Thank you, and good afternoon, everyone. We appreciate you joining us for the Amtech Systems fiscal 2026 second quarter conference call and webcast.

With me today on the call are Bob Daigle, Chairman and Chief Executive Officer, and Mark Weaver, Interim Chief Financial Officer. After close of market today, Amtech released its financial results for the second quarter 2026.

The earnings release is posted on the company's website at www.amtechsystems.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 the webcast.

Some of the comments we made today 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 on the Investors section of our corporate website. The company assumes no obligation to update any such forward-looking statements.

You are cautioned to not 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 forward-looking statements are: changes in technologies used by customers and competitors; change in volatility and the demand for products; the effect of changing worldwide political and economic conditions, including trade sanctions; and the effect of overall market conditions, including equity and credit markets and market acceptance risks; ongoing logistics, supply chain, and labor matters; and capital allocation plans. Other risk factors are detailed in our SEC filings, including our Form 10-K and Form 10-Q.

Additionally, in today's conference call, we will be referencing non-GAAP financial measures as we discuss the financial results for the first quarter. You will find a reconciliation of those non-GAAP measures in our actual GAAP results included in the press release issued today.

I will now turn the call over to Amtech's Chief Executive Officer, Bob Daigle.

Thank you, Jordan. Revenue for the quarter was $20.5 million, which was up over 30% from the same quarter last year and up 8% sequentially.

Our adjusted EBITDA was $2.5 million, or about 12% of sales, an increase of $1.1 million from the prior quarter and $3.9 million from a year ago. While reported revenues were at the high end of our guidance range, our adjusted EBITDA margin was a significant beat, as we had guided to high single-digit EBITDA margins.

Higher gross margins contributed to our improved profitability and cash generation. Gross margin approached 48% in the second quarter, up from 45% in the first quarter.

Cash on hand at the end of the quarter was $24.4 million, an increase of $2.3 million from the prior quarter and $11 million from a year ago. AI-related sales accounted for over 30% of our Thermal Processing Solutions segment revenue in the second quarter, and bookings were very strong.

Momentum for AI-related demand continued to build in the second quarter. Advanced packaging has emerged as a critical bridge between silicon innovation and the escalating demands of artificial intelligence infrastructure.

As traditional Moore's law scaling slows, the ability to pack more computing power into a single footprint now relies less on shrinking individual transistors and more on how those chips are interconnected. By enabling high-bandwidth memory integration, reducing data latency through 2.5D and 3D stacking, and allowing for massive system-on-package architectures, advanced packaging provides the physical foundation necessary for generative AI and large language models to thrive.

In short, packaging is no longer just a protective housing for chips; it is a primary driver of the performance, power efficiency, and scale required to fuel the next generation of AI processors. Capital equipment which can deliver high yields and throughput is vital to support this AI revolution.

As broadly reported, semiconductor OEMs and OSATs continue to increase investments to expand capacity to support the massive AI infrastructure buildouts. Demand has been very strong for our advanced packaging equipment and AI server board assembly equipment due to our differentiated capabilities that include TruFit, TrueFlat technology and market-leading temperature uniformity, which enables high yields when producing these very complex and expensive products.

Although we have limited visibility due to our short lead times, our channel checks support our belief that demand will remain very strong for the foreseeable future. Based on bookings and quoting activity, we expect the percentage of revenue from AI applications in our Thermal Processing Solutions segment to exceed 40% in the third quarter.

We are also seeing increased quoting activity and bookings for panel-level packaging. These more demanding packaging technologies are serving more mainstream semiconductor applications, but their process requirements align very well with our differentiated capabilities.

To accelerate growth, we're continuing to invest in next-generation equipment to support higher-density packaging to address emerging customer requirements. We plan to launch the first products for higher-density packaging at the SEMICON trade show in Taiwan in early September.

We believe the capabilities provided by our next-generation equipment will significantly increase our addressable market and help drive growth beyond 2026. Growth of our Thermal Processing Solutions parts and service business was also a highlight in the quarter.

Customer outreach initiatives have helped drive growth with revenue up 10% sequentially and 56% year-over-year. I should note that while we are benefiting from demand for our products to support the AI buildout, we are also beginning to use AI software integrated with our ERP and CRM sales tools to help support customers and streamline our sales process.

For our Semiconductor Fabrication Solutions segment, we continue to leverage our foundry service and technical capabilities to pursue applications and customers not well supported in the industry. We have built a strong opportunity pipeline and are expanding efforts to replicate successes and grow sales of legacy products.

Overall, our IDI chemicals business revenue was up 15% year-over-year. We have also made significant improvements in the service levels we provide and have driven outreach initiatives to grow our parts and services business at Entrepix.

Revenue for parts and service at Entrepix was up about 40% year-over-year. I'm very encouraged by the early results from our customer-centric growth initiatives.

Unfortunately, much of the success from these initiatives in our Semi Fab Solutions segment has been masked by weak sales of our PR Hoffman products due to weakness in demand from our major silicon carbide customers. As I've stated before, 2026 will be an investment year for our SFS business as we execute on our strategy to overserve the underserved, but we believe that our customer-centric growth initiatives will deliver reoccurring revenue streams with meaningful profits beyond 2026.

The operating leverage and working capital efficiency across the company resulting from our product line rationalization efforts and a migration to a semi-fabless manufacturing model over the past 2 years helped deliver improved results for the quarter and should result in continued strong cash flow and further increases in gross margins and EBITDA margins as revenues increase. Our semi-fabless model, which included the consolidation of our manufacturing footprint from seven facilities to four, should also allow us to significantly increase revenue with minimal capital expenditures.

We ended the quarter producing nine reflow systems per week and have the capacity in supply chains to accommodate the growth we expect with little or no CapEx. In summary, growth opportunities driven by AI infrastructure investments and our customer-centric strategy, combined with strong operating leverage that results from our asset-light, semi-fabless business model, position us very well to deliver meaningful shareholder value.

Before I hand the call over to Mark, I have two organization announcements to share. First, as we announced last week, Tom Sebel has been appointed as CFO and will be joining Amtech on May 14th.

Tom brings more than 20 years of CFO experience across publicly traded and private equity-backed organizations with deep expertise in developing and leading finance teams, driving financial performance, investor relations, and SEC reporting. His background spans several industries including financial services, software, and advanced manufacturing.

I look forward to working closely with Tom as we continue to drive growth and profitability. I would like to take a moment to recognize and thank Mark Weaver for stepping in as interim CFO.

Mark came out of retirement to help us with this transition, and I greatly appreciate his support and his leadership. I am also pleased to announce that Guy Shechter will be joining Amtech on May 19th in a newly created President and Chief Operating Officer role.

Guy has held various commercial and general management positions with semiconductor equipment and advanced packaging equipment companies. The extensive experience, customer relationships, and leadership skills that he brings to Amtech will be critical as we expand our portfolio solutions for AI applications to accelerate growth.

I'm looking forward to having Guy join the Amtech team. Now I'll turn the call over to Mark for more details concerning our Q2 results.

Thank you, Bob. Once again, it has been a pleasure working with you and the folks at Amtech.

I've truly enjoyed my time here. Now I'll review the financials for the fiscal '26 second quarter.

Following the 2-year plus transformation led by Bob, the company is finally at a place where year-over-year revenue comparisons are meaningful. The one consistent characteristic of our revenue comparisons over the past few years has been the positive impact of AI product demand within the TPS segment.

In the second quarter of 2026, AI revenues accounted for more than 30% of TPS segment revenue. Bookings for AI applications remain strong, and we are experienced both book and ship in the same quarter as well as book now and ship later on.

This has led to the second second of quarter of company-wide bookings exceeding sales for the period. Other areas of TPS and SSS sales are also contributing growth on a consolidated basis, which is being partially offset by weakness in select product lines, as Bob discussed in his remarks.

Total SFS revenues were $5.7 million in the second quarter, up 15% from approximately $5 million in both the first quarter of 2026 and the second quarter of 2025. Moving on to gross margins, the company's product line rationalization and our focus on growing higher-margin product lines, including AI advanced packaging solutions, as well as our recurring parts services business, are delivering their intended results, particularly as we are benefiting from greater scale.

Gross margin as a percentage of sales increased to 47.7% in the second quarter of 2026, up nearly 300 basis points from 44.8% in the first quarter of '26. Comparison to the prior year period is not meaningful since that quarter included a $6 million non-cash inventory write-down as part of our broader turnaround and transition, which took margins into negative territory in the second quarter of 2025.

Selling, general, and administrative expenses increased $0.3 million sequentially from the prior quarter and were relatively flat as compared to the second quarter of 2025. The increase is primarily due to expanding business activities, tax, and IT consulting fees.

Research, development development, and engineering expenses were relatively flat compared to prior periods. The company continues to invest with a measured yet opportunistic approach to R&D, including next-generation products targeting the AI supply chain and our specialty chemicals business.

GAAP net income for the second quarter of fiscal 2026 was $1.2 million, or 8 cents per share. This compares to GAAP net income of $0.1 million, or 1 cent per share, for the preceding quarter, and a GAAP net loss of $31.8 million, or $2.23 per share, for the second quarter of fiscal '25.

During the second quarter of 2025, the company recorded significant non-cash inventory write-downs and impairment charges, which make the year-over-year comparisons for profitability not really meaningful. The company's second quarter of '26 GAAP net income includes $0.3 million of foreign currency exchange losses versus $0.2 million in the prior quarter, primarily driven by a weakening United States dollar against the Chinese renminbi.

Unrestricted cash and cash equivalents at March 31st, 2026 were $24.4 million compared to $22.1 million at December 31st, and $17.9 million at September 30th, and $13.4 million a year ago. The increased cash balances are due primarily to the company's focus on operational cash generation, working capital optimization, strong accounts receivable collections, and accounts payable management.

The increase in cash from the first quarter of this year is even more meaningful since we are carrying an additional $0.9 million in inventory to accommodate higher order flow. The company continues to have no debt.

As for the $5 million stock repurchase program, the company did not use any cash for this as no shares were repurchased since the plan was put in place on December 9th. Now turning to our outlook.

For the third fiscal quarter ending June 30th, 2026, the company expects revenue in the range of $20.5 million to $22.5 million. At the midpoint of this range, our guidance is meaningful year-over-year and sequential quarter increase.

AI-related equipment sales for the Thermal Processing Solutions segment is anticipated to drive the majority of our revenue growth and account for as much as 40% of the segment's sales in the third quarter of 2026. With the benefit of continued top-line growth and the sustainable improvements in structural and operational cost reductions, Amtech expects to benefit from its operating leverage to deliver adjusted EBITDA margins in the low double digits range.

The outlook provided during our call today and in our earnings press release is based on an assumed exchange rate between the United States dollar and foreign currencies. Changes in the value of foreign currencies in relation to the United States dollar could cause the actual results to differ from expectations.

Now I will turn the call over to the operator for questions.

Hi, good afternoon, guys. Thanks for taking my questions.

Bob, I was hoping to get a little more granularity on gross margins in SFS. Looks like it was up, about 800 basis points sequentially.

Any kind of added color on what's going on there would be great.

Again, I think a lot of the, revenue revenue contributed the additional revenue contributed a bit to that, and I think the balance would really be mix mix-related. There wasn't anything really structurally different quarter-to-quarter in that segment.

It more reflective of the the mix of products through that business and, the incremental revenue. We have a lot of operating leverage.

As you might imagine, with with the basically the the structural changes we've made over the past couple of years, we've positioned ourselves where we do get very very solid flow-through of any incremental revenue to our overall results.

Great, that that's very helpful. Then I want to ask about kind of geographic mix and how you're seeing demand trends across regions.

Yes. As you might imagine, Asia is really the hotbed for AI infrastructure buildouts.

Traditionally in the packaging area, it's been it's been almost exclusively Taiwan, but what we're seeing is a significant buildout of packaging infrastructure in other parts of Southeast Asia, Thailand, Malaysia, Indonesia, India, for example. We're seeing a broadening of geographic footprint in terms of major investments in the packaging area for almost all driven by AI infrastructure.

I'd say more recently, we're seeing quite a bit more activity I'd say in the in North America as well. It was pretty it was pretty quiet, but we're starting to see some investments being made.

I'd say more so on the enterprise-level board assembly at this stage than chip packaging, but it's it's nice to see some increased AI activity in in in North America as well. That

that's helpful. In terms of Asia, should we be keeping an eye out on any kind of trade policy, tariff, or or supply chain dynamics?

Yeah. Specific to the tariffs, we we positioned ourselves pretty well there where at at if you go back a year ago, any equipment coming to into the US was basically being manufactured in China.

Obviously, there were very meaningful tariff impacts as a result of that. We did establish a a partner where we now manufacture equipment for the for the US in in Singapore-Malaysia area.

We've we've kind of insulated ourselves quite a bit from from the US-China stress levels. Beyond there beyond that, there really haven't been a lot of I'd say cross-Asia issues.

I'd say back to your supply chain question, everyone's talking about memory being more expensive, and and obviously, that's same same for us. We we have to adjust our our cost and pricing accordingly if if memory becomes more expensive.

We really haven't seen any shortages, however. I would say it's more there's a little bit of price pressure that that we need to deal with and and pass along on the memory side.

Great. Then last one for me.

Cash continues to improve. How should we be thinking about capital allocation, or I should say how are you thinking about capital allocation?

You have the $5 million repurchase authorization out there. Is that a priority, or is it more R&D investment in in new products, or even potentially M&A?

Yeah. Let's.

I'd say I'd say growth growth is number one, right? Because back to the operating leverage discussion, the as we grow with the strong margin margin leverage we have in our portfolio.

I should mention, with with all the product lines that we we cut from the portfolio rationalization efforts, I would say really across the board we have very healthy margins across the entire portfolio right now. Any any of the product lines that grow very are very meaningful in terms of improving cash generation, gross margins, and EBITDA.

I'd say from an investment standpoint, we are making those investments. We've been increasing we have our R&D efforts around next-generation equipment.

There could be a little bit of incremental investment needed to drive that home. We're investing in resources to develop the pipeline for SFS in terms of, trying to build out our IDI portfolio and the reoccurring revenue streams.

We'll continue to incrementally invest in that. I don't see that having a meaningful impact on cash needs.

Then the other the other factor I think we want to point out is, with with our semi-fabless model, we have the ability to scale without meaningful CapEx. As as I mentioned in my comments, with even even looking out a year in terms of high growth and demand for the equipment used for AI packaging, we don't really see the need for deploying meaningful cash for CapEx.

Our our semi-fabless model and our supply chain can handle that growth. Having said all that, long story short is, if we find, we're we're we're active if if we could find inorganic opportunities, we would deploy cash accordingly.

As I've said to many people, I spent over a decade doing corporate development in in a prior life, and and I would say we we need to be prudent, cautious, and make sure that what we do is is generating real meaningful value. We're going we're we're going to be when people ask me, "Are you going to acquire?"

, I always answer the question with "Maybe," because if we find acquisitions that can create real value, we're going to do those to accelerate growth. We do have a great pipeline of organic growth that I think can push us forward.

Then back to your question about capital allocation, obviously first priority is growth. If we don't have if we didn't have better uses for that, then then of course we would look at providing the cash back to shareholders in some some form.

Perfect. I appreciate all the added color, guys.

Thank you very much, and congrats on the the strong results.

All right. Thank you, Scott.

Hi. Good afternoon, Bob.

Just wanted to first give you kudos for the.

Hi, George. How you doing?

I'm well. Just want to give you kudos for the tremendous transformation over the last 2 years and with the business, and and now you're we're starting to see the fruits of the operating leverage.

It's fantastic to see this. Thanks for that.

First question

kind of regarding around. The first question I have is on the the change we've seen recently with being very GPU dominated to now a lot more of the CPU and TPUs being more advanced packaging requirements demand.

I wonder if you can kind of like size up and differentiate what this means to Amtech in terms of opportunities and velocity of capacity ads going forward. I I my

my sense, George, is I would it's a very favorable tailwind for us in that if you think about our business and and, in terms of how we package semiconductor packaging or enterprise board assembly for that matter, a lot of it has to do with units and and size of those units, right? I think I think, as many on the call may be aware, you start even going back to the the you look at the Blackwell versus Rubin GPUs where the size of this the packages are getting much much larger is very beneficial.

Because what we do is we've you can kind of think about what we're providing is is very much based on area of production. It's the size of the packages and it's the number of packages.

When you hear people talk about the number of CPUs maybe I've heard numbers as much as what, 10 to 1 against GPUs, TPUs to do a lot of the localized processing of for for AI, I think that bodes very well for volume production in the industry, which typically bodes very well for us. We think it's a tailwind.

It's too early to I we're going to try to get our arms around what this could mean in terms of additional acceleration, but I think it's very positive. It's hard to put my arms around the numbers at this stage.

Okay. I was curious on the on the silicon carbide side of the business with the increasing demand drivers of lots more automotive AI content, power, higher voltages, thermal performance requirements, etc., do do you see any any any demand outlook increasing on this area in the next year or so?

I I possibly, but I do have I temper, when when I look at the the big driver for silicon carbide was really the the EVs, the electric vehicles. A lot of that growth is really being driven primarily in mainland China today, which is less of an opportunity for us than in the West.

I do think the the AI infrastructure will drive some demand increase. It's hard to I think we're quite a ways away from that impacting capital equipment needs because a lot of the the Entrepix volume, if you go back 2, 3 years ago, was was capital equipment as they were ramping up infrastructure for EV.

I don't think there's enough demand there yet to drive any of that. I do think the cost pressures on the silicon carbide side in the West and and the and the tremendous capacity that's put into China that that's competitive, it could it could come back.

I I just wouldn't put I'm I'm not emphasizing that, frankly, George, as a major growth driver for us. It could be helpful, but I do think, eye on the ball here is really maximizing our opportunities around packaging and assembly in AI and it's building out that specialty chemicals annuity business that that if you want to, in terms of where our best investments can be made to drive try to drive value.

Speaking of chemicals, on your chemical side of the business, are you doing much R&D in the for addressing, all the polymers, adhesives, etc. for advanced packaging, semiconductor for like that that addresses like melting and warping and cooling and signal loss, all that sort of stuff?

We're we're mostly

we're mostly cleaners, lubricants. We do have some coolants, however, in the processing of primary wafers, more so more so at the wafer level, though, than and or optics.

I would say optics is an area we're paying more attention to, as as you might imagine, than than the than the chemicals in the packaging area. I do see opportunities, significant opportunities, frankly, in in optics or opticals optical-related semiconductor production, and we're pursuing those.

Do

Do your cooling chemicals and equipment, do they kind of help address these these warpage yield problems that are emerging at the leading edge now?

Not Not so much. I I think, no, that I wouldn't say they do.

Okay. All right, thank you, Bob.

I think the warpage where we benefit is is on the packaging, which is our TrueFlat technology. That's really where we shine, George.

If if you've got a $30,000 processor that you're you're trying to assemble, you need to keep it flat. I would say that's where that's where we really do well with our TrueFlat equipment.

That's. Thank you, Bob.

All right, thank you.

Good evening. Thanks for taking my questions, Bob.

Last quarter, the this small delay in one of your AI customers in in in taking some some packaging equipment had a big impact on your stock. Did we maybe see the the delivery of that equipment in in this current period, or is it expected over the next couple months?

Do do you expect the linearity or the the the overall business to have sort of a smoother trajectory given the size and the scale that you're you're you're gathering over the next couple quarters?

Yeah. I I we did ship that particular equipment during the quarter.

I'd say the the visibility, I wouldn't say is is great, but is getting better because there's a lot more activity in terms of new facilities being put in. We are seeing more bookings with deliveries out a quarter and and, a couple of cases, actually a couple of quarters now, which is very unusual for our business because, as I've mentioned before, we have very short lead times.

We've got very efficient supply chain, turn equipment around very quickly. We've typically been a book-and-ship even in this large-scale capital equipment space.

Having said that, because people are actually building new facilities now and and don't necessarily need all the equipment immediately, we're seeing better visibility, which I think will translate back to I think I think a good point is that it should start to smooth things out a bit, frankly, as we get better visibility and bookings that aren't just current quarter, but out out a ways.

That definitely makes sense. The next question, is one that I get asked fairly often, right?

It's it's more of a big picture question, Bob. Can you talk a little bit about Amtech's moat in advanced packaging and AI?

What's allowed you to dominate this space? There are others that would like to do business in here, but you've maintained really strong reputation on technology, it's allowed you to have those long-term customer relationships and supplier relationships, too.

What's different about what you're doing that that gives you this this moat? Because yeah,

generally we we win when it's a demanding application and there's there's there's actually three components that usually come into play. I'd say in advanced packaging, that TrueFlat technology and and unfortunately we don't have graphics in front of you, but these are large conveyorized piece of equipment, let's say almost half the length of a of a tractor trailer bed that are doing the the the reflow operations for these packages, and you're raising things to very high temperatures.

Most materials, most substrates, and and I think George earlier was alluding to this, tend to bow and twist and and deform as you're heating them up. We have technology which allows us to it it actually pulls a pulls a vacuum, it holds the substrates down flat against the belt so things don't basically shift during the assembly process.

What's that mean? That means high yield.

In applications where you're trying to process something that's very expensive, you need you you're not going to sacrifice yield. You've got to have equipment that's going to be robust.

The other thing I'd say is temperature uniformity. I think we have we have a a significant advantage in terms of being able to provide uniformity across our our reflow, across the belt, within within zones.

Our latest equipment actually has reconfigurable zones that can be customized by customers. We've provided capabilities that that really are enabling for high-yield, high-throughput processing of these things.

I'd say the last thing, which which, I think I've mentioned before, like our our AccuScrub technology, for example, where we can remove the the contaminants from the processing fluxes out of the gas stream so that it reduces downtime in the ovens and reduces the risk of contaminating the product. We've got a bunch.

It's not just one. I guess that's the tough part, Craig, it's not one thing.

We've got a portfolio of capabilities and and IP around some of these capabilities that put us in a position where if you're trying to do you're trying to process an AI package, an AI enterprise board, it's expensive, we're worth it, I guess I'd say, which is why we've captured, a strong position, market position that we have today and enjoy today.

That definitely makes sense. Congratulations on on the strong quarter and a strong long-term positioning there, we'll hop back in the queue.

All right, thank you, Craig.

All right, thank you, operator. In in closing, I want to thank everybody for joining our earnings call today.

We look forward to seeing some of you later this month at the B. Riley Annual Investor Conference, and then in June at the Planet MicroCap Conference.

We hope you can join us at either of these events, and thanks again for your continued support of Amtech Systems, and have a good evening.