Amtech Systems, Inc.

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

Good afternoon and thank you for joining us for Amtech Systems fiscal second quarter 2024 conference call. With me today on the call are Bob Daigle, Chairman and Chief Executive Officer, and Lisa Gibbs, Financial Officer. After close of market today, Amtek released its financial results for the fiscal second quarter of 2024. The earnings release is posted on the company's website at www.amteksystems.com in the Investors 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 during 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 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. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are changes in technologies used by customers and competitors, change in volatility and 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. Other risk factors are detailed in our SEC filings, including our Form 10-K and Forms 10-Q. Additionally, in today's conference call, we will be referring to non-GAAP financial measures as we discuss the second 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. I will now turn the call over to AMTEC's Chief Executive Officer, Bob Daigle.

Thank you, Erica. So, good afternoon, everyone, and thank you for joining AMTEC's quarterly conference call. I'm pleased with the progress we're making to improve our cost structure and position the company for strong operating results as markets recover. Revenue of $25.4 million exceeded the high end of our guidance range, and more importantly, we delivered adjusted EBITDA of $28 million with soft overall demand. The macroeconomic landscape for our target end markets remains mixed. Within the semiconductor industry, while we continue to experience softness in near-term demand for back-end packaging applications, We are seeing an uptick in near-shoring activities in North America and at Chinese OSATs as they add capacity. Within our materials and substrates end markets, we are seeing a similar balance in puts and takes. Consumables demand, particularly for silicon carbide semiconductor production, has been lumpy due to customer buying patterns and softening in overall electric vehicle demand. we are seeing stronger demand for replacement parts in our foundry services. While we await the rebound in demand across broader markets, we continue to focus on optimizing our operations. Through the measures implemented over the past several quarters, we believe we have better aligned the size of our organization to support current market demand. This has resulted in near-term adjusted EBITDA profitability and will help us deliver strong operating results once the broader semiconductor market rebounds. Moreover, we are actively leveraging contract manufacturing partnerships to further enhance our operational efficiencies and provide more flexibility. For example, we showcased our first reflow oven assembled by one of our North American partners at a recent industry trade show. This milestone underscores our goal of creating greater flexibility throughout our manufacturing operations from components and assemblies through complete solutions to optimize our fixed cost structure. And this positions us well to capitalize on the major investments being made in the semiconductor industry to expand regional manufacturing. We are also building on the actions taken last quarter to refine our pricing to address input cost inflation experienced in recent years. New tool pricing is now more closely aligned with prevailing costs and we are beginning to see the improvement in the margin profile of our backlog. However, it will be several quarters before we see the full benefit due to existing backlog in parts of our business. In summary, We remain focused on optimizing the aspects of our business within our control as we anticipate the next cyclical upturn in our target markets. The success of our initiatives have resulted in a second consecutive quarter of positive adjusted EBITDA and operating cash flow, despite the prevailing softness in the markets we serve. Looking ahead, Amtech remains well-positioned to capitalize on several secular trends that will drive demand for our products. Despite near-term softness in the electric vehicle market, advanced mobility applications, which include both hybrid as well as full electric vehicles, are expected to remain a primary driver of growth for the industry. Within the broader semiconductor market, our tools play a critical role in the advanced packaging of processors used for an advanced high performance computing, as well as artificial intelligence applications. Also, with the backdrop of the pandemic and global tensions, sizable investments are being made by governments and industry to build more resilient and secure semiconductor and electronic assembly supply chains. This will create additional opportunities for our tools across the electronics industry. I'm 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. And with that, I'll turn it over to Lisa for further details on the second quarter.