Chinese currency.

Bob: The outlook provided is based on an assumed exchange rate between the United States dollar and the R&D.

Lisa Gibbs: Changes in the value of the R&D in relation to the United States dollar could cause actual results to differ from expectations.

Lisa Gibbs: As I sign off, I would like to welcome Wade to Amtex and thank the Amtex team for all of their hard work and dedication. I would also like to thank Bob and the Board for their support. I am excited for the road ahead for Amtex and strong leadership and strategy.

Lisa Gibbs: As I sign off, I would like to welcome Wade to Amtech and thank the Amtech team for all of their hard work and dedication. I would also like to thank Bob and the board for their support. I am excited about the road ahead for Amtech and its strong leadership and strategy. Bob, I will turn the call back over to you.

Bob: As I sign off, I would like to welcome Wade to Amtech and thank the Amtech team for all of their hard work and dedication.

Lisa Gibbs: I would also like to thank Bob and the board for their support. I am excited for the road ahead for Amtech and its strong leadership and strategy.

Robert Daigle: Bob, I will turn the call back over to you. Thank you, Lisa.

Bob: i will turn the call back over to you

Robert Daigle: Thank you, Lisa. I would like to take a moment to recognize and thank Lisa for her contributions to Amtech over the past eight years. Lisa's commitment to the company and her professional excellence have been invaluable, and I wish her great success with her new role. Amtech's new CFO. Most recently, he served as the CFO of the EMS Group at SA Abloy, a $30 billion publicly traded company headquartered in Sweden.

Bob Daigle: Thank you, Lisa. I would like to take a moment to recognize and thank Lisa for her contributions to Amtech over the past eight years. Lisa's commitment to the company and her professional excellence have been invaluable, and I wish her great success with her new role. I'm pleased to welcome Wade Jenke.

Robert Daigle: I would like to take a moment to recognize and thank Lisa for contributions to Amtex over the past eight years. Lisa's commitment to the company and her professional excellence has been invaluable, and I wish her great success with her new role.

Robert Daigle: I'm pleased to welcome Wade Jenke, Amtech's new CFO. Wade has over 15 years of financial and operational experience with global companies. Most recently, he served as the CFO of the EMS Group at SA ABLOY, a $30 billion publicly traded company headquartered in Sweden. Prior to that, he served in a number of senior financial roles within the SA ABLOY and BAE Systems, spanning SEC reporting, FP&A, cost accounting, and manufacturing accounting. He has also led back in acquisition integrations and ERP implementations. I'm excited to welcome Wade to our team. His experience in both financial and operational functions will greatly contribute to our efforts to fully optimize our operations and create greater shareholder value in the quarters and years ahead.

Wade Jenke: Amtech's new CFO, Wade has over 15 years of financial and operational experience with global companies. Most recently, he served as the CFO of the EMS Group at SA Abloy, a $30 billion publicly traded company headquartered in Sweden. Prior to that, he served in a number of senior financial roles within SAAB Lloyd and BAE Systems, spanning SEC reporting, FP&A, cost accounting, and manufacturing. He has also led back-end acquisition integrations and ERP implementation.

Speaker Change: I'm pleased to welcome Wade Genke.

Wade: Amtech's new CFO . Wade has over 15 years of financial and operational experience with global companies.

Speaker Change: Most recently, he served as the CFO of the EMS Group at SA Abloy, a $30 billion publicly traded company headquartered in Sweden.

Speaker Change: Prior to that, he served in a number of senior financial roles within NASA ABLOY and BAE Systems, spanning SEC reporting, FP&A, cost accounting, and manufacturing accounting.

Speaker Change: He has also led back-end acquisition integrations and ERP implementations.

Wade Jenke: I'm excited to welcome Wade to our team. His experience in both financial and operational functions will greatly contribute to our efforts to fully optimize our operations and create greater shareholder value in the quarters and years ahead. Welcome aboard, Wade.

Speaker Change: I'm excited to welcome Wade to our team. His experience in both financial and operational functions will greatly contribute to our efforts to fully optimize our operations and create greater shareholder value in the quarters and years ahead. Welcome aboard, Wade.

Wade Jenke: Welcome aboard, Wade.

Wade Jenke: Thank you, Bob, and hello to everyone on the call today. I'm excited to join Bob and the talented team at Amtech. I firmly believe an Amtech has the potential for significant growth in revenue, profit, and cash flow, given the company's leadership position in the market that it serves.

Operator: Thank you, Bob, and hello to everyone on the call today. I'm excited to join Bob and the talented team at Amtech. I firmly believe Amtech has the potential for significant growth in revenue, profit, and cash flow, given the company's leadership position in the markets it serves. I look forward to the exciting journey ahead and getting to know many of you personally soon. I will now turn the call over to the operator for questions. Operator?

Robert Daigle: Thank you, Bob, and hello to everyone on the call today.

Operator: I firmly believe Amtech has the potential for significant growth in revenue, profit, and cash flow, given the company's leadership position in the markets it serves. I look forward to the exciting journey ahead and getting to know many of you personally soon.

Speaker Change: unm excited to join bob in the talented ta am t

Operator: I firmly believe in Amtech has the potential for significant growth and revenue profit and cash flow given the company's leadership position in the markets it serves.

Wade Jenke: I look forward to the exciting journey ahead and getting to know many of you personally soon.

Speaker Change: I look forward to the exciting journey ahead and getting to know many of you personally soon.

Operator: I will now turn the call over to the operator for questions.

Mark Miller: Operator? Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star, followed by one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you hear using a speaker phone, please lift the handset before pressing any keys. One moment for your first question. Your first question comes from Mark Miller with Benchmark. Please go ahead.

Speaker Change: I will now turn the call over to the operator for questions.

Operator: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from this polling process, please press star followed by two. If you're using a speakerphone, please lift the handset before pressing any key.

Operator: Operator.

Operator: Okay.

Speaker Change: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by one on your touchtone phone. You will hear a prompt that your hand has been raised.

Speaker Change: should you wish to decline from this pulling process please press star followed by two if you're using a speaker phone please with the handset before pressing any keys one moment for your first question

Operator: If you are using a speakerphone, please lift the handset before pressing any keys. One moment for your first question.

Mark Miller: One moment for your first question. Your first question comes from Mark Miller with Benchmark. Please go ahead.

Speaker Change: Your first question comes from Mark Miller with Benchmark. Please go ahead.

Mark Miller: Please, I'd like to wish you best in your new endeavor and way that I welcome to the Amtech conference calls. Thank you, Mark. You're welcome.

Mark Miller: Lisa, I'd like to wish you the best in your new endeavor. And Wayne, welcome to the Amtech conference call. Thank you, Mark. You talked about some pricing actions. In what areas were these pricing actions taken?

Lisa Gibbs: Lisa, I'd like to wish you the best in your new endeavor, and Wade, welcome to the Amtech conference call. Thank you, Mark. You're welcome. You talked about some pricing actions. What areas were these pricing actions taken in?

Mark Miller: Lisa, I'd like to wish you best in your new endeavor, and Wayne, welcome to the Amtech conference calls.

Bob Daigle: Yeah, Mark, as we commented earlier, a lot of it has been, let me start by saying it is broad. So, most of the parts of our business, we felt we needed to take some actions to deal with the inflationary pressures over the past 18, 24 months. So to answer your question more directly, it has been broad across our portfolio, but I would say disproportionate has really been more on some of the equipment that we're manufacturing, where I think the inflationary pressures on the parts and different components in our systems have been particularly significant, and we need to deal with.

Robert Daigle: You talked about some price in actions. What areas were these price in actions taken? Yeah, Mark, as we commented earlier, a lot of it has been. Let me start by saying it is broad. So we, most of the parts of our business, felt we needed to take some actions to deal with the inflationary pressures over the past, you know, 18, 24 months. So, to answer your question more directly, it has been broad across our portfolio. But I would say this proportionate has really been more on the, on some of the equipment that were manufacturing, where I think the inflationary pressures and the parts and, you know, different components in our systems have been particularly significant, and we needed to deal with it.

Mark Miller: Thank you, Mark.

Speaker Change: You're welcome.

Wayne: You talked about some pricing actions. What areas were these pricing actions taken?

Lisa Gibbs: Yeah, Mark, as we commented earlier, a lot of it has been on some of the equipment that we're manufacturing where I think the inflationary pressures and the parts, and you know, different components in our systems have been particularly significant and we needed to deal with.

Speaker Change: Yeah, Mark, as we commented earlier, a lot of it has been, let me start by saying, it is

Wayne: It is broad, so most of the parts of our business

Speaker Change: We felt we needed to take some actions to deal with the inflationary pressures over the past you know, 18-24 months. So to answer your question more directly, it has been brought across our portfolio

Speaker Change: But I would say disproportionate has really been more on the

Wayne: on some of the equipment that we're manufacturing, where I think the inflationary pressures and the parts and different components in our systems have been particularly significant and we needed to deal with.

Bob Daigle: General Motors and Ford both recently reported strong results for their EV sales. Have you seen any impact from that or any in terms of quoting activity? Any thoughts that's positive for your future outlook?

Robert Daigle: General Motors and Ford both recently reported strong results for their EV sales, and you've seen any impact from that or any in terms of quoting activity and thoughts that's positive for your future outlook. Yeah, I think, you know, I do continue to view EV as having some pretty nice tailwinds. I think some of the, however, the improved results we've seen out of the more traditional automakers has been somewhat offset by the weakness in the market leader in terms of overall the man in the power electronics area. One of the things that I also think is encouraging Mark for us is the, you know, again, they've tempered expectations in terms of full electric vehicle growth rates, but they're still fairly substantial.

Speaker Change: General Motors and Ford both recently reported strong results for their EV sales. Have you seen any impact from that in terms of quoting activity? Any thoughts that's positive for your future outlook?

Bob Daigle: Yeah, I think, you know, I do continue to view EV as having some pretty nice tailwinds. I think some of the, however, the improved results we've seen out of the more traditional automakers have been somewhat offset by the weakness from the market leader in terms of overall demand in the power electronics area. One of the things that I also think is encouraging, Mark, for us is the You know, again, they've tempered expectations in terms of full electric vehicle growth rates, but they're still fairly substantial.

Speaker Change: Yeah, I think, you know, I do continue to view EV as having some pretty nice tailwinds.

Speaker Change: I think some of the, however, the improved results we've seen out of the more traditional automakers.

Mark Miller: has been somewhat offset by the weakness from the market leader in terms of overall demand in the power electronics area. One of the things that I also think is encouraging, Mark, for us is the

Robert Daigle: You know, again, they've tempered expectations in terms of full electric vehicle growth rates, but they're still fairly substantial. So I think that's a nice secular tailwind. But I also believe that what we're beginning to hear more about is

Speaker Change: youknowagain they've tempered expectations in terms of full electric vehicle oral rates but they're still fairly substantial so i think that's a niceseular tailwwhenind but i also believe that what we're beginning to hear more about is the

Robert Daigle: So I think that's a nice secular tailwind, but I also believe that what we're beginning to hear more about is probably a stronger push to hybridize, replace traditional ICE vehicles with more of the hybrid vehicles given strong consumer acceptance for those vehicles in order to meet the fuel efficiency requirements. And then again, that's helpful to us because we do play broadly in the power electronics equipment and consumables area. So I do think that when we look at the puts and takes of kind of a more tempered fully be outlook with an increasing projections for the hybrid electric vehicle side of things.

Bob Daigle: So I think that's a nice secular tailwind. But I also believe that what we're beginning to hear more about is Probably a stronger push to hybridize, replace traditional ICE vehicles with more hybrid vehicles, given strong consumer acceptance for those vehicles, in order to meet fuel efficiency requirements. So, and again, that's helpful to us because we do play broadly in the power electronics equipment and consumables area. So I do think that when we look at the puts and takes of kind of a more tempered, fully V outlook with increasing projections for the hybrid electric vehicle side of things, we actually see that net-net as somewhat favorable to us.

Speaker Change: probably a stronger push to hybridize, replace traditional ICE vehicles with more of the hybrid vehicles given strong consumer acceptance for those vehicles in order to meet the fuel efficiency requirements.

Speaker Change: And again, that's helpful to us because we do play broadly.

Robert Daigle: in the Power Electronics Equipment and Consumables area.

Robert Daigle: So I do think that when we look at the puts and takes of kind of a more tempered, fully V-out look with an increasing

Robert Daigle: We actually see that net, net as somewhat favorable to us.

Speaker Change: You know projections for the hybrid electric vehicle side of things. We actually see that net net as

Robert Daigle: You mentioned the reflow business, so it was one of the drivers for the upside tails. Are you seeing increased quoting activity? What does it look like this will continue? Yes, yes, Mark. Both shipments have been up, quoting activity is up, and more importantly, I would say the mixes. We're seeing improved mix there, and what had really soft and tremendously was the packaging side of the business. Because we manufacture reflow equipment that's used for packaging, advanced packaging, as well as traditional surface mount assembly. And what we're seeing is we've seen several quarters where we have sequentially increased demand for the packaging side of the business.

Bob Daigle: You mentioned the reflow business was one of the drivers for the upside sales. Are you seeing increased quoting activity? What does it look like? I think this will continue.

Speaker Change: somewhat favorable to us.

Speaker Change: You mentioned the reflow business was one of the drivers for the upside sales. Are you seeing increased quoting activity? Does it look like this will continue?

Lisa Gibbs: Yes, yes, Mark. Both shipments have been delayed. Quoting activity is up, and more importantly, I would say the mix is, we're seeing an improved mix there, and what really softened tremendously was the packaging side of the business, because we manufacture reflow equipment that's used for packaging, advanced packaging, as well as traditional surface mount assembly. And what we're seeing is we've seen several quarters where we have sequentially increased demand for the packaging side of the business. And that comes in at a higher margin for us and a higher ASP than surface mount equipment.

Bob Daigle: Yes, yes, Mark. Both shipments have been delayed. Quoting activity is up, and more importantly, I would say the mixes. We're seeing an improved mix there, and what really softened tremendously was the packaging side of the business. Because we manufacture reflow equipment that's used for packaging, advanced packaging, as well as traditional surface mount assembly. And what we're seeing is we've seen several quarters where we have essentially increased demand for the packaging side of the business. And that comes in at a higher margin for us and a higher ASP than surface mount equipment.

Lisa Gibbs: Yeah, yes, yes Mark. Both shipments have been up.

Lisa Gibbs: Quoting activity is up. And more importantly, I would say the mix is, we're seeing an improved mix there. And what had really softened tremendously was the packaging side of the business.

Lisa Gibbs: We manufacture reflow equipment that's used for packaging, advanced packaging, as well as traditional surface mount assembly. And what we're seeing is we've seen several quarters where we have

Robert Daigle: And that comes in at a higher margin for us in a higher ASP than the surface mount equipment.

Lisa Gibbs: sequentially increased the demand for the for the packaging side of the business and that comes in at a higher margin for us in a higher ASP than the surface mount equipment.

Lisa Gibbs: I just have a couple of housekeeping issues. I'll jump back in the queue. Cash from operations and CapEx, what were they for the quarter?

Mark Miller: I just have a couple housekeeping issues. I'll jump back into you. Cash from operations and catbacks. What were they for the corner? I've got the year-to-date numbers in front of me here, Mark. We had cash provided by operations of $9 million, which is a great year-to-date in catbacks, a little bit over $5 million. We finished the build-out of that building in Massachusetts, which was a significant part of our catbacks. And I would say in the nearer term, I would expect that to be more just maintenance type of catbacks. Okay, so these were year-to-date over the last three quarters.

Mark Miller: I just have a couple of housekeeping issues. I'll jump back in the queue. Cash from operations and CapEx, what were they for the quarter?

Mark Miller: I just have a couple housekeeping issues, I'll jump back in the queue. Cash from operations and CapEx, what were they for the quarter?

Lisa Gibbs: I've got the year-to-date numbers in front of me here, Mark. We had cash provided by operations of $9 million, which is a great year-to-date, and CapEx of a little bit over $5 million. We finished the build-out of that building in Massachusetts, which was a significant part of our CapEx. And I would say in the nearer term, I would expect that to be more just, you know, maintenance type of

Speaker Change: I've got the year-to-date numbers in front of me here, Mark.

Speaker Change: We had cash provided by operations of $9 million, which is a great year to date.

Speaker Change: and CapEx a little bit over $5 million. You know, we finished the build-out of that building in Massachusetts, which was a significant part of our CapEx. And I would say in the nearer term, I would expect that to be more just, you know, maintenance type of CapEx.

Mark Miller: Okay, so these were year-to-date over the last three quarters. Okay, thank you.

Mark Miller: Okay, thank you. Thank you.

Speaker Change: Okay, so these were year-to-date over the last three quarters. Okay, thank you.

Kevin Garrigan: Thank you. As a reminder, if you wish to ask a question, please press star and then one on your touchtone phone. We will just stand by for one moment. Your next question comes from Kevin Garrigan with West Park Capital. Please go ahead.

Operator: As a reminder, if you wish to ask a question, please press star, then one on your touch-tone phone. We will just stand by for one moment.

Speaker Change: Thank you. As a reminder, if you wish to ask a question, please press star then one on your touchtone phone. We will just stand by for one moment.

Kevin Garrigan: Your next question comes from Kevin Garrigan with West Park Capital.

Speaker Change: Your next question comes from Kevin Garrigan with West Park Capital. Please go ahead.

Kevin Garrigan: Please go ahead. Yeah, hey guys, thanks for letting me ask a few questions. Bob, I think I may have asked you this last time, but has anything gotten better or worse versus three months ago in the market to kind of give you hope that things may be turning around or getting better for your businesses? Yeah, no, yeah, I'd say generally more positives. I think the areas that have clearly seen some rebound, I would say, are part side of the business, as we mentioned, because again, some of the, that had a lot of the parts business and service side of things that kind of dried up to a great degree about six months ago or so, and we've seen incremental improvement in people maintaining equipment and parts replacements. And then, of course, I think what's very significant here is the fact that we're nowhere near peak demand for the reflow equipment, but sequentially, we're seeing improvements in demand and, in particular, chip packaging.

Bob Daigle: Yeah, hey guys, thanks for letting me ask a few questions. Bob, I think I may have asked you this last time, but has anything gotten better or worse versus three months ago in the market to kind of give you, you know, hope that things may be turning around or getting better for your businesses? Yeah, no, yeah.

Speaker Change: Yeah, hey guys, thanks for letting me ask a few questions. Bob, I think I may have asked you this last time, but, you know, has anything gotten better or worse versus three months ago in the market to kind of give you, you know, hope that things may be turning around or getting better for your businesses?

Bob Daigle: Yeah, no, yeah, I'd say, generally more positive. You know, I think that the areas that Craig Irwin, Wade Jenke, Amtech Systems Inc., that had a lot of the parts business and service side of things had kind of dried up to a great degree about six months ago or so. And we've seen incremental improvement in people maintaining equipment and parts replacements. And then, of course, I think what's very significant here is the fact that we're nowhere near peak demand for the reflow equipment, but sequentially, we're seeing improvements in demand and, in particular, chip packaging.

Operator: Yeah, no, and yeah.

Lisa Gibbs: Generally more positive, you know, I think the areas that have clearly seen some rebound are part of the business side, as we mentioned earlier, because again, some of the

Speaker Change: Yeah, no, yeah, I'd say.

Lisa Gibbs: generally more positive. You know I think that the areas that have clearly seen some rebound I would say are our parts side of the business as we mentioned earlier and because again some of the

Speaker Change: That had, a lot of the parts business and service side of things had kind of dried up to a great degree about, you know, six months ago or so, and we've seen incremental improvement in, you know, people maintaining equipment and parts replacements.

Speaker Change: and then of course know i think 's what's very significant here is the fact that we're nowhere near to peak demand for the reflow equipment but sequentially we're seeing improvements in demand and in particular chip packaging

Bob Daigle: I would say in the consumables area, as I mentioned, that's lumpy. I would still characterize it as stable, It's not always consistent, but we're not seeing either a significant headwind or tailwind in that area. And in general, I wouldn't say that it seemed so. My sense is that, you know, we saw the bottom and the industry a couple of quarters ago, and that, you know, although we had all hoped for this V-shaped recovery, this sharp recovery in the markets we serve, we're not seeing that, but at least we're seeing some incremental improvement.

Speaker Change: I really...

Speaker Change: I would say in the consumables area, as I mentioned, that's lumpy. I would still characterize it as stable. It's not always consistent, but we're not seeing either a significant headwind or tailwind in that area.

Robert Daigle: And in general, I wouldn't say that I, it seemed, I mean, my sense is that you know, we saw the bottom in the industry a couple of quarters ago, and that, you know, although we had all hoped for this V-shape recovery, the sharp recovery in the markets we serve, we're not seeing that, but at least we're seeing some incremental improvements. Okay, got it, got it. Yeah, I've heard similar that we're kind of just bouncing along the bottom at this point. Everyone's kind of still waiting.

Speaker Change: And in general, I wouldn't say that it seemed, I mean, my sense is that, you know, we saw the bottom in the industry, you know,

Speaker Change: a couple of quarters ago, and that, you know, although we had all hoped for this V-shaped recovery, this sharp recovery in the markets we serve, we're not seeing that, but at least we're seeing some incremental improvements.

Kevin Garrigan: Okay, got it, got it. Yeah, I've heard similar that we're kind of just bouncing along the bottom at this point. Everyone's kind of still waiting. Yeah, and I would... If I could just add something, and that's kind of, again, our strategy or approach has really been that we can't deal with the market demand conditions, but we can deal with our cost structure and operating performance.

Speaker Change: Okay, got it, got it. Yeah, I've heard similar that we're kind of just bouncing along the bottom at this point. Everyone's kind of still waiting.

Lisa Gibbs: Yeah, and I would... We can't deal with the market demand conditions, but we can deal with our cost structure and operating performance. And that's really, while we wait for something more substantial, as you point out, maybe things are bouncing a lot at the bottom, to make sure that as things are bouncing along the bottom, we're financially in good shape and doing the best we can to drive EBITDA. Yes, yeah, absolutely. That makes a ton of sense.

Robert Daigle: Yeah, and I would, if I can just add something, and that's kind of, again, our strategy or approach has really been to, you know, we can't deal with the market demand conditions, but we can deal with our cost structure and operating performance, and that's really, while we wait for something more substantial, as you point out, maybe things are bouncing a lot at the bottom, and just make sure, as things are bouncing along the bottom, we're financially in good shape, and doing the best we can to drive the data. Yeah, absolutely, that makes a lot of sense.

Speaker Change: If I can just add something. And that's kind of, again, our, our strategy or approach has really been to

Lisa Gibbs: you know,

Lisa Gibbs: We can't deal with the market demand conditions, but we can deal with our cost structure and operating performance. And that's really, while we wait for something more substantial, as you point out, maybe things are bouncing a lot at the bottom, is make sure as things are bouncing along the bottom, we're financially in good shape and

Bob Daigle: And that's really, while we wait for something more substantial, as you point out, maybe things are bouncing along the bottom, is to make sure that, as things are bouncing along the bottom, we're financially in good shape and doing the best we can to drive EBITDA. Yeah, yeah, absolutely. That makes a ton of sense. Okay, perfect. Um, and then just as a follow-up, Lisa, congrats on the new role and best of luck going forward.

Lisa Gibbs: doing the best we can to drive EBITDA.

Lisa Gibbs: Okay, perfect. Um, and then just as a follow-up, Lisa, congrats on the new role and best of luck going forward. Can you just give us the focus for Amtech in terms of capital allocation for the rest of 2024 and whether M&A is kind of a bit of a focus for you guys?

Kevin Garrigan: Okay, perfect.

Lisa Gibbs: And then you said as a follow-up, Lisa, congrats on the new role and invests of what's going forward. Can you just give us the- It was the focus for Amtech in terms of capital allocation for the rest of 2024, and is M&A a bit of a focus for you guys? You know, I would say that, you know, with the continued focus on positive evid generation, even as we kind of bounce along here at the bottom, as we were saying, you know, we finished that build out of the building in Massachusetts. And here in the near term, I think we kind of return to a maintenance capital.

Lisa Gibbs: yes yeah absolutely that atplanantics on cent ok perfect and then just said as a follow-up weisa think conats on the new role invest of what going forward can you just see ase give us there

Lisa Gibbs: Thank you. Can you just give us the... Okay. Give us the focus for Amtech in terms of capital allocation for the rest of 2024, and is M&A kind of a bit of a focus for you guys?

Lisa Gibbs: Give us the focus for Amtech in terms of capital allocation for the rest of 2024 and is M&A kind of a bit of a focus for you guys?

Lisa Gibbs: You know, I would say that, you know, with a continued focus on, you know, positive eBenefit generation, even as we kind of bounce along here at the bottom, as we were saying, we finished that build out of the building in Massachusetts. And here in the near term, I think we've kind of returned to a maintenance CapEx. We're going into our annual budgeting cycle here in the next month or two.

Lisa Gibbs: You know, I would say that, you know, with the continued focus on, you know, positive EBITDA generation, even as we kind of bounce along here at the bottom, as we were saying,

Lisa Gibbs: we finish that build out the building and massachusetsays here in the near term i think we kind of return to a mainance capex we're going into our annle budgeting cycle here in the next month or two

Robert Daigle: We're going into our annual budgeting cycle here in the next month or two. So, you know, I would expect, you know, potentially a little bit more cat-backed next year as Bob and Wade look at areas to invest in the business on the M&A front.

Lisa Gibbs: So, you know, I would expect, you know, potentially a little bit more CapEx next year as Bob and Wade look at areas to invest in the business. On the M&A front, I will turn that back to Bob since he's the more forward-looking person at this table right now. Yeah, I would say.

Speaker Change: So, you know, I would expect, you know, potentially a little bit more cutbacks next year as Bob and Wade look at areas to invest in the business. On the M&A front, I will turn that back to Bob since he's the more forward-looking person at this table right now.

Kevin Garrigan: I will turn that back to Bob since he's the more forward-looking person at this table right now. Yeah, I would say in the current environment, not in the short term, but I do think it's definitely something that we're starting to dig into more in the medium term in terms of how to deploy capital to enhance growth. Okay, perfect. I appreciate the color. Thank you. As a reminder, if you wish to ask a question, please press star, then one on your touch-tone phone. There are no further questions at this time.

Lisa Gibbs: Yeah, I would say in the current environment, not in the short term, but I do think it's definitely something that we're starting to dig into more in the medium to long term in terms of how to deploy capital to enhance growth.

Bob Daigle: Yeah, I would say in the current environment, not in the short term, but I do think it's definitely something that we're starting to dig into more in the medium to long term in terms of how to deploy capital to enhance growth.

Lisa Gibbs: Yeah, I would say in the current environment, not in the short term, but I do think it's definitely something that we're starting to

Lisa Gibbs: dig into more in the medium term in terms of how to deploy capital to enhance growth.

Kevin Garrigan: Okay, perfect. I appreciate the color. Thank you. Thank you.

Operator: Okay, perfect. I appreciate the color. Thank you. Thank you.

Speaker Change: Okay, perfect. I appreciate the color. Thank you.

Operator: Thank you. As a reminder, if you wish to ask a question, please press star and then one on your touchtone phone. There are no further questions at this time. I will now turn the call back over to CEO Bob Daigle for closing remarks.

Speaker Change: thank you as a reminder if you wish to ask a question please press star then one on your touch onephone

Robert Daigle: I will now turn the call back over to CEO Bob Dagle for closing remarks. Well, thank you again for joining our conference call, and I look forward to updating you on the progress we're making in the coming months.

Operator: There are no further questions at this time. I will now turn the call back over to CEO Bob Daigle for closing remarks.

Robert Daigle: Well, thank you again for joining our conference call, and I look forward to updating you on the progress we're making in the coming months.

Bob Daigle: Well, thank you again for joining our conference call, and I look forward to updating you on the progress.

Robert Daigle: Well, thank you again for joining our conference call, and I look forward to updating you on the progress we're making in the coming months.

Operator: Have a good afternoon evening, everyone.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Thank you very much.

Speaker Change: Have a good afternoon, evening, everyone.

Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Operator: Good day and welcome to the Amtech Systems Fiscal Third Quarter 2024 Earnings Conference Call. Please note that this call is being recorded and simultaneously webcast.

Erica Mannion: I would now like to turn the call over to Erica Mannion of Sapphire Investor Relations. Please go ahead.

Erica Mannion: Good afternoon and thank you for joining us for Amtech Systems Fiscal Third Quarter 2024 Conference Call.

Erica Mannion: With me on the call today are Bob Daigle, Chairman and Chief Executive Officer, Lisa Gibbs, Chief Financial Officer, and Wade Jenke, Incoming Financial Officer. Chief Financial Officer.

Erica Mannion: After close of market today, Amtech released its financial results for the Fiscal Third Quarter of 2024. The earnings release is posted on the company's website at www.amtechsystems.com in the Investors section.

Erica Mannion: Before we begin, I'd like to remind everyone that the safe harvest disclaimer in our public filing covers its call and our webcast. Some of the comments to be made on today's call will contain forward-looking statements and assumptions that are subject to risks and uncertainties, including but not limited to those contained in our SEC filings, all of which are posted within the Investors section of our corporate website. The company assumes no obligation to update any such forward-looking statements.

Erica Mannion: Your caution is not placed under reliance on forward-looking statements which speak only as of today. These statements are not a guarantee of future performance and actual results could differ materially from current expectations. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are changes in the technologies used by customers and competitors, change in volatility and the demand for products, the effect of changing worldwide political and economic conditions, including trade sanctions, the effect of overall market conditions, including the equity and credit markets, and market acceptance risks, ongoing logistics, supply chain and labor challenges, and capital allocations plans.

Erica Mannion: Other risk factors are detailed in our SEC filing, including our form 10K and forms 10Q. Additionally, in today's conference call, we will be referring to non-gap financial measures as we discuss the third quarter financial results. You'll find a reconciliation of these non-gap measures to our actual gap results included in the press release issue to this.

Robert Daigle: Now, I would like to turn the call over to Amtex Chief Executive Officer Bob Gagel. Good afternoon, everyone. Thank you for joining Amtex quarterly conference call. In the third quarter, we continue to optimize our cost structure to match the current demand environment and lay the foundation for meaningful operating leverages as the markets we serve recover. Revenue of 26.7 million exceeded the high end of our guidance range, and our adjusted EBITDA was $2.3 million.

Robert Daigle: I'm pleased that we're beginning to see the financial benefits of the actions we've taken over the past few quarters. The macroeconomic landscape for our end markets remains somewhat next. Within the semiconductor industry, we have begun to see incremental improvement in demand for advanced packaging applications, while we have not seen a sharp recovery, we are seeing a gradual increase in demand from the cyclical lows of the past few quarters. Based on quoting activity and discussions with our customers, we expect to see continued improvement.

Robert Daigle: Offsetting this incremental tailwind, we have experienced a softening of demand for our horizontal diffusion furnaces since these tools are primarily targeted for power electronics, semiconductor applications in automotive and industrial markets. While this impacts both our backlog and the future revenue in the near term, our overall profit levels remain neutral as the contribution margin from these products was significantly lower than our corporate average. Within although demand for consumables used for semiconductor fabrication remains somewhat lumpy, the demand for replacement parts continues to improve.

Robert Daigle: Taken together we believe we've passed the trot in demand for the segment, although we do not expect a sharp recovery in the near term. While we await the rebound in demand across broader markets, we are continuing to focus on optimizing our operations. In the third quarter, we completed the relocation of our US BTU facility to a smaller, more cost-effective facility in Massachusetts and expanded our partnership with contract manufacturers to improve operational efficiency and manufacturing flexibility.

Robert Daigle: The smaller facility reduces our fixed costs by about $1 million a year without impacting the production capacity. In addition, we are beginning to see the benefits of pricing actions we've taken over the last several quarters. That said, it will still be a few quarters before we see the full impact due to existing backlog in parts of our business. Overall, we believe the measures we've implemented over the past few quarters have better aligned our organization to support current market demand while delivering positive near term adjusted evita profitability.

Robert Daigle: The success of our initiatives has resulted in approximately $7 million in annualized cost savings and allowed us to deliver our third consecutive quarter positive adjusted evita and operating cash flow despite the ongoing softness in the markets we serve.

Robert Daigle: Looking ahead, we believe AMTEC is well positioned to capitalize on several secular trends that will drive demand for our products. Within the automotive market, we expect continued growth of power electronic applications and hybrid and full electric vehicles that will generate strong demand for our consumables and equipment. Within the broader semiconductor market, our tools play a critical role in the advanced packaging of processors, used and high performance computing. As OSAT and OEM utilization rates increase, we expect to see a stronger rebound in demand for our reflow equipment. In addition, we expect the benefit from the near-shoring investments being made by government and industry players to build more resilient and secure semiconductor and electronic assembly supply chain.

Lisa Gibbs: The decrease from prior year is primarily attributable to lower sales across most of our product portfolio due to a slowdown in the third quarter of fiscal 2024 gap growth margin increased sequentially compared to the same prior year periods. On the sequential basis, gap growth margin and our semi-conductor segment was positively affected by product mix, attributed to increased revenues for reflow equipment, parts, and services. Gap growth margin in our materials and substrate segment decreased on the sequential basis due primarily to a less favorable product mix of consumables and equipment.

Lisa Gibbs: Compared to same prior year period gap growth margins was relatively consistent between periods. Selling general administrative expenses decreased approximately $40,000 on a sequential basis and decreased $2.1 million compared to the same prior year period. The sequential decrease is due primarily to reductions in labor-related expenses partially offset by increased commissions and shipping expenses on higher sales. Compared to the same prior year period, the decrease is due primarily to lower labor and labor-related expenses as a result of our cost reduction initiatives, as well as lower shipping expenses on lower revenues.

Lisa Gibbs: Gap operating income was $0.8 million compared to gap operating income of $1.4 million in the second quarter of fiscal 2024 and gap operating loss of $1.1 million in the same prior year period. Non-gap operating income was $1.5 million compared to non-gap operating income of $0.2 million in the second quarter of fiscal 2024 and non-gap operating income of $0.4 million in the same prior year period. Gap net income for the third quarter of fiscal 2024 was $0.4 million or $3 cents per share.

Lisa Gibbs: This compares to Gap net income of $1 million or $7 cents per share for the preceding quarter and Gap net loss of $1 million or $7 cents per share for the third quarter of fiscal 2023. Non-gap net income for the third quarter of fiscal 2024 was $1.1 million or $8 cents per share. This compares to non-gap net loss of $0.2 million or $1 cents per share for the preceding quarter and non-gap net income of $0.3 million or $2 cents per share for the third quarter of fiscal 2023.

Lisa Gibbs: Unrestorted Cash and Cash Equivalence at June 30, 2024 for $13.2 million, compared to $13.1 million at September 30, 2023, debt payments during the three months into June 30, 2024 were $0.3 million, net cash as of June 30, 2024 was $8.9 million, compared to $2.4 million as of September 30, 2023. As Bob touched on, we are seeing differences in the order values and margins for new orders booked compared to some of the products shipping from older backlogs.

Lisa Gibbs: Our shipments for the third quarter, third fiscal quarter of 2024, including a mix of larger furnaces whose profit levels are below our current expectations and corporate average. New orders are trending towards lower order values, but higher margin products. And as the semi-market recovers, we will have higher volumes of these types of bookings. As we continue to work down this backlog, we expect our book to bill, especially in the semi-segment to stay below one.

Lisa Gibbs: But over time, our book to bill should be closer or exceed one to one as a higher portion of our business trends towards book and ship orders. As we discussed previously, we expect the gross margin of our backlog and our future gross margins to improve, but it will take another two to three quarters for this to work its way through.

Lisa Gibbs: Now turning to our outlook. For the fourth quarter of this fourth fiscal quarter ending September 30, 2024, we expect revenues in the range of $22 to $25 million with adjusted EBITDA and nominally positive. Although the near-term outlook for revenue and earnings remains challenging, we remain confident with the future prospects are strong for both our consumables and equipment serving advanced mobility and advanced packaging applications.

Lisa Gibbs: We took actions during the first and second quarters of fiscal 2024, which will reduce antextructural cost by approximately $7 million annually and better align products pricing with value. These sets should significantly improve results and enhance profitability through market cycles. Operating results can be significantly impacted positively or negatively by the timing of orders to some shipments, logistical challenges, and the financial results of semiconductor manufacturers. Additionally, the semiconductor equipment industries can be cyclical and inherently impacted by changes in market demand.

Lisa Gibbs: Actual results may differ materially in the weeks and months ahead. The portion of Amtex results is denominated in R&B's a Chinese currency. The outlook provided is based on an assumed exchange rate between the United States dollar and the R&B. Changes in the value of the R&B in relation to the United States dollar could cause actual results to differ from expectations.

Lisa Gibbs: As I sign off, I would like to welcome Wade to Amtex and thank the Amtex team for all of their hard work and dedication. I would also like to thank Bob and the board for their support. I am excited for the road ahead for Amtex and strong leadership and strategy.

Robert Daigle: Bob, I will turn the call back over to you. Thank you, Lisa.

Robert Daigle: I'm pleased to welcome Wade Jenke, Amtech's new CFO. Wade has over 15 years of financial and operational experience with global companies. Most recently he served as the CFO of the EMS Group at SA ABLOY, a $30 billion publicly traded company headquartered in Sweden. Prior to that he served in a number of senior financial roles within the SA ABLOY and BAE systems spanning SEC reporting, FPNA, cost accounting, and manufacturing accounting. He has also led back in acquisition integrations and ERP implementations.

Robert Daigle: I'm excited to welcome Wade to our team. His experience in both financial and operational functions will greatly contribute to our efforts to fully optimize our operations and create greater, shareholder value in the quarters and years ahead.

Robert Daigle: Welcome aboard Wade.

Wade Jenke: Thank you, Bob, and hello to everyone on the call today. I'm excited to join Bob and the talented team at Amtech.

Wade Jenke: I firmly believe an Amtech has the potential for significant growth in revenue, profit, and cash flow, given the company's leadership position in the market that it serves. I look forward to the exciting journey ahead and getting to know many of you personally soon.

Operator: I will now turn the call over to the operator for question. Operator? Thank you, ladies and gentlemen.

Operator: We will now begin the question and answer session. Should you have a question, please press star, followed by one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you hear using a speaker phone, please lift the handset before pressing any keys. One moment for your first question.

Mark Miller: Your first question comes from Mark Miller with Benchmark. Please go ahead.

Robert Daigle: Please, I'd like to wish you best in your new endeavor and way that I welcome to the Amtech conference calls. Thank you, Mark. You're welcome. You talked about some price in actions. What areas were these price in actions taken? Yeah, Mark, as we commented earlier, a lot of it has been, let me start by saying, it is broad. So we most of the parts of our business, we felt we needed to take some actions to deal with the inflationary pressures over the past, you know, 18, 24 months.

Robert Daigle: So to answer your question more directly, it has been broad across our portfolio. But I would say this proportionate has really been more on the, on some of the equipment that were manufacturing, where I think the inflationary pressures and the parts and, you know, different components in our systems have been particularly significant, and we needed to deal with it.

Robert Daigle: One of the things that I also think is encouraging Mark for us is the, you know, again, they've tempered expectations in terms of full electric vehicle growth rates, but they're still fairly substantial. So I think that's a nice secular tailwind, but I also believe that what we're beginning to hear more about is probably a stronger push to hybridize, replace traditional ice vehicles with more of the hybrid vehicles given strong consumer acceptance for those vehicles in order to meet the fuel efficiency requirements.

Robert Daigle: And then again, that's helpful to us because we do play broadly in the power electronics equipment and consumables area. So I do think that when we look at the puts and takes of kind of a more tempered fully be outlook with an increasing projections for the hybrid electric vehicle side of things. We actually see that net net as somewhat favorable to us.

Robert Daigle: You mentioned the reflow business, so it was one of the drivers for the upside tails. Are you seeing increased quoting activity? What does it look like this will continue? Yes, yes, Mark. Both shipments have been up, quoting activity is up, and more importantly, I would say the mixes. We're seeing improved mix there and what had really soft and tremendously was the packaging side of the business. Because we manufacture reflow equipment that's used for packaging, advanced packaging as well as traditional surface mount assembly.

Robert Daigle: And what we're seeing is we've seen several quarters where we have sequentially increased demand for the packaging side of the business. And that comes in at a higher margin for us in a higher ASP than the surface mount equipment.

Mark Miller: I just have a couple housekeeping issues. I'll jump back into you. Cash from operations and catbacks. What were they for the corner? I've got the year-to-date numbers in front of me here, Mark. We had cash provided by operations of $9 million, which is a great year-to-date in catbacks, a little bit over $5 million. We finished the build out of that building in Massachusetts, which was a significant part of our catbacks. And I would say in the nearer term, I would expect that to be more just maintenance type of catbacks. Okay, so these were year to date over the last three quarters. Okay, thank you. Thank you.

Operator: As a reminder, if you wish to ask a question, please press star, then one on your touch-tone phone. We will just stand by for one moment.

Kevin Garrigan: Your next question comes from Kevin Garrigan with West Park Capital. Please go ahead. Yeah, hey guys, thanks for letting me ask a few questions.

Robert Daigle: Bob, I think I may have asked you this last time, but has anything gotten better or worse versus three months ago in the market to kind of give you hope that things may be turning around or getting better for your businesses? Yeah, no, yeah, I'd say generally more positives. I think the areas that have clearly seen some rebound, I would say, are part side of the business, as we mentioned, because again, some of the, that had a lot of the parts business and service side of things that kind of dried up to a great degree about six months ago or so, and we've seen incremental improvement in people maintaining equipment and parts replacements, and then of course, I think what's very significant here is the fact that we're nowhere near peak demand for the reflow equipment, but sequentially, we're seeing improvements in demand and in particular chip packaging.

Robert Daigle: I really, I would say in the consumables area, as I mentioned, that's lumpy. I would still characterize it as stable. You know, it's not always consistent, but we're not seeing either a significant headwind or tailwind in that area. And in general, I wouldn't say that I, it seemed, I mean, my sense is that you know, we saw the bottom in the industry a couple of quarters ago, and that, you know, although we had all hoped for this V-shape recovery, the sharp recovery in the markets we serve, we're not seeing that, but at least we're seeing some incremental improvements.

Robert Daigle: Okay, got it, got it, yeah, I've heard similar that we're kind of just bouncing along the bottom at this point. Everyone's kind of still waiting. Yeah, and I would, if I can just add something, and that's kind of, again, our strategy or approach has really been to, you know, we can't deal with the market demand conditions, but we can deal with our cost structure and operating performance, and that's really, while we wait for something more substantial, as you point out, maybe things are bouncing a lot at the bottom, and just make sure, as things are bouncing along the bottom, we're financially in good shape, and doing the best we can to drive the data. Yeah, absolutely, that makes a lot of sense.

Kevin Garrigan: Okay, perfect.

Kevin Garrigan: And then you said as a follow-up, Lisa, congrats on the new role and invests of what's going forward. Can you just give us the- It was the focus for Amtech in terms of capital allocation for the rest of 2024, and is M&A a bit of a focus for you guys? You know, I would say that, you know, with the continued focus on positive evid generation, even as we kind of bounce along here at the bottom as we were saying, you know, we finished that build out of the building in Massachusetts.

Kevin Garrigan: And here in the near term, I think we kind of return to a maintenance capital. We're going into our annual budgeting cycle here in the next month or two. So, you know, I would expect, you know, potentially a little bit more cat-backed next year is Bob and Wade look at areas to invest in the business on the M&A front. I will turn that back to Bob since he's the more forward-looking person at this table right now.

Kevin Garrigan: Yeah, I would say in current environment, not in the short term, but I do think it's definitely something that we're starting to dig into more in the medium term in terms of how to deploy capital to enhance growth.

Kevin Garrigan: Okay, perfect.

Kevin Garrigan: I appreciate the color.

Kevin Garrigan: Thank you.

Operator: As a reminder, if you wish to ask a question, please press star, then one on your touch-tone phone.

Operator: There are no further questions at this time.

Robert Daigle: I will now turn the call back over to CEO Bob Dagle for closing remarks. Well, thank you again for joining our conference call and I look forward to updating you in the progress we're making in the coming months. Have a good afternoon evening everyone.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation.

Operator: You may now disconnect.

Operator: Thank you very much.

Q3 2024 Amtech Systems Inc Earnings Call

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