Good morning and welcome to the Amtech Systems Fourth Quarter and Fiscal Year 2019 Conference Call. All participants will be in listen-only mode. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Lisa Gibbs, Chief Financial Officer. Please go ahead.

Good morning and thank you for joining us for Amtech Systems fourth quarter and fiscal year 2019 results conference call. With me on the call today are J.S. Whang, Amtech’s Executive Chairman and Chief Executive Officer; Michael Whang, our Chief Operating Officer; and Robert Hass, Amtech’s Executive Vice President. Before the opening of trading today, Amtech released its financial results for the fourth quarter and fiscal year ended September 30, 2019. That earnings release will be posted on the company’s website at amtechsystems.com. During today’s call, management will make forward-looking statements. All such forward-looking statements are based on information available to us as of this date. And we assume no obligation to update any such forward-looking statements. These statements are not a guarantee of future performance, and actual results could differ materially from current expectations. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are changes in the technologies used by our customers and competitors; change in volatility and the demand for our products; the effect of changing worldwide political and economic conditions, including trade sanctions; the effect of overall market conditions, including the equity and credit markets; and market acceptance risks and our capital allocation plans. Other risk factors are detailed in our Securities and Exchange Commission filings, including our Form 10-K and Form 10-Q. I will now turn the call over to Robert Hass, Executive Vice President to discuss discontinued operations.

Thank you Lisa and good morning. As announced in our press release we have entered into a management buyout agreement with certain key management members of R2D, our automation division in France. We have disclosed previously that we were evaluating how and whether R2D would fit into our power semi strategy. After careful consideration, we determined that the disposition of R2D is best for Amtech, its shareholders, and the employees and customers of R2D. We expect to recognize a loss on disposition of R2D in fiscal Q1 2020 of approximately $3 million. We also continue our focus and efforts to divest Tempress our solar division in the Netherlands and our advisors are in the final stages of the project. The parties who have emerged as potential buyers will require a cash infusion from Amtech which we are considering together with other deal terms which are under negotiation. We are hoping to announce a conclusion by calendar year-end. We remain confident these divestitures are the right decision for Amtech and our shareholders allowing us to devote our resources and investments to our unprofitable -- I mean to our profitable semiconductor and fast growing SiC and LED segments. I will now turn the call over to J.S. Whang, our Executive Chairman and Chief Executive Officer. J.S.

Thank you Robert, thank you for joining our call this morning. As our intense effort to dispose off our solar business continues we move forward with the semi strategy focusing our efforts and resources on our semiconductor and silicon carbide business and the multiple growth opportunities they present. While at this time ongoing macroeconomic issues prevail, the underlying long-term growth drivers of our targeted markets are fully intact. Therefore as we begin our fiscal year 2020 we look to prudently invest in both R&D and new product development to expand our offerings and accelerate our growth in the emerging SiC industry and anticipated recovering marketplace ensuring we are well positioned to serve our market leading customers when the semi industry turns around. We are focused on our plan to grow our business and have developed a strategic plan that calls for profitable revenue growth as the semi industry recovers. With the solar business soon to be behind the loss we will also believe -- we also believe the growth industry we serve offers us an excellent acquisition environment and we are confident that there will be opportunity in the coming years that will contribute to our growth and profitabilities. We are committed to profitable growth and we believe we have an exciting future that can provide increased value for our shareholders over the coming years. Therefore divesting the solar business and getting it behind us is a very important task for us. I will now turn the call to Michael Whang, our COO to discuss our continuing operations. Mike.

Thank you J.S. and good morning. Although the semiconductor manufacturing environment has been soft our fourth quarter benefited from favorable product mix at BTU and a strong mix of machine shipments at PR Hoffman. Even with these positives in the fourth quarter we still expect near-term revenue to be adversely impacted by the ongoing tariff environment and the continued economic and trade issues facing the industry. The exact timing of a meaningful upturn in the market demand remains uncertain although we believe the second half of 2020 we will see growth return in the industry especially within silicon carbide devices. In preparing for this significant opportunity and long-term growth potential we are making select investments to expand and upgrade our product offerings, our manufacturing facilities and IT systems to strengthen our position and prepare us to meet the expected upturn in demand. As J.S. discussed we have developed a strategic plan to profitably grow as the semi industry recovers in the second half of 2020. Currently and with the recovery we had the following areas of focus, emerging opportunities in the SiC industry. We are well-positioned to take part in this significant growth area. We are working closely with our customers to understand their SiC growth plans and opportunities. We are investing in our capacity, next generation product development, and investing in our people. We believe these investments will help fuel our growth in the SiC industry. Secondly, the 300 millimeter silicon horizontal thermal reactor, we have a highly successful and proven 300 millimeter solution for growing power semiconductor applications. We have a strong foundation with a key customer and in the second half of fiscal 2019 we announced an order for another industry leading manufacturer. We believe we have a strong opportunity to expand our customer base and future revenue growth in this area. Lastly as a major revenue contributor BTU will continue to track the semi industry cycles for our semi packaging and SMT products. We believe that through investments and product innovation BTU has an opportunity to grow further. Our long-term outlook remains positive and that we see significant opportunities as customers shift from silicon to silicon carbide solutions for multiple next generation applications. This shift represents an exciting growth opportunity in an area where we are all very well positioned. We are confident that the long-term outlook is compelling as demand for advanced power chips is expected to intensify year-over-year. And now I'll turn the call to Lisa to review the fourth quarter and fiscal year financial results.

Thank you Michael. Net revenue for the fourth quarter of fiscal 2019 was $20.2 million compared to $21 million in the preceding quarter and $23.1 million in the fourth quarter of fiscal 2018. Sequentially semiconductor revenue decreased by approximately $1.1 million and silicon carbide LED revenue increased by approximately $1.3 million. Compared to prior year semi net revenue decreased by approximately $4 million and silicon carbide LED revenue increased by approximately $1.3 million. In our semiconductor segment we continue to see weaker demand primarily due to the economic conditions resulting from the trade dispute. The increase in revenue in our silicon carbide LED segment both sequentially and compared to prior year was primarily due to the timing of machine shipments. At September 30, 2019 our total backlog was $17.3 million compared to total backlog of $17.2 million at June 30, 2019. [Indiscernible] customer orders are expected to ship within the next 12 months. Gross margin in the fourth quarter of fiscal 2019 was 42% compared to 37% in the preceding quarter and 36% in the fourth quarter of fiscal 2018. Sequentially and compared to prior year gross margins increased primarily due to favorable product mix most notably increased sales of parts and upgrades. Selling, general, and administrative expense or SG&A in the fourth quarter of fiscal 2019 was $6.1 million compared to $5.7 million in the preceding quarter and $6.2 million in the fourth quarter of fiscal 2018. Sequentially SG&A increased due primarily to increased employee related expenses. Looking at income tax on a full year basis we had a provision for fiscal 2019 for both continuing and discontinued operations of $1.4 million compared to $0.2 million in fiscal 2018. The provision for fiscal 2019 represents taxes primarily in our foreign jurisdictions. We were able to offset our U.S. federal…

[Operator Instructions]. And our first question comes from Jeff Osborne of Cowen and Company. Please go ahead.

Hey, good morning everyone. Couple of questions on my end. On the R2D side can you give us any more detail on sort of what the historic revenue run rate was of that division just as we think about that possibly going away?

On an annual basis it has been since the solar downturn was pretty clear on that, since the downturn in the solar industry the annual revenue rate in R2D has been $2.5 million to $4 million.

Got it, that's helpful Robert. And then if I heard you right I think in Lisa's comments you took 2.2 million impairment on that?

Yes, that was at the end of last year, last fiscal year.

Okay, and then I think also Robert made reference to Tempress and the sale by year-end. What confused me was that I think there was reference to a cash infusion to the buyer. Is there any way to bracket how much cash you're willing to lend I assume to the buyer or how the mechanics of that would work?

No, I won't comment on that other than to say that in the script and in the financial statements we show how much cash is in the continuing operations. And that's what you should focus on. The cash in the discontinued operations is in the assets held for sale. Does that help.

Got it. Yes, that's helpful. How about on the strategic plan that you shared in different speakers remarks but in terms of the $6 million to $8 million for R&D and CapEx Lisa is there a way to think about how much of that is in OpEx versus CapEx?

Sure, I would expect it is more heavily weighted towards R&D probably in the two thirds range of what I gave.

Got it. And I assume Robert on the OpEx for R2D was that meaningful as well or can you give us a sense of what the headcount was for that unit in France?

So the contribution to profit and loss has not been significant.

Yes, got it.

As far as the number of employees I think it is around 35.

Okay, that's helpful. Maybe just the last one, there is a lot of moving pieces Lisa on tax, can you talk about what we should expect for this fiscal year?

Sure, understandable. We do expect to achieve a tax benefit through the divestiture of R2D and through Tempress, kind of like what we did with SoLayTec. And so I think that we will realize that benefit through this fiscal year and then after these divestitures we would expect the tax rate to resume to a normal range.

Great, that's all I had. Thank you.

Thank you Jeff.

[Operator Instructions]. Seeing no further questions this will conclude our question-and-answer session. I would like to turn the conference back over to Lisa Gibbs for any closing remarks.

Thank you for your time today and for your interest in Amtech. This concludes today's call.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.