10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission File Number: 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)

Registrant’s telephone number, including area code: 480-967-5146

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ASYS	NASDAQ.Global Select Market

Indicate by a check mark whether the registrant (1) has filed all reports required to be filed 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 (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At April 30, 2021, there were outstanding 14,245,764 shares of Common Stock.

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

	Page
Cautionary Statement Regarding Forward-Looking Statements	3
PART I. FINANCIAL INFORMATION	4
Item 1. Condensed Consolidated Financial Statements	4
Condensed Consolidated Balance Sheets March 31, 2021 (Unaudited) and September 30, 2020	4
Condensed Consolidated Statements of Operations (Unaudited) Three and Six Months Ended March 31, 2021 and 2020	5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three and Six Months Ended March 31, 2021 and 2020	6
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) Three and Six Months Ended March 31, 2021 and 2020	7
Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended March 31, 2021 and 2020	8
Notes to Condensed Consolidated Financial Statements (Unaudited)	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Overview	20
Results of Operations	22
Liquidity and Capital Resources	25
Off-Balance Sheet Arrangements	26
Contractual Obligations	26
Critical Accounting Policies	27
Impact of Recently Issued Accounting Pronouncements	27
Item 3. Quantitative and Qualitative Disclosures About Market Risk	27
Item 4. Controls and Procedures	27
PART II. OTHER INFORMATION	28
Item 1. Legal Proceedings	28
Item 1A. Risk Factors	28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3. Defaults Upon Senior Securities	29
Item 4. Mine Safety Disclosures	29
Item 5. Other Information	29
Item 6. Exhibits	30
SIGNATURES	31

2

Cautionary Statement Regarding Forward-Looking Statements

Unless otherwise indicated, the terms “Amtech,” the “Company,” “we,” “us” and “our” refer to Amtech Systems, Inc. together with its subsidiaries.

Our discussion and analysis in this Quarterly Report on Form 10-Q, our 2020 Annual Report on Form 10-K, our other reports that we file with the Securities and Exchange Commission (the “SEC”), our press releases and in public statements of our officers and corporate spokespersons contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our or our officers’ current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current events. We have tried, wherever possible, to identify such statements by using words such as “may,” “plan,” “anticipate,” “seek,” “will,” “expect,” “intend,” “estimate,” “believe,” “continue,” “predict,” “potential,” “project,” “should,” “would,” “could,” “likely,” “future,” “target,” “forecast,” “goal,” “observe,” and “strategy” or the negative thereof or variations thereon or similar terminology relating to the uncertainty of future events or outcomes. Some factors that could cause actual results to differ materially from those anticipated include, among others, future economic conditions, including changes in the markets in which we operate; changes in demand for our services and products; our revenue and operating performance; difficulties in successfully executing our growth initiatives; difficulties in executing on our strategic efforts with respect to our silicon carbide/polishing business segment; the effects of competition in the markets in which we operate, including the adverse impact of competitive product announcements or new entrants into our markets and transfers of resources by competitors into our markets; the cyclical nature of the semiconductor industry; pricing and gross profit pressures; control of costs and expenses; risks associated with new technologies and the impact on our business; legislative, regulatory, and competitive developments in markets in which we operate; possible future claims, litigation or enforcement actions and the results of any such claim, litigation proceeding, or enforcement action; business interruptions, including those related to the COVID-19 pandemic and the cybersecurity incident; the potential impacts of the COVID-19 pandemic and any future pandemic on our business operations, financial results and financial position; the severity, magnitude and duration of the COVID-19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel; the resolution of our cybersecurity incident and related costs; and other circumstances and risks identified in this Quarterly Report or referenced from time to time in our filings with the SEC. These and many other factors could affect Amtech’s future operating results and financial condition and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by Amtech or on its behalf.

You should not place undue reliance on these forward-looking statements. We cannot guarantee that any forward-looking statement will be realized, although we believe that the expectations reflected in the forward-looking statements are reasonable as of the date of this Quarterly Report. Achievement of future results is subject to events out of our control, risks, uncertainties and potentially inaccurate assumptions. The Annual Report on Form 10-K that we filed with the SEC for the year ended September 30, 2020 listed various important factors that could affect Amtech’s future operating results and financial condition and could cause actual results to differ materially from historical results and expectations based on forward-looking statements made in this document or elsewhere by Amtech or on its behalf. These factors can be found under the heading “Item 1A. Risk Factors” in our Annual Report on Form 10-K and investors should refer to them as well as the additional risk factors identified in this Quarterly Report. Because it is not possible to predict or identify all such factors, any such list cannot be considered a complete set of all potential risks or uncertainties.

The Company undertakes no obligation to update or publicly revise any forward-looking statement whether as a result of new information, future developments or otherwise. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this paragraph. You are advised, however, to consult any further disclosures we make on related subjects in our subsequently filed Form 10-Q and Form 8-K reports and our other filings with the SEC. As noted above, we provide a cautionary discussion of risks, uncertainties and possibly inaccurate assumptions relevant to our business under “Item 1A. Risk Factors” of our Annual Report on Form 10-K. We note these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. You should understand it is not possible to predict or identify all such factors.

3

PART I. FINANCIAL INFORMATION

Item  1. Condensed Consolidated Financial Statements

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share data)

	March 31, 2021			September 30, 2020
Assets	(Unaudited)
Current Assets
Cash and cash equivalents	$	40,399		$	45,070
Accounts receivable (less allowance for doubtful accounts of $194 and $159 at    March 31, 2021, and September 30, 2020, respectively)		16,980			11,243
Inventories		16,389			17,277
Income taxes receivable		1,057			1,362
Other current assets		1,735			1,617
Total current assets		76,560			76,569
Property, Plant and Equipment - Net		12,025			11,995
Right-of-Use Assets - Net		6,016			5,124
Intangible Assets - Net		912			609
Goodwill - Net		11,150			6,633
Deferred Income Taxes - Net		566			566
Other Assets		707			602
Total Assets	$	107,936		$	102,098
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	5,878		$	2,676
Accrued compensation and related taxes		2,157			2,066
Accrued warranty expense		414			380
Other accrued liabilities		1,421			751
Current maturities of long-term debt		388			380
Contract liabilities		295			1,224
Total current liabilities		10,553			7,477
Long-Term Debt		4,601			4,798
Long-Term Lease Liability		5,803			5,064
Income Taxes Payable		3,471			3,240
Other Long-Term Liabilities		67			—
Total Liabilities		24,495			20,579
Commitments and Contingencies
Shareholders’ Equity
Preferred stock; 100,000,000 shares authorized; none issued		—			—
Common stock; $0.01 par value; 100,000,000 shares authorized; shares    issued and outstanding: 14,221,865 and 14,063,172 at March 31, 2021    and September 30, 2020, respectively		142			141
Additional paid-in capital		125,513			124,435
Accumulated other comprehensive loss		(276	)		(646	)
Retained deficit		(41,938	)		(42,411	)
Total shareholders’ equity		83,441			81,519
Total Liabilities and Shareholders’ Equity	$	107,936		$	102,098

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(Unaudited)

(in thousands, except per share data)

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021			2020
Revenues, net of returns and allowances	$	19,790		$	14,460		$	37,765		$	35,152
Cost of sales		12,062			9,102			22,525			21,620
Gross profit		7,728			5,358			15,240			13,532
Selling, general and administrative		5,688			5,415			10,901			11,330
Research, development and engineering		1,869			915			3,114			1,537
Operating income (loss)		171			(972	)		1,225			665
Loss on sale of subsidiary		—			—			—			(2,793	)
Interest income (expense) and other, net		73			595			(182	)		525
Income (loss) from continuing operations    before income taxes		244			(377	)		1,043			(1,603	)
Income tax provision		490			166			570			207
(Loss) income from continuing operations,    net of tax		(246	)		(543	)		473			(1,810	)
Loss from discontinued operations, net of tax		—			(11,151	)		—			(11,816	)
Net (loss) income	$	(246	)	$	(11,694	)	$	473		$	(13,626	)
(Loss) Income Per Basic Share:
Basic (loss) income per share from    continuing operations	$	(0.02	)	$	(0.04	)	$	0.03		$	(0.13	)
Basic loss per share from discontinued    operations	$	—		$	(0.79	)	$	—		$	(0.83	)
Net (loss) income per basic share	$	(0.02	)	$	(0.83	)	$	0.03		$	(0.96	)
(Loss) Income Per Diluted Share:
Diluted (loss) income per share from    continuing operations	$	(0.02	)	$	(0.04	)	$	0.03		$	(0.13	)
Diluted loss per share from discontinued    operations	$	—		$	(0.79	)	$	—		$	(0.83	)
Net (loss) income per diluted share	$	(0.02	)	$	(0.83	)	$	0.03		$	(0.96	)
Weighted average shares outstanding - basic		14,151			14,150			14,121			14,193
Weighted average shares outstanding - diluted		14,151			14,150			14,217			14,193

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(in thousands)

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021		2020
Net (loss) income	$	(246	)	$	(11,694	)	$	473	$	(13,626	)
Foreign currency translation adjustment		(225	)		(459	)		370		622
Reclassification adjustment for net foreign    currency translation losses included in net loss		—			7,205			—		8,797
Comprehensive (loss) income	$	(471	)	$	(4,948	)	$	843	$	(4,207	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Shareholders’ Equity

(Unaudited)

(in thousands)

	Common Stock						Treasury Stock									Accumulated Other			Retained Earnings			Total
	Shares			Par Value			Shares			Par Value			Additional Paid- In Capital			Comprehensive Income (Loss)			(Accumulated Deficit)			Shareholders' Equity
Balance at    September 30, 2019		14,269		$	143			—		$	—		$	125,098		$	(11,233	)	$	(26,556	)	$	87,452
Net loss		—			—			—			—			—			—			(1,932	)		(1,932	)
Translation adjustment		—			—			—			—			—			2,673			—			2,673
Stock compensation    expense		—			—			—			—			68			—			—			68
Stock options    exercised		117			1			—			—			700			—			—			701
Balance at    December 31, 2019		14,386			144			—			—			125,866			(8,560	)		(28,488	)		88,962
Net loss		—			—			—			—			—			—			(11,694	)		(11,694	)
Translation adjustment		—			—			—			—			—			6,746			—			6,746
Stock compensation    expense		—			—			—			—			65			—			—			65
Stock repurchases		—			—			(366	)		(2,000	)		—			—			—			(2,000	)
Retirement of stock    repurchases		(366	)		(4	)		366			2,000			(1,864	)		—			(132	)		—
Stock options    exercised		21			—			—			—			78			—			—			78
Balance at    March 31, 2020		14,041		$	140			—		$	—		$	124,145		$	(1,814	)	$	(40,314	)	$	82,157
Balance at    September 30, 2020		14,063		$	141			—		$	—		$	124,435		$	(646	)	$	(42,411	)	$	81,519
Net income		—			—			—			—			—			—			719			719
Translation adjustment		—			—			—			—			—			595			—			595
Stock compensation    expense		—			—			—			—			65			—			—			65
Stock options    exercised		28			—			—			—			135			—			—			135
Balance at    December 31, 2020		14,091			141			—			—			124,635			(51	)		(41,692	)		83,033
Net loss		—			—			—			—			—			—			(246	)		(246	)
Translation adjustment		—			—			—			—			—			(225	)		—			(225	)
Stock compensation    expense		—			—			—			—			84			—			—			84
Stock options    exercised		131			1			—			—			794			—			—			795
Balance at    March 31, 2021		14,222		$	142			—		$	—		$	125,513		$	(276	)	$	(41,938	)	$	83,441

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Six Months Ended March 31,
	2021			2020
Operating Activities
Net income (loss)	$	473		$	(13,626	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by    operating activities:
Depreciation and amortization		644			694
Write-down of inventory		230			330
Deferred income taxes		—			784
Non-cash share-based compensation expense		149			133
Loss on sales of subsidiaries		—			13,709
Provision for (reversal of) allowance for doubtful accounts, net		28			(32	)
Other, net		8			4
Changes in operating assets and liabilities:
Accounts receivable		(5,485	)		1,374
Inventories		859			(527	)
Other assets		(1,132	)		3,667
Accounts payable		3,122			(1,849	)
Accrued income taxes		536			(2,094	)
Accrued and other liabilities		1,232			(228	)
Contract liabilities		(929	)		(1,063	)
Net cash (used in) provided by operating activities		(265	)		1,276
Investing Activities
Purchases of property, plant and equipment		(433	)		(345	)
Acquisition, net of cash and cash equivalents acquired		(5,082	)		—
Net cash disposed of in sales of subsidiaries		—			(9,940	)
Net cash used in investing activities		(5,515	)		(10,285	)
Financing Activities
Proceeds from the exercise of stock options		930			779
Repurchase of common stock		—			(2,000	)
Payments on long-term debt		(189	)		(194	)
Net cash provided by (used in) financing activities		741			(1,415	)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and    Restricted Cash		368			558
Net Decrease in Cash, Cash Equivalents and Restricted Cash		(4,671	)		(9,866	)
Cash, Cash Equivalents and Restricted Cash, Beginning of Period*		45,070			59,134
Cash, Cash Equivalents and Restricted Cash, End of Period	$	40,399		$	49,268

* Includes Cash, Cash Equivalents and Restricted Cash that are included in Held-For-Sale Assets on the Condensed Consolidated Balance Sheets for periods prior to January 22, 2020.

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED MARCH 31, 2021 AND 2020

(UNAUDITED)

1.  Basis of Presentation and Significant Accounting Policies

Nature of Operations and Basis of Presentation – Amtech Systems, Inc. (the “Company,” “Amtech,” “we,” “our” or “us”) is a leading, global manufacturer of capital equipment, including thermal processing and wafer polishing, and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power devices, analog and discrete devices, electronic assemblies and light-emitting diodes (LEDs). We sell these products to semiconductor device and module manufacturers worldwide, particularly in Asia, North America and Europe.

We serve niche markets in industries that are experiencing technological advances, and which historically have been very cyclical. Therefore, future profitability and growth depend on our ability to develop or acquire and market profitable new products and on our ability to adapt to cyclical trends.

In the second quarter of fiscal 2019, we began the process to divest our solar business. As such, we have reported the results of the Solar segment as discontinued operations in our Condensed Consolidated Statements of Operations. These divestitures were completed in the second quarter of fiscal 2020. For additional information on the divestitures, see Note 12. For additional information on our segments, see Note 10.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), and consequently do not include all disclosures normally required by accounting principles generally accepted in the United States of America. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments necessary, all of which are of a normal and recurring nature, to present fairly our financial position, results of operations and cash flows. Certain information and note disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. The condensed consolidated balance sheet at September 30, 2020, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

Our fiscal year is from October 1 to September 30. Unless otherwise stated, references to the years 2021 and 2020 relate to the fiscal year ending September 30, 2021 and the fiscal year ended September 30, 2020, respectively.

The consolidated results of operations for the three and six months ended March 31, 2021, are not necessarily indicative of the results to be expected for the full fiscal year.

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

9

Reclassifications – Certain reclassifications have been made to prior year financial statements to conform to the current year presentation.  These reclassifications had no effect on the previously reported consolidated financial statements for any period.

Divestitures – Significant accounting policies associated with a decision to dispose of a business are discussed below:

Discontinued Operations – A business is classified as discontinued operations if the disposal represents a strategic shift that will have a major effect on operations or financial results and meets the criteria to be classified as held for sale or is disposed of by sale or otherwise. Significant judgments are involved in determining whether a business meets the criteria for discontinued operations reporting and the period in which these criteria are met. If a business is reported as a discontinued operation, the results of operations through the date of sale, including any gain or loss recognized on the disposition, are presented on a separate line of the Condensed Consolidated Statements of Operations. Interest on debt directly attributable to the discontinued operation is allocated to discontinued operations.

Assets Held for Sale – An asset or business is classified as held for sale when (i) management commits to a plan to sell and it is actively marketed; (ii) it is available for immediate sale and the sale is expected to be completed within one year; and (iii) it is unlikely significant changes to the plan will be made or that the plan will be withdrawn. In isolated instances, assets held for sale may exceed one year due to events or circumstances beyond our control. The assets and related liabilities are aggregated and reported on separate lines of the Condensed Consolidated Balance Sheets.

Shipping Expense – Shipping and handling fees associated with inbound and outbound freight are expensed as incurred and included in selling, general and administrative expenses. Shipping expense was $0.2 million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively, and $0.3 million in each of the six months ended March 31, 2021 and 2020, respectively.

Research, Development and Engineering Expense – The table below shows gross research and development expenses and grants earned, in thousands:

	Three Months Ended March 31,					Six Months Ended March 31,
	2021		2020			2021		2020
Research, development and engineering	$	1,869	$	1,017		$	3,114	$	1,780
Grants earned		—		(102	)		—		(243	)
Net research, development and engineering	$	1,869	$	915		$	3,114	$	1,537

Concentrations of Credit Risk – Our customers consist of semiconductor manufacturers worldwide, as well as the lapping and polishing marketplace. Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable. Credit risk is managed by performing ongoing credit evaluations of the customers’ financial condition, by requiring significant deposits where appropriate, and by actively monitoring collections. Letters of credit are required of certain customers depending on the size of the order, type of customer or its creditworthiness, and country of domicile.

As of March 31, 2021, two Semiconductor segment customers individually represented 20% and 12% of accounts receivable.  As of September 30, 2020, two Semiconductor customers individually represented 11% and 10% of accounts receivable.

We maintain our cash and cash equivalents in multiple financial institutions. Balances in the United States, which account for approximately 86% and 89% of total cash balances as of March 31, 2021 and September 30, 2020, respectively, are primarily invested in U.S. Treasuries or are in financial institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). The remainder of our cash is maintained with financial institutions with reputable credit in China, the United Kingdom, Singapore and Malaysia.  We maintain cash in bank accounts in amounts which at times may exceed federally insured limits. We have not experienced any losses on such accounts.

10

Refer to Note 11 to Condensed Consolidated Financial Statements for information regarding major customers, foreign sales and revenue in other countries subject to fluctuation in foreign currency exchange rates.

Impact of Recently Issued Accounting Pronouncements

There have been no material changes or additions to the recently issued accounting standards other than those previously reported in Note 1 to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended September 30, 2020 that affect or may affect our consolidated financial statements.

2. Acquisition

On March 3, 2021, we acquired 100% of the issued and outstanding shares of capital stock of Intersurface Dynamics, Inc. (“IDI”), a Connecticut-based manufacturer of substrate process chemicals used in various manufacturing processes, including semiconductors, silicon and compound semiconductor wafers, and optics, for a cash purchase price of $5,250,000. The purchase price allocation is not yet finalized; however, a substantial portion of the total purchase price was allocated to goodwill. IDI’s results of operations are included in our Material and Substrate segment from the date of acquisition.

3.  Contracts with Customers

The components of contract liabilities are as follows, in thousands:

	March 31, 2021		September 30, 2020
Customer deposits	$	295	$	1,224
Contract liabilities	$	295	$	1,224

4.  Leases

We lease office space, buildings, land, vehicles and equipment. Lease agreements with an initial term of 12 months or less are not recorded on the balance sheet.  Instead, we recognize the lease expense as incurred over the lease term.   

Certain lease agreements include one or more options to renew, with renewal terms that can extend the lease term from one to five years. The exercise of lease renewal options is at our sole discretion. Some agreements also include options to purchase the leased property. The estimated life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.  

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Significant Accounting Policy

We determine if a contract or arrangement is, or contains, a lease at inception.  Balances related to operating leases are included in right-of-use (“ROU”) assets in our Condensed Consolidated Balance Sheets.  Balances related to financing leases are immaterial and are included in property and equipment, other current liabilities, and long-term lease liability in our Condensed Consolidated Balance Sheets.  ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.  

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ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.  As none of our leases provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.  The ROU asset includes any prepaid lease payments and additional direct costs and excludes lease incentives.  Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.  

The following table provides information about the financial statement classification of our lease balances reported within the Condensed Consolidated Balance Sheets as of March 31, 2021 and September 30, 2020, in thousands:

	March 31, 2021		September 30, 2020
Assets
Operating lease assets	$	6,016	$	5,124
Finance lease assets		20		26
Total lease assets	$	6,036	$	5,150
Liabilities
Current
Operating lease liabilities	$	295	$	113
Finance lease liabilities		9		11
Non-current
Operating lease liabilities		5,791		5,048
Finance lease liabilities		12		16
Total lease liabilities	$	6,107	$	5,188

The following table provides information about the financial statement classification of our lease expenses reported in the Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2021 and 2020, in thousands:

		Three Months Ended March 31,				Six Months Ended March 31,
Lease cost	Classification	2021		2020		2021		2020
Operating lease cost	Cost of sales	$	13	$	24	$	84	$	87
Operating lease cost	Selling, general and administrative expenses		96		15		144		28
Finance lease cost	Cost of sales		2		6		4		11
Finance lease cost	Selling, general and administrative expenses		1		2		3		4
Short-term lease cost	Cost of sales		49		—		76		—
Total lease cost		$	161	$	47	$	311	$	130

Future minimum lease payments under non-cancelable leases, including leases that are executed but not yet effective, as of March 31, 2021 are as follows, in thousands:

	Operating leases		Finance Leases		Total
Remainder of 2021	$	402	$	6	$	408
2022		1,055		8		1,063
2023		1,048		6		1,054
2024		1,028		2		1,030
2025		1,015		—		1,015
Thereafter		9,695		—		9,695
Total lease payments		14,243		22		14,265
Less:  Interest		5,432		1		5,433
Present value of lease liabilities		8,811		21	$	8,832

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Operating lease payments include $6.4 million related to optional lease extension periods for multiple leases that are not yet exercisable but are reasonably certain of being exercised.

The following table provides information about the remaining lease terms and discount rates applied as of March 31, 2021:

	March 31, 2021
Weighted average remaining lease term
Operating leases	17.35 years
Finance leases	2.50 years
Weighted average discount rate
Operating leases		4.17	%
Finance leases		4.17	%

5.  Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similarly to basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. In the case of a net loss, diluted earnings per share is calculated in the same manner as basic EPS.

For the three and six months ended March 31, 2021, options for 98,000 and 349,000 weighted average shares, respectively, were excluded from the diluted EPS calculations because they were anti-dilutive. For the three and six months ended March 31, 2020, options for 641,000 and 690,000 weighted average shares, respectively, were excluded from the diluted EPS calculations because they were anti-dilutive. These shares could become dilutive in the future.

A reconciliation of the components of the basic and diluted EPS calculations follows (in thousands, except per share amounts):

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021		2020
Numerator:
Net (loss) income from continuing operations	$	(246	)	$	(543	)	$	473	$	(1,810	)
Net loss from discontinued operations	$	—		$	(11,151	)	$	—	$	(11,816	)
Net (loss) income	$	(246	)	$	(11,694	)	$	473	$	(13,626	)
Denominator:
Weighted-average shares used to compute basic EPS		14,151			14,150			14,121		14,193
Common stock equivalents (1)		—			—			96		—
Weighted-average shares used to compute diluted EPS		14,151			14,150			14,217		14,193
Basic (loss) income per share from continuing operations	$	(0.02	)	$	(0.04	)	$	0.03	$	(0.13	)
Basic loss per share from discontinued operations	$	—		$	(0.79	)	$	—	$	(0.83	)
Net (loss) income per basic share	$	(0.02	)	$	(0.83	)	$	0.03	$	(0.96	)
Diluted (loss) income per share from continuing operations	$	(0.02	)	$	(0.04	)	$	0.03	$	(0.13	)
Diluted loss per share from discontinued operations	$	—		$	(0.79	)	$	—	$	(0.83	)
Net (loss) income per diluted share	$	(0.02	)	$	(0.83	)	$	0.03	$	(0.96	)

(1) The number of common stock equivalents is calculated using the treasury method and the average market price during the period.

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6.  Inventory

The components of inventories are as follows, in thousands:

	March 31, 2021			September 30, 2020
Purchased parts and raw materials	$	12,519		$	14,530
Work-in-process		3,694			3,074
Finished goods		3,997			3,942
		20,210			21,546
Excess and obsolete reserves		(3,821	)		(4,269	)
	$	16,389		$	17,277

7.  Equity and Stock-Based Compensation

Stock-based compensation expense was immaterial in all periods presented.  Stock-based compensation expense is included in selling, general and administrative expenses.

The following table summarizes our stock option activity during the six months ended March 31, 2021:

	Options			Weighted Average Exercise Price
Outstanding at beginning of period		696,665		$	7.00
Granted		198,000			6.14
Exercised		(158,693	)		5.86
Forfeited		(31,076	)		13.99
Outstanding at end of period		704,896		$	6.71
Exercisable at end of period		471,814		$	7.01
Weighted average fair value of options granted    during the period	$	3.27

The fair value of options was estimated at the applicable grant date using the Black-Scholes option pricing model with the following assumptions:

	Six Months Ended March 31, 2021
Risk free interest rate		1	%
Expected life	6 years
Dividend rate		—	%
Volatility		59	%

On February 4, 2020, the Board approved a stock repurchase program, pursuant to which we may repurchase up to $4 million of our outstanding Common Stock over a one-year period, commencing on February 10, 2020. Repurchases under the program were to be made in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in compliance with the rules and regulations of the SEC; however, we had no obligation to repurchase shares and the timing, actual number, and value of shares to be repurchased was subject to management’s discretion and depended on our stock price and other market conditions. We could have, in the sole discretion of the Board, terminated the repurchase program at any time while it was in effect. Repurchased shares were to be retired or kept in treasury for further issuance. During the quarter ended March 31, 2020, we repurchased 366,000 shares of our Common Stock on the open market at a total cost of approximately $2.0 million (an average price of $5.46 per share). All shares repurchased during the year ended September 30, 2020 have been retired. The term of our repurchase program expired as of the quarter ended March 31, 2021. There were no repurchases during the quarter ended March 31, 2021.

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On February 9, 2021, the Board approved a new stock repurchase program, pursuant to which we may repurchase up to $4 million of our outstanding Common Stock over a one-year period, commencing on February 16, 2021. Repurchases under the program will be made in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in compliance with the rules and regulations of the Securities and Exchange Commission; however, we have no obligation to repurchase shares and the timing, actual number, and value of shares to be repurchased is subject to management’s discretion and will depend on our stock price and other market conditions. We may, in the sole discretion of the Board, terminate the repurchase program at any time while it is in effect. Repurchased shares may be retired or kept in treasury for further issuance. There were no repurchases during the quarter ended March 31, 2021.

8.  Income Taxes

For the three months ended March 31, 2021 and 2020, we recorded income tax expense at our continuing operations of $0.5 million and $0.2 million, respectively. For the six months ended March 31, 2021 and 2020, we recorded income tax expense of $0.6 million and $0.2 million, respectively. Tax expense for the six months ended March 31, 2021, includes a benefit of approximately $0.3 million related to the reversal of previously recorded uncertain tax positions. In the three months ended March 31, 2020, we recorded income tax benefit of $0.1 million in our discontinued operations. In the six months ended March 31, 2020, we recorded income tax benefit of $47,000 in our discontinued operations. The quarterly income tax provision is calculated using an estimated annual effective tax rate, based upon expected annual income, permanent items, statutory rates and planned tax strategies in the various jurisdictions in which we operate. However, losses in certain jurisdictions and discrete items are treated separately.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020, included a provision for a five-year carryback of net operating losses. We have assessed the benefit of the provision and utilized a portion of the 2019 net operating loss carryback to offset income from 2018. The impacts of this provision were recognized during fiscal 2020.

Deferred tax assets and liabilities reflect the tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We record a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of a deferred tax asset will not be realized. Our expectations regarding realization of our deferred tax assets is based upon the weight of all available evidence, including such factors as our recent earnings history, expected future taxable income and available tax planning strategies.  We established valuation allowances on substantially all net U.S. deferred tax assets, after considering all of the available objective evidence, both positive and negative, historical and prospective, with greater weight given to historical evidence, and determined it is not more likely than not that these assets will be realized. In 2020, we reversed a portion of the valuation allowance related to foreign deferred tax assets which we have determined will be utilized against net operating income in future years. We will continue to monitor our cumulative income and loss positions in the U.S. and foreign jurisdictions to determine whether full valuation allowances on net deferred tax assets are appropriate.

We classify all of our uncertain tax positions as income taxes payable long-term.  At March 31, 2021 and September 30, 2020, the total amount of unrecognized tax benefits was approximately $0.9 million and $1.2 million, respectively. Income taxes payable long-term includes other items, primarily withholding taxes that are not due until the related intercompany service fees are paid.

We classify interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2021 and September 30, 2020, we had an accrual for potential interest and penalties of approximately $0.6 million and $0.8 million, respectively, classified with income taxes payable long-term.

Amtech and one or more of its subsidiaries file income tax returns in China and other foreign jurisdictions, as well as in the U.S. and various states in the U.S. We have not signed any agreements with the Internal Revenue Service, any state or foreign jurisdiction to extend the statute of limitations for any fiscal year.  As such, the number of open years is the number of years dictated by statute in each of the respective taxing jurisdictions, which generally is from 3 to 5 years.

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9.  Commitments and Contingencies

Purchase Obligations – As of March 31, 2021, we had unrecorded purchase obligations in the amount of $11.8 million. These purchase obligations consist of outstanding purchase orders for goods and services. While the amount represents purchase agreements, the actual amounts to be paid may be less in the event that any agreements are renegotiated, canceled or terminated.

Legal Proceedings and Other Claims – From time to time, we are a party to claims and actions for matters arising out of our business operations. We regularly evaluate the status of the legal proceedings and other claims in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss, or an additional loss, may have been incurred and determine if accruals are appropriate. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of possible loss can be made for disclosure. Although the outcome of claims and litigation is inherently unpredictable, we believe that we have adequate provisions for any probable and estimable losses. It is possible, nevertheless, that our consolidated financial position, results of operations or liquidity could be materially and adversely affected in any particular period by the resolution of a claim or legal proceeding. Legal expenses related to defense, negotiations, settlements, rulings and advice of outside legal counsel are expensed as incurred.

Employment Contracts – We have employment contracts and change in control agreements with, and severance plans covering, certain officers and management employees under which severance payments would become payable in the event of specified terminations without cause or terminations under certain circumstances after a change in control. If severance payments under the current employment contracts or severance plans were to become payable, the severance payments would generally range from twelve to thirty-six months of salary.

10.  Business Segment Information

Upon the acquisition of IDI in the second quarter of 2021, we evaluated our organizational structure and concluded that we have two reportable business segments following the acquisition. Our two reportable segments are as follows:

Semiconductor – We design, manufacture, sell and service thermal processing equipment and related controls for use by leading semiconductor manufacturers, and in electronics, automotive and other industries.

Material and Substrate – We produce consumables and machinery for lapping (fine abrading) and polishing of materials, such as sapphire substrates, optical components, silicon wafers, numerous types of crystal materials, ceramics and metal components. Our Material and Substrate segment includes our former SiC/LED segment in addition to IDI (see Note 2).

Information concerning our business segments is as follows, in thousands:

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021			2020
Net Revenues:
Semiconductor	$	17,119		$	11,992		$	32,694		$	29,224
Material and Substrate		2,671			2,468			5,071			5,285
Non-segment related		—			—			—			643
	$	19,790		$	14,460		$	37,765		$	35,152
Operating income (loss):
Semiconductor	$	1,665		$	(18	)	$	3,862		$	2,704
Material and Substrate		(253	)		421			(319	)		955
Non-segment related		(1,241	)		(1,375	)		(2,318	)		(2,994	)
	$	171		$	(972	)	$	1,225		$	665

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	March 31, 2021		September 30, 2020
Identifiable Assets:
Semiconductor	$	56,079	$	51,648
Material and Substrate		19,714		12,717
Non-segment related*		32,143		37,733
	$	107,936	$	102,098

* Non-segment related assets include cash, property, income tax assets and other assets.

Goodwill and other long-lived assets

We review our long-lived assets, including goodwill, for impairment at least annually in our fourth quarter or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Additional information on impairment testing of long-lived assets, intangible assets and goodwill can be found in Notes 1 and 10 of our Annual Report on Form 10-K for the year ended September 30, 2020.

11.  Major Customers and Foreign Sales

During the six months ended March 31, 2021, two customers individually represented 17% and 10% of our net revenues.  During the six months ended March 31, 2020, no customer individually represented greater than 10% of our net revenues.

Our net revenues were from customers in the following geographic regions:

	Six Months Ended March 31,
	2021			2020
United States		24	%		34	%
Other		3	%		6	%
Total North America		27	%		40	%
China		28	%		24	%
Malaysia		5	%		4	%
Taiwan		20	%		11	%
Other		8	%		7	%
Total Asia		61	%		46	%
Germany		3	%		3	%
Other		9	%		11	%
Total Europe		12	%		14	%
		100	%		100	%

12.  Assets Held for Sale, Discontinued Operations and Disposals

Discontinued Operations

In April 2019, we announced that our Board determined that it was in the long-term best interest of the Company to exit the solar business segment and focus our strategic efforts on our semiconductor and silicon carbide/polishing business segments in order to more fully realize the opportunities the Company believes are presented in those areas. The divestitures of our solar business included our Tempress and SoLayTec subsidiaries, which comprised substantially all of our Solar segment. We classified substantially all of the Solar segment as held for sale in our Condensed Consolidated Balance Sheets and reported its results as discontinued operations in our Condensed Consolidated Statements of Operations for periods reported subsequent to the announcement.

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On June 7, 2019 (“SoLayTec Sale Date”), we completed the sale of our subsidiary, SoLayTec, to a third party located in the Netherlands.  Upon the sale, we recognized a gain of approximately $1.6 million, which we reported as gain on sale of subsidiary in our Condensed Consolidated Statements of Operations for the three months ended June 30, 2019.  Effective on the SoLayTec Sale Date, SoLayTec is no longer included in our consolidated financial statements.

Effective January 22, 2020 (“Tempress Sale Date”), we completed the sale of our subsidiary, Tempress Group Holding B.V. (“Tempress”) for nominal consideration to a third party located in the Netherlands. In connection with this sale transaction, we provided an unsecured term loan to Tempress in the principal sum of $2.25 million, to be used to fund Tempress’ working capital requirements and to facilitate the restructuring of Tempress’ operations.  We forgave $0.5 million of the loan in accordance with the terms of the loan agreement.  We recorded a pre-tax loss on deconsolidation of approximately $10.9 million, of which approximately $7.2 million was the recognition of previously recorded accumulated foreign currency translation losses.  The total pre-tax loss does not have a material effect on our cash balances at our continuing operations.  We also recognized a significant tax benefit relating to this loss, which can be carried over to future years. Effective on the Tempress Sale Date, Tempress is no longer included in our consolidated financial statements.

Operating results of our discontinued solar operations were as follows, in thousands:

	Three Months Ended March 31, 2020			Six Months Ended March 31, 2020
Revenues, net of returns and allowances	$	2,155		$	7,442
Cost of sales		1,830			5,969
Gross profit		325			1,473
Selling, general and administrative		476			1,814
Research, development and engineering		91			540
Restructuring charges		37			37
Operating loss		(279	)		(918	)
Loss on sale of subsidiary		(10,916	)		(10,916	)
Interest expense and other, net		(22	)		(29	)
Loss from discontinued operations before income taxes		(11,217	)		(11,863	)
Income tax benefit		(66	)		(47	)
Net loss from discontinued operations, net of tax	$	(11,151	)	$	(11,816	)

Amtech’s Condensed Consolidated Statements of Cash Flows combines cash flows from discontinued operations with cash flows from continuing operations within each cash flow statement category. The following table summarizes selected cash flow information for discontinued operations, in thousands:

	Six Months Ended March 31, 2020
Loss from discontinued operations, net of tax	$	(11,816	)
Depreciation and amortization	$	180
Reversal of allowance for doubtful accounts, net	$	(66	)
Purchases of property, plant and equipment	$	1

Other Disposal

On December 13, 2019 (“R2D Sale Date”), we finalized the sale of our subsidiary, R2D Automation SAS (“R2D”), to certain members of R2D’s management team.  Upon the sale, we recognized a loss of approximately $2.8 million, which we reported as loss on sale of subsidiary in our Condensed Consolidated Statements of Operations for the six months ended March 31, 2020.  Effective on the R2D Sale Date, R2D is no longer included in our consolidated financial statements.  R2D does not meet the discontinued operations or held-for-sale criteria.

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13.  Subsequent Events

On April 12, 2021, we detected a data incident in which attackers acquired data and disabled some of the technology systems used by one of our subsidiaries.  Upon learning of the incident, we immediately engaged external counsel and retained a team of third-party forensic, incident response, and security professionals to investigate and determine the full scope of this incident.  Our investigation of the data incident is ongoing with the assistance from our outside professionals, and we are in the process of determining what data was affected and what customers or individuals require notice.  We have notified law enforcement officials and confirmed that the incident is covered by our insurance.  

Despite this disruption, production continued in our facilities.  Our previously disabled subsidiary network is now back up and running securely. Working alongside our security professionals, we have been safely bringing our subsidiary’s systems online with enhanced security controls. We have deployed an advanced next generation anti-virus and endpoint detection and response tool, as well as Managed Detection & Response services.

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Item  2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our “Condensed Consolidated Financial Statements” in Item 1 of this Quarterly Report on Form 10-Q (“Quarterly Report”) and our consolidated financial statements and related notes included in Item 8, “Financial Statements and Supplementary Data” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

Overview

We are a leading, global manufacturer of capital equipment, including thermal processing and wafer polishing and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power devices, analog and discrete devices, electronic assemblies and light-emitting diodes (LEDs). We sell these products to semiconductor device and module manufacturers worldwide, particularly in Asia, North America and Europe.

We operate in two reportable business segments, based primarily on the industry they serve: (i) Semiconductor, and (ii) Material and Substrate. In our Semiconductor segment, we supply thermal processing equipment, including solder reflow ovens, horizontal diffusion furnaces, and custom high-temp belt furnaces for use by semiconductor, electronics, and electro/mechanical assembly manufacturers. In our Material and Substrate segment, we produce substrate consumables, chemicals, and machinery for lapping (fine abrading) and polishing of materials, such as silicon wafers for semiconductor products, sapphire wafers for LED applications, and compound substrates, like silicon carbide wafers, for power device applications.

Our semiconductor customers are primarily manufacturers of integrated circuits and optoelectronics sensors and discrete (O-S-D) components used in analog, power and radio frequency (RF). The semiconductor industry is cyclical and historically has experienced fluctuations. Our revenue is impacted by these broad industry trends.

Strategy

We continue to focus on our plans to profitably grow our business and have developed a strategic growth plan and a capital allocation plan that we believe will support our growth objectives. Our strategic growth plan calls for profitable growth as the semi industry recovers, with the following areas of focus:

• Emerging opportunities in the SiC industry – We believe we are well-positioned to take part in this significant growth area, specifically as it relates to silicon carbide wafer capacity expansion. 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 in our people. We believe these investments will help fuel our growth in the SiC industry.

• 300mm Horizontal Thermal Reactor – We have a highly successful and proven 300mm horizontal diffusion solution for growing power semiconductor applications. We have a strong foundation with the leading 300mm power chip manufacturer, and, in fiscal 2019, we announced an order to another industry-leading manufacturer. In February 2020, we announced another order from a top-tier global power semiconductor customer in Asia, and in August 2020, we announced a repeat order for our 300mm solution. We believe we have a strong opportunity to continue expanding our customer base and grow revenue with our 300mm solution.

• As a major revenue contributor to our organization, BTU International, Inc. (BTU) will continue to track semi industry growth cycles for our advanced semi-packaging and SMT products, in addition to specialized custom belt furnaces used in automotive and other specialized industrial applications. We believe that through investments in product innovation, BTU has an opportunity to grow further, especially in high growth applications of electric vehicles (EV) and 5G communications.

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We anticipate that the required investments to achieve our revenue growth targets will be in the range of $6.0 - $8.0 million in research and development and capital expenditures. We may also need to make investments in other areas of our business, such as management information systems and capacity expansions at other existing manufacturing facilities.  Our current capacity expansion plans include the relocation of our Shanghai, China manufacturing facility upon the expiration of the current lease in the third quarter of 2021.  The new facility will increase capacity in support of our Pyramax product line, serving our Advanced Packaging, other semiconductor packaging and SMT customers. Additionally, as a capital equipment manufacturer, we will need working capital to support and fuel our future growth. We are and will continue to closely scrutinize these planned investments, in light of the COVID-19 challenges, and we may defer some of our projects. However, we intend to continue to invest in our business to support and fuel our future growth.

In addition to these investments in our organic growth, another key aspect of our capital allocation policy is our plan to grow through acquisitions. We have the expertise and track record to identify strong acquisition targets in the semi and SiC growth environment and to execute transactions and integrations to provide for value creating, profitable growth in both the short-term and long-term. On March 3, 2021, we acquired Intersurface Dynamics, Inc. (“IDI”), a Connecticut-based manufacturer of substrate process chemicals used in various manufacturing processes, including semiconductors, silicon and compound semiconductor wafers, and optics. As of the date of the filing of this Quarterly Report on Form 10-Q, we do not have a definitive agreement to acquire any additional acquisition target.

Cybersecurity Incident

On April 12, 2021, we detected a data incident in which attackers acquired data and disabled some of the technology systems used by one of our subsidiaries.  Upon learning of the incident, we immediately engaged external counsel and retained a team of third-party forensic, incident response, and security professionals to investigate and determine the full scope of this incident.  Our investigation of the data incident is ongoing with the assistance from our outside professionals, and we are in the process of determining what data was affected and what customers or individuals require notice.  We have notified law enforcement officials and confirmed that the incident is covered by our insurance.

Despite this disruption, production continued in our facilities.  Our previously disabled subsidiary network is now back up and running securely. Working alongside our security professionals, we have been safely bringing our subsidiary’s systems online with enhanced security controls. We have deployed an advanced next generation anti-virus and endpoint detection and response tool, as well as Managed Detection & Response services.  We remain committed to protecting the security of the personal information entrusted to us and providing high-quality products and service to our customers.

Solar and Automation Divestitures

On April 3, 2019, we announced that our Board of Directors (the “Board”) determined that it was in the long-term best interest of the Company to exit the solar business segment and focus our strategic efforts on our semiconductor and silicon carbide/polishing business segments in order to more fully realize the opportunities the Company believes are presented in those areas. We completed the sale of our solar subsidiaries, SoLayTec and Tempress, on June 7, 2019 and January 22, 2020, respectively. Additionally, on December 13, 2019, we completed the sale of our automation division, R2D, to certain members of R2D’s management team.

Segment Reporting Changes

Upon the acquisition of IDI in the second quarter of 2021, we evaluated our organizational structure and concluded that we have two reportable business segments following the acquisition. Our Material and Substrate segment includes our former SiC/LED segment in addition to IDI.

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Results of Operations

The following table sets forth certain operational data as a percentage of net revenue for the periods indicated:

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021			2020
Net revenue		100	%		100	%		100	%		100	%
Cost of sales		61	%		63	%		60	%		62	%
Gross margin		39	%		37	%		40	%		38	%
Selling, general and administrative		29	%		38	%		29	%		32	%
Research, development and engineering		9	%		6	%		8	%		4	%
Operating income (loss)		1	%		(7	)%		3	%		2	%
Loss on sale of subsidiary		—	%		—	%		—	%		(8	)%
Interest income and other, net		—	%		4	%		—	%		1	%
Income (loss) from continuing operations before    income taxes		1	%		(3	)%		3	%		(5	)%
Income tax provision		2	%		1	%		2	%		—	%
(Loss) income from continuing operations, net of tax		(1	)%		(4	)%		1	%		(5	)%
Loss from discontinued operations, net of tax		—	%		(77	)%		—	%		(34	)%
Net (loss) income		(1	)%		(81	)%		1	%		(39	)%

In the second quarter of 2019, we began the process to divest our solar business, which we completed on January 22, 2020 with the sale of our Tempress subsidiary.  As such, we have reported the results of the Solar segment as discontinued operations in our Condensed Consolidated Statements of Operations for 2020.

Net Revenue

Net revenue consists of revenue recognized upon shipment or installation of equipment, with the exception of products using new technology, for which revenue is recognized upon customer acceptance. Spare parts sales are recognized upon shipment and service revenue is recognized upon completion of the service activity, which is generally ratable over the term of the service contract. Since the majority of our revenue is generated from large system sales, revenue and operating income can be significantly impacted by the timing of system shipments and system acceptances.

Our net revenue by operating segment was as follows (dollars in thousands):

	Three Months Ended March 31,									Six Months Ended March 31,
Segment	2021		2020		Incr (Decr)		% Change			2021		2020		Incr (Decr)			% Change
Semiconductor	$	17,119	$	11,992	$	5,127		43	%	$	32,694	$	29,224	$	3,470			12	%
Material and Substrate		2,671		2,468		203		8	%		5,071		5,285		(214	)		(4	)%
Non-segment related		—		—		—		—	%		—		643		(643	)		(100	)%
Total net revenue	$	19,790	$	14,460	$	5,330		37	%	$	37,765	$	35,152	$	2,613			7	%

Total net revenue for the quarters ended March 31, 2021 and 2020 was $19.8 million and $14.5 million, respectively, an increase of approximately $5.3 million or 37%. Our semiconductor segment revenues are dependent on our customers’ expansions, and our 2020 results were negatively impacted by the uncertainty in the global economy due primarily to the impact of the COVID-19 virus, as well as lingering trade tensions between the U.S. and China.  Beginning in the third quarter of 2020, we experienced a return to near-capacity in our China factory. This trend has continued into fiscal 2021. Material and Substrate revenue increased due to higher machine and machine parts sales between periods. Despite the uncertainty caused by the COVID-19 virus, we believe there remains significant potential in the SiC industry and long-term growth in power semiconductor.

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Total net revenue for the six months ended March 31, 2021 and 2020 was $37.8 million and $35.2 million, respectively, an increase of approximately $2.6 million or 7%. Revenue from the Semiconductor segment increased $3.5 million compared to the prior year period. This change is primarily attributable to higher shipments of our diffusion furnaces in the 2021 period. Revenue from our Material and Substrate segment decreased $0.2 million due primarily to lower machine sales in the 2021 period, partially offset by an increase in consumable sales.  Non-segment related revenues relate to R2D, the automation division that we divested in December 2019.

Backlog and Orders

Our backlog as of March 31, 2021 and 2020 was as follows (dollars in thousands):

	March 31,
Segment	2021		2020		Incr (Decr)			% Change
Semiconductor	$	25,281	$	17,799	$	7,482			42	%
Material and Substrate		1,253		1,819		(566	)		(31	)%
Total backlog	$	26,534	$	19,618	$	6,916			35	%

New orders booked in the three and six months ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	Three Months Ended March 31,										Six Months Ended March 31,
Segment	2021		2020		Incr (Decr)			% Change			2021		2020		Incr (Decr)			% Change
Semiconductor	$	29,651	$	17,019	$	12,632			74	%	$	45,134	$	32,113	$	13,021			41	%
Material and Substrate		2,875		3,607		(732	)		(20	)%		5,261		6,138		(877	)		(14	)%
Total new orders	$	32,526	$	20,626	$	11,900			58	%	$	50,395	$	38,251	$	12,144			32	%

As of March 31, 2021, three Semiconductor customers individually accounted for 22%, 22% and 11% of our backlog. No other customer accounted for more than 10% of our backlog as of March 31, 2021.  Four customers accounted for 64% of our backlog as of March 31, 2021. The orders included in our backlog are generally credit approved customer purchase orders believed to be firm and are generally expected to ship within the next twelve months.  Because our orders are typically subject to cancellation or delay by the customer, our backlog at any particular point in time is not necessarily representative of actual sales for succeeding periods, nor is backlog any assurance that we will realize profit from completing these orders.

Gross Profit and Gross Margin

Gross profit is the difference between net revenue and cost of goods sold. Cost of goods sold consists of purchased material, labor and overhead to manufacture equipment and spare parts and the cost of service and support to customers for installation, warranty and paid service calls. Gross margin is gross profit as a percent of net revenue.  Our gross profit and gross margin by operating segment were as follows (dollars in thousands):

	Three Months Ended March 31,													Six Months Ended March 31,
Segment	2021		Gross Margin			2020		Gross Margin			Incr (Decr)			2021		Gross Margin			2020		Gross Margin			Incr (Decr)
Semiconductor	$	7,093		41	%	$	4,413		37	%	$	2,680		$	14,005		43	%	$	11,599		40	%	$	2,406
Material and Substrate		635		24	%		945		38	%		(310	)		1,235		24	%		1,924		36	%		(689	)
Non-segment related		—		—	%		—		—	%		—			—		—	%		9		1	%		(9	)
Total gross profit	$	7,728		39	%	$	5,358		37	%	$	2,370		$	15,240		40	%	$	13,532		38	%	$	1,708

Gross profit for the three months ended March 31, 2021 and 2020 was $7.7 million (39% of net revenue) and $5.4 million (37% of net revenue), respectively, an increase of $2.4 million.  Our gross margins can be affected by capacity utilization and the type and volume of machines and consumables sold each quarter. Gross margin on products from our Semiconductor segment increased compared to the three months ended March 31, 2020, due primarily to increased capacity utilization and favorable product mix, partially offset by an increase in discounts

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offered in the 2021 period for multi-unit orders. Gross margin on products from our Material and Substrate segment decreased compared to the three months ended March 31, 2020, due primarily to increased raw material costs which were not passed on to customers, as well as increased inventory obsolescence charges. We are experiencing increased material costs across all our segments and expect this to continue through at least the end of fiscal 2021.  We are reviewing our pricing plans and supplier agreements; however, we continue to feel pricing pressure from our customers, so we are unable to determine how long we will continue to absorb these additional costs.

Gross profit for the six months ended March 31, 2021 and 2020 was $15.2 million (40% of net revenue) and $13.5 million (38% of net revenue), respectively, an increase of $1.7 million. Gross margin on products from our Semiconductor segment increased compared to the six months ended March 31, 2020, due primarily to favorable product mix and lower labor costs as a portion of our engineers finished customer-specific design projects and began work on strategic-development projects. Gross margin on products from our Material and Substrate segment decreased compared to the six months ended March 31, 2020, due primarily to lower capacity utilization resulting from lower machine and consumable sales.

Selling, General and Administrative

Selling, general and administrative expenses (“SG&A”) consists of the cost of employees, consultants and contractors, facility costs, sales commissions, shipping costs, promotional marketing expenses, legal and accounting expenses and bad debt expense.

SG&A expenses for the three months ended March 31, 2021 and 2020 were $5.7 million and $5.4 million, respectively. SG&A increased compared to the prior year quarter due primarily to increased commissions on higher sales and increased legal fees related to the acquisition of IDI, partially offset by lower travel and trade show expense due to the COVID-19 pandemic.

SG&A expenses for the six months ended March 31, 2021 and 2020 were $10.9 million and $11.3 million, respectively. SG&A decreased compared to the prior year period due primarily to no longer having R2D SG&A included in our results and lower travel and trade show expense due to the COVID-19 pandemic.

Research, Development and Engineering

Research, development and engineering (“RD&E”) expenses consist of the cost of employees, consultants and contractors who design, engineer and develop new products and processes as well as materials and supplies used in producing prototypes. We receive reimbursements through governmental research and development grants which are netted against these expenses when certain conditions have been met.

RD&E expense, net of grants earned, for the three months ended March 31, 2021 and 2020 were $1.9 million and $0.9 million, respectively, and $3.1 million and $1.5 million in the six months ended March 31, 2021 and 2020. The increase in RD&E expenses is due to increased labor expense related to a portion of our engineers as they completed customer-specific design projects and began work on strategic-development projects. Grants earned are immaterial in all periods presented.

Income Taxes

Our effective tax rate continues to be higher than the statutory rate as a result of higher income in foreign jurisdictions. We expect this trend to continue throughout 2021. For the three months ended March 31, 2021 and 2020, we recorded income tax expense at our continuing operations of $0.5 million and $0.2 million, respectively. For the six months ended March 31, 2021 and 2020, we recorded income tax expense of $0.6 million and $0.2 million, respectively. Tax expense for the six months ended March 31, 2021, includes a benefit of approximately $0.3 million related to the reversal of previously recorded uncertain tax positions. In the three months ended March 31, 2020, we recorded income tax benefit of $0.1 million in our discontinued operations. In the six months ended March 31, 2020, we recorded an income tax benefit of $47,000 in our discontinued operations. The income tax provisions are based upon estimates of annual income, annual permanent differences and statutory tax rates in the various jurisdictions in which we operate, except that certain loss jurisdictions and discrete items are treated separately.

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Generally accepted accounting principles require that a valuation allowance be established when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. A review of all available positive and negative evidence needs to be considered, including a company’s performance, the market environment in which the company operates and the length of carryback and carryforward periods. According to those principles, it is difficult to conclude that a valuation allowance is not needed when the negative evidence includes cumulative losses in recent years. We have concluded that we will maintain a full valuation allowance for all net deferred tax assets related to the carryforwards of U.S. net operating losses and foreign tax credits. We will continue to monitor our cumulative income and loss positions in the U.S. and foreign jurisdictions to determine whether full valuation allowances on net deferred tax assets are appropriate.

Our future effective income tax rate depends on various factors, such as the amount of income (loss) in each tax jurisdiction, tax regulations governing each region, non-tax deductible expenses incurred as a percent of pre-tax income and the effectiveness of our tax planning strategies.

Discontinued Operations

As disclosed previously in the “Solar and Automation Divestitures” section, we announced that our Board determined that it was in the long-term best interest of the Company to exit the solar business segment and focus our strategic efforts on our semiconductor and silicon carbide/polishing business segments in order to more fully realize the opportunities we believe are presented in those areas.  The divestitures included our Tempress and SoLayTec subsidiaries, which comprised substantially all of our Solar segment.  As such, we reported the results of the Solar segment as discontinued operations in our Condensed Consolidated Statements of Operations.  SoLayTec was sold effective June 7, 2019, and Tempress was sold effective January 22, 2020 (see Note 12 for additional information).

Liquidity and Capital Resources

The following table sets forth for the periods presented certain consolidated cash flow information (in thousands):

	Six Months Ended March 31,
	2021			2020
Net cash (used in) provided by operating activities	$	(265	)	$	1,276
Net cash used in investing activities		(5,515	)		(10,285	)
Net cash provided by (used in) financing activities		741			(1,415	)
Effect of exchange rate changes on cash, cash equivalents and    restricted cash		368			558
Net decrease in cash, cash equivalents and restricted cash		(4,671	)		(9,866	)
Cash, cash equivalents and restricted cash, beginning of period*		45,070			59,134
Cash, cash equivalents and restricted cash, end of period	$	40,399		$	49,268

* Includes Cash, Cash Equivalents and Restricted Cash that are included in Held-For-Sale Assets on the Condensed Consolidated Balance Sheets for periods prior to January 22, 2020.

Cash and Cash Flow

The decrease in cash and cash equivalents from September 30, 2020 of $4.7 million was primarily due to cash paid for the acquisition of IDI, partially offset by proceeds received from the exercise of stock options.  We maintain a portion of our cash and cash equivalents in RMB at our Chinese operations; therefore, changes in the exchange rates have an impact on our cash balances. Our working capital was $66.0 million as of March 31, 2021 and $69.1 million as of September 30, 2020.  The decrease in our working capital occurred primarily due to decreases in cash and inventory balances and an increase in accounts payable, which were partially offset by an increase in accounts receivable. Our ratio of current assets to current liabilities was 7.3:1 as of March 31, 2021, and 10.2:1 as of September 30, 2020.

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The success of our growth strategy is dependent upon the availability of additional capital resources on terms satisfactory to management. Our sources of capital in the past have included the sale of equity securities, which includes common stock sold in private transactions and public offerings, long-term debt and customer deposits.  There can be no assurance that we can raise such additional capital resources when needed or on satisfactory terms.  We believe that our principal sources of liquidity discussed above are sufficient to support operations for at least the next twelve months.  We have never paid dividends on our common stock.

Cash Flows from Operating Activities

Cash used in our operating activities was approximately $0.3 million for the six months ended March 31, 2021, compared to cash provided by operating activities of $1.3 million for the six months ended March 31, 2020, a decrease of approximately $1.5 million.  During the six months ended March 31, 2021, net income adjusted for non-cash items of $1.5 million was offset by $1.8 million of cash used in operations as a result of changes in operating assets and liabilities. During the six months ended March 31, 2020, net loss adjusted for non-cash items provided cash of $2.0 million, which was partially offset by $0.7 million of cash used in operations as a result of changes in operating assets and liabilities.

Cash Flows from Investing Activities

For the six months ended March 31, 2021 and 2020, cash used in investing activities was $5.5 million compared to $10.3 million in the prior year period. The amount for the first half of fiscal 2021 includes $5.1 million net cash paid for the acquisition of IDI in addition to $0.4 million of cash used for capital expenditures.  The amount for the second quarter of fiscal 2020 reflects the divestiture of our solar business.  We expect capital expenditures to increase throughout 2021 as we initiate and complete the relocation of our Semiconductor manufacturing facility in Shanghai, China after the current lease expires in the third quarter of 2021.

Cash Flows from Financing Activities

For the six months ended March 31, 2021, $0.7 million of cash provided by financing activities was comprised of approximately $0.9 million of proceeds received from the exercise of stock options, partially offset by payments on long-term debt of $0.2 million. For the six months ended March 31, 2020, $1.4 million of cash used in financing activities was comprised of $0.8 million of proceeds received from the exercise of stock options, which was fully offset by $2.0 million used for stock repurchases and payments on long-term debt of $0.2 million.

Off-Balance Sheet Arrangements

As of March 31, 2021, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K promulgated by the SEC that have or are reasonably likely to have a current or future effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Contractual Obligations

Unrecorded purchase obligations at our continuing operations were $11.8 million as of March 31, 2021, compared to $4.6 million as of September 30, 2020, an increase of $7.2 million. This increase primarily reflects the inventory required due to the increase in orders for our diffusion furnaces as well as increased orders for products sold by our Shanghai, China location.

There were no other material changes to the contractual obligations included in Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended September 30, 2020.

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Critical Accounting Policies

Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report discusses our condensed consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the condensed consolidated financial statements, the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

On an ongoing basis, we evaluate our estimates and judgments, including those related to revenue recognition, inventory valuation, accounts receivable collectability, warranty and impairment of long-lived assets. We base our estimates and judgments on historical experience and on various other factors that we believe to be reasonable under the circumstances. The results of these estimates and judgments form the basis for making conclusions about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

A critical accounting policy is one that is both important to the presentation of our financial position and results of operations, and requires management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. These uncertainties are discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended September 30, 2020. We believe our critical accounting policies relate to the more significant judgments and estimates used in the preparation of our consolidated financial statements.

We believe the critical accounting policies discussed in the section entitled “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020 represent the most significant judgments and estimates used in the preparation of our consolidated financial statements. There have been no significant changes in our critical accounting policies during the six months ended March 31, 2021.

Impact of Recently Issued Accounting Pronouncements

For discussion of the impact of recently issued accounting pronouncements, see “Part I, Item 1. Financial Information” under “Impact of Recently Issued Accounting Pronouncements.”

Item  3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations and, therefore, are not required to provide the information requested by this Item.

Item  4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), has carried out an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2021, pursuant to Exchange Act Rules 13a-15(e) and 15(d)-15(e).  Disclosure controls and procedures means controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including the principal executive and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.  Based upon that evaluation, our CEO and CFO have concluded that as of such date, our disclosure controls and procedures in place were effective.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the second fiscal quarter to which this report relates that materially affected, or are reasonably likely to materially affect, the internal control over financial reporting of the Company.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For discussion of legal proceedings, see Note 9 to our condensed consolidated financial statements under “Part I, Item 1. Financial Information” under “Commitments and Contingencies” of this Quarterly Report.

Item  1A. Risk Factors

We refer you to documents filed by us with the SEC, specifically “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020 (the “2020 Form 10-K”), which identifies important risk factors that could materially affect our business, financial condition and future results. We also refer you to the factors and cautionary language set forth in the section entitled “Cautionary Statements Regarding Forward-Looking Statements” immediately preceding “Item 1. Condensed Consolidated Financial Statements” of this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q, including the accompanying condensed consolidated financial statements and related notes, should be read in conjunction with such risks and other factors for a full understanding of our operations and financial condition. The risks described in our 2020 Form 10-K and any described herein are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or operating results.  Except as set forth below, there have been no material changes to the risk factors previously disclosed in our 2020 Form 10-K.

Information security breaches or failures of our information technology systems may have a negative impact on our operations and our reputation.

We may be subject to information security breaches or failures of our information technology systems caused by advanced persistent threats, unauthorized access, sabotage, vandalism, terrorism or accident. Compromises and failure to our information technology networks and systems could result in unauthorized release of our confidential or proprietary information, or that of our customers and suppliers, as well as employee personal data. The costs to protect against or alleviate breaches and systems failures require significant human and financial capital expenditures, which in turn could potentially disrupt our continuing operations, increase our liability as a result of compromises to personally identifiable information, and may lead to a material and adverse effect on our financial reporting, reputation and business.

On April 12, 2021, we detected a data incident in which attackers acquired data and disabled some of the technology systems used by one of our subsidiaries.  Upon learning of the incident, we immediately engaged external counsel and retained a team of third-party forensic, incident response, and security professionals to investigate and determine the full scope of this incident.  Our investigation of the data incident is ongoing with the assistance from our outside professionals, and we are in the process of determining what data was affected and what customers or individuals require notice.  We have notified law enforcement officials and confirmed that the incident is covered by our insurance.  

Despite this disruption, production continued in our facilities.  Our previously disabled subsidiary network is now back up and running securely. Working alongside our security professionals, we have been safely bringing our subsidiary’s systems online with enhanced security controls. We have deployed an advanced next generation anti-virus and endpoint detection and response tool, as well as Managed Detection & Response services.  

While our investigation of the April 2021 data incident remains ongoing, this incident could result in legal claims or proceedings, regulatory investigations or actions, and other types of liability under laws that protect the privacy and security of personal information, including federal, state and foreign data protection and privacy regulations, violations of which could result in significant judgements against us, penalties and fines.

The cost of investigating, mitigating and responding to data incidents and complying with any applicable breach notification obligations to individuals, regulators, customers and others, including the April 2021 data incident, could be significant. Our insurance policy has a specific payout limit.  Based on information available to us, we expect that our claim will not exceed this limit, but that will depend on the ultimate amount of costs and other losses arising from such disruptions, failures, attempted attacks or security breaches. In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all. Further, defending a suit, regardless of its merit, could be costly, divert management attention and harm our reputation.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

On February 4, 2020, the Board approved a stock repurchase program, pursuant to which the Company may repurchase up to $4 million of its outstanding Common Stock over a one-year period, commencing on February 10, 2020. Repurchases under the program were to be made in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in compliance with the rules and regulations of the SEC; however, the Company had no obligation to repurchase shares and the timing, actual number, and value of shares to be repurchased was subject to management’s discretion and depended on the Company’s stock price and other market conditions. The Company could have, in the sole discretion of the Board, terminated the repurchase program at any time while it was in effect. Repurchased shares were to be retired or kept in treasury for further issuance. During the quarter ended March 31, 2020, we repurchased 366,000 shares of our Common Stock on the open market at a total cost of approximately $2.0 million (an average price of $5.46 per share). All shares repurchased during the year ended September 30, 2020 have been retired. The term of our repurchase program expired as of the quarter ended March 31, 2021.

On February 9, 2021, the Board approved a new stock repurchase program, pursuant to which the Company may repurchase up to $4 million of its outstanding Common Stock over a one-year period, commencing on February 16, 2021. Repurchases under the program will be made in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in compliance with the rules and regulations of the Securities and Exchange Commission; however, the Company has no obligation to repurchase shares and the timing, actual number, and value of shares to be repurchased is subject to management’s discretion and will depend on the Company’s stock price and other market conditions. The Company may, in the sole discretion of the Board, terminate the repurchase program at any time while it is in effect. Repurchased shares may be retired or kept in treasury for further issuance.

During the three months ended March 31, 2021, we did not repurchase any of our equity securities nor did we sell any equity securities that were not registered under the Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

EXHIBIT		INCORPORATED BY REFERENCE				FILED
NO.	EXHIBIT DESCRIPTION	FORM	FILE NO.	EXHIBIT NO.	FILING DATE	HEREWITH
31.1	Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended					X
31.2	Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as Amended					X
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.					X
101.SCH	Inline XBRL Taxonomy Extension Schema Document					X
101.PRE	Inline Taxonomy Presentation Linkbase Document					X
101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document					X
101.LAB	Inline XBRL Taxonomy Label Linkbase Document					X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document					X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)					X

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SIGNATURES

Pursuant to the requirements of the Securities 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/ Lisa D. Gibbs	Dated:	May 5, 2021
	Lisa D. Gibbs
	Vice President and Chief Financial Officer
	(Principal Financial Officer and Duly Authorized Officer)

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EX-31.1

Exhibit 31.1

AMTECH SYSTEMS, INC. AND ITS SUBSIDIARIES

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Michael Whang, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Amtech Systems, Inc. (the “registrant”),

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By	/s/ Michael Whang
	Michael Whang
	Chief Executive Officer
	Amtech Systems, Inc.
Date:	May 5, 2021

EX-31.2

Exhibit 31.2

AMTECH SYSTEMS, INC. AND ITS SUBSIDIARIES

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Lisa D. Gibbs, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Amtech Systems, Inc. (the “registrant”),

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By	/s/ Lisa D. Gibbs
	Lisa D. Gibbs
	Vice President and Chief Financial Officer
	Amtech Systems, Inc.
Date:	May 5, 2021

EX-32.1

Exhibit 32.1

AMTECH SYSTEMS, INC. AND ITS SUBSIDIARIES

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Amtech Systems, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Whang, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By	/s/ Michael Whang
	Michael Whang
	Chief Executive Officer
	Amtech Systems, Inc.
Date:	May 5, 2021

The foregoing certification is being furnished pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, regardless of any general incorporation language in such filing.

EX-32.2

Exhibit 32.2

AMTECH SYSTEMS, INC. AND ITS SUBSIDIARIES

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Amtech Systems, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lisa D. Gibbs, Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. sections 1350, as adopted pursuant to sections 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By	/s/ Lisa D. Gibbs
	Lisa D. Gibbs
	Vice President and Chief Financial Officer
	Amtech Systems, Inc.
Date:	May 5, 2021

The foregoing certification is being furnished pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, regardless of any general incorporation language in such filing.

XML

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2021	Apr. 30, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Entity Registrant Name	AMTECH SYSTEMS, INC.
Entity Central Index Key	0000720500
Current Fiscal Year End Date	--09-30
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		14,245,764
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	0-11412
Entity Tax Identification Number	86-0411215
Entity Address, Address Line One	131 South Clark Drive
Entity Address, City or Town	Tempe
Entity Address, State or Province	AZ
Entity Address, Postal Zip Code	85281
City Area Code	480
Local Phone Number	967-5146
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	AZ
Document Quarterly Report	true
Document Transition Report	false
Trading Symbol	ASYS
Title of 12(b) Security	Common Stock, par value $0.01 per share
Security Exchange Name	NASDAQ

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Current Assets
Cash and cash equivalents	$ 40,399	$ 45,070
Accounts receivable (less allowance for doubtful accounts of $194 and $159 at March 31, 2021, and September 30, 2020, respectively)	16,980	11,243
Inventories	16,389	17,277
Income taxes receivable	1,057	1,362
Other current assets	1,735	1,617
Total current assets	76,560	76,569
Property, Plant and Equipment - Net	12,025	11,995
Right-of-Use Assets - Net	6,016	5,124
Intangible Assets - Net	912	609
Goodwill - Net	11,150	6,633
Deferred Income Taxes - Net	566	566
Other Assets	707	602
Total Assets	107,936	102,098
Current Liabilities
Accounts payable	5,878	2,676
Accrued compensation and related taxes	2,157	2,066
Accrued warranty expense	414	380
Other accrued liabilities	1,421	751
Current maturities of long-term debt	388	380
Contract liabilities	295	1,224
Total current liabilities	10,553	7,477
Long-Term Debt	4,601	4,798
Long-Term Lease Liability	5,803	5,064
Income Taxes Payable	3,471	3,240
Other Long-Term Liabilities	67
Total Liabilities	24,495	20,579
Commitments and Contingencies
Shareholders’ Equity
Preferred stock; 100,000,000 shares authorized; none issued
Common stock; $0.01 par value; 100,000,000 shares authorized; shares issued and outstanding: 14,221,865 and 14,063,172 at March 31, 2021 and September 30, 2020, respectively	142	141
Additional paid-in capital	125,513	124,435
Accumulated other comprehensive loss	(276)	(646)
Retained deficit	(41,938)	(42,411)
Total shareholders’ equity	83,441	81,519
Total Liabilities and Shareholders’ Equity	$ 107,936	$ 102,098

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Current Assets
Allowance for doubtful accounts	$ 194	$ 159
Shareholders’ Equity
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	14,221,865	14,063,172
Common stock, shares outstanding	14,221,865	14,063,172

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Revenues, net of returns and allowances	$ 19,790	$ 14,460	$ 37,765	$ 35,152
Cost of sales	12,062	9,102	22,525	21,620
Gross profit	7,728	5,358	15,240	13,532
Selling, general and administrative	5,688	5,415	10,901	11,330
Research, development and engineering	1,869	915	3,114	1,537
Operating income (loss)	171	(972)	1,225	665
Loss on sale of subsidiary				(2,793)
Interest income (expense) and other, net	73	595	(182)	525
Income (loss) from continuing operations before income taxes	244	(377)	1,043	(1,603)
Income tax provision	490	166	570	207
(Loss) income from continuing operations, net of tax	(246)	(543)	473	(1,810)
Loss from discontinued operations, net of tax		(11,151)		(11,816)
Net (loss) income	$ (246)	$ (11,694)	$ 473	$ (13,626)
(Loss) Income Per Basic Share:
Basic (loss) income per share from continuing operations	$ (0.02)	$ (0.04)	$ 0.03	$ (0.13)
Basic loss per share from discontinued operations		(0.79)		(0.83)
Net (loss) income per basic share	(0.02)	(0.83)	0.03	(0.96)
(Loss) Income Per Diluted Share:
Diluted (loss) income per share from continuing operations	(0.02)	(0.04)	0.03	(0.13)
Diluted loss per share from discontinued operations		(0.79)		(0.83)
Net (loss) income per diluted share	$ (0.02)	$ (0.83)	$ 0.03	$ (0.96)
Weighted average shares outstanding - basic	14,151	14,150	14,121	14,193
Weighted average shares outstanding - diluted	14,151	14,150	14,217	14,193

XML

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Statement Of Income And Comprehensive Income [Abstract]
Net (loss) income	$ (246)	$ (11,694)	$ 473	$ (13,626)
Foreign currency translation adjustment	(225)	(459)	370	622
Reclassification adjustment for net foreign currency translation losses included in net loss		7,205		8,797
Comprehensive (loss) income	$ (471)	$ (4,948)	$ 843	$ (4,207)

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Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid- In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings (Accumulated Deficit)
Beginning balance at Sep. 30, 2019	$ 87,452	$ 143		$ 125,098	$ (11,233)	$ (26,556)
Beginning balance (in shares) at Sep. 30, 2019		14,269,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(1,932)					(1,932)
Translation adjustment	2,673				2,673
Stock compensation expense	68			68
Stock options exercised	701	$ 1		700
Stock options exercised (in shares)		117,000
Ending balance at Dec. 31, 2019	88,962	$ 144		125,866	(8,560)	(28,488)
Ending balance (in shares) at Dec. 31, 2019		14,386,000
Beginning balance at Sep. 30, 2019	87,452	$ 143		125,098	(11,233)	(26,556)
Beginning balance (in shares) at Sep. 30, 2019		14,269,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(13,626)
Ending balance at Mar. 31, 2020	82,157	$ 140		124,145	(1,814)	(40,314)
Ending balance (in shares) at Mar. 31, 2020		14,041,000
Beginning balance at Dec. 31, 2019	88,962	$ 144		125,866	(8,560)	(28,488)
Beginning balance (in shares) at Dec. 31, 2019		14,386,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(11,694)					(11,694)
Translation adjustment	6,746				6,746
Stock compensation expense	65			65
Stock repurchases	$ (2,000)		$ (2,000)
Stock repurchases (in shares)	(366,000)		(366,000)
Retirement of stock repurchases		$ (4)	$ 2,000	(1,864)		(132)
Retirement of stock repurchases (in shares)		(366,000)	366,000
Stock options exercised	$ 78			78
Stock options exercised (in shares)		21,000
Ending balance at Mar. 31, 2020	82,157	$ 140		124,145	(1,814)	(40,314)
Ending balance (in shares) at Mar. 31, 2020		14,041,000
Beginning balance at Sep. 30, 2020	$ 81,519	$ 141		124,435	(646)	(42,411)
Beginning balance (in shares) at Sep. 30, 2020	14,063,172	14,063,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	$ 719					719
Translation adjustment	595				595
Stock compensation expense	65			65
Stock options exercised	135			135
Stock options exercised (in shares)		28,000
Ending balance at Dec. 31, 2020	83,033	$ 141		124,635	(51)	(41,692)
Ending balance (in shares) at Dec. 31, 2020		14,091,000
Beginning balance at Sep. 30, 2020	$ 81,519	$ 141		124,435	(646)	(42,411)
Beginning balance (in shares) at Sep. 30, 2020	14,063,172	14,063,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	$ 473
Ending balance at Mar. 31, 2021	$ 83,441	$ 142		125,513	(276)	(41,938)
Ending balance (in shares) at Mar. 31, 2021	14,221,865	14,222,000
Beginning balance at Dec. 31, 2020	$ 83,033	$ 141		124,635	(51)	(41,692)
Beginning balance (in shares) at Dec. 31, 2020		14,091,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(246)					(246)
Translation adjustment	(225)				(225)
Stock compensation expense	$ 84			84
Stock repurchases (in shares)	0
Stock options exercised	$ 795	$ 1		794
Stock options exercised (in shares)		131,000
Ending balance at Mar. 31, 2021	$ 83,441	$ 142		$ 125,513	$ (276)	$ (41,938)
Ending balance (in shares) at Mar. 31, 2021	14,221,865	14,222,000

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands		6 Months Ended
		Mar. 31, 2021	Mar. 31, 2020
Operating Activities
Net income (loss)		$ 473	$ (13,626)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization		644	694
Write-down of inventory		230	330
Deferred income taxes			784
Non-cash share-based compensation expense		149	133
Loss on sales of subsidiaries			13,709
Provision for (reversal of) allowance for doubtful accounts, net		28	(32)
Other, net		8	4
Changes in operating assets and liabilities:
Accounts receivable		(5,485)	1,374
Inventories		859	(527)
Other assets		(1,132)	3,667
Accounts payable		3,122	(1,849)
Accrued income taxes		536	(2,094)
Accrued and other liabilities		1,232	(228)
Contract liabilities		(929)	(1,063)
Net cash (used in) provided by operating activities		(265)	1,276
Investing Activities
Purchases of property, plant and equipment		(433)	(345)
Acquisition, net of cash and cash equivalents acquired		(5,082)
Net cash disposed of in sales of subsidiaries			(9,940)
Net cash used in investing activities		(5,515)	(10,285)
Financing Activities
Proceeds from the exercise of stock options		930	779
Repurchase of common stock			(2,000)
Payments on long-term debt		(189)	(194)
Net cash provided by (used in) financing activities		741	(1,415)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash		368	558
Net Decrease in Cash, Cash Equivalents and Restricted Cash		(4,671)	(9,866)
Cash, Cash Equivalents and Restricted Cash, Beginning of Period	[1]	45,070	59,134
Cash, Cash Equivalents and Restricted Cash, End of Period		$ 40,399	$ 49,268

[1] Includes Cash, Cash Equivalents and Restricted Cash that are included in Held-For-Sale Assets on the Condensed Consolidated Balance Sheets for periods prior to January 22, 2020.

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Basis of Presentation and Significant Accounting Policies

6 Months Ended

Mar. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation and Significant Accounting Policies

1.  Basis of Presentation and Significant Accounting Policies

Nature of Operations and Basis of Presentation – Amtech Systems, Inc. (the “Company,” “Amtech,” “we,” “our” or “us”) is a leading, global manufacturer of capital equipment, including thermal processing and wafer polishing, and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power devices, analog and discrete devices, electronic assemblies and light-emitting diodes (LEDs). We sell these products to semiconductor device and module manufacturers worldwide, particularly in Asia, North America and Europe.

We serve niche markets in industries that are experiencing technological advances, and which historically have been very cyclical. Therefore, future profitability and growth depend on our ability to develop or acquire and market profitable new products and on our ability to adapt to cyclical trends.

In the second quarter of fiscal 2019, we began the process to divest our solar business. As such, we have reported the results of the Solar segment as discontinued operations in our Condensed Consolidated Statements of Operations. These divestitures were completed in the second quarter of fiscal 2020. For additional information on the divestitures, see Note 12. For additional information on our segments, see Note 10.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), and consequently do not include all disclosures normally required by accounting principles generally accepted in the United States of America. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments necessary, all of which are of a normal and recurring nature, to present fairly our financial position, results of operations and cash flows. Certain information and note disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. The condensed consolidated balance sheet at September 30, 2020, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

Our fiscal year is from October 1 to September 30. Unless otherwise stated, references to the years 2021 and 2020 relate to the fiscal year ending September 30, 2021 and the fiscal year ended September 30, 2020, respectively.

The consolidated results of operations for the three and six months ended March 31, 2021, are not necessarily indicative of the results to be expected for the full fiscal year.

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications – Certain reclassifications have been made to prior year financial statements to conform to the current year presentation.  These reclassifications had no effect on the previously reported consolidated financial statements for any period.

Divestitures – Significant accounting policies associated with a decision to dispose of a business are discussed below:

Discontinued Operations – A business is classified as discontinued operations if the disposal represents a strategic shift that will have a major effect on operations or financial results and meets the criteria to be classified as held for sale or is disposed of by sale or otherwise. Significant judgments are involved in determining whether a business meets the criteria for discontinued operations reporting and the period in which these criteria are met. If a business is reported as a discontinued operation, the results of operations through the date of sale, including any gain or loss recognized on the disposition, are presented on a separate line of the Condensed Consolidated Statements of Operations. Interest on debt directly attributable to the discontinued operation is allocated to discontinued operations.

Assets Held for Sale – An asset or business is classified as held for sale when (i) management commits to a plan to sell and it is actively marketed; (ii) it is available for immediate sale and the sale is expected to be completed within one year; and (iii) it is unlikely significant changes to the plan will be made or that the plan will be withdrawn. In isolated instances, assets held for sale may exceed one year due to events or circumstances beyond our control. The assets and related liabilities are aggregated and reported on separate lines of the Condensed Consolidated Balance Sheets.

Shipping Expense – Shipping and handling fees associated with inbound and outbound freight are expensed as incurred and included in selling, general and administrative expenses. Shipping expense was $0.2 million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively, and $0.3 million in each of the six months ended March 31, 2021 and 2020, respectively.

Research, Development and Engineering Expense – The table below shows gross research and development expenses and grants earned, in thousands:

	Three Months Ended March 31,					Six Months Ended March 31,
	2021		2020			2021		2020
Research, development and engineering	$	1,869	$	1,017		$	3,114	$	1,780
Grants earned		—		(102	)		—		(243	)
Net research, development and engineering	$	1,869	$	915		$	3,114	$	1,537

Concentrations of Credit Risk – Our customers consist of semiconductor manufacturers worldwide, as well as the lapping and polishing marketplace. Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable. Credit risk is managed by performing ongoing credit evaluations of the customers’ financial condition, by requiring significant deposits where appropriate, and by actively monitoring collections. Letters of credit are required of certain customers depending on the size of the order, type of customer or its creditworthiness, and country of domicile.

As of March 31, 2021, two Semiconductor segment customers individually represented 20% and 12% of accounts receivable.  As of September 30, 2020, two Semiconductor customers individually represented 11% and 10% of accounts receivable.

We maintain our cash and cash equivalents in multiple financial institutions. Balances in the United States, which account for approximately 86% and 89% of total cash balances as of March 31, 2021 and September 30, 2020, respectively, are primarily invested in U.S. Treasuries or are in financial institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). The remainder of our cash is maintained with financial institutions with reputable credit in China, the United Kingdom, Singapore and Malaysia.  We maintain cash in bank accounts in amounts which at times may exceed federally insured limits. We have not experienced any losses on such accounts.

Refer to Note 11 to Condensed Consolidated Financial Statements for information regarding major customers, foreign sales and revenue in other countries subject to fluctuation in foreign currency exchange rates.

Impact of Recently Issued Accounting Pronouncements

There have been no material changes or additions to the recently issued accounting standards other than those previously reported in Note 1 to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended September 30, 2020 that affect or may affect our consolidated financial statements.

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Acquisition

6 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Acquisition

2. Acquisition

On March 3, 2021, we acquired 100% of the issued and outstanding shares of capital stock of Intersurface Dynamics, Inc. (“IDI”), a Connecticut-based manufacturer of substrate process chemicals used in various manufacturing processes, including semiconductors, silicon and compound semiconductor wafers, and optics, for a cash purchase price of $5,250,000. The purchase price allocation is not yet finalized; however, a substantial portion of the total purchase price was allocated to goodwill. IDI’s results of operations are included in our Material and Substrate segment from the date of acquisition.

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Contracts with Customers

6 Months Ended

Mar. 31, 2021

Revenue From Contract With Customer [Abstract]

Contracts with Customers

3.  Contracts with Customers

The components of contract liabilities are as follows, in thousands:

	March 31, 2021		September 30, 2020
Customer deposits	$	295	$	1,224
Contract liabilities	$	295	$	1,224

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Leases

6 Months Ended

Mar. 31, 2021

Leases [Abstract]

Leases

4.  Leases

We lease office space, buildings, land, vehicles and equipment. Lease agreements with an initial term of 12 months or less are not recorded on the balance sheet.  Instead, we recognize the lease expense as incurred over the lease term.   

Certain lease agreements include one or more options to renew, with renewal terms that can extend the lease term from one to five years. The exercise of lease renewal options is at our sole discretion. Some agreements also include options to purchase the leased property. The estimated life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.  

Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Significant Accounting Policy

We determine if a contract or arrangement is, or contains, a lease at inception.  Balances related to operating leases are included in right-of-use (“ROU”) assets in our Condensed Consolidated Balance Sheets.  Balances related to financing leases are immaterial and are included in property and equipment, other current liabilities, and long-term lease liability in our Condensed Consolidated Balance Sheets.  ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.  

ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.  As none of our leases provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.  The ROU asset includes any prepaid lease payments and additional direct costs and excludes lease incentives.  Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.  

The following table provides information about the financial statement classification of our lease balances reported within the Condensed Consolidated Balance Sheets as of March 31, 2021 and September 30, 2020, in thousands:

	March 31, 2021		September 30, 2020
Assets
Operating lease assets	$	6,016	$	5,124
Finance lease assets		20		26
Total lease assets	$	6,036	$	5,150
Liabilities
Current
Operating lease liabilities	$	295	$	113
Finance lease liabilities		9		11
Non-current
Operating lease liabilities		5,791		5,048
Finance lease liabilities		12		16
Total lease liabilities	$	6,107	$	5,188

The following table provides information about the financial statement classification of our lease expenses reported in the Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2021 and 2020, in thousands:

		Three Months Ended March 31,				Six Months Ended March 31,
Lease cost	Classification	2021		2020		2021		2020
Operating lease cost	Cost of sales	$	13	$	24	$	84	$	87
Operating lease cost	Selling, general and administrative expenses		96		15		144		28
Finance lease cost	Cost of sales		2		6		4		11
Finance lease cost	Selling, general and administrative expenses		1		2		3		4
Short-term lease cost	Cost of sales		49		—		76		—
Total lease cost		$	161	$	47	$	311	$	130

Future minimum lease payments under non-cancelable leases, including leases that are executed but not yet effective, as of March 31, 2021 are as follows, in thousands:

	Operating leases		Finance Leases		Total
Remainder of 2021	$	402	$	6	$	408
2022		1,055		8		1,063
2023		1,048		6		1,054
2024		1,028		2		1,030
2025		1,015		—		1,015
Thereafter		9,695		—		9,695
Total lease payments		14,243		22		14,265
Less:  Interest		5,432		1		5,433
Present value of lease liabilities		8,811		21	$	8,832

Operating lease payments include $6.4 million related to optional lease extension periods for multiple leases that are not yet exercisable but are reasonably certain of being exercised.

The following table provides information about the remaining lease terms and discount rates applied as of March 31, 2021:

	March 31, 2021
Weighted average remaining lease term
Operating leases	17.35 years
Finance leases	2.50 years
Weighted average discount rate
Operating leases		4.17	%
Finance leases		4.17	%

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Earnings Per Share

6 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Earnings Per Share

5.  Earnings Per Share

Basic earnings per share (“EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS is computed similarly to basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if potentially dilutive common shares had been issued. In the case of a net loss, diluted earnings per share is calculated in the same manner as basic EPS.

For the three and six months ended March 31, 2021, options for 98,000 and 349,000 weighted average shares, respectively, were excluded from the diluted EPS calculations because they were anti-dilutive. For the three and six months ended March 31, 2020, options for 641,000 and 690,000 weighted average shares, respectively, were excluded from the diluted EPS calculations because they were anti-dilutive. These shares could become dilutive in the future.

A reconciliation of the components of the basic and diluted EPS calculations follows (in thousands, except per share amounts):

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021		2020
Numerator:
Net (loss) income from continuing operations	$	(246	)	$	(543	)	$	473	$	(1,810	)
Net loss from discontinued operations	$	—		$	(11,151	)	$	—	$	(11,816	)
Net (loss) income	$	(246	)	$	(11,694	)	$	473	$	(13,626	)
Denominator:
Weighted-average shares used to compute basic EPS		14,151			14,150			14,121		14,193
Common stock equivalents (1)		—			—			96		—
Weighted-average shares used to compute diluted EPS		14,151			14,150			14,217		14,193
Basic (loss) income per share from continuing operations	$	(0.02	)	$	(0.04	)	$	0.03	$	(0.13	)
Basic loss per share from discontinued operations	$	—		$	(0.79	)	$	—	$	(0.83	)
Net (loss) income per basic share	$	(0.02	)	$	(0.83	)	$	0.03	$	(0.96	)
Diluted (loss) income per share from continuing operations	$	(0.02	)	$	(0.04	)	$	0.03	$	(0.13	)
Diluted loss per share from discontinued operations	$	—		$	(0.79	)	$	—	$	(0.83	)
Net (loss) income per diluted share	$	(0.02	)	$	(0.83	)	$	0.03	$	(0.96	)

(1) The number of common stock equivalents is calculated using the treasury method and the average market price during the period.

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Inventory

6 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Inventory

6.  Inventory

The components of inventories are as follows, in thousands:

	March 31, 2021			September 30, 2020
Purchased parts and raw materials	$	12,519		$	14,530
Work-in-process		3,694			3,074
Finished goods		3,997			3,942
		20,210			21,546
Excess and obsolete reserves		(3,821	)		(4,269	)
	$	16,389		$	17,277

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Equity and Stock-Based Compensation

6 Months Ended

Mar. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Equity and Stock-Based Compensation

7.  Equity and Stock-Based Compensation

Stock-based compensation expense was immaterial in all periods presented.  Stock-based compensation expense is included in selling, general and administrative expenses.

The following table summarizes our stock option activity during the six months ended March 31, 2021:

	Options			Weighted Average Exercise Price
Outstanding at beginning of period		696,665		$	7.00
Granted		198,000			6.14
Exercised		(158,693	)		5.86
Forfeited		(31,076	)		13.99
Outstanding at end of period		704,896		$	6.71
Exercisable at end of period		471,814		$	7.01
Weighted average fair value of options granted    during the period	$	3.27

The fair value of options was estimated at the applicable grant date using the Black-Scholes option pricing model with the following assumptions:

	Six Months Ended March 31, 2021
Risk free interest rate		1	%
Expected life	6 years
Dividend rate		—	%
Volatility		59	%

On February 4, 2020, the Board approved a stock repurchase program, pursuant to which we may repurchase up to $4 million of our outstanding Common Stock over a one-year period, commencing on February 10, 2020. Repurchases under the program were to be made in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in compliance with the rules and regulations of the SEC; however, we had no obligation to repurchase shares and the timing, actual number, and value of shares to be repurchased was subject to management’s discretion and depended on our stock price and other market conditions. We could have, in the sole discretion of the Board, terminated the repurchase program at any time while it was in effect. Repurchased shares were to be retired or kept in treasury for further issuance. During the quarter ended March 31, 2020, we repurchased 366,000 shares of our Common Stock on the open market at a total cost of approximately $2.0 million (an average price of $5.46 per share). All shares repurchased during the year ended September 30, 2020 have been retired. The term of our repurchase program expired as of the quarter ended March 31, 2021. There were no repurchases during the quarter ended March 31, 2021.

On February 9, 2021, the Board approved a new stock repurchase program, pursuant to which we may repurchase up to $4 million of our outstanding Common Stock over a one-year period, commencing on February 16, 2021. Repurchases under the program will be made in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in compliance with the rules and regulations of the Securities and Exchange Commission; however, we have no obligation to repurchase shares and the timing, actual number, and value of shares to be repurchased is subject to management’s discretion and will depend on our stock price and other market conditions. We may, in the sole discretion of the Board, terminate the repurchase program at any time while it is in effect. Repurchased shares may be retired or kept in treasury for further issuance. There were no repurchases during the quarter ended March 31, 2021.

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Income Taxes

6 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

8.  Income Taxes

For the three months ended March 31, 2021 and 2020, we recorded income tax expense at our continuing operations of $0.5 million and $0.2 million, respectively. For the six months ended March 31, 2021 and 2020, we recorded income tax expense of $0.6 million and $0.2 million, respectively. Tax expense for the six months ended March 31, 2021, includes a benefit of approximately $0.3 million related to the reversal of previously recorded uncertain tax positions. In the three months ended March 31, 2020, we recorded income tax benefit of $0.1 million in our discontinued operations. In the six months ended March 31, 2020, we recorded income tax benefit of $47,000 in our discontinued operations. The quarterly income tax provision is calculated using an estimated annual effective tax rate, based upon expected annual income, permanent items, statutory rates and planned tax strategies in the various jurisdictions in which we operate. However, losses in certain jurisdictions and discrete items are treated separately.

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020, included a provision for a five-year carryback of net operating losses. We have assessed the benefit of the provision and utilized a portion of the 2019 net operating loss carryback to offset income from 2018. The impacts of this provision were recognized during fiscal 2020.

Deferred tax assets and liabilities reflect the tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We record a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of a deferred tax asset will not be realized. Our expectations regarding realization of our deferred tax assets is based upon the weight of all available evidence, including such factors as our recent earnings history, expected future taxable income and available tax planning strategies.  We established valuation allowances on substantially all net U.S. deferred tax assets, after considering all of the available objective evidence, both positive and negative, historical and prospective, with greater weight given to historical evidence, and determined it is not more likely than not that these assets will be realized. In 2020, we reversed a portion of the valuation allowance related to foreign deferred tax assets which we have determined will be utilized against net operating income in future years. We will continue to monitor our cumulative income and loss positions in the U.S. and foreign jurisdictions to determine whether full valuation allowances on net deferred tax assets are appropriate.

We classify all of our uncertain tax positions as income taxes payable long-term.  At March 31, 2021 and September 30, 2020, the total amount of unrecognized tax benefits was approximately $0.9 million and $1.2 million, respectively. Income taxes payable long-term includes other items, primarily withholding taxes that are not due until the related intercompany service fees are paid.

We classify interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2021 and September 30, 2020, we had an accrual for potential interest and penalties of approximately $0.6 million and $0.8 million, respectively, classified with income taxes payable long-term.

Amtech and one or more of its subsidiaries file income tax returns in China and other foreign jurisdictions, as well as in the U.S. and various states in the U.S. We have not signed any agreements with the Internal Revenue Service, any state or foreign jurisdiction to extend the statute of limitations for any fiscal year.  As such, the number of open years is the number of years dictated by statute in each of the respective taxing jurisdictions, which generally is from 3 to 5 years.

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Commitments and Contingencies

6 Months Ended

Mar. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

9.  Commitments and Contingencies

Purchase Obligations – As of March 31, 2021, we had unrecorded purchase obligations in the amount of $11.8 million. These purchase obligations consist of outstanding purchase orders for goods and services. While the amount represents purchase agreements, the actual amounts to be paid may be less in the event that any agreements are renegotiated, canceled or terminated.

Legal Proceedings and Other Claims – From time to time, we are a party to claims and actions for matters arising out of our business operations. We regularly evaluate the status of the legal proceedings and other claims in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss, or an additional loss, may have been incurred and determine if accruals are appropriate. If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of possible loss can be made for disclosure. Although the outcome of claims and litigation is inherently unpredictable, we believe that we have adequate provisions for any probable and estimable losses. It is possible, nevertheless, that our consolidated financial position, results of operations or liquidity could be materially and adversely affected in any particular period by the resolution of a claim or legal proceeding. Legal expenses related to defense, negotiations, settlements, rulings and advice of outside legal counsel are expensed as incurred.

Employment Contracts – We have employment contracts and change in control agreements with, and severance plans covering, certain officers and management employees under which severance payments would become payable in the event of specified terminations without cause or terminations under certain circumstances after a change in control. If severance payments under the current employment contracts or severance plans were to become payable, the severance payments would generally range from twelve to thirty-six months of salary.

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Business Segment Information

6 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Business Segment Information

10.  Business Segment Information

Upon the acquisition of IDI in the second quarter of 2021, we evaluated our organizational structure and concluded that we have two reportable business segments following the acquisition. Our two reportable segments are as follows:

Semiconductor – We design, manufacture, sell and service thermal processing equipment and related controls for use by leading semiconductor manufacturers, and in electronics, automotive and other industries.

Material and Substrate – We produce consumables and machinery for lapping (fine abrading) and polishing of materials, such as sapphire substrates, optical components, silicon wafers, numerous types of crystal materials, ceramics and metal components. Our Material and Substrate segment includes our former SiC/LED segment in addition to IDI (see Note 2).

Information concerning our business segments is as follows, in thousands:

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021			2020
Net Revenues:
Semiconductor	$	17,119		$	11,992		$	32,694		$	29,224
Material and Substrate		2,671			2,468			5,071			5,285
Non-segment related		—			—			—			643
	$	19,790		$	14,460		$	37,765		$	35,152
Operating income (loss):
Semiconductor	$	1,665		$	(18	)	$	3,862		$	2,704
Material and Substrate		(253	)		421			(319	)		955
Non-segment related		(1,241	)		(1,375	)		(2,318	)		(2,994	)
	$	171		$	(972	)	$	1,225		$	665

	March 31, 2021		September 30, 2020
Identifiable Assets:
Semiconductor	$	56,079	$	51,648
Material and Substrate		19,714		12,717
Non-segment related*		32,143		37,733
	$	107,936	$	102,098

* Non-segment related assets include cash, property, income tax assets and other assets.

Goodwill and other long-lived assets

We review our long-lived assets, including goodwill, for impairment at least annually in our fourth quarter or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Additional information on impairment testing of long-lived assets, intangible assets and goodwill can be found in Notes 1 and 10 of our Annual Report on Form 10-K for the year ended September 30, 2020.

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Major Customers and Foreign Sales

6 Months Ended

Mar. 31, 2021

Geographic Areas Revenues From External Customers [Abstract]

Major Customers and Foreign Sales

11.  Major Customers and Foreign Sales

During the six months ended March 31, 2021, two customers individually represented 17% and 10% of our net revenues.  During the six months ended March 31, 2020, no customer individually represented greater than 10% of our net revenues.

Our net revenues were from customers in the following geographic regions:

	Six Months Ended March 31,
	2021			2020
United States		24	%		34	%
Other		3	%		6	%
Total North America		27	%		40	%
China		28	%		24	%
Malaysia		5	%		4	%
Taiwan		20	%		11	%
Other		8	%		7	%
Total Asia		61	%		46	%
Germany		3	%		3	%
Other		9	%		11	%
Total Europe		12	%		14	%
		100	%		100	%

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Assets Held for Sale, Discontinued Operations and Disposals

6 Months Ended

Mar. 31, 2021

Discontinued Operations And Disposal Groups [Abstract]

Assets Held for Sale, Discontinued Operations and Disposals

12.  Assets Held for Sale, Discontinued Operations and Disposals

Discontinued Operations

In April 2019, we announced that our Board determined that it was in the long-term best interest of the Company to exit the solar business segment and focus our strategic efforts on our semiconductor and silicon carbide/polishing business segments in order to more fully realize the opportunities the Company believes are presented in those areas. The divestitures of our solar business included our Tempress and SoLayTec subsidiaries, which comprised substantially all of our Solar segment. We classified substantially all of the Solar segment as held for sale in our Condensed Consolidated Balance Sheets and reported its results as discontinued operations in our Condensed Consolidated Statements of Operations for periods reported subsequent to the announcement.

On June 7, 2019 (“SoLayTec Sale Date”), we completed the sale of our subsidiary, SoLayTec, to a third party located in the Netherlands.  Upon the sale, we recognized a gain of approximately $1.6 million, which we reported as gain on sale of subsidiary in our Condensed Consolidated Statements of Operations for the three months ended June 30, 2019.  Effective on the SoLayTec Sale Date, SoLayTec is no longer included in our consolidated financial statements.

Effective January 22, 2020 (“Tempress Sale Date”), we completed the sale of our subsidiary, Tempress Group Holding B.V. (“Tempress”) for nominal consideration to a third party located in the Netherlands. In connection with this sale transaction, we provided an unsecured term loan to Tempress in the principal sum of $2.25 million, to be used to fund Tempress’ working capital requirements and to facilitate the restructuring of Tempress’ operations.  We forgave $0.5 million of the loan in accordance with the terms of the loan agreement.  We recorded a pre-tax loss on deconsolidation of approximately $10.9 million, of which approximately $7.2 million was the recognition of previously recorded accumulated foreign currency translation losses.  The total pre-tax loss does not have a material effect on our cash balances at our continuing operations.  We also recognized a significant tax benefit relating to this loss, which can be carried over to future years. Effective on the Tempress Sale Date, Tempress is no longer included in our consolidated financial statements.

Operating results of our discontinued solar operations were as follows, in thousands:

	Three Months Ended March 31, 2020			Six Months Ended March 31, 2020
Revenues, net of returns and allowances	$	2,155		$	7,442
Cost of sales		1,830			5,969
Gross profit		325			1,473
Selling, general and administrative		476			1,814
Research, development and engineering		91			540
Restructuring charges		37			37
Operating loss		(279	)		(918	)
Loss on sale of subsidiary		(10,916	)		(10,916	)
Interest expense and other, net		(22	)		(29	)
Loss from discontinued operations before income taxes		(11,217	)		(11,863	)
Income tax benefit		(66	)		(47	)
Net loss from discontinued operations, net of tax	$	(11,151	)	$	(11,816	)

Amtech’s Condensed Consolidated Statements of Cash Flows combines cash flows from discontinued operations with cash flows from continuing operations within each cash flow statement category. The following table summarizes selected cash flow information for discontinued operations, in thousands:

	Six Months Ended March 31, 2020
Loss from discontinued operations, net of tax	$	(11,816	)
Depreciation and amortization	$	180
Reversal of allowance for doubtful accounts, net	$	(66	)
Purchases of property, plant and equipment	$	1

Other Disposal

On December 13, 2019 (“R2D Sale Date”), we finalized the sale of our subsidiary, R2D Automation SAS (“R2D”), to certain members of R2D’s management team.  Upon the sale, we recognized a loss of approximately $2.8 million, which we reported as loss on sale of subsidiary in our Condensed Consolidated Statements of Operations for the six months ended March 31, 2020.  Effective on the R2D Sale Date, R2D is no longer included in our consolidated financial statements.  R2D does not meet the discontinued operations or held-for-sale criteria.

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Subsequent Events

6 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

13.  Subsequent Events

On April 12, 2021, we detected a data incident in which attackers acquired data and disabled some of the technology systems used by one of our subsidiaries.  Upon learning of the incident, we immediately engaged external counsel and retained a team of third-party forensic, incident response, and security professionals to investigate and determine the full scope of this incident.  Our investigation of the data incident is ongoing with the assistance from our outside professionals, and we are in the process of determining what data was affected and what customers or individuals require notice.  We have notified law enforcement officials and confirmed that the incident is covered by our insurance.  

Despite this disruption, production continued in our facilities.  Our previously disabled subsidiary network is now back up and running securely. Working alongside our security professionals, we have been safely bringing our subsidiary’s systems online with enhanced security controls. We have deployed an advanced next generation anti-virus and endpoint detection and response tool, as well as Managed Detection & Response services.

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Basis of Presentation and Significant Accounting Policies (Policies)

6 Months Ended

Mar. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Nature of Operations and Basis of Presentation

Nature of Operations and Basis of Presentation – Amtech Systems, Inc. (the “Company,” “Amtech,” “we,” “our” or “us”) is a leading, global manufacturer of capital equipment, including thermal processing and wafer polishing, and related consumables used in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power devices, analog and discrete devices, electronic assemblies and light-emitting diodes (LEDs). We sell these products to semiconductor device and module manufacturers worldwide, particularly in Asia, North America and Europe.

We serve niche markets in industries that are experiencing technological advances, and which historically have been very cyclical. Therefore, future profitability and growth depend on our ability to develop or acquire and market profitable new products and on our ability to adapt to cyclical trends.

In the second quarter of fiscal 2019, we began the process to divest our solar business. As such, we have reported the results of the Solar segment as discontinued operations in our Condensed Consolidated Statements of Operations. These divestitures were completed in the second quarter of fiscal 2020. For additional information on the divestitures, see Note 12. For additional information on our segments, see Note 10.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”), and consequently do not include all disclosures normally required by accounting principles generally accepted in the United States of America. In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments necessary, all of which are of a normal and recurring nature, to present fairly our financial position, results of operations and cash flows. Certain information and note disclosures normally included in financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC. The condensed consolidated balance sheet at September 30, 2020, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020.

Our fiscal year is from October 1 to September 30. Unless otherwise stated, references to the years 2021 and 2020 relate to the fiscal year ending September 30, 2021 and the fiscal year ended September 30, 2020, respectively.

The consolidated results of operations for the three and six months ended March 31, 2021, are not necessarily indicative of the results to be expected for the full fiscal year.

Principles of Consolidation

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries.  All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications

Reclassifications – Certain reclassifications have been made to prior year financial statements to conform to the current year presentation.  These reclassifications had no effect on the previously reported consolidated financial statements for any period.

Divestitures

Divestitures – Significant accounting policies associated with a decision to dispose of a business are discussed below:

Discontinued Operations – A business is classified as discontinued operations if the disposal represents a strategic shift that will have a major effect on operations or financial results and meets the criteria to be classified as held for sale or is disposed of by sale or otherwise. Significant judgments are involved in determining whether a business meets the criteria for discontinued operations reporting and the period in which these criteria are met. If a business is reported as a discontinued operation, the results of operations through the date of sale, including any gain or loss recognized on the disposition, are presented on a separate line of the Condensed Consolidated Statements of Operations. Interest on debt directly attributable to the discontinued operation is allocated to discontinued operations.

Assets Held for Sale – An asset or business is classified as held for sale when (i) management commits to a plan to sell and it is actively marketed; (ii) it is available for immediate sale and the sale is expected to be completed within one year; and (iii) it is unlikely significant changes to the plan will be made or that the plan will be withdrawn. In isolated instances, assets held for sale may exceed one year due to events or circumstances beyond our control. The assets and related liabilities are aggregated and reported on separate lines of the Condensed Consolidated Balance Sheets.

Shipping Expense

Shipping Expense – Shipping and handling fees associated with inbound and outbound freight are expensed as incurred and included in selling, general and administrative expenses. Shipping expense was $0.2 million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively, and $0.3 million in each of the six months ended March 31, 2021 and 2020, respectively.

Research, Development and Engineering Expenses

Research, Development and Engineering Expense – The table below shows gross research and development expenses and grants earned, in thousands:

	Three Months Ended March 31,					Six Months Ended March 31,
	2021		2020			2021		2020
Research, development and engineering	$	1,869	$	1,017		$	3,114	$	1,780
Grants earned		—		(102	)		—		(243	)
Net research, development and engineering	$	1,869	$	915		$	3,114	$	1,537

Concentrations of Credit Risk

Concentrations of Credit Risk – Our customers consist of semiconductor manufacturers worldwide, as well as the lapping and polishing marketplace. Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable. Credit risk is managed by performing ongoing credit evaluations of the customers’ financial condition, by requiring significant deposits where appropriate, and by actively monitoring collections. Letters of credit are required of certain customers depending on the size of the order, type of customer or its creditworthiness, and country of domicile.

As of March 31, 2021, two Semiconductor segment customers individually represented 20% and 12% of accounts receivable.  As of September 30, 2020, two Semiconductor customers individually represented 11% and 10% of accounts receivable.

We maintain our cash and cash equivalents in multiple financial institutions. Balances in the United States, which account for approximately 86% and 89% of total cash balances as of March 31, 2021 and September 30, 2020, respectively, are primarily invested in U.S. Treasuries or are in financial institutions insured by the Federal Deposit Insurance Corporation (“FDIC”). The remainder of our cash is maintained with financial institutions with reputable credit in China, the United Kingdom, Singapore and Malaysia.  We maintain cash in bank accounts in amounts which at times may exceed federally insured limits. We have not experienced any losses on such accounts.

Refer to Note 11 to Condensed Consolidated Financial Statements for information regarding major customers, foreign sales and revenue in other countries subject to fluctuation in foreign currency exchange rates.

Impact of Recently Issued Accounting Pronouncements

Impact of Recently Issued Accounting Pronouncements

There have been no material changes or additions to the recently issued accounting standards other than those previously reported in Note 1 to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended September 30, 2020 that affect or may affect our consolidated financial statements.

Significant Accounting Policy

Significant Accounting Policy

We determine if a contract or arrangement is, or contains, a lease at inception.  Balances related to operating leases are included in right-of-use (“ROU”) assets in our Condensed Consolidated Balance Sheets.  Balances related to financing leases are immaterial and are included in property and equipment, other current liabilities, and long-term lease liability in our Condensed Consolidated Balance Sheets.  ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.  

ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.  As none of our leases provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.  The ROU asset includes any prepaid lease payments and additional direct costs and excludes lease incentives.  Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.  

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Basis of Presentation and Significant Accounting Policies (Tables)

6 Months Ended

Mar. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Summary of Research, Development and Engineering Expense

The table below shows gross research and development expenses and grants earned, in thousands:

	Three Months Ended March 31,					Six Months Ended March 31,
	2021		2020			2021		2020
Research, development and engineering	$	1,869	$	1,017		$	3,114	$	1,780
Grants earned		—		(102	)		—		(243	)
Net research, development and engineering	$	1,869	$	915		$	3,114	$	1,537

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Contracts with Customers (Tables)

6 Months Ended

Mar. 31, 2021

Revenue From Contract With Customer [Abstract]

Components of Contract Liabilities

The components of contract liabilities are as follows, in thousands:

	March 31, 2021		September 30, 2020
Customer deposits	$	295	$	1,224
Contract liabilities	$	295	$	1,224

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Leases (Tables)

6 Months Ended

Mar. 31, 2021

Leases [Abstract]

Schedule of Financial Statement Classification of Lease Balances Within Condensed Consolidated Balance Sheets

The following table provides information about the financial statement classification of our lease balances reported within the Condensed Consolidated Balance Sheets as of March 31, 2021 and September 30, 2020, in thousands:

	March 31, 2021		September 30, 2020
Assets
Operating lease assets	$	6,016	$	5,124
Finance lease assets		20		26
Total lease assets	$	6,036	$	5,150
Liabilities
Current
Operating lease liabilities	$	295	$	113
Finance lease liabilities		9		11
Non-current
Operating lease liabilities		5,791		5,048
Finance lease liabilities		12		16
Total lease liabilities	$	6,107	$	5,188

Schedule of Financial Statement Classification of Lease Expenses Reported in Condensed Consolidated Statements of Operations

The following table provides information about the financial statement classification of our lease expenses reported in the Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2021 and 2020, in thousands:

		Three Months Ended March 31,				Six Months Ended March 31,
Lease cost	Classification	2021		2020		2021		2020
Operating lease cost	Cost of sales	$	13	$	24	$	84	$	87
Operating lease cost	Selling, general and administrative expenses		96		15		144		28
Finance lease cost	Cost of sales		2		6		4		11
Finance lease cost	Selling, general and administrative expenses		1		2		3		4
Short-term lease cost	Cost of sales		49		—		76		—
Total lease cost		$	161	$	47	$	311	$	130

Future Minimum Lease Payments Under Non-cancelable Leases Including Leases that are Executed but not yet Effective

Future minimum lease payments under non-cancelable leases, including leases that are executed but not yet effective, as of March 31, 2021 are as follows, in thousands:

	Operating leases		Finance Leases		Total
Remainder of 2021	$	402	$	6	$	408
2022		1,055		8		1,063
2023		1,048		6		1,054
2024		1,028		2		1,030
2025		1,015		—		1,015
Thereafter		9,695		—		9,695
Total lease payments		14,243		22		14,265
Less:  Interest		5,432		1		5,433
Present value of lease liabilities		8,811		21	$	8,832

Schedule of Weighted Average Remaining Term and Discount Rates

The following table provides information about the remaining lease terms and discount rates applied as of March 31, 2021:

	March 31, 2021
Weighted average remaining lease term
Operating leases	17.35 years
Finance leases	2.50 years
Weighted average discount rate
Operating leases		4.17	%
Finance leases		4.17	%

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Earnings Per Share (Tables)

6 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Reconciliation of Components of Basic and Diluted EPS Calculations

A reconciliation of the components of the basic and diluted EPS calculations follows (in thousands, except per share amounts):

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021		2020
Numerator:
Net (loss) income from continuing operations	$	(246	)	$	(543	)	$	473	$	(1,810	)
Net loss from discontinued operations	$	—		$	(11,151	)	$	—	$	(11,816	)
Net (loss) income	$	(246	)	$	(11,694	)	$	473	$	(13,626	)
Denominator:
Weighted-average shares used to compute basic EPS		14,151			14,150			14,121		14,193
Common stock equivalents (1)		—			—			96		—
Weighted-average shares used to compute diluted EPS		14,151			14,150			14,217		14,193
Basic (loss) income per share from continuing operations	$	(0.02	)	$	(0.04	)	$	0.03	$	(0.13	)
Basic loss per share from discontinued operations	$	—		$	(0.79	)	$	—	$	(0.83	)
Net (loss) income per basic share	$	(0.02	)	$	(0.83	)	$	0.03	$	(0.96	)
Diluted (loss) income per share from continuing operations	$	(0.02	)	$	(0.04	)	$	0.03	$	(0.13	)
Diluted loss per share from discontinued operations	$	—		$	(0.79	)	$	—	$	(0.83	)
Net (loss) income per diluted share	$	(0.02	)	$	(0.83	)	$	0.03	$	(0.96	)

(1) The number of common stock equivalents is calculated using the treasury method and the average market price during the period.

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Inventory (Tables)

6 Months Ended

Mar. 31, 2021

Inventory Disclosure [Abstract]

Schedule of Components of Inventories

The components of inventories are as follows, in thousands:

	March 31, 2021			September 30, 2020
Purchased parts and raw materials	$	12,519		$	14,530
Work-in-process		3,694			3,074
Finished goods		3,997			3,942
		20,210			21,546
Excess and obsolete reserves		(3,821	)		(4,269	)
	$	16,389		$	17,277

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Equity and Stock-Based Compensation (Tables)

6 Months Ended

Mar. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Stock Option Activity

The following table summarizes our stock option activity during the six months ended March 31, 2021:

	Options			Weighted Average Exercise Price
Outstanding at beginning of period		696,665		$	7.00
Granted		198,000			6.14
Exercised		(158,693	)		5.86
Forfeited		(31,076	)		13.99
Outstanding at end of period		704,896		$	6.71
Exercisable at end of period		471,814		$	7.01
Weighted average fair value of options granted    during the period	$	3.27

Schedule of Fair Value of Stock Option Using Black-Scholes Option Pricing Model

The fair value of options was estimated at the applicable grant date using the Black-Scholes option pricing model with the following assumptions:

	Six Months Ended March 31, 2021
Risk free interest rate		1	%
Expected life	6 years
Dividend rate		—	%
Volatility		59	%

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Business Segment Information (Tables)

6 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Schedule of Business Segment Information

Information concerning our business segments is as follows, in thousands:

	Three Months Ended March 31,						Six Months Ended March 31,
	2021			2020			2021			2020
Net Revenues:
Semiconductor	$	17,119		$	11,992		$	32,694		$	29,224
Material and Substrate		2,671			2,468			5,071			5,285
Non-segment related		—			—			—			643
	$	19,790		$	14,460		$	37,765		$	35,152
Operating income (loss):
Semiconductor	$	1,665		$	(18	)	$	3,862		$	2,704
Material and Substrate		(253	)		421			(319	)		955
Non-segment related		(1,241	)		(1,375	)		(2,318	)		(2,994	)
	$	171		$	(972	)	$	1,225		$	665

	March 31, 2021		September 30, 2020
Identifiable Assets:
Semiconductor	$	56,079	$	51,648
Material and Substrate		19,714		12,717
Non-segment related*		32,143		37,733
	$	107,936	$	102,098

* Non-segment related assets include cash, property, income tax assets and other assets.

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Major Customers and Foreign Sales (Tables)

6 Months Ended

Mar. 31, 2021

Geographic Areas Revenues From External Customers [Abstract]

Schedule of Revenues by Geographic Region

Our net revenues were from customers in the following geographic regions:

	Six Months Ended March 31,
	2021			2020
United States		24	%		34	%
Other		3	%		6	%
Total North America		27	%		40	%
China		28	%		24	%
Malaysia		5	%		4	%
Taiwan		20	%		11	%
Other		8	%		7	%
Total Asia		61	%		46	%
Germany		3	%		3	%
Other		9	%		11	%
Total Europe		12	%		14	%
		100	%		100	%

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Assets Held for Sale, Discontinued Operations and Disposals (Tables)

6 Months Ended

Mar. 31, 2021

Discontinued Operations And Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations

Operating results of our discontinued solar operations were as follows, in thousands:

	Three Months Ended March 31, 2020			Six Months Ended March 31, 2020
Revenues, net of returns and allowances	$	2,155		$	7,442
Cost of sales		1,830			5,969
Gross profit		325			1,473
Selling, general and administrative		476			1,814
Research, development and engineering		91			540
Restructuring charges		37			37
Operating loss		(279	)		(918	)
Loss on sale of subsidiary		(10,916	)		(10,916	)
Interest expense and other, net		(22	)		(29	)
Loss from discontinued operations before income taxes		(11,217	)		(11,863	)
Income tax benefit		(66	)		(47	)
Net loss from discontinued operations, net of tax	$	(11,151	)	$	(11,816	)

The following table summarizes selected cash flow information for discontinued operations, in thousands:

	Six Months Ended March 31, 2020
Loss from discontinued operations, net of tax	$	(11,816	)
Depreciation and amortization	$	180
Reversal of allowance for doubtful accounts, net	$	(66	)
Purchases of property, plant and equipment	$	1

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Basis of Presentation and Significant Accounting Policies - Shipping Expense - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Schedule Of Expense [Line Items]
Selling, general and administrative	$ 5,688	$ 5,415	$ 10,901	$ 11,330
Shipping
Schedule Of Expense [Line Items]
Selling, general and administrative	$ 200	$ 100	$ 300	$ 300

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Basis of Presentation and Significant Accounting Policies - Summary of Research, Development and Engineering Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Research, development and engineering	$ 1,869	$ 1,017	$ 3,114	$ 1,780
Grants earned		(102)		(243)
Net research, development and engineering	$ 1,869	$ 915	$ 3,114	$ 1,537

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Basis of Presentation and Significant Accounting Policies - Concentrations of Credit Risk - Additional Information (Details)	6 Months Ended	12 Months Ended
	Mar. 31, 2021	Sep. 30, 2020
US Treasuries and FDIC Insured
Concentration Risk [Line Items]
Percentage of cash balances	86.00%	89.00%
Customer One | Accounts Receivable | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	20.00%	11.00%
Customer Two | Accounts Receivable | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration risk, percentage	12.00%	10.00%

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Acquisition - Additional Information (Details) - Intersurface Dynamics, Inc.	Mar. 03, 2021 USD ($)
Business Acquisition [Line Items]
Business acquisition, effective date of acquisition	Mar. 03, 2021
Business acquisition, percentage of voting interests acquired	100.00%
Business acquisition, cash purchase price	$ 5,250,000

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Contracts with Customers - Components of Contract Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Capitalized Contract Cost [Line Items]
Contract liabilities	$ 295	$ 1,224
Customer deposits
Capitalized Contract Cost [Line Items]
Contract liabilities	$ 295	$ 1,224

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Leases - Additional Information (Details) $ in Millions	6 Months Ended
	Mar. 31, 2021 USD ($)
Lessee Lease Description [Line Items]
Operating lease, existence of option to extend	true
Operating lease, optional lease extension periods for multiple leases, description	Operating lease payments include $6.4 million related to optional lease extension periods for multiple leases that are not yet exercisable but are reasonably certain of being exercised.
Payments related to optional lease extension periods for multiple leases	$ 6.4
Minimum
Lessee Lease Description [Line Items]
Operating lease renewal term	1 year
Maximum
Lessee Lease Description [Line Items]
Operating lease renewal term	5 years

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Leases - Schedule of Financial Statement Classification of Lease Balances Within Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Leases [Abstract]
Operating lease assets	$ 6,016	$ 5,124
Finance lease assets	$ 20	$ 26
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Property, Plant and Equipment - Net	Property, Plant and Equipment - Net
Total lease assets	$ 6,036	$ 5,150
Operating lease liabilities	$ 295	$ 113
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other accrued liabilities	Other accrued liabilities
Finance lease liabilities	$ 9	$ 11
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other accrued liabilities	Other accrued liabilities
Operating lease liabilities	$ 5,791	$ 5,048
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Long-Term Lease Liability	Long-Term Lease Liability
Finance lease liabilities	$ 12	$ 16
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Long-Term Lease Liability	Long-Term Lease Liability
Total lease liabilities	$ 6,107	$ 5,188

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Leases - Schedule of Financial Statement Classification of Lease Expenses Reported in Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Lessee Lease Description [Line Items]
Total lease cost	$ 161	$ 47	$ 311	$ 130
Cost of sales
Lessee Lease Description [Line Items]
Operating lease cost	13	24	84	87
Finance lease cost	2	6	4	11
Short-term lease cost	49		76
Selling, general and administrative expenses
Lessee Lease Description [Line Items]
Operating lease cost	96	15	144	28
Finance lease cost	$ 1	$ 2	$ 3	$ 4

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Leases - Future Minimum Lease Payments Under Non-cancelable Leases Including Leases that are Executed but not yet Effective (Detail) $ in Thousands	Mar. 31, 2021 USD ($)
Operating Lease
Remainder of 2021	$ 402
2022	1,055
2023	1,048
2024	1,028
2025	1,015
Thereafter	9,695
Total lease payments	14,243
Less: Interest	5,432
Present value of lease liabilities	8,811
Finance Lease
Remainder of 2021	6
2022	8
2023	6
2024	2
Total lease payments	22
Less: Interest	1
Present value of lease liabilities	21
Operating Lease and Finance lease
Remainder of 2021	408
2022	1,063
2023	1,054
2024	1,030
2025	1,015
Thereafter	9,695
Total lease payments	14,265
Less: Interest	5,433
Present value of lease liabilities	$ 8,832

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Leases - Schedule of Weighted Average Remaining Term and Discount Rates (Detail)	Mar. 31, 2021
Leases [Abstract]
Operating leases, Weighted average remaining lease term	17 years 4 months 6 days
Finance leases, Weighted average remaining lease term	2 years 6 months
Operating leases, Weighted average discount rate	4.17%
Finance leases, Weighted average discount rate	4.17%

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Earnings Per Share - Additional Information (Details) - shares	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Stock Options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	98,000	641,000	349,000	690,000

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Earnings Per Share - Reconciliation of Components of Basic and Diluted EPS Calculations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020
Numerator:
Net (loss) income from continuing operations	$ (246)	$ (543)	$ 473	$ (1,810)
Loss from discontinued operations, net of tax		(11,151)		(11,816)
Net (loss) income	$ (246)	$ (11,694)	$ 473	$ (13,626)
Denominator:
Weighted-average shares used to compute basic EPS	14,151	14,150	14,121	14,193
Common stock equivalents			96
Weighted-average shares used to compute diluted EPS	14,151	14,150	14,217	14,193
Basic (loss) income per share from continuing operations	$ (0.02)	$ (0.04)	$ 0.03	$ (0.13)
Basic loss per share from discontinued operations		(0.79)		(0.83)
Net (loss) income per basic share	(0.02)	(0.83)	0.03	(0.96)
Diluted (loss) income per share from continuing operations	(0.02)	(0.04)	0.03	(0.13)
Diluted loss per share from discontinued operations		(0.79)		(0.83)
Net (loss) income per diluted share	$ (0.02)	$ (0.83)	$ 0.03	$ (0.96)

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Inventory - Schedule of Components of Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Sep. 30, 2020
Inventory Disclosure [Abstract]
Purchased parts and raw materials	$ 12,519	$ 14,530
Work-in-process	3,694	3,074
Finished goods	3,997	3,942
Inventory, gross	20,210	21,546
Excess and obsolete reserves	(3,821)	(4,269)
Inventory	$ 16,389	$ 17,277

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Equity and Stock-Based Compensation - Summary of Stock Option Activity (Details) - Stock Options	6 Months Ended
	Mar. 31, 2021 $ / shares shares
Options
Outstanding at beginning of period | shares	696,665
Granted | shares	198,000
Exercised | shares	(158,693)
Forfeited | shares	(31,076)
Outstanding at end of period | shares	704,896
Exercisable at end of period | shares	471,814
Weighted average fair value of options granted during the period	$ 3.27
Weighted Average Exercise Price
Outstanding at beginning of period	7.00
Granted	6.14
Exercised	5.86
Forfeited	13.99
Outstanding at end of period	6.71
Exercisable at end of period	$ 7.01

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Equity and Stock-Based Compensation - Schedule of Fair Value of Stock Option Using Black-Scholes Option Pricing Model (Details)	6 Months Ended
	Mar. 31, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Risk free interest rate	1.00%
Expected life	6 years
Volatility	59.00%

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Equity and Stock-Based Compensation - Additional Information (Details) - USD ($)			3 Months Ended
	Feb. 16, 2021	Feb. 10, 2020	Mar. 31, 2021	Mar. 31, 2020
Equity [Abstract]
Authorized stock repurchase amount	$ 4,000,000	$ 4,000,000
Stock repurchase program period	1 year	1 year
Shares repurchased and retired during the period			0	366,000
Total cost of shares repurchased and retired				$ 2,000,000
Average price per share of shares repurchased				$ 5.46

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Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2020
Income Tax Contingency [Line Items]
Income tax expense	$ 490,000	$ 166,000	$ 570,000	$ 207,000
Benefit related to reversal of previously recorded uncertain tax positions			300,000
Income tax expense from discontinued operations		$ (100,000)		$ (47,000)
Unrecognized tax benefits that would impact effective tax rate	900,000		900,000		$ 1,200,000
Accrual for potential interest and penalties	$ 600,000		$ 600,000		$ 800,000
Minimum
Income Tax Contingency [Line Items]
Number of years open for tax examinations			3 years
Maximum
Income Tax Contingency [Line Items]
Number of years open for tax examinations			5 years

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Commitments and Contingencies - Additional Information (Details) $ in Millions	6 Months Ended
	Mar. 31, 2021 USD ($)
Other Commitments [Line Items]
Purchase obligation	$ 11.8
Minimum
Other Commitments [Line Items]
Severance payment term	12 months
Maximum
Other Commitments [Line Items]
Severance payment term	36 months

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Business Segment Information - Additional Information (Details)	6 Months Ended
	Mar. 31, 2021 segment
Segment Reporting [Abstract]
Number of business segments	2

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Business Segment Information - Schedule of Business Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2021	Mar. 31, 2020	Sep. 30, 2020
Segment Reporting Information [Line Items]
Net revenues	$ 19,790	$ 14,460	$ 37,765	$ 35,152
Operating income (loss)	171	(972)	1,225	665
Identifiable assets	107,936		107,936		$ 102,098
Operating Segments | Semiconductor
Segment Reporting Information [Line Items]
Net revenues	17,119	11,992	32,694	29,224
Operating income (loss)	1,665	(18)	3,862	2,704
Identifiable assets	56,079		56,079		51,648
Operating Segments | Material and Substrate
Segment Reporting Information [Line Items]
Net revenues	2,671	2,468	5,071	5,285
Operating income (loss)	(253)	421	(319)	955
Identifiable assets	19,714		19,714		12,717
Non-Segment Related
Segment Reporting Information [Line Items]
Net revenues				643
Operating income (loss)	(1,241)	$ (1,375)	(2,318)	$ (2,994)
Identifiable assets	$ 32,143		$ 32,143		$ 37,733

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Major Customers and Foreign Sales - Additional Information (Details) - Net Revenues - Customer Concentration Risk	6 Months Ended
	Mar. 31, 2021
Customer One
Revenue, Major Customer [Line Items]
Concentration risk, percentage	17.00%
Customer Two
Revenue, Major Customer [Line Items]
Concentration risk, percentage	10.00%

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Major Customers and Foreign Sales - Schedule of Revenues by Geographic Region (Details) - Net Revenues - Geographic Concentration Risk	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue, Major Customer [Line Items]
Concentration risk, percentage	100.00%	100.00%
United States
Revenue, Major Customer [Line Items]
Concentration risk, percentage	24.00%	34.00%
Other North America
Revenue, Major Customer [Line Items]
Concentration risk, percentage	3.00%	6.00%
Total North America
Revenue, Major Customer [Line Items]
Concentration risk, percentage	27.00%	40.00%
China
Revenue, Major Customer [Line Items]
Concentration risk, percentage	28.00%	24.00%
Malaysia
Revenue, Major Customer [Line Items]
Concentration risk, percentage	5.00%	4.00%
Taiwan
Revenue, Major Customer [Line Items]
Concentration risk, percentage	20.00%	11.00%
Other Asia
Revenue, Major Customer [Line Items]
Concentration risk, percentage	8.00%	7.00%
Total Asia
Revenue, Major Customer [Line Items]
Concentration risk, percentage	61.00%	46.00%
Germany
Revenue, Major Customer [Line Items]
Concentration risk, percentage	3.00%	3.00%
Other Europe
Revenue, Major Customer [Line Items]
Concentration risk, percentage	9.00%	11.00%
Total Europe
Revenue, Major Customer [Line Items]
Concentration risk, percentage	12.00%	14.00%

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Assets Held for Sale, Discontinued Operations and Disposals - Additional Information (Details) - USD ($) $ in Thousands			6 Months Ended
	Jan. 22, 2020	Jun. 07, 2019	Mar. 31, 2021	Mar. 31, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain (Loss) on sale of subsidiary				$ (13,709)
SoLayTec | Discontinued Operations, Disposed of by Sale [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain (Loss) on sale of subsidiary		$ 1,600
Tempress | Discontinued Operations, Disposed of by Sale [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Unsecured term loan, principal amount	$ 2,250
Pre-tax loss on deconsolidation	10,900
Previously recorded accumulated foreign currency translation losses recognized	$ 7,200
Forgave unsecured term loans			$ 500
R2D | Disposal Group, Disposed of by Sale, Not Discontinued Operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain (Loss) on sale of subsidiary				$ (2,800)

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Assets Held for Sale, Discontinued Operations and Disposals - Operating Results of Discontinued Operations (Details) - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2020	Mar. 31, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income tax benefit	$ (100,000)	$ (47,000)
Net loss from discontinued operations, net of tax	(11,151,000)	(11,816,000)
Tempress and SoLayTec | Discontinued Operations, Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues, net of returns and allowances	2,155,000	7,442,000
Cost of sales	1,830,000	5,969,000
Gross profit	325,000	1,473,000
Selling, general and administrative	476,000	1,814,000
Research, development and engineering	91,000	540,000
Restructuring charges	37,000	37,000
Operating loss	(279,000)	(918,000)
Loss on sale of subsidiary	(10,916,000)	(10,916,000)
Interest expense and other, net	(22,000)	(29,000)
Loss from discontinued operations before income taxes	(11,217,000)	(11,863,000)
Income tax benefit	(66,000)	(47,000)
Net loss from discontinued operations, net of tax	$ (11,151,000)	$ (11,816,000)

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Assets Held for Sale, Discontinued Operations and Disposals - Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Reversal of allowance for doubtful accounts, net	$ 28	$ (32)
Tempress and SoLayTec | Discontinued Operations, Held-for-sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss from discontinued operations, net of tax		(11,816)
Depreciation and amortization		180
Reversal of allowance for doubtful accounts, net		(66)
Purchases of property, plant and equipment		$ 1