Amtech Systems, Inc.

Good day and welcome to the Amtech Systems Fiscal Third Quarter 2020 Conference Call. Please note that this event is being recorded. I would now like to turn the conference over to Erica Mannion of Sapphire Investor Relations. Please go ahead.

Good afternoon and thank you for joining us for Amtech Systems Financial Third Quarter Conference Call. With me today on the call are Michael Wang, Chief Executive Officer, and Lisa Gibbs, Chief Financial Officer. After the close of market today, Amtek released its financial results for the third quarter of fiscal 2020. That earnings release is posted on the company's website at amtek.com. During today's call, management will make forward-looking statements. All such forward-looking statements are based on information available as of this date and the company assumes no obligation to update any 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 that could cause actual results to differ materially from those in the forward-looking statements are changes in the technologies used by customers and competitors, changing 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 risk, capital allocation plans, and the worldwide COVID-19 pandemic. Other risk factors are detailed in the company's SEC filings included in Form 10-K and Forms 10-Q. I will now turn the call over to Michael Wang, Chief Executive Officer.

Thank you, Erica. Before Lisa reviews our third quarter results, I would like to provide an update on how our business is faring through the economic downturn created by the global pandemic. I am pleased to report that all of our global manufacturing facilities remain open, and thanks to the diligent efforts of our supply chain team and manufacturing partners, the third quarter we saw minimal disruptions to our business. The global impact of the pandemic continues to create challenges. and given the risks and uncertainties surrounding potential resurgences, we must remain vigilant and react quickly when the issues are discovered. Shifting to end markets, we have continued to see stronger demand from those geographies which were first impacted by the pandemic, namely in the Asia-Pacific region. In addition, we are beginning to see demand aligned with the end market exposure. For example, those customers with a heavier exposure to the automotive industry are taking a more cautious approach to capital expansion initiatives as they evaluate the true level of in-market demand in the coming quarters. Inversely, those customers which tend to have higher exposure to faster design cycle industries, such as consumer electronics, are continuing to execute on plans for next generation products. It is worth noting, however, that even these customers remain more cautious than usual as they evaluate the overall economic environment. As the world shifts to focus to the timing and slope of a potential economic recovery, we think it is important to remind investors how macro demand drivers translate into orders for our products. Within the power semi-market, for example, demand for our products is closely tied to capacity expansion initiatives. with customers placing orders a few quarters ahead of bringing new capacity online. Historically, some of these customers have been cautious to add capacity ahead of realized increases in market demand, and as such, in the current environment, we would expect them to remain cautious until there is greater visibility on the global economic outlook and demand. Will their strong industry position remain are closely aligned with our customers and we continue to believe expansion plans are a matter of when, if not this. Within the silk and carbide power market, demand for our products stems from both equipment sales ahead of expansion as well as consumables which are purchased as needed on a recurring basis. Related to the equipment, similar to the power semi-market, some of our customers have historically been cautious to add capacity ahead of market demand. In addition, as it relates to new products, there is generally a qualification cycle up to one year before bottom shipments begin. Our consumable products, given our leading market share, growth and demand tends to align with industry growth and wafer starts. With that said, we are starting to see green shoots of activity that provides momentum and growth support for power semiconductors. As an example today, We announced a follow-on order for a semi-compliant, fully automated, high-temp, 300-millimeter diffusion furnace from a top-tier power-sending customer. Not only does this order further validate our market leadership position in the 300-millimeter horizontal diffusion furnaces, it also demonstrates the robustness of long-term growth drivers for power-sending devices and the willingness of customers to expand capacity to serve the growing market. with an increasing number of automotive manufacturers announcing plans for electric vehicle platforms in the years ahead and demand drivers such as 5G in the telecom market and automation IoT in the industrial market, the magnitude of power sending opportunity including silicon carbide power devices both for the market as a whole and as well as a product specifically remains large. While we remain excited as ever about the mid to long-term opportunities in front of us, In the near term, growth catalysts for our business will likely be tied to our customers' confidence in the economic outlook and demand growth. Given this dynamic, we feel fortunate to have a business that is well-equipped to navigate times of uncertainty like those we find ourselves now. As we demonstrated in the third quarter, despite a 28% year-over-year decrease in revenue, we again delivered growth margins in the high 30s with a nominal net loss. The stability of these results, in part, comes from our diversified exposure across the semi-industries manufacturing chain, as well as our well-recognized brands, distinguished technologies, and best-in-class service capabilities. With market-leading position for each of our end markets, which go back decades, we are in a strong position of having a solid foundation on which to operate our business while we wait for the inflection of future growth drivers. We are also continuing to take advantage of this current market environment by making the necessary investments to support our customers and capture the growth ahead. In the third quarter, for example, we participated in the 7010 West virtual event, which provided us an opportunity to stay engaged with our customers and showcase our leading-edge innovation in the power saving and silicon carbide markets. As the world moves virtual, we are pivoting within our own organization to ensure we remain aligned with the needs of our customers. We likewise remain committed to our strategic initiatives, namely new product development to drive organic revenue growth and continuous operational improvement. In addition, we continue to evaluate strategic acquisition opportunities to expand our product and technology portfolios and build upon our strengths in the areas that we believe will outgrow the overall semi-market. With the actions we are taking, we believe you can emerge from these uncertain times in a position to outgrow the market and increase operating leverage to drive higher profits and maximize shareholder value in the years ahead. And now I turn the call over to Lisa to review our third quarter financial results.