Why Investors Are Overreacting To Amtech's Shelf Offering

Amtech Systems, Inc., (NASDAQ:ASYS) supplies horizontal diffusion furnace systems used for solar (photovoltaic) cell and semiconductor manufacturing. The Company provides products and services to two industries: the solar industry and the semiconductor industry. The Company's solar and semiconductor equipment is sold under brand names of Tempress Systems and Bruce Technologies, which have customers in both the solar industry and the semiconductor industry. Within the solar industry, it provides diffusion and automation equipment to solar cell manufacturers and it also offers plasma enhanced chemical vapor deposition [PECVD] and phosphocilicate glass [PSG] equipment. Within the semiconductor industry, it provides equipment to manufacturers of analog, power, automotive and microcontroller chips with geometries greater than 0.3 micron.

Amtech Systems announced its Fiscal '11 First Quarter results after market close on February 8th. After opening the following day at over $30, the stock has since fallen below $25. Longs are puzzled as to why such a drop has occurred considering such a stellar report which crushed analyst estimates, the details of which include:

  • Record net revenue of $53.7 million, up 18% sequentially from $45.4 million in Q4 2010.
  • Record quarterly bookings of $137 million ($127 million solar), up 176% sequentially from $50 million ($41 million solar) in Q4 2010.
  • Record quarter-end backlog of $173 million ($162 million solar), up 83% sequentially from $94 million ($85 million solar) at September 30, 2010. (In Fiscal 2010, Amtech was able to realize 60% of this $94 backlog in revenues. If the company realizes 60% of its $173M in revenues, that event alone would account for $103M without even taking into account revenues from current operations).
  • Net income of $5.0 million, or $0.52 per diluted share, compared to net income of $5.4 million, or $0.58 per diluted share, sequentially.
  • Expected guidance for Fiscal 2011 full year revenues to surpass $230 million, a greater than 92% increase from fiscal 2010, with fiscal 2011 second quarter revenues in the range of $55 to $60 million.
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