Financial Data and Key Metrics - Revenue for Q1 2024 was 24.9million,exceedingthehighendofguidanceandmarkinga160.2 million, a significant turnaround from a 2.4millionlossinthepriorquarter[6]−GAAPnetlossforQ12024was9.4 million (0.66pershare),comparedtoa12 million loss (0.85pershare)inQ42023anda2.7 million loss (0.20pershare)inQ12023[17]−Unrestrictedcashandcashequivalentsincreasedby4 million to 17millionduringthequarter[18]BusinessSegmentPerformance−Revenuedecreased107.6 million, with 0.8millionimpactinggrossprofit[15]MarketPerformance−Semiconductormarketdemandremainsmixed,withsoftnessinwaferfabricationandback−endpackagingequipment,butresilienceinsubmarketsrelatedtohybridandelectricvehicles[7]−Demandforconsumablesusedinsiliconcarbidesemiconductorproductionisimproving,withstrongdemandforhigh−endbeltfurnacesanddiffusionfurnaces[8]StrategicDirectionandIndustryCompetition−Thecompanyisfocusedonoperationaloptimization,achieving6 million in annualized cost savings through restructuring and strategic contract manufacturing partnerships [6][9] - Plans to relocate a US manufacturing facility to a smaller, more cost-effective site in Q3 2024 to reduce fixed expenses while maintaining production capabilities [10] - Pricing strategy adjustments are being implemented to align with rising input costs, with promising progress in new tool quotations [10] Management Commentary on Operating Environment and Outlook - Management expects Q2 2024 revenue to range between 22millionand25 million, with EBITDA nominally negative to neutral [20] - Long-term growth is anticipated in AI-related infrastructure and global supply chain diversification, driving demand for back-end equipment and silicon carbide wafer production [12] - The company remains confident in the future prospects of its consumables and equipment businesses, particularly in advanced mobility and packaging applications [20] Other Important Information - SG&A expenses decreased by 2.5millionsequentiallyand0.6 million year-over-year, driven by lower acquisition expenses, consulting fees, and intangible amortization [16] - Research, development, and engineering expenses decreased by 1millionsequentiallyduetoreducedinvestmentinnext−generationpolishingtools[16]−DebtrestructuringinDecember2023increasedtherevolvercapacityto14 million, with 5.6 million transferred from the term loan [18] Q&A Session Summary Question: Backlog and Pipeline Outlook - The backlog is strong, particularly in power semiconductor packaging and silicon carbide wafer production, with expectations of increased activity in silicon carbide manufacturing capital equipment over the next 1-2 years [24][26] - A recovery in the back-end and advanced packaging segments is anticipated as the industry digests existing capacity [27] Question: Cost Savings and Demand Response - The 6 million in annualized cost savings will be fully realized by Q2 2024, with 4millionimpactingthecurrentquarterandtheremaining2 million lagging slightly [29] - Restructuring efforts, including strategic contract manufacturing partnerships, are designed to maintain scalability and readiness for market rebound without compromising growth [30] Question: Working Capital and Balance Sheet Adjustments - The company expects working capital to fluctuate as it executes its $50 million backlog and relocates a manufacturing facility, with continued focus on optimizing working capital and leveraging partner buying power [32] Question: Financial Covenants and Pricing Strategy - The company is in compliance with revised financial covenants, exceeding the required EBITDA threshold [36] - Pricing strategy adjustments have been well-received, with updated pricing models expected to improve margins as the backlog is replenished [38]
