SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
=================================================================
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarter Ended: Commission File number:
June 30, 1996 0-11412
- ---------------------- -----------------------
AMTECH SYSTEMS, INC.
-----------------------------------------------------
(Exact name of Registrant as specified in its charter)
Arizona 86-0411215
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
131 South Clark Drive Tempe, Arizona 85281
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(602) 967-5146
-------------------------------
(Registrant's telephone number,
including area code)
N/A
-----------------------------------------
Former name, former address and former
fiscal year, if changed since last report
Indicate by check mark whether the Registrant (i) has filed all reports
required by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (ii) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the close of the period covered by this report.
4,109,668 Shares
----------------
<PAGE>
PART I. FINANCIAL INFORMATION
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
- -------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS - ASSETS
- -------------------------------------------------------------------------------
June 30, September 30,
1996 1995
------------- -------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 704,588 $ 833,820
Short-term investments 2,626,534 3,671,569
Accounts receivable - net 2,926,442 2,286,743
Inventories 661,350 524,071
Deferred income taxes 213,000 165,000
Prepaid expenses 55,541 45,392
------------- -------------
Total current assets 7,187,455 7,526,595
------------- -------------
PROPERTY, PLANT AND EQUIPMENT -
AT COST:
Land and buildings 347,235 --
Leasehold improvements 161,724 162,404
Machinery and equipment 418,436 333,971
Furniture and fixtures 594,638 652,607
------------- -------------
1,522,033 1,148,982
Less: accumulated
depreciation and
amortization (559,042) (499,184)
------------- -------------
Property and equipment - net 962,991 649,798
------------- -------------
PURCHASE PRICE IN EXCESS
OF NET ASSETS ACQUIRED -- 85,315
------------- -------------
OTHER ASSETS 463,186 103,811
------------- -------------
$ 8,613,632 $ 8,365,519
============= =============
See accompanying Notes to Condensed Financial Statements.
2
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
- -------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' INVESTMENT
- -------------------------------------------------------------------------------
June 30, September 30,
1996 1995
------------- -------------
(Unaudited)
CURRENT LIABILITIES:
Accounts payable $ 828,155 $ 528,322
Accrued liabilities:
Compensation and related taxes 329,985 373,383
Warranty and installation expenses 205,562 116,347
Other accrued liabilities 174,046 120,239
Income taxes payable 283,000 225,000
Current maturities of long-term debt 13,005 --
------------- -------------
Total current liabilities 1,833,753 1,363,291
------------- -------------
LONG-TERM DEBT 211,064 --
------------- -------------
STOCKHOLDERS' INVESTMENT:
Preferred stock, no specified
terms; 100,000,000 shares
authorized; none issued -- --
Common stock, $.01 par value;
100,000,000 shares authorized;
4,109,668 shares outstanding at
June 30, 1996 and 4,305,702
shares at September 30, 1995 20,549 21,529
Additional paid-in capital 7,064,351 7,872,010
Cumulative foreign currency
translation adjustment (48,423) 29,459
Accumulated deficit (467,662) (920,770)
------------- -------------
Total stockholders' investment 6,568,815 7,002,228
------------- -------------
$ 8,613,632 $ 8,365,519
============= =============
See accompanying Notes to Condensed Financial Statements.
3
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
- -------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 1996 AND 1995
- -------------------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ ------------------------
1996 1995 1996 1995
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
SEMICONDUCTOR EQUIPMENT:
- ------------------------
Net product sales $ 3,232,173 $ 1,379,603 $ 6,311,328 $ 4,816,947
Cost of product sales 2,023,705 869,368 4,191,125 3,235,567
----------- ----------- ----------- -----------
Gross margin 1,208,468 510,235 2,120,203 1,581,380
Selling and general 723,264 452,974 1,827,112 1,449,435
Research & development 96,769 29,990 214,042 164,386
----------- ----------- ----------- -----------
Operating profit (loss) 388,435 27,271 79,049 (32,441)
----------- ----------- ----------- -----------
Interest income 39,559 74,788 167,967 152,549
----------- ----------- ----------- -----------
Income before
income taxes 427,994 102,059 247,016 120,108
Income tax provision 150,000 39,000 100,000 52,000
----------- ----------- ----------- -----------
INCOME FROM
CONTINUING OPERATIONS 277,994 63,059 147,016 68,108
----------- ----------- ----------- -----------
DISCONTINUED TECHNICAL
- ----------------------
CONTRACT PERSONNEL:
-------------------
Income from discontinued
operations - 8,419 51,757 49,461
Income tax provision - 4,000 30,000 23,000
----------- ----------- ----------- -----------
NET INCOME FROM DISCON-
TINUED OPERATIONS - 4,419 21,757 26,461
GAIN ON SALE OF ECHELON 23,834 - 284,335 -
----------- ----------- ----------- -----------
NET INCOME $ 301,828 $ 67,478 $ 453,108 $ 94,569
=========== =========== =========== ===========
INCOME PER SHARE - NOTE 2:
- -------------------------
Continuing operations $ .05 $ .01 $ .04 $ .02
Net income per share $ .05 $ .02 $ .09 $ .03
WEIGHTED AVERAGE
OUTSTANDING SHARES: 6,315,734 4,305,702 6,381,556 3,633,394
See accompanying Notes to Condensed Financial Statements.
4
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND 1995
- --------------------------------------------------------------------------------
Nine Months Ended
June 30,
-------------------------
1996 1995
----------- -----------
(Unaudited) (Unaudited)
OPERATING ACTIVITIES:
Net income $ 453,108 $ 94,569
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation and amortization 131,251 102,860
Inventory and receivable write-downs 81,553 63,000
Less gain on disposal of assets (286,437) (426)
Equity in losses of unconsolidated venture 34,967 --
Deferred tax benefit (60,000) (2,000)
Changes in operating assets and liabilities:
Increase in accounts receivable (1,138,776) (279,508)
Increase in inventories and prepaid expenses (194,675) (339,187)
Decrease (Increase) in other assets (8,429) 201,773
Increase in accounts payable 351,439 67,786
Increase in income taxes payable 58,000 61,000
Increase in accrued liabilities 175,869 369,289
----------- -----------
Net cash provided (used)
by operating activities (402,130) 339,156
----------- -----------
INVESTING ACTIVITIES:
Maturities and sales (purchases) of
short-term investments - net 1,045,035 (2,719,564)
Investment in unconsolidated subsidiary (425,000) --
Proceeds from asset sale 28,383 10,000
Purchases of property, plant and equipment (487,121) (206,510)
Cash distributed in disposal of Echelon (109,698) --
----------- -----------
Net cash provided (used) by
investing activities 51,599 (2,916,074)
----------- -----------
FINANCING ACTIVITIES:
Proceeds from a mortgage loan 232,474 --
Net proceeds from secondary public offering -- 3,623,382
----------- -----------
Net cash provided by financing activities 232,474 3,623,382
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES (11,175) 35,254
----------- -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (129,232) 1,081,718
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 833,820 736,984
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 704,588 $ 1,818,702
=========== ===========
See accompanying Notes to Condensed Financial Statements.
5
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND 1995
- --------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
1996 1995
----------- ------------
Cash paid during the period for:
Income taxes $ 132,000 $ 16,000
SUPPLEMENTAL INFORMATION OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Value received in the form of the
Company's stock in exchange for
the net assets of Echelon Service Co. $ 808,638 $ --
See accompanying Notes to Condensed Financial Statements.
6
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 1996 AND 1995
(1) BASIS OF PRESENTATION
---------------------
The accompanying consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries, Tempress Systems, Inc. for the
entire period and Echelon Service Company, the Baltimore based operation of the
technical personnel segment, through the date of disposition (see Note 3 below).
All significant intercompany accounts and transactions have been eliminated in
consolidation.
(2) INTERIM REPORTING
-----------------
The accompanying consolidated financial statements are unaudited;
however, these financial statements contain all adjustments which are, in the
opinion of management, necessary for a fair presentation of the consolidated
financial position of the Company as of June 30, 1996 and September 30, 1995 and
the consolidated results of its operations for the three and nine month periods
ended June 30, 1996 and 1995, and its consolidated cash flows for the nine
months ended June 30, 1996 and 1995.
The accounting policies followed by the Company are set forth in Note 2
to the consolidated financial statements in the Company's 1995 Annual Report on
Form 10-K for the year ended September 30, 1995, which is incorporated herein by
reference.
Inventories as of June 30, 1996 and September 30, 1995 included
work-in-process of $226,000 and $182,000, respectively. The remaining inventory
primarily consists of purchased parts and completed sub-assemblies.
The consolidated results of operations for the three and nine months
ended June 30, 1996 and 1995, are not necessarily indicative of the results to
be expected for the full year.
Earnings per share have been calculated using the modified treasury
stock method, which assumes that the warrants and options are exercised and that
a portion of the proceeds are used to repurchase 20% of the outstanding shares
and that the remainder is used first to reduce debt and then to acquire
short-term government securities. The outstanding warrants and options were
dilutive for the three and nine months ended June 30, 1996, and the calculation
of earnings per share for those periods can be summarized as follows:
Continued on next page.....
7
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS - continued
Three Months Ended Nine Months Ended
June 30, 1996 June 30, 1996
------------------ -----------------
Average shares outstanding 4,109,668 4,175,490
Incremental shares
attributable to warrants/options 2,206,066 2,206,066
---------- ----------
Total shares used in
the calculation 6,315,734 6,381,556
========== ==========
Income from continuing operations $ 277,994 $ 147,016
Interest net of tax assumed
to be earned on additional
short-term investments $ 31,896 $ 107,752
---------- ----------
Income from continuing
operations as adjusted $ 309,890 $ 254,768
========== ==========
Earnings per share -continuing $ .05 $ .04
Net income $ 301,828 $ 453,108
Interest net of tax assumed
to be earned on additional
short-term investments $ 31,896 $ 107,752
---------- ----------
Adjusted net income $ 333,724 $ 560,860
========== ==========
Earnings per share $ .05 $ .09
(3) SALE OF DISCONTINUED OPERATIONS
-------------------------------
In October 1995, the Board of Directors approved a plan to discontinue
the technical contract personnel business represented by the operations of
Echelon Service Company, then a wholly-owned subsidiary. Effective December 31,
1995, the Company exchanged all of its ownership in the stock of Echelon Service
Company for 196,034 shares of the Company's outstanding Common Stock previously
owned by Eugene R. Hartman, then an officer and director of the Company. The
transaction was preceded by a dividend from Echelon to the Company in order to
equalize the values. The transaction was structured to be a tax-free
reorganization and, as such, no provision was made for income taxes. As a result
of the transaction, the Company recognized a gain of $284,000.
Continued on next page.....
8
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS - continued
(4) INVESTMENT IN SOUTH KOREAN JOINT VENTURE
----------------------------------------
During the first quarter of fiscal 1996, the Company entered into a
joint venture agreement pursuant to which it is to have a 45% ownership interest
and a 50% voting interest in Seil Semicon, Inc., located in South Korea, in
return for a commitment to invest $500,000 in cash. As of June 30, 1996, the
Company has invested $425,000 in the joint venture. The remaining commitment is
subject to call by the majority owner, subject to his securing $3,000,000 in
financing for the joint venture. The joint venturers plan to operate a silicon
test wafer reclaiming business through Seil Semicon, Inc., which is in the
start-up phase. The ultimate success of Seil Semicon, Inc. depends on a number
of factors, including securing adequate financing, of which there can be no
assurance.
(5) STOCKHOLDERS' INVESTMENT
------------------------
Effective March 29, 1996, there was a two-for-one forward stock split
of the Company's $.01 par value common stock. As a result, the number of
outstanding shares was increased by 2,054,834 to 4,109,668. All share and per
share amounts have been restated accordingly. In conjunction with the stock
split, the number of shares issuable pursuant to stock options, stock bonus
grants, and warrants were increased proportionately and the related exercise
prices were decreased proportionately. If all such contingent shares were
exercised, the number of outstanding shares would increase by 3,028,000 and the
resulting proceeds to the Company would be $7,869,775.
(6) RECLASSIFICATIONS
-----------------
Certain reclassifications have been made to the amounts for fiscal 1995
to conform to the presentation of the fiscal 1996 amounts.
9
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION AND WORKING CAPITAL. During the nine months ended
June 30, 1996, working capital decreased by $810,000, primarily as the result of
the $425,000 investment in Seil Semicon, Inc., a South Korean joint venture, the
disposition of Echelon Service Company in exchange for Common Stock of the
Company previously owned by Eugene R. Hartman ($408,000) and $136,000 used in
the acquisition of a building in the Netherlands, net of the associated
mortgage. Other than that mortgage, there is no long-term or short-term debt and
stockholders' investment is 76% of total capitalization.
LIQUIDITY AND CAPITAL RESOURCES. During the nine months ended June 30,
1996, the Company's cash position, including equivalents, decreased by $129,000.
The decrease in cash and cash equivalents resulted from $402,000 cash used in
operating activities, primarily used to fund the increase in receivables
generated by the increase in sales. The cash used in operating activities was
partially offset by the $284,000 cash generated by the investing and financing
activities, as setforth in the consolidated statements of cash flows. The
current ratio declined from 5.5:1 as of September 30, 1995 to 3.9:1 as of June
30, 1996, due to the decline in working capital, discussed above, and the
increase in current liabilities associated with the increased level of operating
activity. Despite the decline in this financial ratio, management believes it
still indicates that the Company's financial condition remains strong.
Management believes the Company's liquidity is sufficient for its
current operations. See the Management's Discussion and Analysis included in the
Company's 1995 annual report on Form 10-K for further information regarding the
Company's long-term plans for future operations. If the commercial feasibility
of the Company's patented photo-assisted CVD (Chemical Vapor Deposition)
invention is proven and justifies development of products for use in research
and development and production facilities, that development effort will cost an
estimated $3.2 million. However, if the Company's existing businesses continue
to grow at their existing pace, some of the currently available liquidity will
be required to finance increased receivables and inventory. The Company's
liquidity is believed to be sufficient to fund growth of the current product
lines for at least the next two years, but may be slightly insufficient to fund
both that growth and a major development project. Funds to meet any potential
short-fall may be provided by one or more debt or equity financings, which might
include bank financing secured by receivables and inventory, or possible
exercise of the outstanding redeemable common stock warrants. However, there can
be no assurance of the availability or sufficiency of these or any other source
of financing.
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS - continued
ORDER BACKLOG. The semiconductor equipment order backlog was
approximately $4,600,000, as of June 30, 1996, as compared to $1,300,000 as of
June 30, 1995. The increase in the backlog is due to a multi-year order,
expansion of the horizontal diffusion furnace business and customer requested
delays in deliveries from that originally scheduled. While orders are ordinarily
filled within one to six months of receipt, the current backlog includes
approximately $2,120,000 of orders, primarily from one customer, of which an
estimated one-half is planned for shipment in each of fiscal 1997 and fiscal
1998.
The backlog is approximately $2,550,000 lower as of June 30, 1996 than
it was as of its March 31, 1996 peak. That decline is primarily due to the
shipment of many of the backlog orders previously delayed due to the long
lead-times on certain components purchased from suppliers of quartz parts.
However, the Company is also experiencing a reduction in bookings stemming from
increased caution in capital spending by the world's semiconductor producers,
caused by rapidly declining prices for their products and an oversupply of
capacity for certain of those semiconductor products. Short-term forecasts for
front-end semiconductor production equipment, the segment of the industry in
which the Company participates, range from a decline of 16% in calendar year
1997 to growth of 8% for the same period. This slowdown could affect the level
of the Company's shipments as early as the first quarter of fiscal 1997.
RESULTS OF OPERATIONS.
- ----------------------
THREE MONTHS ENDED JUNE 30,
1996 vs. 1995
Semiconductor Equipment - Continuing Operations:
- ------------------------------------------------
Revenues increased 134%, or $1,852,000, to $3,232,000 in the third
quarter of fiscal 1996 from $1,380,000 in the third quarter of the fiscal 1995
year. The increase in revenue is due to both the expansion of the Company's
horizontal diffusion furnace business and the shipment of many of the backlog
orders previously delayed due to long lead-times on certain components purchased
from suppliers of quartz parts. While the lead-times on quartz components has
become more manageable, they could again cause delays in shipments in the
future. See ORDER BACKLOG above for a discussion of recent events and short-term
forecasts of revenues for the semiconductor equipment industry
Gross margin increased $698,000, to $1,208,000, or 37% of sales, in the
third quarter of fiscal 1996 from $510,000, or 37% of sales, in the third
quarter of fiscal 1995. The increase in gross margin is primarily due to the
increase in shipments.
The selling, general and administrative expenses for the third quarter
of fiscal 1996 were $270,000 higher than in comparable period of last fiscal
year. The increased expenses primarily resulted from an additional provision for
certain doubtful receivables, expanded sales and marketing activities on a
world-wide basis and other costs associated with the expanded operations.
Research and development costs also increased $67,000, as the Company continues
the photo-CVD ("chemical vapor deposition") research and attempts to develop new
products. Despite these increases, such expenses represented 25% of sales in the
third quarter of fiscal 1996, which is a significant improvement over the
comparable period of fiscal 1995 when such expenses amounted to 35% of sales.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS - continued
Income From Continuing Operations.
- ----------------------------------
As a result of the above, for the three months ended June 30, 1996, the
Company earned $388,000 of operating profit compared to an operating profit of
$27,000 for the third quarter of fiscal 1995. The income from continuing
operations before income taxes includes the operating profit of the
semiconductor equipment segment, interest income, and income tax expense. During
the third quarter of the current fiscal year, interest income was $40,000, or
$35,000 less than in the third quarter of the preceding year.
Income tax expenses increased $111,000 because of the increase in
operating profit discussed above. As a result of the above, continuing
operations generated $278,000 in net earnings, $.05 per share, or $215,000 more
than the $63,000, or $.01 per share, of income earned during the same quarter of
fiscal 1995.
Discontinued Operations:
- ------------------------
As a result of the December 31, 1995 sale of the technical contract
personnel segment, there was no income from discontinued operations in the third
quarter of fiscal 1996, except a $24,000 adjustment to the gain on sale. For the
comparable period in fiscal 1995, there was a profit from discontinued
operations of $4,000, after recognizing $4,000 of income tax expense.
Total Company:
- --------------
The three months ended June 30, 1996, resulted in $302,000 of net
income, or $.05 per share, compared to net income of $67,000, or $.02 per share,
in the third quarter of fiscal 1995. The most significant factor contributing to
the improvement in earnings was the $1,853,000, or 134%, increase in revenues
discussed above.
NINE MONTHS ENDED JUNE 30,
1996 vs. 1995
Semiconductor Equipment:
- ------------------------
The semiconductor equipment revenues increased $1,494,000, or 31%, to
$6,311,000 during the first nine months of fiscal 1996 from $4,817,000 for the
first nine months of fiscal 1995. The increase in revenue is due to the
Company's expanded diffusion furnace business. See ORDER BACKLOG above for a
discussion of recent events and short-term forecasts of revenues for the
semiconductor equipment industry.
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS - continued
Gross margins increased $539,000 to $2,120,000, or 34% as a percentage
of revenue, from $1,581,000, or 33% of revenue, during the first nine months of
fiscal 1995. The increase in the gross margin percentage is primarily due to the
effects of spreading certain fixed manufacturing and engineering costs over
higher sales dollars. However, most of the improvement in gross margins is
attributable to the growth in revenues.
The selling and general expenses of the semiconductor segment for the
first nine months of fiscal 1996 were $378,000 higher than in the comparable
period of last fiscal year. The increased expenses primarily resulted from
expanded sales and marketing activities on a world-wide basis, an additional
provision for doubtful accounts receivable and other increases in expenses
associated with the growth in the operations. Research and development costs
also increased $50,000, as the Company continues the photo-CVD ("chemical vapor
deposition") research and attempts to develop new products.
Income From Continuing Operations:
- ----------------------------------
For the first nine months of fiscal 1996, the semiconductor equipment
segment had operating income of $79,000 as compared to a loss of $32,000 for the
first three quarters of fiscal 1995. The $111,000 improvement in operating
profit is due to increased shipments and the related gross profit, both
explained above.
The income from continuing operations includes the operating profit
(loss) of the semiconductor equipment segment, discussed above, interest income,
and income tax expense. Interest income increased by $15,000 during the first
three quarters of fiscal 1996, as compared to the nine months ended June 30,
1995, as the Company had the proceeds of the public offering available for
investment for the entire fiscal 1996 period, as compared to only six months of
the fiscal 1995 period.
During the nine months of fiscal 1996 there was income tax expense of
$100,000, compared to the income tax expense of $52,000 reported for the first
nine months of fiscal 1995. The effective income tax rate for the first three
quarters of both fiscal years is greater than the statutory federal rate due to
the permanent differences between financial and taxable income.
As a result of the above, continuing operations produced net earnings
of $147,000, or $.04 per share, in the first nine months of fiscal 1996,
representing an increase of $79,000 from the income of $68,000, or $.02 per
share, earned in the first nine months of fiscal 1995.
Continued on next page.....
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS - continued
Discontinued Operations:
- ------------------------
The net earnings of the discontinued operations of the technical
contract personnel business were $22,000 and $26,000, respectively, for the nine
months ended June 30, 1996 and 1995. The fact that the Company did not operate
in this segment during the third quarter because of the sale of this
discontinued operation effective December 31, 1995, was offset by the fact that
the profit earned during last year's third quarter was largely offset by the
loss in the second quarter, generally a loss quarter for that segment.
Effective December 31, 1995, the Company exchanged all of its ownership
in the technical contract personnel business represented by the stock of Echelon
Service Company for 196,034 shares of the Company's outstanding Common Stock
previously owned by Eugene R. Hartman, then an officer and director of the
Company. The transaction was preceded by a dividend from Echelon to the Company
in order to equalize the values. The transaction was structured to be a tax-free
reorganization and, as such, no provision was made for income taxes. As a result
of the transaction, the Company recognized a gain of $284,000.
Total Company
- -------------
For the nine months ended June 30, 1996 net income was $453,000, or $.09 per
share, as compared to net income of $95,000, or $.03 per share, for the
comparable period of fiscal 1995. Income from continuing operations accounted
for $.02 of the improvement in earnings per share, while the gain on the sale of
discontinued operations provided the other $.04 increase.
14
<PAGE>
PART II
Item 1. Legal Proceedings.
------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits - All of the exhibits required by Item 601 of Regulation
S-K are hereby incorporated by reference to the Company's Annual
Report on Form 10-K dated January 16, 1996, and the Form S-3 filed
August 9, 1996, in order to update the registration of the
redeemable warrants.
(b) No reports on Form 8-K were filed for the quarter ended June 30,
1996.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
AMTECH SYSTEMS INC.
by /s/ Robert T. Hass
----------------------------------
Robert T. Hass, Vice-President and
Chief Financial Officer
DATED: August 14, 1996
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE BALANCE SHEETS AS
OF JUNE 30, 1996 AND SEPTEMBER 30, 1995, AND THE
STATEMENTS OF OPERATION AND THE STATEMENTS OF CASH
FLOW FOR THE NINE MONTHS ENDED JUNE 30, 1996 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER
ENDED JUNE 30, 1996.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 704,588
<SECURITIES> 2,626,534
<RECEIVABLES> 3,016,442
<ALLOWANCES> 90,000
<INVENTORY> 661,350
<CURRENT-ASSETS> 7,187,455
<PP&E> 1,522,033
<DEPRECIATION> 559,042
<TOTAL-ASSETS> 8,613,632
<CURRENT-LIABILITIES> 1,833,753
<BONDS> 0
0
0
<COMMON> 20,549
<OTHER-SE> 6,548,266
<TOTAL-LIABILITY-AND-EQUITY> 8,613,632
<SALES> 6,311,328
<TOTAL-REVENUES> 6,311,328
<CGS> 4,191,125
<TOTAL-COSTS> 4,191,125
<OTHER-EXPENSES> 2,031,154
<LOSS-PROVISION> 10,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 247,016
<INCOME-TAX> 0
<INCOME-CONTINUING> 147,016
<DISCONTINUED> 306,092
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 453,108
<EPS-PRIMARY> $.09
<EPS-DILUTED> $.09
</TABLE>
