ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read together with our Consolidated Financial Statements and the accompanying notes included in "Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K. This discussion contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors including, but not limited to, those described in “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Please refer to page 5 for further information regarding forward-looking statements and “Item 1A. Risk Factors” for a description of our risk factors.
Overview
We provide equipment, consumables and services for semiconductor device packaging, wafer production and device fabrication. Our products are used to fabricate and package semiconductor devices, such as graphic processing units (GPU’s) used in AI applications, silicon carbide (SiC) and silicon (Si) power devices and other optical, analog and digital devices. We sell these products to semiconductor device packaging, electronic assembly and device fabrication companies worldwide.
We operate in two reportable segments, based primarily on the industries they serve: (i) Thermal Processing Solutions and (ii) Semiconductor Fabrication Solutions. Our thermal processing solutions include reflow equipment for chip packaging and electronic assembly, diffusion furnaces and furnaces used to produce ceramic based power semiconductor packages and passive electronic components. Our semiconductor fabrication solutions include consumables, equipment and services for wafer polishing, cleaning, slicing and dicing.
The markets we serve are historically cyclical, but not seasonal, with constantly evolving technical requirements and can be subject to tariffs and sourcing restrictions driven by geopolitical tensions. Our revenue is impacted by these broad industry trends.
Growth and Investment Strategy
We believe there are three key secular trends that are key to our future growth:
Artificial Intelligence - With Artificial Intelligence (AI), we believe our reflow oven systems have leading market share with Outsourced Semiconductor Assembly and Test Services (OSATS) providers who perform advanced packaging of the AI chips.
Supply Chain Resiliency - There is a global trend of creating supply chain resiliency by expanding and/or relocating operations outside of mainland China. We believe these factories will create demand for new equipment and services in growing regions like Southeast Asia and Mexico.
Advanced Mobility - Advanced Mobility encompasses both the development and adoption of electric vehicles and charging infrastructure, including both electric vehicle (EV) and hybrid electric vehicles (HEV), as well as advanced automotive electronics including Advanced Driver Assistance Systems (ADAS), infotainment and telematics. Our products intersect these markets in multiple ways: CMP consumables and wafer cleaning systems for the SiC substrates used in the EV power inverters; thermal processing systems for producing EV battery cooling systems and ceramic substrates for HEV power semiconductor packaging; and reflow ovens for ADAS, infotainment and telematics component assemblies.
Customer-centric product development in R&D : We continue to invest in research and development to expand our Thermal Processing Solutions reflow equipment product-line for AI applications. Our goal is to expand our addressable market by enabling mass production of higher density packages. We are also investing in application development and R&D resources to accelerate growth of our Semiconductor Fabrications Solutions business by expanding our consumables product portfolio and providing exceptional technical support and service to customers.
Semi-Fabless Manufacturing Model: We have migrated to a semi-fabless manufacturing model for the majority of our capital equipment business to improve our ability to scale production and reduce fixed costs. Our manufacturing partners provide a cost-effective alternative to in-house production and help mitigate the financial impact of variable demand that is inherent to the capital equipment business.
In June 2022, we completed the sale of the real property where our manufacturing facility in Massachusetts is located and entered into a two-year leaseback of the facility. This sale-leaseback transaction resulted in a net cash inflow of approximately $14.9 million, after repayment of the existing mortgage and settlement of related sale expenses. In September 2023, we signed a lease for a new location with less square footage and completed the move to this new location in June 2024. As we expand our use of contract manufacturers, we will continue to look for ways to reduce our real estate footprint. In March 2024, we completed the sale of our corporate headquarters real property in Arizona. The sale resulted in a net cash inflow of approximately $2.5 million, after settlement of related sale expenses. Following the closing of this transaction, we entered into a lease agreement for a new office for our corporate headquarters, which commenced during the third quarter of fiscal year 2024. In addition, we are evaluating business continuity and resiliency within our operations, our management information systems, and our needs to allow for greater efficiencies and to ensure our infrastructure can support our future growth plans. As a capital equipment manufacturer, we will continue to invest in our business to drive future growth.
Segment Reporting Changes
We evaluated our organizational structure and concluded that we have two reportable segments; Thermal Processing Solutions and Semiconductor Fabrication Solutions.
Industry Fluctuations
Our quarterly and annual operating results have been and will continue to be impacted by the timing of large system orders. Further, the semiconductor equipment industry is highly cyclical, and the conditions of this industry remain volatile. Therefore, our order flow fluctuates quarter to quarter. For additional information regarding the risks related to our business and industry, please refer to “Item 1A. Risk Factors” within this Form 10-K.
Fiscal Year
Our fiscal year is from October 1 to September 30. Unless otherwise stated, references to the years 2025 and 2024 relate to the fiscal years ended September 30, 2025 and 2024, respectively.
Results of Operations
The following table sets forth certain financial data as a percentage of net revenue for the periods indicated:
Years Ended September 30,
Net revenue
Cost of sales
Intangible asset impairment
Gross margin
Selling, general and administrative
Research, development and engineering
Gain on sale of fixed assets
Goodwill impairment
Intangible asset impairment
Severance
Operating loss
Interest income
Interest expense
Foreign currency gain (loss)
Other
Loss before income taxes
Income tax provision
Net loss
Fiscal 2025 compared to Fiscal 2024
Net Revenue
Net revenue consists of revenue recognized upon shipment or delivery of equipment. 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, gross profit and operating income can be significantly impacted by the timing of system shipments.
Our net revenue by reportable segment was as follows, dollars in thousands:
Years Ended September 30,
Increase
Segment
(Decrease)
% Change
Thermal Processing Solutions
Semiconductor Fabrication Solutions
Total net revenue
Net revenue for the years ended September 30, 2025 and 2024 were $79.4 million and $101.2 million, respectively, a decrease of $21.9 million or 22%. Revenue from the Thermal Processing Solutions segment decreased $11.1 million, or 16%, over the prior year period. Our Thermal Processing Solution results for 2025 reflect decreases in belt furnace shipments and horizontal diffusion furnaces shipments, partially offset by increases in shipments of our parts and service business. We are also seeing year-over-year growth in our advanced packaging SPG reflow oven business due to AI chip demand. Revenue from our Semiconductor Fabrication Solutions segment decreased $10.7 million, or 34%, due to decreases in shipments of our polishing equipment. Additionally, we experienced declines in our wafer cleaning equipment, partially offset by increases in shipments of our consumables. Our chemical consumable business, which produces solutions for the semiconductor and medical industries experienced year-over-year growth.
Orders and Backlog
New orders booked by reportable segment were as follows, dollars in thousands:
Years Ended September 30,
Segment
Increase (Decrease)
% Change
Thermal Processing Solutions
Semiconductor Fabrication Solutions
Total new orders
Our backlog by reportable segment was as follows, dollars in thousands:
September 30,
Segment
Increase
(Decrease)
% Change
Thermal Processing Solutions
Semiconductor Fabrication Solutions
Total backlog
At the end of 2025, two customers individually accounted for 29% and 11% of our total backlog. No other customer accounted for more than 10% of our backlog as of September 30, 2025. 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. 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. During 2025, the improvement in lead times across all of our product lines favorably contributed to the decline in our backlog.
Gross Profit and Gross Margin
Gross profit is the difference between net revenue and cost of goods sold and intangible asset impairment. 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 reportable segment were as follows, dollars in thousands:
Years Ended September 30,
Segment
Gross
Margin
Gross
Margin
Increase
(Decrease)
% Change
Thermal Processing Solutions
Semiconductor Fabrication Solutions
Total gross profit
Gross profit for the years ended September 30, 2025 and 2024 was $27.0 million and $36.2 million, respectively, representing a decrease of $9.2 million, or 26%. Gross margin for 2025 and 2024 was 34% and 36%, respectively. Gross margin for the Thermal Processing Solutions segment stayed consistent at 35% in 2025 and 2024, due primarily to inventory obsolescence expense and unfavorable product mix with decreases in shipments of our lower margin profile high-temperature furnaces and BDF equipment partially offset by the employee retention credit (ERC) which reduced expenses. In addition, we had an increase in shipments of our higher margin profile advanced packaging SPG equipment. Gross margin for the Semiconductor Fabrication Solutions segment, decreased to 30% in 2025, compared to 37% in 2024 due primarily to inventory obsolescence expense caused by a decline in the mature node semiconductor market slightly offset by the ERC which reduced expenses. We experienced moderate material costs increases across all our segments. In response to such increased costs, we reviewed our pricing plans and supplier agreements, with the objective of passing along these increased costs to our customers where possible; however, we continue to experience pricing pressure from our customers. We are also continuing to explore additional partnerships with contract manufacturers, who can leverage their buying power on a larger scale. Throughout fiscal 2025, we made targeted labor reductions as a result of the shift to contract manufacturing and the continuing in the broader semiconductor industry.
Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses consist primarily 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.
Our net SG&A expense by reportable segment was as follows, dollars in thousands:
Years Ended September 30,
Increase
Segment
(Decrease)
% Change
Thermal Processing Solutions
Semiconductor Fabrication Solutions
Non-segment related
Total selling, general and administrative expense
Total SG&A expenses for the years ended September 30, 2025 and 2024 were $29.0 million and $33.8 million, respectively, representing a decrease of $4.9 million or 14%. This decrease was primarily due to planned cost reduction efforts around overhead expenses and staff reductions during 2025, resulting in lower insurance expenses, professional fees, salaries and employee-related expenses, such as travel, commissions and bonuses. In addition, the ERC reduced expenses contributing to the lower SG&A. Non-segment related SG&A expense includes $1.2 million and $1.5 million of non-cash stock-based compensation expense for 2025 and 2024, respectively.
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. RD&E expenses may vary from period to period depending on the engineering projects in process. Expenses related to engineers working on strategic projects or sustaining engineering projects are recorded in RD&E. However, from time to time, we add functionality to our products or develop new products during
engineering and manufacturing to fulfill specifications in a customer’s order, in which case the cost of development, along with other costs of the order, are charged to cost of goods sold.
Our net research and development expense by reportable segment was as follows, dollars in thousands:
Years Ended September 30,
Increase
Segment
(Decrease)
% Change
Thermal Processing Solutions
Semiconductor Fabrication Solutions
Total research, development and engineering expense
RD&E expenses for the years ended September 30, 2025 and 2024 were $2.6 million and $4.2 million, respectively, a decrease of $1.5 million. The decrease in RD&E expense is due to the timing of purchases related to specific strategic-development projects at our Thermal Processing Solutions and Semiconductor Fabrication Solutions segments. In addition we had lower overhead expenses due to cost saving initiatives and the ERC which reduced expenses.
Gain on Sale of Fixed Assets
Gain on sale of fixed assets consists of the gain on the sale of our corporate headquarters in Arizona in March 2024. This sale resulted in a net gain of approximately $2.2 million, after settlement of related sale expenses and disposal of assets.
Intangible Asset Impairment
In the second quarter of fiscal year 2025, we recognized impairment of our definite lived intangible assets of $2.6 million at our Semiconductor Fabrication Solutions segment. As disclosed above, this impairment was recorded within operating expenses in the Condensed Consolidated Statement of Operations. See Note 8 for a description of the facts and circumstances leading to the intangible asset impairments.
In the first quarter of fiscal year 2024, we recognized impairment of our definite lived intangible assets of $1.3 million at our Semiconductor Fabrication Solutions segment. Of the $1.3 million, $0.8 million of this impairment was recorded in cost of goods sold, and the remainder was recorded within operating expenses in our Consolidated Statement of Operations. See Note 8 for a description of the facts and circumstances leading to the intangible asset impairment events.
Goodwill Impairment
In the second quarter of fiscal year 2025, we recognized impairment of our goodwill of $15.4 million at our Semiconductor Fabrication Solutions segment and $5.0 million at our Thermal Processing Solutions segment. See Note 9 for a description of the facts and circumstances leading to the goodwill impairment.
In the first quarter of fiscal year 2024, we recognized impairment of our goodwill of $6.4 million at our Semiconductor Fabrication Solutions segment as a result of a triggering event identified at the end of the first quarter. See Note 9 for a description of the facts and circumstances leading to the goodwill impairment.
Severance Expense
Severance expense was $0.7 million and $0.4 million in 2025 and 2024, respectively. This related primarily to staff reductions across our locations as we shifted more work to contract manufacturers and dealt with decreasing demand.
Income Taxes
Our effective tax rate was (8.3)% and (13.0)% in 2025 and 2024, respectively. The effective tax rate is the ratio of total income tax expense to pre-tax income. The effective tax rates for 2025 and 2024 were lower than the U.S. statutory rate of 21%. The 2025 effective tax rate was negatively impacted by non-deductible expenses, including
goodwill impairment, foreign income taxed at different rates, foreign withholding tax and losses for which no tax benefit can be recognized.
In 2025 and 2024, we recorded income tax expense of $2.3 million and $1.0 million, respectively. The income tax provisions are based upon estimates of annual income, annual permanent differences, statutory tax rates and credits in the various jurisdictions in which we operate. Significant judgments and estimates are required in the determination of the consolidated income tax expense.
Generally accepted accounting principles of the United States (“GAAP”) 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 objective negative evidence includes cumulative losses in recent years. Such objective negative evidence limits the ability to consider other subjective evidence, such as future projections. Based on the consideration of all available evidence, we have concluded that we will maintain a full valuation allowance for the net deferred tax assets in the U.S. 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 U.S. net deferred tax assets are appropriate.
The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations. ASC 740, "Income Taxes", states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. As of September 30, 2025, we have no unrecognized tax benefits recorded within our financial statements. We record unrecognized tax benefits as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available.
We expect to pay minimal U.S federal cash taxes for the foreseeable future as a result of our U.S. net operating losses and tax credits that are carried forward.
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-deductible expenses incurred as a percent of pre-tax income and the effectiveness of our tax planning strategies.
On July 4th, 2025, the President signed into law significant federal tax legislation, H.R.1 (commonly known as the One Big Beautiful Bill Act or OBBBA). The legislation includes numerous changes to U.S. corporate income tax law, including but not limited to: permanent 100% bonus depreciation for qualified property, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on business interest expense, changes to the international tax regime, and expanded limitations on the deductibility of executive compensation under IRC Section 162(m). Most provisions are effective for tax years beginning after December 31, 2024, with certain transition rules and exceptions.
OBBBA is not expected to have a material impact on our consolidated financial statements due to the full valuation allowance in the US. We continue to monitor additional guidance issued relating to OBBBA and assess the impact to our financial statements.
Selected Quarterly Data (Unaudited)
The following table sets forth selected unaudited consolidated quarterly financial information, in thousands, except percentages and per share amounts:
Fiscal Year 2025
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Revenue, net
Cost of sales
Intangible asset impairment
Gross profit (loss)
Selling, general and administrative
Research, development and engineering
Loss (gain) on sale of fixed assets
Goodwill impairment
Intangible asset impairment
Severance expense
Operating income (loss)
Interest income
Interest expense
Foreign currency gain (loss)
Other
Income (loss) before income taxes
Income tax provision
Net income (loss)
Gross margin
Operating margin
Income (loss) Per Share:
Net income (loss) per basic share
Weighted average shares outstanding - basic
Net income (loss) per diluted share
Weighted average shares outstanding - diluted
Fiscal Year 2024
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Revenue, net
Cost of sales
Intangible asset impairment
Gross profit
Selling, general and administrative
Research, development and engineering
Gain on sale of fixed assets
Goodwill impairment
Intangible asset impairment
Severance expense
Operating (loss) income
Interest income
Interest expense
Foreign currency (loss) gain
Other
(Loss) income before income taxes
Income tax provision
Net (loss) income
Gross margin
Operating margin
(Loss) income Per Share:
Net (loss) income per basic share
Weighted average shares outstanding - basic
Net (loss) income per diluted share
Weighted average shares outstanding - diluted
Liquidity and Capital Resources
Liquidity
We maintain a strong focus on liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our obligations through our industry cycles, under both normal and stressed conditions. We manage our liquidity to provide access to sufficient funding to meet our business needs and financial obligations throughout business cycles. We operate in the semiconductor capital equipment industry, which is cyclical, and we must ensure we have sufficient liquidity during the down cycles and varying macroeconomic conditions. Our liquidity plans are established within the context of our financial and strategic planning processes and consider the liquidity necessary to fund our operating commitments, which include purchase obligations for inventory and equipment, rent, payroll and general expenses. We also take into consideration our capital allocation and growth objectives, including investing in research and development and capital expenditures (including capacity assessments and IT systems).
The success of our investment and 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 a credit facility with a regional bank, the sale of equity securities, which includes common stock sold in private transactions and public offerings, and cash generated from operations. 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.
Capital Allocation
Our capital allocation strategy focuses on building shareholder value. We do this by first investing in ourselves and growing our capabilities. We then look to supplement and strengthen our capabilities through acquisitions and strategic investments. And finally, we provide the return realized by our investments to our stockholders. These three priorities are detailed as follows:
Invest in R&D and capital expenditures to strengthen our competitive position. Historically, our R&D efforts have focused on upgrades to existing product platforms as well as new product designs. Capital expenditures consist primarily of capacity expansion as well as investments in IT systems.
Invest in strategic acquisitions that will complement our strong platform of product offerings. In evaluating these opportunities, our objectives include enhancing our earnings and cash flows, adding complementary product offerings, expanding our geographic footprint, improving our production efficiency and expanding our customer base. As a result, we continue to manage our balance sheet to maintain adequate liquidity so that we may react quickly as opportunities arise.
Once the above priorities have been met, we evaluate the return of capital to shareholders, as we have done in the past. We have never paid dividends on our common stock, and we do not expect to pay dividends on common stock in the foreseeable future. However, our Board from time to time has authorized annual stock repurchase plans.
Cash and Cash Flow
The following table sets forth for the periods presented certain consolidated cash flow information, in thousands:
Years Ended September 30,
Net cash provided by operating activities
Net cash used in investing activities
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
A summary of our cash position, is as follows, in thousands, except working capital ratio:
September 30,
Cash and cash equivalents
Restricted cash
Working capital
Current ratio (current assets to current liabilities)
The increase in cash and cash equivalents from September 30, 2024 of $6.8 million was primarily due to cash generated in operations slightly offset by investing activities and the effect of exchange rates on cash. We maintain a portion of our cash and cash equivalents in Renminbis, a Chinese currency, at our operations in China. As a result, changes in the exchange rates have an impact on our cash balances.
During periods of weakening demand, we typically generate cash from operating activities, which we may decide to reinvest in our business via strategic projects. Conversely, we are more likely to use operating cash flows for working capital requirements during periods of higher growth. 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, the incurrence of long-term debt and customer deposits.
Cash Flows from Operating Activities
Cash provided by operating activities was $7.9 million in 2025 compared to cash provided by operating activities of $9.8 million in 2024. In 2025, we decreased our accounts receivable, inventory, and contract asset balances as we completed shipments throughout the year, reducing our backlog. These cash inflows were partially offset by decreases in accrued liabilities and contract liabilities as our purchasing activity decreased and the related liabilities were paid. During 2024, we decreased our accounts receivable, inventory, and contract asset balances as we completed shipments throughout the year, also reducing our backlog. These cash inflows were partially offset by decreases in accounts payable and accrued liabilities as our purchasing activity decreased and the related liabilities were paid.
Cash Flows from Investing Activities
Cash used in investing activities was $0.9 million in 2025, primarily consisting of $1.0 million in capital expenditures made to improve operations and systems. Cash used in investing activities was $2.2 million in 2024, primarily consisting of $4.9 million in capital expenditures, partially offset by $2.7 million of proceeds from the sale of our real property in Arizona. We expect capital expenditures to decrease slightly in 2026, as we have completed our relocation projects and continue to pursue optimization projects to implement new technology across our divisions to improve our business.
Cash Flows from Financing Activities
In 2025, cash provided by financing activities was $0.3 million, comprised primarily of $0.4 million proceeds from the exercise of stock options. In 2024, cash used in financing activities was $10.6 million, comprised primarily of $10.7 million payments on long-term debt. Our bank term loan and revolving credit agreement has been paid in full and our remaining debt is a small amount of financing leases.
Off-Balance Sheet Arrangements
As of September 30, 2025, 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
We had the following contractual obligations as of September 30, 2025, in thousands:
Contractual obligations
Total
Less than
1 year
1-3 years
3-5 years
More than
5 years
Debt obligations
Lease obligations:
Buildings
Office equipment
Vehicles
Total operating lease obligations
Purchase obligations
Total
Acquisitions
Our business strategy includes the possible acquisition of or investments in other businesses to expand or complement our operations. The magnitude, timing and nature of any future acquisitions or investments will depend on a number of factors, including the availability of suitable acquisition candidates, the negotiation of acceptable terms, our financial capabilities and access to capital, and general economic and business conditions. Financing for future
transactions would result in the utilization of cash, incurrence of additional debt, issuance of equity securities or some combination of the foregoing.
Critical Accounting Estimates
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of our consolidated financial statements that have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the consolidated financial statements, the 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.
On an on-going basis, we evaluate our estimates and judgments, including those related to income taxes, inventory valuation, business combinations, goodwill and long-lived assets. We base our estimates and judgments on historical experience, expectations regarding the future 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 estimate 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 “Item 1A. Risk Factors.” We believe that the following accounting estimates we have identified as critical involve a greater degree of judgment and complexity than our other accounting policies. Accordingly, these are the estimates we believe are the most critical to understanding and evaluating our consolidated financial condition and results of operations. Refer to Note 1 to our consolidated financial statements included elsewhere in this report for a summary of each of the related accounting policies.
Income Taxes. We file consolidated federal income tax returns in the United States for all subsidiaries except those in China, Singapore, Malaysia and the UK, where separate returns are filed. The calculation of tax liabilities for all jurisdictions involves significant judgment in identifying uncertain tax positions, estimating the amount of deferred tax assets that will be realized in the future and the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our operations and financial condition. For the years ended September 30, 2025 and 2024, we had no unrecognized tax benefit.
Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. In evaluating our ability to recover our deferred tax assets in the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies and results of recent operations. It is difficult to conclude that a valuation allowance is not needed when the negative evidence includes cumulative losses in recent years. If we were to determine that it is more likely than not that we would not be able to realize all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to earnings in the period such determination is made. Likewise, if we later determine that it is more likely than not that all or part of the net deferred tax assets would be realized, a tax benefit would be realized when all or part of the previously provided valuation allowance would be reversed. As of September 30, 2025, we have significant U.S. deferred tax assets that have a full valuation allowance. Any changes to the judgments related to our valuation allowance could have a material impact on our results of operations. For the years ended September 30, 2025 and 2024, we had net deferred tax assets of $1.0 million and $0.2 million.
Inventory Valuation. We value our inventory at the lower of cost or net realizable value. Inventory cost includes the purchase price of parts or finished goods and freight and/or other overhead costs incurred to receive the inventory into our manufacturing facilities. We regularly review inventory quantities and record a write-down to net realizable value for excess and obsolete inventory. The write-down is primarily based on purchase history, historical inventory usage
adjusted for expected changes in product demand, product offerings and production requirements. Our industry is characterized by customers in highly-cyclical industries, rapid technological changes, frequent new product developments and rapid product obsolescence. Changes in demand for our products or to our product offerings could result in further write-downs, which could have a material impact on our results of operations.
During the year ended September 30, 2025, we recorded provisions to reduce inventories to their lower of cost and net realizable value of approximately $6.6 million compared to $2.8 million during the year ended September 30, 2024.
Business Combination. We follow the acquisition method of accounting to record identifiable assets acquired and liabilities assumed in connection with acquired businesses at their estimated fair value as of the date of acquisition.
Identifiable intangible assets from business combinations are recognized at their estimated fair values as of the date of acquisition and consist of non-compete agreements, backlog, customer relationships, developed technology and trade names. Determination of the estimated fair value of identifiable intangible assets requires judgment. The fair value of acquired identifiable intangible assets were estimated using various valuation methodologies. The multi-period excess earnings method was used to value the acquired developed technology and the distributor method for the acquired customer relationships. Both approaches are income-based methods, which required judgment in estimating appropriate discount rates, obsolescence, customer attrition, and remaining useful lives. Any adverse change in these factors, among others, could have a significant effect on the valuation of the intangible assets and could have a material effect on our consolidated financial statements. The acquired intangible assets all had finite lives, ranging from one to ten years. The fair value of identifiable intangible assets acquired in connection with our acquisition of Entrepix was $13.6 million. Goodwill represents the excess of the fair value of the consideration conveyed in an acquisition over the fair value of net assets acquired.
Goodwill . We perform an annual impairment test as of September 30, or more frequently if indicators of potential impairment exist, to determine whether the fair value of a reporting unit in which goodwill resides is less than its carrying value. If, based on the review of the qualitative factors, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying value, we would bypass the quantitative impairment test. We have determined that our reporting units are the same as our reporting segments.
When evaluating goodwill for impairment, we may first perform a qualitative assessment whether it is more likely than not that a reporting unit’s carrying amount exceeds its fair value, referred to as a “step zero” approach. Events or circumstances we consider in performing the “step zero” qualitative assessment include macro-economic conditions, market and industry conditions, internal cost factors, share price fluctuations, and the operational stability and overall financial performance of the reporting units. If we conclude that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, we would perform the first step of the goodwill impairment test.
The first step of the goodwill impairment test, which compares the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not considered impaired, and we are not required to perform additional analysis. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, we would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value (although the loss would not exceed the total amount of goodwill allocated to the reporting unit).
Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. Our goodwill impairment test uses a weighting of the income approach and the market approach to estimate a reporting unit’s fair value. The income approach is based on a discounted future cash flow analysis that uses certain assumptions including: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; expected future investments and working capital requirements to sustain and grow the business; and estimated discount rates based on the reporting unit’s weighted average cost of capital as derived by the Capital Asset Pricing Model and other methods, which includes observable market inputs and other data from identified comparable companies. The same estimates are also used internally for our capital budgeting process, and for long-term and short-term business planning and forecasting. We test the reasonableness of the inputs and outcomes of our discounted cash flow analysis against available comparable market data, and we also perform a reconciliation of our total market capitalization to the estimated fair value of all of our reporting units. The market approach is based on the application
of appropriate market-derived multiples selected from (i) comparable publicly-traded companies and/or (ii) the implied transaction multiples derived from identified merger and acquisition activity in the market. Multiples are then selected based on a comparison of the reviewed data to that of the reporting unit and applied to relevant historical and forecasted financial parameters such as levels of revenues, EBITDA, EBIT or other metrics. If actual results differ significantly from our projections, we may be required to record a material impairment charge.
As of March 31, 2025, the Company lowered its guidance for the second quarter of fiscal year 2025 and reset projections for future periods due to prolonged weakness in the mature node semiconductor market driven by high inventory, tepid demand, and geopolitical tensions. As a result, we recognized impairment of our goodwill of $15.4 million at our Semiconductor Fabrication Solutions segment and $5.0 million at our Thermal Processing Solutions segment. At the end of December 2023, we identified a triggering event. As a result of the decline in our stock price as of December 31, 2023, our book value materially exceeded our market value leading to a $6.4 million impairment charge in fiscal 2024. The impairment testing as of September 30, 2024, resulted in the fair value of our Thermal Processing Solutions segment exceeding its carrying value by approximately 44%, and the fair value of our Semiconductor Fabrication Solutions segment exceeding its carrying value by approximately 18%, resulting in no additional goodwill impairment. See Note 9 for additional information on goodwill by segment.
Long-Lived Asset Impairment. Long-lived assets, including tangible and intangible assets with finite lives, are amortized over their respective lives to their estimated residual values and are also reviewed for impairment whenever certain triggering events may indicate impairment. When such events or changes in circumstances occur, a recoverability test is performed comparing projected undiscounted cash flows from the use and eventual disposition of an asset group to its carrying value. If the estimated undiscounted cash flows are not sufficient to recover the carrying value of the asset group, the Company then compares the carrying value of the individual long-lived assets with their estimated fair values. An impairment would be recorded for the excess of the carrying value over the fair value. If actual results differ significantly from our projections, we may be required to record a material impairment charge.
As of September 30, 2025 and 2024, the Company performed a qualitative impairment test on intangible assets and goodwill and concluded there was no further impairment. As of March 31, 2025, the Company lowered its guidance for the second quarter of fiscal year 2025 and reset projections for future periods due to prolonged weakness in the mature node semiconductor market driven by high inventory, tepid demand, and geopolitical tensions. As a result, we recorded intangible asset impairment of $2.6 million in our Semiconductor Fabrication Solutions segment. As of December 31, 2023, we identified a triggering event due to the decline in our stock price driving our market value materially below our book value. As a result, we recorded a $1.3 million impairment charge in fiscal 2024 to the intangible assets in our Semiconductor Fabrication Solutions segment. See Note 8 for additional information on intangible assets.
Impact of Recently Issued Accounting Pronouncements
For discussion of recently issued accounting pronouncements, see “Recently Issued Accounting Pronouncements” within “Note 1. Summary of Operations and Significant Accounting Policies” in “Item 8. Financial Statements and Supplementary Data.”
ITEM 7A. QUANTITATIVE AND QUALITA TIVE 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 8. FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA
The following documents are filed as part of this Annual Report on Form 10-K:
Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 185 )
Consolidated Balance Sheets: September 30, 2025 and 2024
Consolidated Statements of Operations: Years ended September 30, 2025 and 2024
Consolidated Statements of Comprehensive Income (Loss): Years ended September 30, 2025 and 2024
Consolidated Statements of Shareholders’ Equity: Years ended September 30, 2025 and 2024
Consolidated Statements of Cash Flows: Years ended September 30, 2025 and 2024
Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements
Note 1
Summary of Operations and Significant Accounting Policies
Note 2
Earnings Per Share & Diluted Earnings Per Share
Note 3
Severance
Note 4
Inventories
Note 5
Property, Plant and Equipment
Note 6
Sale and Leaseback of Real Estate
Note 7
Leases
Note 8
Intangible Assets
Note 9
Goodwill
Note 10
Income Taxes
Note 11
Long-Term Debt
Note 12
Equity and Stock-Based Compensation
Note 13
Benefit Plans
Note 14
Commitments and Contingencies
Note 15
Reportable Segments
Note 16
Major Customers and Sales by Country
Note 17
Geographic Regions
Note 18
Subsequent Event
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
Amtech Systems, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Amtech Systems, Inc. and subsidiaries (the Company) as of September 30, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the two-year period ended September 30, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended September 30, 2025, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of the Company's reporting units
As discussed in Notes 1 and 9 to the consolidated financial statements, the Company evaluates goodwill for impairment on an annual basis as of September 30, or when it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The Company's goodwill impairment test uses a weighting of the income and market approaches to estimate a reporting unit’s fair value. The income approach is based on a discounted future cash flow analysis and involves the use of assumptions, including projections of revenues and expenses, long-term growth rates, and estimated discount rates. During the three months ended March 31, 2025, the Company performed an interim quantitative assessment for goodwill impairment that indicated that the carrying values of the Company’s reporting units exceeded their estimated fair values, resulting in goodwill impairment charges of
$15.4 million for the Semiconductor Fabrication Solutions reporting unit and $5.0 million for the Thermal Processing Solutions reporting unit. As of September 30, 2025, the Company has $0.9 million of goodwill, which relates to the Semiconductor Fabrication Solutions reporting unit.
We identified the evaluation of the fair values of the Company’s reporting units as of March 31, 2025 as a critical audit matter. A high degree of subjective auditor judgment was required to evaluate the key assumptions used in the discounted future cash flow analysis to estimate the fair values of the Company’s reporting units. Specifically, minor changes to key assumptions, including projected revenue and expenses, long-term growth rates, and estimated discount rates, could have a significant effect on the Company’s assessment of the fair value of each reporting unit. Additionally, the use of professionals with specialized skills and knowledge was required to assess these key assumptions.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design of certain internal controls related to the Company’s goodwill impairment process, including controls over the development of key assumptions and the determination of the estimated fair values of the Company’s reporting units. We evaluated each reporting unit’s projected revenue and expenses by comparing them to the historical results of the reporting unit and assessing the impacts of internal and/or external economic factors. In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:
evaluating the Company’s long-term growth rate for each reporting unit by comparing it to a long-term growth rate range that was independently developed using publicly available industry and economic growth rates
evaluating the Company’s discount rate for each reporting unit by comparing it to a discount rate that was independently developed using publicly available market data for comparable companies.
/s/ KPMG LLP
We have served as the Company’s auditor since 2024.
Phoenix, Arizona
December 10, 2025
PART I. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Consolidated B alance Sheets
(in thousands, except share and per share data)
September 30,
Assets
Current Assets
Cash and cash equivalents
Accounts receivable - Net
Inventories
Income taxes receivable
Other current assets
Total current assets
Property, Plant and Equipment - Net
Right-of-Use Assets - Net
Intangible Assets - Net
Goodwill
Deferred Income Taxes - Net
Other Assets
Total Assets
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable
Accrued compensation and related taxes
Accrued warranty expense
Other accrued liabilities
Current portion of finance lease liabilities and long-term debt
Current portion of long-term operating lease liabilities
Contract liabilities
Income taxes payable
Total current liabilities
Finance Lease Liabilities and Long-Term Debt
Long-Term Operating Lease Liabilities
Income Taxes Payable
Other Long-Term Liabilities
Total Liabilities
Commitments and Contingencies (Note 14)
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: 14,354,797 and 14,258,879 in
2025 and 2024, respectively
Additional paid-in capital
Accumulated other comprehensive loss
Retained deficit
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
The accompanying notes are an integral part of these consolidated financial statements.
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statem ents of Operations
(in thousands, except per share data)
Years Ended September 30,
Revenue, net
Cost of sales
Intangible asset impairment
Gross profit
Selling, general and administrative
Research, development and engineering
Loss (gain) on sale of fixed assets
Goodwill impairment
Intangible asset impairment
Severance expense
Operating loss
Interest income
Interest expense
Foreign currency gain (loss)
Other
Loss before income taxes
Income tax provision
Net Loss
Loss Per Share:
Net loss per basic share
Net loss per diluted share
Weighted average shares outstanding:
Basic
Diluted
The accompanying notes are an integral part of these consolidated financial statements.
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of C omprehensive Income (Loss)
(in thousands)
Years Ended September 30,
Net loss
Foreign currency translation adjustment
Comprehensive loss
The accompanying notes are an integral part of these consolidated financial statements.
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders’ Equity
(in thousands)
Common Stock
Accumulated
Additional
Other
Total
Par
Paid-in
Comprehensive
Retained
Shareholders’
Shares
Value
Capital
Income (Loss)
Deficit
Equity
Balances at September 30, 2023
Net loss
Translation adjustment
Stock compensation expense
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes
Stock options exercised
Balances at September 30, 2024
Net loss
Translation adjustment
Stock compensation expense
Issuance of common stock under employee stock plans, net of shares withheld for payroll taxes
Stock options exercised
Balances at September 30, 2025
The accompanying notes are an integral part of these consolidated financial statements.
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statem ents of Cash Flows
(in thousands)
Years Ended September 30,
Operating Activities
Net loss
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization
Write-down of inventory
Goodwill impairment
Intangible asset impairment
Provision for allowance for doubtful accounts
Deferred income taxes
Non-cash stock-based compensation expense
Loss (gain) on sale of fixed assets
Changes in operating assets and liabilities:
Accounts receivable
Inventories
Contract and other assets
Accounts payable
Accrued income taxes
Accrued and other liabilities
Contract liabilities
Net cash provided by operating activities
Investing Activities
Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Net cash used in investing activities
Financing Activities
Proceeds from the exercise of stock options
Repurchase of common stock
Payments on long-term debt
Borrowings on long-term debt
Payment of payroll taxes on stock-based compensation through shares withheld
Net cash provided by (used in) financing activities
Effect of Exchange Rate Changes on Cash and Cash Equivalents
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents, Beginning of Year
Cash and Cash Equivalents, End of Year
Supplemental Cash Flow Information:
Income tax payments, net
Interest paid
Supplemental Non-cash Operating, Financing and Investing Activities:
Transfer of inventory to property, plant, and equipment
Transfer of property, plant, and equipment to inventory
Payables due for fixed asset additions
Leased assets obtained in exchange for new operating lease liabilities
Leased assets obtained in exchange for new finance lease liabilities
The accompanying notes are an integral part of these consolidated financial statements.
Notes to Consolidated Financial Statements
For the Years Ended September 30, 2025 and 2024
1. Summary of Operatio ns and Significant Accounting Policies
Description of Business – Amtech provides equipment, consumables and services for semiconductor device packaging, wafer production and device fabrication. Our products are used to fabricate and package semiconductor devices, such as graphic processing units (GPU’s) used in AI applications, silicon carbide (SiC) and silicon (Si) power devices and other optical, analog and digital devices. We sell these products to semiconductor device packaging, electronic assembly and device fabrication companies worldwide.
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.
Our fiscal year is from October 1 to September 30. Unless otherwise stated, references to the years 2025 and 2024 relate to the fiscal years ended September 30, 2025 and 2024, respectively.
Principles of Consolidation – The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates – The preparation of Consolidated Financial Statements in conformity with US GAAP requires us to make estimates and judgments that affect the amounts reported in our Consolidated Financial Statements and the accompanying notes. Significant items subject to such estimates and assumptions include the useful lives of property, plant and equipment, realizability of intangible assets, deferred costs and deferred tax assets, standalone selling prices and future contract volumes and the direct costs to complete the performance obligation for revenue recognition, fair value of stock options, performance-based restricted stock units and warrants.
Cash and Cash Equivalents – We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Our cash and cash equivalents consist of amounts invested in U.S. money market funds and various U.S. and foreign bank operating and time deposit accounts.
We maintain our cash and cash equivalents in multiple financial institutions. Balances in the United States, which account for approximately 75 % and 66 % of total cash balances as of September 30, 2025 and 2024, respectively, are primarily invested in financial institutions insured by the FDIC as well as a money market account. The remainder of our cash is maintained with financial institutions with reputable credit in China, Singapore, the UK and Malaysia. We maintain cash in bank accounts in amounts which at times may exceed federally insured limits. At September 30, 2025 and 2024, account balances exceeded insured limits by approximately $ 12.0 million a nd $ 5.7 million, respectively. We have not experienced any losses on such accounts.
Accounts Receivable and Allowance for Credit Losses – Accounts receivable are recorded at the sales price of products sold to customers on trade credit terms. We establish a valuation allowance to reflect our best estimate of expected losses inherent in our accounts receivable balance. The allowance is based on our evaluation of the aging of the receivables, historical write-offs, the current economic environment and communications with the customer. We write off individual accounts against the allowance when we no longer believe that it is probable that we will collect the receivable because we become aware of a customer’s inability to meet its financial obligations.
The following is a summary of the activity in our allowance for credit losses, in thousands:
Years Ended September 30,
Balance at beginning of year
Provision
Write offs
Adjustment (1)
Balance at end of year
(1) Primarily foreign currency translation adjustments.
Our net accounts receivable as of September 30, 2025 and 2024 was $ 19.9 million and $ 22.0 million, respectively.
Inventories – We value our inventory at the lower of cost (first-in, first-out method) or net realizable value. Inventory cost includes the purchase price of parts or finished goods, labor, overhead and any freight cost incurred to receive the inventory into our manufacturing facilities. We regularly review inventory quantities and record a write-down to net realizable value for excess and obsolete inventory. The write-down is primarily based on historical inventory usage adjusted for expected changes in product demand and production requirements. Our industry is characterized by customers in highly-cyclical industries, rapid technological changes, frequent new product developments and rapid product obsolescence. Changes in demand for our products could result in further write-downs.
Other Current Assets – Other current assets consist of vendor deposits and prepaid expenses. No ite m included in other current assets makes up more than 5 % of total current assets.
Property, Plant and Equipment – Property, plant and equipment are recorded at cost upon acquisition. We begin depreciation and amortization when an asset is both in the location and condition for its intended use. Maintenance and repairs are charged to expense as incurred. The cost of property retired or sold and the related accumulated depreciation and amortization are removed from the applicable accounts when disposition occurs and any gain or loss is recognized. Depreciation and amortization are computed using the straight-line method over the estimated useful life of the asset. Useful lives for equipment and machinery range from three to seven years ; for leasehold improvements from three to fifteen years ; for furniture and fixtures from five to ten years ; for software from three to seven years and for buildings from 20 to 30 years .
Reviews are regularly performed to determine whether facts and circumstances exist which indicate that the useful life is shorter than originally estimated or the carrying amount of assets may not be recoverable. Impairment, if any, is based on the excess of the carrying amount over the estimated fair value of those assets.
Leases – 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 Consolidated Balance Sheets. Balances related to financing leases are immaterial and are included in property, plant and equipment, operating lease liabilities, finance lease liabilities and long-term debt in our 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 lease 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, which we include in the recognition of the ROU asset and lease liability, when it is reasonably certain that we will exercise that option.
We lease office space, buildings, land, vehicles and equipment. We made an accounting policy election not to separate non-lease components from lease components for all existing classes of underlying assets with the exception of land and buildings. Lease agreements with an initial term of 12 months or less with no renewal options are not recorded on the balance sheet. Instead, we recognize the lease expense as incurred over the lease term. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We have one lease that requires the underlying asset to be returned to its original condition at the end of the lease term. The related asset retirement obligation, which is immaterial, is reflected within other long-term liabilities in our Consolidated Balance Sheets.
Certain lease agreements include one or more options to renew, with individual option terms that can extend the lease term from one to five years . The exercise of lease renewal options is at our sole discretion. Some equipment leases 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.
In June 2022, we entered into a sale-leaseback transaction to facilitate a future move of our Massachusetts operations, pursuant to which we sold the property to a third party and agreed to lease the property back for two years. To determine whether the transfer of the property should be accounted for as a sale, we evaluated whether we transferred control to the third party in accordance with the revenue recognition guidance set forth in ASC 606. The transfer was deemed to be a sale at market terms. Therefore, we recognized the transaction price for the sale based on the cash
proceeds received, derecognized the carrying amount of the underlying assets and recognized a gain in the Consolidated Statements of Operations for the difference between the carrying value of the asset and the transaction price. We then accounted for the leaseback in accordance with our lease accounting policy.
Intangible Assets – Intangible assets acquired in business combinations are capitalized and subsequently amortized on a straight-line basis over their estimated useful life. We review our intangible assets for impairment when events or circumstances indicate the carrying value may not be recoverable. When indicators exist, recoverability of assets is measured by a comparison of the carrying value of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group is determined not to be recoverable, the Company performs an analysis of the fair value of the individual long-lived assets and will recognize an impairment loss when the fair value is less than the carrying value of such long-lived assets. Patent costs consist primarily of legal and filing fees incurred to file patents on proprietary methods and technology we developed. Patent costs are expensed when incurred, as they are insignificant.
In the second quarter of the year ended September 30, 2025 and first quarter of the year ended September 30, 2024, we recorded an impairment of definite lived intangible assets in our Semiconductor Fabrication Solutions segment. See Note 8 for a description of the facts and circumstances leading to the intangible asset impairment.
Goodwill – Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of net identified tangible and intangible assets acquired. Goodwill is not subject to amortization but is tested for impairment annually or when it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is concluded that there is impairment, we would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value (although the loss would not exceed the total amount of goodwill allocated to the reporting unit). We have determined that our reporting units are the same as our reporting segments.
In the second quarter of the year ended September 30, 2025 we recorded impairment of goodwill in our Semiconductor Fabrication Solutions and Thermal Processing Solutions segments. In the first quarter of the year ended September 30, 2024, we recorded an impairment of goodwill in our Semiconductor Fabrication Solutions segment. Additional information on impairment testing of goodwill is set forth in Note 9.
In the fourth quarter of the year ended September 30, 2025, we performed a qualitative assessment whether it is more likely than not that a reporting unit’s carrying amount exceeds its fair value, referred to as a “step zero” approach. Based on the review of the qualitative factors, we determined it is not more likely than not that the fair value of a reporting unit is less than its carrying value, we bypassed the quantitative impairment test. Events or circumstances we considered in performing the “step zero” qualitative assessment include macro-economic conditions, market and industry conditions, internal cost factors, share price fluctuations, and the operational stability and overall financial performance of the reporting units.
Revenue Recognition – We recognize revenue when a customer obtains control of promised goods or services in an amount that reflects the consideration expected to be received in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a product or service to the customer. The transaction price of a contract is allocated to each distinct performance obligation based upon the relative standalone selling price ("SSP") for each performance obligation and is recognized as revenue upon satisfaction of the performance obligation. We have elected the practical expedient in ASC 606 whereby an entity need not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. We have also elected the practical expedient in ASC 606 whereby an entity may recognize revenue on an as-invoiced basis in certain cases where performance obligations are satisfied over time and the invoiced amount corresponds directly with the value the provided to the customer. To record revenue properly, we apply the following five steps:
1) Identify the contract with the customer
A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the related payment terms, (ii) the contract
has commercial substance, and (iii) we determine that collection of substantially all consideration for goods and services that will be transferred is probable based on the customer’s intent and ability to pay the promised consideration.
2) Identify the performance obligations in the contract
Performance obligations are identified based on the goods and services that will be transferred to the customer that are both (i) capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other available resources, and (ii) are distinct in the context of the contract, whereby the transfer of the good or service is separately identifiable from other promises to the customer in the contract. To the extent a contract includes multiple promised goods and services, we must apply judgment to determine whether promised goods and services are capable of being distinct and distinct in the context of the contract. If these criteria are not met, the promised goods and services are accounted for as a combined performance obligation.
Our equipment sales consist of multiple promises, including the delivery of the system itself and obligations that are not delivered simultaneously with the system, such as installation services and training. In most cases, these services require minimal effort and are immaterial in the context of the contract. Therefore, equipment and related services are treated as one performance obligation. Customers who purchase new systems are provided an assurance-type warranty, generally for periods of 12 to 36 months. Assurance-type warranties are not considered a performance obligation.
We account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as performance obligations.
Our obligations for returns and/or refunds are immaterial in all periods presented.
3) Determine the transaction price
The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods and services to the customer.
The transaction price is based on the price reflected in the individual customer’s purchase order.
Occasionally, our customers earn a commission on the purchase and/or resale of our products. These payments to customers are recorded as a reduction of revenue an d are less than 5 % of our total revenues.
In substantially all of our sales transactions, we incur incremental costs to obtain contracts with customers, in the form of sales commissions. We maintain a commission program which rewards our sales representatives for system sales and our employees for system sales and other individual goals. We have elected a practical expedient to allow for the recognition of commission expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Based on the nature of our contracts with customers, we expense all commissions as incurred based upon the expectation that the amortization period would be one year or less.
4) Allocate the transaction price to performance obligations in the contract
If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each distinct performance obligation.
When required, the SSP for each performance obligation is based on observable data from standalone sales. To determine the SSP for labor-related performance obligations, we use directly observable inputs based on the standalone sale prices for these services.
5) Recognize revenue when, or as, we satisfy a performance obligation
We satisfy performance obligations either over time or at a point in time. Revenue is recognized over time if either (i) the customer simultaneously receives and consumes the benefits provided by our performance, (ii) our performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (iii) our performance
does not create an asset with an alternative use to the entity and we have an enforceable right to payment for performance completed to date. If we do not satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a customer. For over time recognition, we are required to select a single revenue recognition method for the performance obligation that faithfully depicts our performance in transferring control of the goods and services.
Equipment and related product revenues (e.g., furnace systems, system add-ons, machinery, consumables and spare parts) are recognized at a point in time, when they are shipped or delivered, depending on contractual terms.
Revenue for services, including maintenance services, is recognized over time based on hours incurred, as the hours incurred align to the maintenance activities performed. We also utilize the as-invoiced practical expedient in certain cases where performance obligations are satisfied over time and the invoiced amount corresponds directly with the value provided to the customer.
We exclude from the transaction price all sales taxes that are assessed by a governmental authority and that are imposed on and concurrent with a specific revenue-producing transaction and collected from a customer (for example, sales, use, value added, and certain excise taxes). Sales taxes are presented on a net basis (excluded from revenues) in our Consolidated Statements of Operations. Our remaining performance obligations as of September 30, 2025, have an original duration o f one year or less. Our customers generally have payment terms of 30 - 90 days . We do not have any payment terms that exceed one year from the point we have satisfied the related performance obligations.
Management reviews disaggregated revenue at the reportable segment level. Revenue-generating transactions vary between our reportable segments due to several factors. For example, lead times vary among our reportable segments and among our products. Most of the revenue for our Semiconductor Fabrication Solutions segment results from the sale of consumables, rather than equipment sales. These consumables have a much shorter production period than equipment produced by our other reportable segment. Due to these variations between reportable segments, management determined that disaggregated revenue by reportable segment sufficiently depicts how economic factors affect the nature, amount, timing and uncertainty of our revenue and cash flows. See Note 15 for additional information on our reportable segments.
Contract Assets – Contract assets consist of amounts we are not legally able to invoice but have completed the related performance obligation. These amounts generally arise from variances between the contractual payment terms and the transaction price assigned to the open performance obligations (e.g., we have recognized revenue in an amount greater than the amount that is billable under the contract). There wer e no contrac t assets at September 30, 2025 and 2024 .
Contract Liabilities – Contract liabilities are reflected in current liabilities on the Consolidated Balance Sheets as all performance obligations are expected to be satisfied within the next 12 months. Contract liabilities include customer deposits and deferred revenue. Contract liabilities relate to payments invoiced or received in advance of completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations.
The following is a summary of activity for contract liabilities, in thousands:
Years Ended September 30,
Beginning balance
New deposits
Deferred revenue
Revenue recognized
Adjustment
Ending balance
Warranty – A limited warranty is provided free of charge, generally for periods of 12 to 36 months to all purchasers of our new products and systems. Accruals are recorded for estimated warranty costs at the time revenue is recognized. While our warranty costs have historically been within our expectations and we believe that the amounts accrued for
warranty expenditures are sufficient for all systems sold through September 30, 2025, we cannot guarantee that our warranty costs will remain predictable. In addition, technological changes or previously unknown defects in raw materials or components may result in more extensive and frequent warranty service than anticipated, which could result in an increase in our warranty expense.
The following is a summary of activity in accrued warranty expense, in thousands:
Years Ended September 30,
Beginning balance
Additions for warranties issued during the period
Costs incurred during the period
Changes related to pre-existing warranties
Ending balance
Shipping Expense – Shipping expenses wer e $ 1.2 million and $ 2.0 million for 2025 and 2024 , respectively, and are included in selling, general and administrative expenses.
Employee Retention Tax – The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) provided an employee retention credit (“ERC”) which was a refundable tax credit against certain employment taxes. The Consolidated Appropriations Act (the “Appropriations Act”) extended and expanded the availability of the employee retention credit through December 31, 2021. The Appropriations Act amended the employee retention credit to be equal to 70% of qualified wages paid to employees during the 2021 calendar year. The Company qualified for the employee retention credit for qualified wages through December 2021 and filed a cash refund claim during the calendar year ended December 31, 2023. The employee retention credit in the amount of $ 2.1 million was received in the Company’s third fiscal quarter of 2025 and recognized as a reduction to payroll tax expense on the Condensed Consolidated Statements of Operations for the three months ended June 30, 2025. The ERC was credited against cost of sales, selling, general and administrative, and research, development and engineering for $ 1.0 million, $ 0.8 million, and $ 0.3 million, respectively.
Advertising Expense – Advertising costs are expensed as incurred. Advertising expense s were $ 0.4 million and $ 0.5 million for 2025 and 2024 , respectively, and are included in selling, general and administrative expenses.
Stock-Based Compensation – We measure compensation costs relating to share-based payment transactions based upon the grant-date fair value of the award. Those costs are recognized as expense over the requisite service period, which is generally the vesting period, with forfeitures recognized as they occur. We estimate the fair value of stock option awards on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes model requires us to apply estimates, including expected stock price volatility, expected life of the option and the risk-free interest rate. We issue new shares under our existing equity plans upon the exercise of stock options.
We recognize compensation expense associated with the issuance of RSUs over the requisite service period for each respective grant. The total compensation expense associated with RSUs represents the value based upon the number of RSUs awarded multiplied by the closing price of our common stock on the date of grant. Recipients of RSUs do not have voting or dividend rights until the vesting conditions are satisfied and shares are released. We issue new shares under our existing equity plans upon the vesting of RSUs.
Research, Development and Engineering Expenses – RD&E expenses consist primarily 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. RD&E expenses may vary from period to period depending on the engineering projects in process. Expenses related to engineers working on strategic projects or sustaining engineering projects are recorded in RD&E. However, from time to time we add functionality to our products or develop new products during engineering and manufacturing to fulfill specifications in a customer’s order, in which case the cost of development, along with other costs of the order, are charged to cost of goods sold.
Foreign Currency Transactions and Translation – We use the U.S. dollar as our reporting currency. Our operations in the UK, China and other countries are primarily conducted in their functional currencies, the Euro, Renminbi, or
the local country currency, respectively. Accordingly, assets and liabilities of the subsidiaries are translated into U.S. dollars at the exchange rate in effect at the balance sheet dates. Income and expense items are translated at the average exchange rate for each month within the year. The resulting translation adjustments are recorded directly in accumulated other comprehensive income (loss), net of tax - foreign currency translation adjustments as a separate component of shareholders’ equity. Net foreign currency transaction gains/losses, including transaction gains/losses on intercompany balances that are not of a long-term investment nature and non-functional currency cash balances, are reported as a separate component of non-operating (income) expense in our Consolidated Statements of Operations.
Income Taxes – We file consolidated federal income tax returns in the United States for all subsidiaries except those in China, Singapore, Malaysia and the UK, where separate returns are filed. We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and deferred tax liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and deferred tax liabilities is recognized in income in the period that includes the enactment date.
We recognize deferred tax assets to the extent we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law and results of recent operations. If we determine that we are unable to realize our deferred tax assets, we make an adjustment to the deferred tax asset to recognize only the portion of the asset that is more likely than not to be realized by recording a valuation allowance.
We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. We recognize interest and penalties related to uncertain tax benefits on the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties, if applicable, are included on the income taxes payable long-term line in the Consolidated Balance Sheets.
Concentrations of Credit Risk – Our customers are primarily manufacturers of semiconductor substrates and devices and electronic assemblies. 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 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 September 30, 2025, two Thermal Processing Solutions customers individually represented 15 % and 13 % of accounts receivable. As of September 30, 2024 , one Thermal Processing Solutions customer represented 12 % of accounts receivable.
Refer to Note 17 for information regarding revenue and assets in other countries subject to fluctuation in foreign currency exchange rates.
Fair Value of Financial Instruments – We group our financial assets and liabilities measured at fair value on a recurring basis into three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:
Level 1 – Valuation is based upon quoted market price for identical instruments traded in active markets.
Level 2 – Valuation is based on quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market. Valuation techniques include use of discounted cash flow models and similar techniques.
It is our policy to use observable inputs whenever reasonably practicable in order to minimize the use of unobservable inputs when developing fair value measurements. When available, we use quoted market prices to measure fair value. If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including interest rate yield curves, option volatilities and currency rates. In certain cases, where market rate assumptions are not available, we are required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument. Changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect current or future valuations.
Cash, and Cash Equivalent – Included in cash and cash equivalents in the Consolidated Balance Sheets are money market funds and time deposit accounts. Cash equivalents are classified as Level 1 in the fair value hierarchy.
Receivables and Payables – The recorded amounts of these financial instruments, including accounts receivable and accounts payable, approximate their fair value because of the short maturities of these instruments.
Debt – The Loan Agreement was fully repaid in the fourth quarter of 2024, and was subsequently terminated effective September 11, 2024. The carrying value of debt under our Loan Agreement was based on fixed interest rates. The fair value for the Loan Agreement was estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and is therefore classified as Level 2 in the fair value hierarchy.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2023-07”), which requires disclosure of additional information about specific expense categories underlying certain income statement expense line items. This ASU is effective for our annual periods beginning October 1, 2027, and interim periods beginning October 1, 2028, and requires either prospective or retrospective application. We are currently evaluating the impact of this ASU on our disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires additional annual income tax disclosures. These include a tabular rate reconciliation comprised of eight specific categories, the disaggregation of income taxes paid between federal, state, and foreign jurisdictions, and to disaggregate income from continuing operations before income tax expense and income tax expense from continuing operations between domestic and foreign. ASU 2023-09 eliminates the disclosure of the nature and estimate of reasonably possible changes to unrecognized tax benefits in the next 12 months or that an estimated range cannot be made. ASU 2023-09 is effective for fiscal years beginning on or after December 15, 2024, with early adoption permitted, and can be applied on a prospective or retrospective basis. We are currently evaluating the impact of this ASU on our disclosures.
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The ASU is effective for public business entities for fiscal years beginning after December 15, 2023, and for interim reporting periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments in ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements. We adopted ASU 2023-07 in our Form 10-K for the year ended September 30, 2025 . The adoption of this guidance impacted our disclosures only and did no t have a material impact. See Note 15 "Reportable Segments" for more information.
There were no other new accounting pronouncements issued or effective as of September 30, 2025 that had or are expected to have a material impact on our consolidated financial statements.
2. Earnings Per Share & Diluted Earnings Per Share
Basic EPS is computed by dividing net income 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. Dilutive potential common shares include outstanding RSUs and stock options. In the case of a net loss, diluted EPS is calculated in the same manner as basic EPS.
For the years 2025 and 2024 , 939,000 and 798,000 weighted average shares, respectively, were excluded from the diluted EPS calculations because they were anti-dilutive. These share-based awards could become dilutive in the future.
A reconciliation of the denominators of the basic and diluted EPS calculations follows, in thousands, except per share amounts:
Years Ended September 30,
Numerator:
Net loss
Denominator:
Weighted-average shares used to compute basic EPS
Dilutive potential common shares due to stock options (1)
Dilutive potential common shares due to RSUs (1)
Weighted-average shares used to compute diluted EPS
Loss per share:
Net loss per basic share
Net loss per diluted share
(1) The number of common stock equivalents is calculated using the treasury stock method and the average market price during the period.
3. Severance
In 2025 and 2024, we recorded severance expense of $ 0.7 million and $ 0.4 million, respectively. This related primarily to staff reductions across our locations as we shifted more work to contract manufacturers and dealt with decreasing demand.
Years Ended September 30,
Balance at beginning of the year
Severance expense, net of adjustments
Cash payments
Balance at the end of the year
4. Inventories
The components of inventories are as follows, in thousands:
September 30,
Purchased parts and raw materials
Work-in-process
Finished goods
We recorded $ 6.0 million related to the write-off of inventory for closing of a product line in the year ended September 30, 2025. W e recorded $ 0.4 million related to the write-off of inventory for our polishing machine products in the year ended September 30, 2024.
5. Property, Plant and Equipment
The following is a summary of property, plant and equipment, in thousands:
September 30,
Building and leasehold improvements
Equipment and machinery
Furniture and fixtures
Software
Accumulated depreciation and amortization
Depreciation wa s $ 2.3 million and $ 2.1 million in 2025 and 2024 , respectively.
6. Sale and Leaseback of Real Estate
On June 23, 2022, BTU completed the sale and leaseback of its building in Massachusetts (the “Property”). The sale price was $ 20.6 million, of which $ 0.7 million was deducted at closing for commission and other closing expenses. Simultaneously with the closing, BTU entered into a two-year leaseback of the Property. The lease terms include annual base rent of $ 1.5 million in an absolute triple net lease. In connection with the sale, BTU recognized a pre-tax gain on sale of $ 12.5 million in 2022, which is recorded within operating expenses on the Consolidated Statement of Operations. This sale-leaseback transaction resulted in a net cash inflow of approximately $ 14.9 million in 2022, after repayment of the existing mortgage and settlement of related sale expenses. The leaseback ended in the third quarter of 2024.
7 . Leases
The following table provides information about the financial statement classification of our lease balances reported within the Consolidated Balance Sheets , in thousands:
September 30,
Assets
Right-of-use assets - operating
Right-of-use assets - finance
Total right-of-use assets
Liabilities
Current
Operating lease liabilities
Finance lease liabilities
Total current portion of long-term lease liabilities
Long-term
Operating lease liabilities
Finance lease liabilities
Total long-term lease liabilities
Total lease liabilities
The following table provides information about the financial statement classification of our lease expenses reported in the Consolidated Statements of Operations, in thousands:
Years Ended September 30,
Lease cost
Classification
Operating lease cost
Cost of sales
Operating lease cost
Selling, general and administrative expenses
Operating lease cost
Research, development and engineering
Finance lease cost
Cost of sales
Finance lease cost
Selling, general and administrative expenses
Total lease cost
Future minimum lease payments under non-cancelable leases as of September 30, 2025 are as follows, in thousands:
Years Ending September 30,
Operating Leases
Finance Leases
Total
Thereafter
Total lease payments
Less: Interest
Present value of lease liabilities
Operating lease payments inclu d e $ 2.3 million rel ated to options to extend lease terms that are reasonably certain of being exercised.
The following table provides information about the remaining lease terms and discount rates applied:
September 30,
Weighted average remaining lease term
Operating leases
7.57 years
8.47 years
Finance leases
2.76 years
2.73 years
Weighted average discount rate
Operating leases
Finance leases
8 . Intangible Assets
Intangible assets consist of the following, in thousands:
September 30,
Amortization Period
Backlog
1 year
Customer relationships
6 - 10 years
Developed technology
1.75 years
Noncompetition agreements
5 years
Trade names
3 - 15 years
Accumulated amortization
Less asset impairments:
Backlog
Customer relationships
Developed technology
Noncompetition agreements
Trade names
Intangible assets, net
Intangible assets are amortized over a weighted-average amortization period of 6.5 years. Our customer relationship and trade name intangible assets are amortized over weighted-average amortization periods of 2.0 and 4.5 y ears, respectively.
We review our intangible assets for impairment when events or circumstances indicate the carrying value may not be recoverable. Except as discussed below, we concluded that a triggering event had not occurred that would more likely than not reduce the fair value of intangible assets below their carrying value. At the end of December 2023, we identified a triggering event. As a result of the decline in our stock price as of December 31, 2023, our book value materially exceeded our market value. As discussed in the Goodwill section below, this resulted in a triggering event for impairment of goodwill. The results of the goodwill impairment test indicated that the book value of our Semiconductor Fabrication Solutions reporting unit was in excess of the fair value, and, thus, was impaired. Prior to recognizing any impairment of goodwill, we tested the related long-lived assets for impairment in our Semiconductor Fabrication Solutions segment. We tested each identified asset group within our Semiconductor Fabrication Solutions segment by first performing a recoverability test, comparing projected undiscounted cash flows from the use and eventual disposition of each asset group to its carrying value. This test indicated that the undiscounted cash flows were not sufficient to recover the carrying value of certain asset groups. We then compared the carrying value of the individual long-lived assets within those asset groups their fair value in order to determine if existed. Determining the fair value of those asset groups involves the use of significant estimates and assumptions, including projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends, and estimated discount rates based on the asset group's weighted average return on assets, as derived from various methods. The fair value of the intangible assets were estimated using various valuation methodologies,
including the multi-period excess earnings method, the relief from royalty method and the distributor method. These fair value measurements fall under Level 3 of the fair value hierarchy. As a result, we recorded a total impairment charge for intangible assets in our Semiconductor Fabrication Solutions segment of $ 1.3 million during the quarter ended December 31, 2023. This impairment charge relates to developed technology, trade name, customer relationships and non-competition agreements at Entrepix.
Additionally, at the end of March 2025, the Company lowered its guidance for the second quarter of fiscal year 2025 and reset projections for the rest of the year due to a prolonged weakness in the mature node semiconductor market driven by high inventory, tepid demand, and geopolitical tensions. As disclosed in the Goodwill section below, this resulted in a triggering event for impairment of goodwill. The results of the goodwill impairment test indicated that the book value of our Semiconductor Fabrication Solutions segment and Thermal Processing Solutions segment was in excess of fair value and was impaired. Prior to recognizing any impairment of goodwill, we tested the related long-lived assets for impairment in our Semiconductor Fabrication Solutions and Thermal Processing Solutions segments. We tested each identified asset group within each segment by first performing a recoverability test, comparing projected undiscounted cash flows from the use and eventual disposition of each asset group to its carrying value. This test indicated that the undiscounted cash flows were not sufficient to recover the carrying value of certain asset groups within our Semiconductor Fabrication Solutions segment. We then compared the carrying value of the individual long-lived assets within those asset groups their fair value in order to determine if existed. Determining the fair value of those asset groups involves the use of significant estimates and assumptions, including projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends, and estimated discount rates based on the asset group's weighted average return on assets, as derived from various methods. The fair value of the intangible assets was estimated using various valuation methodologies, including the multi-period excess earnings method and the relief from royalty method and the distributor method. These fair value measurements fall under Level 3 of the fair value hierarchy. As a result, we recorded a total charge for intangible assets in our Semiconductor Fabrication Solutions segment of $ 2.6 million during the quarter ended March 31, 2025. The $ 2.6 million consists of $ 1.8 million for customer relationships and $ 0.8 million for trade names primarily at Entrepix.
Amortization expense related to intangible assets was $ 0.3 million and $ 0.8 million in 2025 and 2024 , respectively. Future amortization expense for the remaining unamortized balance as of September 30, 2025 is estimated as follows, in thousands:
Years Ending September 30,
Amortization
Expense
Thereafter
Total
9 . Goodwill
The changes in the carrying amount of goodwill, by reportable segment, are as follows, in thousands:
Thermal Processing Solutions
Semiconductor Fabrication Solutions
Total Goodwill
Goodwill
Accumulated impairment losses
Balance at September 30, 2024
Goodwill acquired
Impairment of goodwill
Balance at September 30, 2025
Goodwill
Accumulated impairment losses
Balance at September 30, 2025
On January 17, 2023, we acquired Entrepix, which has been integrated into our Semiconductor Fabrication Solutions segment. Under the purchase method of accounting, the purchase price for the acquisition was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over fair value of net assets acquired of approximately $ 16.5 million was recorded as goodwill in the Semiconductor Fabrication Solutions segment. The primary driver for this acquisition was to add CMP and wafer cleaning equipment to our existing substrate polishing and wet process chemical offerings.
We review goodwill for impairment when events or circumstances indicate the carrying value may not be recoverable. We performed our annual test of goodwill impairment as of September 30, 2025 and 2024. The results of the goodwill impairment test indicated that the fair value of both our Thermal Processing and Semiconductor Fabrication Solutions reporting units were in excess of the carrying value, and, thus, were not impaired. At the end of December 2023, we identified a triggering event. As a result of the decline in our stock price as of December 31, 2023, our book value materially exceeded our market value leading to a $ 6.4 million impairment charge in fiscal 2024. Additionally, as of March 31, 2025, the Company lowered its guidance for the second quarter of fiscal year 2025 and reset projections for future periods due to prolonged weakness in the mature node semiconductor market driven by high inventory, tepid demand, and geopolitical tensions. This triggering event indicated a need to test goodwill for impairment. The goodwill test indicated book value was in excess of fair value by $ 15.4 million for our Semiconductor Fabrication Solutions segment and $ 5.0 million for our Thermal Processing Solutions segment. As a result, we recorded a $ 20.4 million charge in the period ended March 31, 2025.
Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. Our goodwill impairment test uses a weighting of the income approach and the market approach to estimate a reporting unit’s fair value. The income approach is based on a discounted future cash flow analysis that uses certain assumptions including: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; expected future investments and working capital requirements to sustain and grow the business; and estimated discount rates based on the reporting unit’s weighted average cost of capital as derived by the Capital Asset Pricing Model and other methods, which includes observable market inputs and other data from identified comparable companies. The same estimates are also used internally for our capital budgeting process, and for long-term and short-term business planning and forecasting. We test the reasonableness of the inputs and outcomes of our discounted cash flow analysis against available comparable market data, and we also perform a reconciliation of our total market capitalization to the estimated fair value of all of our reporting units. The market approach is based on the application of appropriate market-derived multiples selected from (i) comparable publicly-traded companies and/or (ii) the implied transaction multiples derived from identified merger and acquisition activity in the market. Multiples are then selected based on a comparison of the reviewed data to that of the reporting unit and applied to relevant historical and forecasted financial parameters such as levels of revenues, EBITDA, EBIT or other metrics. The calculation of fair value falls under Level 3 of the fair value hierarchy.
10. Income Taxes
Income Tax (Benefit) Provision
The components of (loss) income before (benefit) provision for income taxes are as follows, in thousands:
Years Ended September 30,
Domestic
Foreign
The components of the provision for income taxes are as follows, in thousands:
Years Ended September 30,
Current:
Domestic federal
Foreign
Foreign withholding taxes
Domestic state
Total current
Deferred:
Domestic federal
State
Foreign
Total deferred
Total provision
A reconciliation of actual income taxes to income taxes at the expected U.S. federal corporate income tax rate is as follows, in thousands, except percentages:
Years Ended September 30,
Tax (benefit) expense at the federal statutory rate
Effect of permanent book-tax differences
State tax provision
Valuation allowance for net deferred tax assets
Tax rate differential
Goodwill impairment
Withholding taxes
Other items
Deferred Income Taxes and Valuation Allowance
Deferred income taxes reflect the tax effects of temporary differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to be realized. The components of deferred tax assets and deferred tax liabilities are as follows, in thousands:
September 30,
Deferred tax assets:
Net operating loss carryforwards
Accruals and reserves
Income tax credits
Operating lease liabilities
Research and development costs
Foreign service fee
Other assets
Total deferred tax assets
Valuation allowance
Deferred tax assets, net of valuation allowance
Deferred tax liabilities:
Goodwill and identifiable intangible assets
Property and equipment, net
Operating lease, right-of-use assets
Prepaid assets
Total deferred tax liabilities
Total deferred tax assets, net
Changes in the deferred tax valuation allowance are as follows, in thousands:
Years Ended September 30,
Balance at the beginning of the year
Additions to valuation allowance
Balance at the end of the year
The deferred tax valuation allowance increased by $ 2.4 million and $ 1.2 million for the years ended September 30, 2025 and 2024, respectively.
In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities, projected future income and tax planning strategies in making this assessment. We have established valuation allowances on 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 objective evidence, and determined it is not more likely than not that these assets will be realized.
We intend to permanently reinvest undistributed earnings of our foreign subsidiaries. It is not practicable to estimate the amount of tax that might be payable on the undistributed amounts.
Net Operating Losses
As of September 30, 2025, w e have federal net operating loss carryforwards of approximately $ 10.0 million that expire at various times between 2032 and 2035 . The utilization of those federal net operating losses is limited to approximately $ 0.8 million per year. Additionally, we have federal net operating loss carryforwards of approximately $ 74.3 million that have an indefinite carryforward period. The utilization of those federal net operating losses is limited to 80 % of taxable income. We h ave no foreign net operating loss carryforwards as of September 30, 2025. We have approxi mately $ 19.1 million of state net operating loss carryforwards, with various expiration dates and limitations on utilization, depending on the state. As of September 30, 2025, we have ap proximately $ 2.7 million o f Foreig n Tax Credit carryforwards that expire at various times between 2030 and 2035 and approximately $ 0.6 million of Fed eral and State Research and Development credits that expire at various times between 2035 and 2045 .
Uncertain Tax Positions
For the years ended September 30, 2025 and 2024 we had no unrecognized tax benefit.
Tax Return Matters
We file income tax returns in China, Singapore, Malaysia and the UK, as well as 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. U.S. Federal tax returns generally have a 3-year statute of limitations. Therefore, U.S. federal returns for tax years ending on or a fter September 30, 2022 remain open for examination. In addition, the IRS may adjust attribute c arryforwards utilized in an open year even though the year the attributes originated may be closed. State and foreign statutes are generally 3 to 5 years but vary by jurisdiction. These open years contain certain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, timing, or inclusion of revenues and expenses, or the sustainability of income tax positions of Amtech and our subsidiaries.
11. Long-Term Debt
Our finance lease liabilities and long-term debt consists of the following, in thousands:
September 30,
Finance leases
Less: current portion of finance lease liabilities
and long-term debt
Finance Lease Liabilities and Long-Term Debt
Interest expense on finance lease liabilities and long-term debt was $ 25,000 and $ 0.6 million in 2025 and 2024, respectively.
Annual maturities relating to our long-term debt as of September 30, 2025 are as follows, in thousands:
Annual
Maturities
Thereafter
Total long-term debt
Loan and Security Agreement
On January 17, 2023, we entered into a Loan and Security Agreement (the “Loan Agreement”) among Amtech, its U.S. based wholly owned subsidiaries Bruce Technologies, Inc., BTU International, Inc., Intersurface Dynamics, Incorporated, P.R. Hoffman Machine Products, Inc., and Entrepix, Inc., and UMB Bank, N.A., national banking association. The Loan Agreement provided for (i) a term loan (the “Term Loan”) in the amount of $ 12.0 million maturing January 17, 2028 , and (ii) a revolving loan facility (the “Revolver”) with an availability of $ 8.0 million maturing January 17, 2024 , each of which were secured by a first priority lien on substantially all of our assets. The recorded amount of the Term Loan had an interest rate of 6.38 % and the Revolver had a floating per annum rate of interest equal to the Prime Rate, adjusted daily.
The Loan Agreement was fully repaid in the fourth quarter of 2024 and was subsequently terminated effective September 11, 2024. See the disclosure in our prior filings with the SEC for a discussion of the financial covenants that were in effect under the Loan Agreement, our failure to comply with the Debt to EBITDA and Fixed Charge Coverage Ratio covenants thereunder, and the Forbearance and Modification Agreement that we operated under prior to terminating this credit facility.
Finance Lease Obligations
Our finance lease obligations totaled $ 0.3 million as of September 30, 2025 and September 30, 2024, respectively.
The current and long-term portions of our finance leases are included in the current and long-term portions of finance lease liabilities and long-term debt in the table above and in our Consolidated Balance Sheets as of September 30, 2025 and 2024.
12. Equity and Stock-Based Compensation
Stock-Based Compensation Expense
Stock-based compensation expenses of $ 1.2 million and $ 1.5 million for 2025 and 2024, respectively, are included in selling, general and administrative expenses. As of September 30, 2025, total compensation cost related to non-vested stock options not yet recognized i s $ 0.4 million, which is expected to be recognized over the next 1.07 y ears on a weighted-average basis. As of September 30, 2025, total compensation cost related to nonvested RSUs not yet recognized i s $ 0.6 million, which is expected to be recognized over the next 2.08 years.
Amtech Equity Compensation Plans
The 2022 Plan, under which 1,000,000 shares could be granted, was adopted by the Board of Directors in November 2021, and approved by the shareholders in March 2022.
The 2007 Plan, under which 500,000 shares could be granted, was adopted by the Board in April 2007, and approved by the shareholders in May 2007. The 2007 Plan was amended in 2009, 2014 and 2015 to add 2,500,000 shares. The plan was also amended in 2019 to extend the term of the plan and allow for the grant of restricted stock units. Upon the adoption of the 2022 Plan, no further awards will be granted from the 2007 Plan. Previously issued awards will remain outstanding in accordance with their terms.
The Non-Employee Directors Stock Option Plan was approved by the shareholders in 1996 for issuance of up to 100,000 shares of common stock to directors. The Non-Employee Directors Stock Option Plan was amended in 2005, 2009 and 2014 to add 400,000 shares. The plan was also amended in 2020 to extend the term of the plan. Upon the adoption of the 2022 Plan as stated above, no further awards will be granted from the Non-Employee Directors Stock Option Plan. Previously issued awards will remain outstanding in accordance with their terms.
Equity compensation plans as of September 30, 2025 are summarized in the table below:
Name of Plan
Shares
Authorized
Shares
Available for Grant
Options
Outstanding
Unvested RSUs Outstanding
Plan
Expiration
2022 Plan
Mar. 2032
2007 Plan
Mar. 2024
Non-Employee Directors Stock Option Plan
Mar. 2024
Stock Options
Stock options issued under the terms of our equity compensation plans have, or will have, an exercise price equal to or greater than the fair market value of the common stock at the date of the option grant and expire no later than 10 years from the date of grant. Options issued under the plans vest over 1 to 3 years. We estimated the fair value of stock option awards on the date of grant using the Black-Scholes option pricing model using the following assumptions:
Years Ended September 30,
Risk free interest rate
Expected life
5 years
5 years
Dividend rate
Volatility
The following table summarizes our stock option activity :
Years Ended September 30,
Options
Weighted
Average
Exercise
Price
Options
Weighted
Average
Exercise
Price
Outstanding at beginning of
period
Granted
Exercised
Forfeited/expired
Outstanding at end of period
Exercisable at end of period
Weighted average grant-date
fair value of options
granted during the period
The following table summarizes information for stock options outstanding and exercisable as of September 30, 2025:
Options Outstanding
Options Exercisable
Range of Exercise Prices
Number
Outstanding
Remaining
Contractual
Life
(in years)
Weighted
Average
Exercise
Price Per
Share
Number
Exercisable
Weighted
Average
Exercise
Price Per
Share
The aggregate intrinsic values of options outstanding and options exercisable as of September 30, 2025 were approxima tely $ 2.5 million and $ 1.8 million, respectively, which represents the total pre-tax intrinsic value, based on our closing stock price of $ 9.26 per share as of September 30, 2025, the last business day of our fiscal year, which would have been received by the option holders had all option holders exercised their options as of that date. The total intrinsic value of stock options exercised was $ 93,000 and $ 17,000 in 2025 and 2024, respectively.
The following table summarizes our RSU activity during the year ended September 30, 2025:
Number
Weighted
Average
Grant Date
Fair Value
Fair Value
Nonvested at beginning of year
Granted
Vested, including shares withheld to cover taxes
Forfeited
Nonvested at end of period
(1) The aggregate fair value of vested RSU's represent the total pre-tax fair value, based on the closing stock price on the day of vesting, which would have been received by holders of RSU's had all such holders sold their underlying shares on that date.
(2) The aggregate fair value of the nonvested RSU's and represents the total pre-tax fair value, based on our closing stock price o f $ 9.26 as of September 30, 2025, the last trading day of our fiscal year, which would have been received by holders of RSU's had all such holders sold their underlying shares on that date.
13. Benefit Plans
We have retirement plans covering substantially all our employees. The principal plans are our defined contribution plan that covers substantially all of our employees in the United States and the multi-employer pension plan for hourly union employees in Pennsylvania.
Defined Contribution Plan – Domestic employees of Amtech and its subsidiaries who meet certain eligibility requirements may participate, at the employee’s option, in the 401(k) Plan. The 401(k) Plan is a defined contribution plan subject to the provisions of ERISA. We match employee contributions to the 401(k) Plan equal to 60 % of the participants' elective deferrals, up to 3.6 % of the participants’ eligible compensation each payroll period. Employees are auto-enrolled upon eligibility at a 6 % contribution rate; however, an employee may opt out at their election. The matc h expense was $ 0.3 million a nd $ 0.4 million in 2025 and 2024, respectively.
Pension Plan – Our hourly union employees in Pennsylvania participate in a multi-employer pension plan, the NIGPP, in accordance with the union agreement between PR Hoffman and the United Automobile, Aerospace and Agriculture Implement Workers of America. The agreement was renewed in 2025 for a three-year term that expires September 30, 2028 . Every company participating in the plan pays a contribution per hour worked for each employee of the company that is eligible to participate in the NIGPP. Our contributions to the NIGPP were $ 30,000 and $ 35,000 in 2025 and 2024, respectively.
14. Commitments and Contingencies
Purchase Obligations – As of September 30, 2025, we had unrecorded purchase obligations in the amount of $ 4.0 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 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 six to twelve months of salary.
15. Reportable Segments
In the operation of the business, management, including our Chief Operating Decision Maker (“CODM”), who is also our Chief Executive Officer , reviews certain financial information, including segmented internal profit and loss statements. The primary profitability measure used by the CODM to review segment operating results is net income. The CODM uses net income to allocate resources during our annual planning process and throughout the year, as well as to assess the performance of our segments, primarily by monitoring actual results compared to prior period and expected results.
Amtech has two operating segments that are structured around the types of product offerings provided to our customers. In addition, the operating segments may be further distinguished by the Company’s respective brands. These two operating segments comprise our two reportable segments discussed below. Our two reportable segments are as follows:
Thermal Processing Solutions – 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.
Semiconductor Fabrication Solutions – We provide consumables, parts and service, and equipment for producing silicon carbide, silicon and gallium nitride wafers, optical components and a variety of crystalline materials.
Information concerning our reportable segments is as follows, in thousands:
Year Ended September 30, 2025
Thermal Processing Solutions
Semiconductor Fabrication Solutions
Total
Revenue
Less:
Material
Labor
Overhead
Intangible asset impairment
Gross profit
Selling & marketing
General & administrative
Research & development
Loss on sale of fixed assets
Goodwill impairment
Intangible asset impairment
Severance expense
Operating income (loss)
Interest income
Interest expense
Other segment items (1)
Non-segment items (2)
Net loss
(1) Other segment items consists primarily of expenses related to foreign currency gain or loss and income tax provision (benefit). Thermal Processing Solutions and Semiconductor Fabricated Solutions income tax provision was $ 1.4 million and $ 13,000 .
(2) Non-segment items consists primarily of expenses related to corporate salaries and professional services expenses, income tax, interest income and interest expense.
Year Ended September 30, 2024
Thermal Processing Solutions
Semiconductor Fabrication Solutions
Total
Revenue
Less:
Material
Labor
Overhead
Intangible asset impairment
Gross profit
Selling & marketing
General & administrative
Research & development
Goodwill impairment
Intangible asset impairment
Severance expense
Operating income (loss)
Interest income
Interest expense
Other segment items (1)
Non-segment items (2)
Net income (loss)
(1) Other segment items consists primarily of expenses related to foreign currency gain or loss and income tax provision (benefit). Thermal Processing Solutions and Semiconductor Fabricated Solutions income tax provision (benefit) was $ 0.8 million and ($ 0.2 ) million, respectively.
(2) Non-segment items consists primarily of expenses related to corporate salaries and professional services expenses, gain on sale of assets, income tax, interest income and interest expense.
September 30,
Depreciation and amortization:
Thermal Processing Solutions
Semiconductor Fabrication Solutions
Non-segment related*
* Non-segment related to depreciation and amortization expense at corporate.
September 30,
Identifiable assets:
Thermal Processing Solutions
Semiconductor Fabrication Solutions
Non-segment related*
* Non-segment related assets include cash, property and other assets.
16. Major Customers and Sales by Country
In 2025 and 2024 no customers accounted for 10% of net revenues.
The percentages of our net revenues were to customers in the following geographic regions:
Years Ended September 30,
United States
Canada
Mexico
Other
Total Americas
China
Malaysia
Taiwan
Singapore
Other
Total Asia
Czech Republic
United Kingdom
Hungary
Austria
Germany
Other
Total Europe
17. Geographic Regions
We have operations in the United States and China, as well as satellite offices in Europe and Asia. Revenues, operating income (loss) and identifiable assets by geographic region are as follows, in thousands:
Years Ended September 30,
Net revenue:
United States*
China
Other
Operating (loss) income:
United States*
China
Other
* United States revenue include s $ 20.8 million and $ 14.7 million in 2025 and 2024, respectively, related to the products manufactured in our China facility but sold through our Massachusetts facility.
September 30,
Net property, plant and equipment:
United States
China
Other
18. Subsequent Event
Stock Repurchase Program
On December 9, 2025, the Board of Directors (the “Board”) of Amtech Systems, Inc. (the “Company”) authorized and approved a share repurchase program for up to $ 5 million of the currently outstanding shares of the Company’s common stock over a period of 12 months. Under the stock repurchase program, the Company intends to repurchase shares through open market purchases, privately-negotiated transactions, block purchases, 10b5-1 plans, or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934 (the “Exchange Act”).
The Company cannot predict when or if it will repurchase any shares of common stock as such stock repurchase program will depend on a number of factors, including constraints specified in any Rule 10b5-1 trading plans, price, general business and market conditions, and alternative investment opportunities. Information regarding share repurchases will be available in the Company’s periodic reports on Form 10-Q and 10-K filed with the Securities and Exchange Commission as required by the applicable rules of the Exchange Act.
This report contains forward-looking information, as that term is defined under the Exchange Act, including information regarding purchases by the Company of its common stock pursuant to any Rule 10b5-1 trading plans. By their nature, forward-looking information and statements are subject to risks, uncertainties, and contingencies, including changes in price and volume and the volatility of the Company’s common stock; adverse developments affecting either or both of prices and trading of exchange-traded securities, including securities listed on the Nasdaq Global Select Market; and unexpected or otherwise unplanned or alternative requirements with respect to the capital investments of the Company. The Company does not undertake to update any forward looking statements or information, including those contained in this report.
