Good day, and welcome to the Amtech Systems Business Update Conference Call. Please note that this event is being recorded. I would now like to turn the call over to Michael Funari of Sapphire [Investment] (ph) Relations.

Good afternoon, and thank you for joining us for Amtech Systems' business update conference call. With me on the call today are Bob Daigle, Chairman and Chief Executive Officer; Lisa Gibbs, Chief Financial Officer; and Paul Lancaster, Vice President of Sales and Customer Service. After close of market today, Amtech released a summary of its revenue and business status as of September 30, 2023. The press release is posted on the company's website at www.amtechsystems.com in the Investor section. Before we begin, I'd like to remind everyone that the safe harbor disclaimer in our public filings covers this call and our webcast. Some of the comments to be made 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 within the Investors section of our corporate website. The company assumes no obligation to update any such forward-looking statements. You are cautioned not to 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 the technologies used by customers and competitors; change in volatility and demand for products; the effect of changing worldwide political and economic conditions, including trade sanctions; the effect of overall market conditions, including equity and credit markets and market acceptance risks; ongoing logistics, supply chain and labor challenges; capital allocation plans; the COVID-19 pandemic; and our ability to effectively integrate our acquisition of Entrepix, Inc., which we acquired in January 2023. Other risk factors are detailed in our SEC filings, including Form 10-K and Forms 10-Q. I will now turn the call over to Amtech's Chief Executive Officer, Bob Daigle.

Thank you, Mike. Good afternoon, everyone, and thank you for joining our conference call. In today's call, we will provide a business update. Reporting of our full financial results will be delayed due to the complexity and judgment involved in the valuation and impairment analysis that's underway. I'd like to share a few observations I've made about Amtech and speaking with both customers and stakeholders over the past four months and discuss the subsequent actions we are taking. Amtech is a company with well-recognized brands, great products and technologies, dedicated and talented employees, and best-in-class service capabilities which support a diverse customer base. Our company has tremendous promise and is well-positioned to capitalize on several secular trends that will drive demand for our equipment and consumables. The advanced mobility market, including electric vehicles, is expected to drive growth not only for semiconductors and subsystems within the vehicles, but also for battery cooling systems and a broad array of electric vehicle power modules, which our tools serve. Within the broader semiconductor market, our tools are used for advanced packaging of processors for high-performance computing and artificial intelligence applications. And across the electric -- electronics industry as a whole, the pandemic and global tensions have made it abundantly clear that more resilient semiconductor and electronic assembly supply chains are needed. This will also expand the opportunities for our tools. As we evaluate the strategic roadmap for Amtech, we are focusing on those areas where we have strong differentiation and are able to add significant value in the markets we serve and for our shareholders. As a part of this evaluation, we have come to three realizations. First, technology, innovation, and customer partnerships remain core to what sets Amtech apart in the industry. Often the applications we target are amongst the most difficult…

Thank you, Bob. We closed fiscal 2023 with revenues of $113.3 million compared to $106.3 million in fiscal 2022. In a challenging demand environment, our acquisition of Entrepix, completed in January of 2023, contributed to this increase in year-over-year revenues. Turning to our quarterly results, net revenues decreased 10% sequentially and 14% from the fourth quarter of fiscal 2022. The decrease from prior year is primarily attributable to lower shipments from our Shanghai manufacturing facility, partially offset by an increase in shipments of our high-temperature belt furnaces and the addition of Entrepix in fiscal 2023. The sequential decrease is primarily due to a decrease in shipments across all of our business segments. We are experiencing lower bookings in multiple areas of our business due to the softness in the overall semiconductor market. Due to the prolonged downturn in general economic conditions in the semiconductor industry and delays in the adoption of next-gen polishing tools, we anticipate an intangible asset impairment charge in our material and substrate segment as of September 30, 2023. Due to the complexity and judgment involved in the valuation and impairment analyses, we are working with our external auditors to finalize the audit procedures. When complete, the company will issue a press release with our fourth quarter and full year fiscal 2023 results, as well as file our annual report on Form 10-K. Unrestricted cash and cash equivalents at September 30, 2023 were $13.1 million compared to $14.3 million at June 30, 2023. Approximately 56% of our cash balance as of September 30, 2023, is held in the United States. We are clearly in a very challenging demand environment for our business. As we disclosed in the 8-K that was released on Monday, we have entered into a forbearance agreement with our bank. The purpose and intention…

Thank you. Ladies and gentlemen, at this time, we will be conducting a question-and-answer session. [Operator Instructions] And we do have a question from the line of Mark Miller with Benchmark. Please proceed with your question.

Yeah. I'd like to ask a couple questions about the recent forbearance agreement. It appears that you're reducing the size of your term loan and moving the balance to a larger revolver. Is that correct?

That is correct, Mark.

Now, why did you do this? Why didn't you do this before violating the covenant? I'm just curious.

We've been working with the bank, and the timing kind of worked out with our Q4 results to work through this. Obviously, it takes some time to work through everything. And unfortunately, we weren't able to get it done before the Q4 results. But the reason for that is it gives us the lower monthly term payments which helps with our monthly cash flows as well as increased access to our revolver. The other part of it is that the revolver expired in January '24, and this extends it into January of '25.

Okay. It also appears that the moving term balance on the revolver, the loan maturity is going from 2028 to 2025. Is that correct?

So, the term loan is moving from 2028 to 2029. And then, the revolver was maturing in '24 and now it's in January of '25.

Okay. There's no -- so, I guess there's no real change in liquidity. Is this confirmed?

That is confirmed. We're working on getting to cash breakeven and managing during this cycle. And you will have access to that revolver as demand returns if we need access to working capital. So, we're going to just continue to strive for that breakeven so that we can stay in this spot until things -- demand comes back.

And one final question. What is the margin paid on the floating rate in the new interest payment?

My estimate is the interest rate will be right around 10%.

Okay. Just one other question. In terms of your backlog, do -- have you or do you anticipate having to remove any of the orders from your backlog?

We've not had cancellations. We've had a couple of customer push-outs. But at this point, we've not had cancellations. We've talked about our backlog in the past and the importance of shipping it and bringing it down. So, that's part of what we saw this quarter with our contract manufacturer partner helping us get more units out the door.

Okay. Thank you.

Thanks, Mark.

[Operator Instructions] There are no further questions in the queue. I'd like to hand the call back to management for closing remarks.

Yeah. This is Bob Daigle again. I'd just like to thank everyone for joining our conference call today and we'll be happy to -- once we file the K, happy to jump on calls with folks to have more discussions.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.