Asyst, The Incredible Shrinking Company (ASYT)

It is usually a bad sign when a company reports a quarter with comparisons to the immediately previous quarter, which make the company look good, instead of the year ago quarter, which make the company look bad. Welcome to Asyst Technologies (NASD:ASYT). The company's fiscal Q4 announcement, for the period ending March 31, compares the quarter's $110.7 million in revenue to the $106.8 million the company did in fiscal Q3. Gross margin and income figures are compared on the same basis.

Moving toward the bottom of the company's statement, the P&L shows that revenue dropped from $143.6 million for the three months ending in March 31, 2005 to the $110.7 million this year. Operating income actually rose from $2.4 million last year to $9.9 million in 2006.

The top-line story is equally bad comparing the two full fiscal years. Revenue for the year ending March 31, 2005 was $613.0 million. For the same period ending March 31, 2006 revenue dropped to $459.6 million. Again, operating income improved to $33.1 million from a loss of $17.6 million.

The company, which is a provider of integrated automation solutions to enhance semiconductor and flat panel display manufacturing productivity, is completely dependent on two customers. ATI, which accounted for $46.3 million in fiscal Q4, and Asyst Shinko (a 51% owned joint venture in Japan) which brought the company $64.3 million in revenue for the Q.

Asyst said that bookings had risen sharply in the quarter, but this was not reflected in guidance. The company expects revenue of $110 to $120 million in the June quarter. Obviously, at the low end, the company would be flat with the March period. The June quarter a year ago had revenue of over $117 million.

The company also announced that its chief operating officer was leaving "to pursue other business and personal interests".

Am Tech/JSA Research promptly downgraded the stock after all of this news. They now rate the company a "Hold".

Asyst has shown good growth over the three years prior to the current one, so expectations for that to continue were probably high. The stock was pushing $20 in late 2003 and early 2004. It is now at $7.69, after a 27% drop on all the news.

With a market cap of $372 million, Asyst trades at about one time sales. Don't look for that to improve much soon.

ASYT 2-yr chart:

Douglas A. McIntyre is the former Editor-in-Chief and Publisher of Financial World Magazine. He is also the former president of Switchboard.com, which was the 10th most visited site in the world at the time, according to MediaMetrix. He has been chief executive of FutureSource LLC and On2 Technologies, Inc. and has served on the boards of TheStreet.com and Edgar Online. He does not own securities in companies he writes about. He can be reached at [e-mail].