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:
March 31, 1997 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.
4,151,718 Shares
----------------
<PAGE>
PART I. FINANCIAL INFORMATION
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS - ASSETS
- --------------------------------------------------------------------------------
March 31, September 30,
1997 1996
----------- -----------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 1,439,920 $ 1,994,217
Short-term investments 2,239,354 2,464,120
Accounts receivable - net 3,457,520 1,581,973
Inventories 693,350 739,201
Deferred income taxes 268,000 223,000
Prepaid expenses 52,120 46,935
----------- -----------
Total current assets 8,150,264 7,049,446
----------- -----------
PROPERTY AND EQUIPMENT, AT COST:
Land and Building 415,308 373,380
Leasehold improvements 162,402 161,724
Machinery and equipment 456,237 432,435
Furniture and fixtures 640,704 608,972
----------- -----------
1,674,651 1,576,511
Less: accumulated depreciation
and amortization (680,541) (600,180)
----------- -----------
Property and equipment - net 994,110 976,331
----------- -----------
OTHER ASSETS 59,799 432,837
----------- -----------
$ 9,204,173 $ 8,458,614
=========== ===========
See accompanying Notes to Condensed Financial Statements.
2
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' INVESTMENT
- --------------------------------------------------------------------------------
March 31, September 30,
1997 1996
----------- -----------
(Unaudited)
CURRENT LIABILITIES:
Accounts payable $ 1,203,494 $ 652,771
Accrued liabilities:
Compensation and related taxes 399,233 442,785
Warranty and installation expenses 246,608 185,450
Other accrued liabilities 186,718 143,988
Income taxes payable 204,000 144,000
----------- -----------
Total current liabilities 2,240,053 1,568,994
----------- -----------
LONG-TERM DEBT 234,705 265,355
----------- -----------
STOCKHOLDERS' INVESTMENT:
Preferred stock, no specified
terms; 100,000,000 shares
authorized; none issued -- --
Common stock, $.01 par value;
100,000,000 shares authorized;
4,151,718 shares outstanding at
March 31, 1997 and 4,109,668
shares at September 30, 1996 41,517 41,097
Additional paid-in capital 7,118,008 7,043,803
Cumulative foreign currency
translation adjustment (183,774) (48,548)
Accumulated deficit (246,336) (412,087)
----------- -----------
Total stockholders' investment 6,729,415 6,624,265
----------- -----------
$ 9,204,173 $ 8,458,614
=========== ===========
See accompanying Notes to Condensed Financial Statements.
3
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 1997 AND 1996
- --------------------------------------------------------------------------------
Three Months Ended Six Months Ended
March 31, March 31,
------------------------ ------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net product sales $ 2,582,807 $ 1,408,267 $ 4,590,327 $ 3,079,155
Cost of product sales 1,881,913 1,004,118 3,220,516 2,167,420
----------- ----------- ----------- -----------
Gross margin 700,894 404,149 1,369,811 911,735
Selling and general 629,402 573,844 1,207,802 1,103,849
Research & development 55,323 74,462 130,894 117,273
Gain on asset disposal -- -- (115,487) --
----------- ----------- ----------- -----------
Operating profit (loss) 16,169 (244,157) 146,602 (309,387)
----------- ----------- ----------- -----------
Interest income - net 47,124 62,594 94,149 128,409
----------- ----------- ----------- -----------
Income from continuing
operations before
income taxes 63,293 (181,563) 240,751 (180,978)
Income tax provision
(benefit) 18,000 (50,000) 75,000 (50,000)
----------- ----------- ----------- -----------
INCOME (LOSS) FROM
CONTINUING OPERATIONS 45,293 (131,563) 165,751 (130,978)
----------- ----------- ----------- -----------
DISCONTINUED OPERATIONS:
Income from discontinued
operations - - - 21,757
Gain on disposal of
discontinued segment - (13,195) - 260,501
----------- ----------- ----------- -----------
- (13,195) - 282,258
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 45,293 $ (144,758) $ 165,751 $ 151,280
=========== =========== =========== ===========
PRIMARY EARNINGS PER SHARE (Note 5):
Continuing Operations $ .01 $ (.03) $ .04 $ (.03)
Net Income $ .01 $ (.04) $ .04 $ .04
WEIGHTED AVERAGE
OUTSTANDING SHARES 4,151,718 4,109,668 4,142,291 4,208,220
See accompanying Notes to Condensed Financial Statements.
4
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 1997 AND 1996
- --------------------------------------------------------------------------------
Six Months Ended
March 31,
-------------------------
1997 1996
------------ -----------
(Unaudited) (Unaudited)
OPERATING ACTIVITIES:
Net income $ 165,751 $ 151,280
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 103,340 86,797
Inventory and receivable write-downs 33,324 6,000
Less gain on disposal of assets (115,487) (262,603)
Deferred tax benefit (45,000) (50,000)
Changes in operating assets and liabilities:
Decrease (Increase) in accounts receivable (2,018,875) 537,503
Increase in inventories and prepaid expenses (26,674) (414,836)
Decrease (Increase) in other assets (2,855) 4,913
Increase in accounts payable 609,503 267,530
Increase (Decrease) in income taxes payable 60,000 (102,000)
Increase in accrued liabilities 137,853 31,868
----------- -----------
Net cash provided (used)
by operating activities (1,099,120) 256,452
----------- -----------
INVESTING ACTIVITIES:
Maturities of short-term investments,
net of purchases 224,766 588,430
Investment in unconsolidated subsidiary -- (285,578)
Proceeds from disposition of assets 475,047 28,383
Purchase of property and equipment (155,617) (110,335)
Cash distributed in disposal of Echelon -- (107,596)
----------- -----------
Net cash provided by investing activities 544,196 113,304
----------- -----------
FINANCING ACTIVITIES:
Principal payments on mortgage loan (7,909) --
Net proceeds from exercise of stock options 32,201 --
------------ -----------
Net cash provided by financing activities 24,292 --
------------ -----------
EFFECT OF EXCHANGE RATE CHANGES (23,665) (18,364)
----------- -----------
INCREASE IN CASH AND CASH EQUIVALENTS (554,297) 351,392
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 1,994,217 833,820
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,439,920 $ 1,185,212
=========== ===========
See accompanying Notes to Condensed Financial Statements.
5
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 1997 AND 1996
- --------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
1997 1996
-------- --------
Cash paid during the period for:
Interest expense $ 9,435 $ --
Income taxes $ 60,000 $130,000
SUPPLEMENTAL INFORMATION OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Value of stock bonuses issued in exchange
for services rendered in a prior period $ 42,424 $ --
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
---------------------------------------
March 31, 1997
(1) BASIS OF PRESENTATION
---------------------
The accompanying consolidated financial statements include the accounts
of Amtech Systems, Inc. and its wholly-owned subsidiary, Tempress Systems, Inc.,
based in Heerde, The Netherlands, hereinafter referred to as the Company.
Echelon Service Company, which comprised the discontinued operations, is
included in these financial statements through the date of disposition. See Note
4 regarding discontinued operations. 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 March 31, 1997 and September 30, 1996
and the consolidated results of its operations for the three and six months
ended March 31, 1997 and 1996, and its consolidated cash flows for the six
months ended March 31, 1997 and 1996.
The accounting policies followed by the Company are set forth in Note 2
to the consolidated financial statements in the Company's 1996 Annual Report on
Form 10-K for the year ended September 30, 1996, which is incorporated herein by
reference.
Inventories as of March 31, 1997 and September 30, 1996 included
work-in-process of $192,021 and $211,880, respectively. The remaining inventory
primarily consists of purchased parts and completed sub-assemblies.
The consolidated results of operations for the three and six months
ended March 31, 1997 and 1996, are not necessarily indicative of the results to
be expected for the full year.
(3) INVESTMENT IN UNCONSOLIDATED SUBSIDIARY
---------------------------------------
During the first quarter of fiscal 1996, the Company entered into a
joint venture agreement pursuant to which it would have a 45% ownership interest
and a 50% voting interest in Seil Semicon, Inc. in return for a commitment to
invest $500,000 in cash. The joint venturers' plan was to operate a silicon test
wafer reclaiming business through Seil Semicon, Inc., which is in the start-up
phase. During the fourth quarter of fiscal 1996, it was
Continued on next page.....
7
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS - continued
(3) INVESTMENT IN UNCONSOLIDATED SUBSIDIARY - Continued
---------------------------------------
determined that the joint venture required significantly more capital than
originally anticipated. In the first quarter of fiscal 1997, the Company
disposed of its interest in the joint venture because management believed that
raising the Company's commitment to $3 million, without obtaining majority
control, was more risk than was appropriate for the Company. The Company
received $475,000 during December 1996, in exchange for its interest in the
joint venture, thereby recovering its investment and related expenses. Because
the Company disposed of its interest in the Korean joint venture, Seil Semicon,
Inc., and recovered its equity in the first year start-up losses and certain
expenses related to that venture incurred last year, a $115,000 gain was
recorded in the first quarter of fiscal 1997.
(4) DISCONTINUED OPERATIONS
-----------------------
Effective December 29, 1996, the Company exchanged all of its ownership
in the technical contract personnel business, represented by all of the stock of
Echelon Service Company, for 196,034 shares of the Company's outstanding $.01
par value 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.
The fiscal 1996 income from discontinued operations are those of
Echelon Service Company through the date of disposal and is net of applicable
income taxes of $30,000. Revenues of discontinued operations during that period
were $1,235,000.
(5) EARNINGS PER SHARE
------------------
Fully diluted earnings per share (EPS) for the periods covered by these
financial statements are the same as primary EPS.
The Financial Accounting Standards Board ("FASB") has released FASB
Statement 128, Earnings Per Share ("FASB 128"), which will become effective for
fiscal years ending after December 15, 1997. For the three and six month periods
ended March 31, 1997 and 1996, the basic EPS required by FASB 128 would have
been the same as the primary earnings per share reported on the face of the
income statement. The basic EPS required by the FASB 128 will always be equal to
or greater than primary earnings per share currently required to be disclosed.
Pro forma diluted EPS calculated in accordance with FASB 128 are as follows:
Three Months Ended Six Months Ended
March 31, March 31,
------------------- -----------------
1997 1996 1997 1996
--------- --------- -------- -------
DILUTED EARNINGS PER SHARE:
Continuing Operations $ .01 $ (.03) $ .03 $ (.02)
Net Income $ .01 $ (.03) $ .03 $ .03
8
<PAGE>
AMTECH SYSTEMS, INC.
AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Condition and Working Capital.
- ----------------------------------------
As of March 31, 1997, the Company has $3,679,000 of readily available
liquidity in the form of cash and cash equivalents and short-term investments, a
decrease of $779,000 since September 30, 1996. During the six months ended March
31, 1997, working capital increased by $430,000 to $5,910,000, primarily as the
result of the proceeds received upon disposition of the Company's interest in
Seil Semicon, Inc., an unconsolidated joint venture, which was owned until
December 1996. Cash and short-term investments comprise 40% of total assets and
stockholders' investment is 73% of total capitalization. The current ratio was
3.6:1 as of March 31, 1997, compared to 4.5:1 as of September 30, 1996. While
the there has been a decline in the current ratio since the beginning of the
year, management believes that the ratio and the continued liquidity are a
reflection of the Company's strong financial condition.
Liquidity and Capital Resources.
- --------------------------------
Management believes the Company's liquidity is sufficient for its
current operations. The Company is continuing to perform research on high
intensity lamps to be used in conjunction with its patented photo-assisted
chemical vapor deposition ("CVD") technology prior to making a decision
regarding development of a commercial product incorporating that technology. In
addition, the Company continues to evaluate potential product or business
acquisitions that may complement its business. See the management's discussion
and analysis included in the Company's 1996 annual report on Form 10-K, which is
hereby incorporated by reference, for further information regarding the
Company's plans for acquisitions and development of a product based upon the
Company's CVD technology. Management plans to complete at least one significant
acquisition before the end of the year. There can be no assurance of the
sufficiency of existing working capital or the availability of any other source
of financing necessary to permit the Company to pursue simultaneously both its
acquisition strategy and to complete development of a photo-assisted CVD
product.
The semiconductor equipment order backlog was approximately
$5,133,000, as of March 31, 1997, as compared to $7,150,000 as of March 31,
1996. The decline in the order backlog reflects shipments of a multi-year order
and an increase in shipments due to an expansion of the production capacity of
the Netherlands operation. Approximately $1,000,000 of the higher backlog as of
March 31, 1996 was due to delayed shipments in fiscal 1996, related to the then
long lead-times on components purchased from suppliers
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS - continued
of quartz parts and because $400,000 of system order shipments were deferred at
the request of customers. While orders are ordinarily filled within three to six
months of receipt, the current backlog includes approximately $1,000,000 of
orders to one customer that will not be shipped until fiscal 1998.
THREE MONTHS ENDED MARCH 31,
1997 vs. 1996
Continuing Operations.
- ----------------------
Revenues increased 83%, to $2,583,000 in the second quarter of fiscal
1997, or $1,175,000 higher than the $1,408,000 of product sales reported in the
second quarter of the fiscal 1996 year. Approximately $1,000,000 of the increase
was due to lower than expected shipments in fiscal 1996, as a result of long
lead-times on components purchased from suppliers of quartz parts and because
$400,000 of system order shipments were deferred at the request of customers.
While there may be similar delays in the future, none were incurred in the
quarter ended March 31, 1997.
Gross margin increased $297,000, or 74%, to $701,000, and amounted to
27% of sales, in the second quarter of fiscal 1997, compared to $404,000, or 29%
of sales, in the second quarter of fiscal 1996. The increase in gross margin is
primarily due to the higher volume of shipments. While spreading the fixed
portion of manufacturing costs over the higher sales volume caused such costs to
decrease as a percentage of sales, this benefit was more than offset by a
product mix with a higher material cost content than in the prior year,
resulting in the net reduction in gross margins as percent of sales.
The selling, general and administrative expenses for the second
quarter of fiscal 1997 were $56,000 higher than in comparable period of last
fiscal year. The increased expenses primarily result from expanded overhead
costs related to the larger office and manufacturing facilities in The
Netherlands and increased selling, marketing and installation activities on a
world-wide basis. Research and development costs decreased $19,000, as the
Company's photo-CVD ("chemical vapor deposition") research has slowed pending
the delivery of higher intensity lamps that are required for that research.
Income (Loss) From Continuing Operations.
- -----------------------------------------
As a result of the above, for the three months ended March 31, 1997,
the Company had operating income of $16,000 as compared to an operating loss of
$244,000 for the second quarter of fiscal 1996, an improvement of $260,000.
The income (loss) from continuing operations includes the operating
profit (loss) from continuing operations, discussed above, net interest income,
and income taxes
10
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS - continued
(benefit). During the second quarter of the current fiscal year, net interest
income was $47,000, or $15,000 less than in the corresponding quarter of the
preceding year, because interest bearing funds had to be re-deployed to finance
the higher level of accounts receivable.
Income tax expense increased $68,000, because the loss for the quarter
ended March 31, 1996 resulted in an income tax benefit of $50,000. The $50,000
income tax benefit for the second quarter of fiscal 1996 is approximately
$12,000 less than would result from applying the statutory rates to the before
tax loss, because of the effects of the permanent differences between financial
and taxable income. As a result of the above, continuing operations produced
income of $45,000, $.01 per share, or $177,000 more than the $132,000 loss, or
$.03 per share, recognized during the same quarter of fiscal 1996.
Discontinued Operations.
- ------------------------
As a result of the December 31, 1996 sale of the technical contract
personnel segment, there was no income from discontinued operations in the
second quarter of fiscal 1997 or 1996. However, during the second quarter of
fiscal 1996, there was an adjustment reducing the gain on disposition of that
segment of the business by $13,000.
Total Company.
- --------------
The three months ended March 31, 1997, resulted in a net income of
$45,000, or $.01 per share, compared to a net loss of $145,000, or a loss of
$.04 per share, in the second quarter of fiscal 1996. The most significant
factors contributing to the $190,000 improvement in net earnings was the
$1,175,000 increase in sales discussed above and the resulting increase in gross
margins.
SIX MONTHS ENDED MARCH 31,
1997 vs. 1996
Continuing Operations.
- ----------------------
Revenues increased 49% to $4,590,000 during the first six months of
fiscal 1997 from $3,079,000 for the first six months of fiscal 1996. The higher
revenues were made possible by the expanded production capacity of The
Netherlands operations resulting from larger facilities and the hiring of new
employees. Also, the Company did not have to delay shipments pending delivery of
long lead-time parts from vendors or encounter customer requested deferred
shipments as it did in the prior year, as discussed above.
Gross margin increased $458,000, or 50%, to $1,370,000, in the
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS - continued
first half of fiscal 1997, from $912,000 in the comparable period in fiscal
1996. The increase in gross margin is directly related to the higher volume of
shipments. While spreading the fixed portion of manufacturing costs over the
higher sales volume caused such costs to decrease as a percentage of sales, this
benefit was offset by a product mix with a higher material cost content than in
the prior year. As a result, gross margins as a percentage of revenue were 30%
in both the first half of fiscal 1996 and 1997.
The selling and general expenses of the semiconductor segment for the
first six months of fiscal 1997 were $104,000 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 in order to
promote the entire product line, with the greatest emphasis on the horizonal
diffusion furnace developed in The Netherlands. The costs associated with the
larger facilities in The Netherlands, including the costs of re-locating the
operations to Heerde, contributed to the increase. These increases were
partially offset by reductions in the sales and marketing costs of the U.S.
based operations associated with the decision to defer the introduction of
low-cost furnaces.
There was a $14,000 increase in expenses related to the higher level
of research and development activities during the first half of fiscal 1997. The
entire $14,000 results from a higher level of internal and external research and
development activities during the first quarter of the current fiscal year.
Because the Company disposed of its interest in the Korean joint
venture, Seil Semicon, Inc., and recovered its equity in the first year start-up
losses and certain expenses related to that venture incurred last year, a
$115,000 gain was recorded in the first quarter of fiscal 1997. This nearly
offset all of the increase in expenses discussed in the preceding two
paragraphs.
Income From Continuing Operations.
- ----------------------------------
For the first six months of fiscal 1997, the operating profit from
continuing operations was $147,000 as compared to a loss of $309,000 for the
first two quarters of fiscal 1996. The $456,000 improvement in operating
earnings is directly related to the gross margin on the increased sales volume,
discussed above. Approximately 75% of this improvement results from operating
activities and the remainder from the disposition of the Company's interest in a
Korean joint-venture.
The income (loss) from continuing operations includes the operating
profit (loss), discussed above, net interest income, and income taxes (benefit).
Net interest income declined by $34,000 during the first half of fiscal 1997, as
interest bearing investments were liquidated to finance the growth in accounts
receivable associated with the higher sales volume.
During the first half of fiscal 1997 there was an income tax expense
of $75,000, compared to an income tax benefit of $50,000 reported for the first
half of fiscal 1996. The $50,000 income tax
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS - continued
benefit for the first two quarters of fiscal 1996 is approximately $12,000 less
than would result from applying the statutory rates to the before tax loss,
because of the effects of the permanent differences between financial and
taxable income. The income tax expense in the first half of fiscal 1997 is
approximately $7,000 less than what would result by applying the statutory rates
to the before tax loss, as the Company received in the current year a tax
benefit from the equity in losses recognized in the financial statements in
fiscal 1996 due to the disposition of the Korean joint venture. This benefit was
partially offset by differences between financial and taxable income as
reflected in the Company's estimated effective tax rate which was applied to
pre-tax book income for the year.
As a result of the above, continuing operations produced net income of
$166,000, or $.04 per share, in the first six months of fiscal 1997,
representing an improvement of $297,000, from the net loss of $131,000, or loss
of $.03 per share, reported in the first half of fiscal 1996.
Discontinued Operations.
- ------------------------
Operating profits of the technical contract personnel business were
$22,000 in the first half of fiscal 1996. There was no comparable income in the
current year because of the sale of this discontinued operation during December
1995.
During December 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 $261,000.
Total Company
- -------------
For the six months ended March 31, 1997 there was net income of $166,000, or
$.04 per share, as compared to net income of $151,000, or $.04 per share, for
the comparable period of fiscal 1996. The net income for the first half of
fiscal 1996 was generated entirely by the sale of the discontinued operations.
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS - continued
FORWARD-LOOKING STATEMENTS
This report contains certain forward-looking statements. The
forward-looking statements contained herein are based upon current expectations
that involve a number of risks and uncertainties. The forward-looking statements
are based upon a number of assumptions, including without limitation those
enumerated in the related section of the Management's Discussion and Analysis
included in the Company's 1996 annual report on Form 10-K, which are hereby
incorporated by reference. Assumptions related to the foregoing involve
judgements with respect to, among other things, future economic, competitive and
market conditions, and future business decisions, all of which are beyond the
control of the Company. Although the Company believes that the assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could prove inaccurate and, therefore, there can be no assurance that the
results contemplated in forward-looking statements will be realized. In
addition, the business and operations of the Company are subject to substantial
risks which increase the uncertainty inherent in such forward-looking
statements. In light of the significant uncertainties inherent in such
forward-looking information included herein, the inclusion of such information
should not be regarded as a representation by the Company, or any other person,
that the objectives or plans for the Company will be achieved.
14
<PAGE>
PART II
Item 1. Legal Proceedings.
------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
On February 28, 1997, the Company held its annual meeting of
shareholders at which time the following persons where elected to the board of
directors with shares voted as follows:
Board Members Elected Shares Voted For Votes Withheld
- --------------------- ---------------- --------------
Jong. S. Whang 3,850,224 36,759
Robert T. Hass 3,848,924 38,059
Donald F. Johnston 3,847,620 39,363
Alvin Katz 3,841,977 45,006
Bruce R. Thaw 3,841,167 45,816
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
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 December 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: May 15, 1997
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM THE BALANCE SHEET AS
OF MARCH 31, 1997, AND THE STATEMENT OF OPERATION
AND THE STATEMENT OF CASH FLOW FOR THE SIX MONTHS
ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH QUARTERLY REPORT ON
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 1,439,920
<SECURITIES> 2,239,354
<RECEIVABLES> 3,557,520
<ALLOWANCES> 100,000
<INVENTORY> 693,350
<CURRENT-ASSETS> 8,150,264
<PP&E> 1,674,651
<DEPRECIATION> 680,541
<TOTAL-ASSETS> 9,204,173
<CURRENT-LIABILITIES> 2,240,053
<BONDS> 234,705
0
0
<COMMON> 41,517
<OTHER-SE> 6,687,898
<TOTAL-LIABILITY-AND-EQUITY> 9,204,173
<SALES> 4,590,327
<TOTAL-REVENUES> 4,590,327
<CGS> 3,220,516
<TOTAL-COSTS> 3,220,516
<OTHER-EXPENSES> 1,318,696
<LOSS-PROVISION> 20,000
<INTEREST-EXPENSE> 9,435
<INCOME-PRETAX> 240,751
<INCOME-TAX> 75,000
<INCOME-CONTINUING> 165,751
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 165,751
<EPS-PRIMARY> $.04
<EPS-DILUTED> $.04
</TABLE>
