AMTECH SYSTEMS, INC. REPORTS ITS
2004 FOURTH QUARTER AND FISCAL YEAR RESULTS

Tempe, AZ ? January 14, 2005 ? AMTECH SYSTEMS, INC. (NASDAQ: ASYS), a global supplier of production and automation systems and related supplies for the semiconductor, silicon wafer, solar cell and microelectromechanical system (MEMS) industries, today reported results for its fourth quarter and fiscal year ended September 30, 2004.

Revenues for the fourth quarter of fiscal 2004 totaled $4.9 million, a decrease of 18% from $6.0 million in the fourth quarter of fiscal 2003. Excluding revenues of Bruce Technologies, Inc. (?BTI?), acquired in July 2004, revenues for the fourth quarter of fiscal 2004 were $3.8 million. Fourth quarter 2004 revenues were below the quarterly average for the year because the quarter began with the lowest quarter-end backlog since March 2000. Also, the $5.2 million of new orders in the fourth quarter of fiscal 2004, excluding orders of BTI, were received too late to positively affect that quarter's revenue. Contributing to the unfavorable comparison was the fact that revenues in the fourth quarter of fiscal 2003 were unusually high as a result of a multi-system order that was produced during the third and fourth quarters of that year, but not recognized until the last system was delivered in the fourth quarter of 2003. 

Revenues for the 2004 fiscal year were $19.3 million, a 1% decline compared to $19.4 million for the 2003 fiscal year. As with the fourth quarter, the decline in fiscal 2004 revenue to $18.2 million, excluding BTI, was largely due to the volatility and timing in the flow of new orders. 

The net loss for the fourth quarter of 2004 was $3.0 million, or $1.11 per diluted share, compared with net income of $0.4 million, or $.15 per diluted share, for the comparable period in fiscal 2003. The net loss for the 2004 fiscal year was $3.2 million, or $1.17 per diluted share, compared to the fiscal 2003 net loss of $0.1 million, or $.04 per diluted share. A portion of the 2004 loss was attributable to the decline in revenue from existing operations, discussed above. The remainder of the loss was the result of a number of non-cash and other charges, which can be summarized as follows:

The fiscal 2004 pre-tax loss is $2.1 million, compared to the fiscal 2003 pre-tax loss of $0.2 million. The pre-tax loss includes depreciation and amortization expense of $0.5 million. 

Amtech recorded a non-cash charge of $1.1 million to provide a full valuation allowance on its net deferred tax assets at September 30, 2004, which contributed to the reported net loss of $3.2 million. Deferred tax assets, such as those resulting from net operating losses, reduce taxable income in future years. Statement of Financial Accounting Statement (SFAS) No. 109 requires an assessment of a company's current and previous performance and other relevant factors when determining the need for a valuation allowance. Factors such as current and cumulative losses are given substantially more weight than the outlook for future profitability. ?As we were closing the fiscal year, a review of the significant fourth quarter loss and the cumulative tax losses from the prior two years caused us to conclude that it would be appropriate to record a valuation allowance related to our net deferred tax assets,? said Robert T. Hass, Chief Financial Officer. ?Recording this charge is not necessarily a reflection of our view of Amtech's future prospects.?

As of September 30, 2004, our order backlog had decreased to $7.3 million, from $7.6 million at September 30, 2003. Backlog includes customer orders expected to ship within the next 12 months and revenue deferred pursuant to Amtech's revenue recognition policy. Amtech's backlog as of any specific point in time is not necessarily indicative of actual revenue or earnings for any succeeding period due to possible customer changes in delivery schedules or cancellation of orders, and because a backlog does not provide any assurance of a profit from those orders.

Mr. J.S. Whang, President and Chief Executive Officer, stated, ?We are in a very cyclical industry and we believe that as we move through the cycles, our results of operations generally lag those of the larger, leading-edge semiconductor equipment manufacturers by two to three quarters. Also, because most of our revenue is derived from the manufacture and sale of large systems and at times from multi-system orders, our results reflect significant volatility between quarters and even years.

Both of these factors negatively affected our results for fiscal 2004. We view our loss in this context and in light of the fact that most of the larger companies in our industry reported significantly larger losses relative to their size in the past two years, before reporting strong earnings in 2004. Despite the results for fiscal 2004, we continued to make investments during the year that are expected to improve our future results of operations.? 

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by Amtech Systems, Inc.) contains 



statements that are forward-looking. All statements other than statements of historical fact are hereby identified as ?forward-looking statements,? as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward looking information involves a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated by management. Potential risks and uncertainties include, among other factors, industry specific and general business conditions, competitive market conditions, success of Amtech's growth and sales strategies, the possibility of customer changes in delivery schedules, cancellation of orders, potential delays in product shipments, delays in obtaining inventory parts from suppliers, failure to satisfy customer acceptance requirements and other risk factors described in Amtech's SEC filings. All forward-looking statements are based on management's estimates, projections and assumptions as of the date hereof and Amtech assumes no obligation to update this press release.

This earnings release should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2004.