Amtech Systems, Inc.

Good day, and welcome to the Amtech Systems first quarter 2020 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Lisa Gibbs, Chief Financial Officer. Please go ahead, ma'am.

Good afternoon and thank you for joining us for Amtek Systems' first quarter fiscal year 2020 results conference call. With me on the call today are J.S. Wang, Amtek's executive chairman, Michael Wang, our chief executive officer, and Robert Haas, our executive vice president. Today, Amtek released its financial results for the first quarter of fiscal 2020. That earnings release will be posted on the company's website at amteksystems.com. During today's call, management will make forward-looking statements. All such forward-looking statements are based on information available to us as of this date and we assume no obligation to update any such forward-looking statements. 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 our customers and competitors, change in volatility and the demand for our 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, and our capital allocation plans. Other risk factors are detailed in our Securities and Exchange Commission filings, including our Form 10-K and Forms 10-Q. I will now turn the call over to Robert Haas, our Executive Vice President. Robert?

Thank you, Lisa. On January 28, 2020, we announced the sale of our shares of Tempers Group Holding BV to an independent foundation. I would like to provide some additional details on the foundation structure. and why the sale of Tempris to the Foundation was in the best interest for Amtech and our shareholders. The Foundation, Stichting Continuité Tempris, is an independent legal entity formed under Dutch law and created for the sole benefit of the employees, customers and suppliers of Tempris. The Foundation is governed by an independent board with restructuring expertise and no affiliation with Amtek. The foundation is a standalone entity with no shareholders, partners or members. Effective with the closing of the sale of Tempris, Amtek no longer has any financial interest in the future losses or profits of Tempris or the foundation and has no further involvement or connection with and no control over the foundation other than the right to receive loan repayments upon occurrence of certain events and receive limited information from the foundation pursuant to the covenants set forth in the term loan agreement with Temporis. Our objectives in selling Temporis were to stop the losses resulting from our solar operations, which were over $10 million in 2019 alone. and to dedicate our internal resources to our power semiconductor strategy without the continuing distraction of the solar operations and its losses. As we stated in the press release, we went through a robust sales process with an independent financial advisor that spanned nearly one year and the parties who emerged as potential buyers offered terms that were unfavorable to us, and most required a large cash infusion from Amtech. We evaluated these offers along with other options, which included keeping Tempris and restructure it ourselves in preparation for another sales attempt, wind it down, or selling our Tempris shares to an independent foundation where it can go through the restructuring and sales process independent of Amtech. Keeping temperance would have required the infusion of more casts, resulting in continuation of management's distraction and the burden of the ongoing losses, all while maintaining the uncertainty of whether it could be sold on more acceptable terms in the future. Winding down temperance would be extremely costly and time-consuming due to the obligations to suppliers and customers and severance to employees required under Dutch law. Thus, neither restructuring or winding down Tempris would achieve our objectives. In both scenarios, we would have continued losses during the restructuring and sale or wind down of Tempris, which on a cumulative basis could possibly be higher than what we have recorded for this quarter, while still retaining significant uncertainty. In working with our Dutch legal advisors, We closely examine the foundation option. The foundation is a standalone entity incorporated under Dutch law through the filing of a deed of incorporation. Given the unfavorable terms offered by prospective buyers during our almost year-long effort to sell Temporis, and after considerable review and deliberation, management and our board concluded that selling Temporis to an independent foundation for a nominal amount was the best option for Amtech to effectively and efficiently exit the solar business and focus on its power semiconductor strategy. The cash on Tempris' balance sheet is primarily customer deposits. The loan provides Tempris with the working capital necessary to remain a going concern, fulfill orders, and give the foundation time to restructure Tempris and position it for an eventual sale. This week, Tempris met the first milestone in the loan agreement and we paid $500,000, bringing the loan balance down to $1,700,000. Amtek, our management team and our board of directors had no further involvement of any sort in Tempris. The sale to the foundation allows for the continuation of the business for the benefit of Tempress' employees, vendors, and customers, and allows us to now focus 100% on the opportunities that are ahead in power semiconductor. Thus, this foundation sale accomplishes our objectives, and we believe is in the best interest of Amtech's shareholders. I will now turn the call over to JS Wang, our Executive Chairman.