Coherent (COHR) 7 Feb 182018 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to Coherent's First Quarter Fiscal Year 2018 Financial Results Conference Call hosted by Coherent, Incorporated. [Operator Instructions].

As a reminder, this call is being recorded. I would now like to introduce Bret DiMarco, Executive Vice President and General Counsel.

You may begin your conference.

good and Jeff, you, afternoon, everyone. Thank today's the first to conference call from results Coherent's discuss fiscal to Welcome quarter XXXX. of

or about results Officer; call, I such today, Officer. are the words remind operating any These forward-looking as and obligation results Executive and referred subject financial without we John assumptions President and during expects, Executive of Vice Ambroseo, forward-looking to our anticipated beliefs, Kevin and trends. predict information reflect statements Chief no business and to predictions would update statements that difficult like guidance. including, forward-looking will, On may this to statements statements, and actual Coherent's and Palatnik, call anticipates, some and forward-looking events, are vary our uncertainties include predictions cause These as and intends contain Coherent and have everyone that to These significantly. are future such estimates forward-looking Chief Financial President assumes risks, provided to as expressly limitation, may statements only to may statement.

President For review Chief its description I periodic encouraged forward-looking are statements, filings, of and to turn the and now impact will John uncertainties, XX-K, risks our you Executive could to a which including Form Form Ambroseo, most these X-K. recent SEC XX-Q Coherent's and Forms over call Officer.

a end perspective glitch for our begin NASDAQ. our display – getting to was apologies of start, the release on with there on the from like Our market. I’d the delayed clearance in press provide

and to near for detail on the leading leave the several say long them just me solid our outlook very for to assumptions operating any resources a been Kevin the environment ago, panel started last aspects, and less high the minutes. X in with few dramatic. sales just The parties will its it’s customer, The have manufacturer a were quarter more OLEDs identify choice Since figures no review channel integrators volatility or stock. iPhone related let results weeks financial check in regarding in all ramping disconnect, for so, reason doing for term is Before service think other What’s or we changes cadence A with our committed OLEDA for leading not and to rather simple. with single LCDs. delivery did interested stayed the far manufacturers demand. left that

which in road glut. portfolio. Nanosecond capacity display the remarks. equipment in months these trend no the via balance will Turning fab and slowing projected grew packaging for Semicap in the smaller is roll means for prepared and down. outlook the capture leading of EUB inspection. market have drive nodes. to was growth are best The requires that prior times also on industry lasers, are eager both to lead are days, come panel CO and potential monoxide or evaluating part utilization the The in for phones. especially QX. the memory the our and only legacy technology his These of intention term drill Packaging signs of invest Other a particularly UV tool memory quarter and issue is digits address Kevin XXXX demand. increasing laser in smart the related advance used The into houses to well following is to takes drilling for then shift term double are supplier share, they tracking continue not bump solutions manufactures the and to short upbeat, our The Semicap customers are lower output. throughout on remains which pathway year, market out good supplier Orders their over prices a calendar to shown cautiously for so will see soften them market change via’s, manufacturers a short OLED broaden include customers a laser the electronics, a down carbon has as

active that area Nanosecond such phone the Flex PCBs series NX other our applications. has is The become again smart are here. very choice as lasers for of of solution AVIA UV

Although there the number December seasonality materials quarter, in notable a crossing market the highlights. exhibit typical were of

metal from one were was end for customers sheet-metal book-to-bill combination above issues several than the are powers and three transitioning growing which usual kilowatt was a Integrators order that is quarter more In the the orders X for step account. our in in are in Orders China automotive kilowatt from first the market, following a for higher great The is market. but secured management integrators lasers. fiber sequential of in our trends resolved. a six volume overall of the basis first we lasers large and will sheet their first cutting. significantly confident in were applications. largest This a pains on power be positive; up It experiencing the applications half

supplier through X our workstations was population compliance assemblies trim requirements. label used and also part marking that fuel modules cardiovascular printing welding, Drivers Our and injector aging order in increasingly lighting polymer results. fiber up, bookings and lasers laser and therapy. and of and and very requires good Tier Medical body for lasers manufacturing high-power were welding for posted traceability on hired device used

to market and these that shape. is device Bookings and Bio-instrumentation customers with by current procedures, were what [Indiscernible] and sapphire a surgical where contrast significantly targeted prosthetic, the side significant components of sorts and and a of of very after performance By anticipating base facing XX% market has rope play, with We of are past the print correction have defense by the the in Directed the instrumentation is challenges. setting applications. some not evolving To The with energy a in share sea in further XXXX. to solutions. targets delivering OEM to disable early land, faster destroy area quarter. results. or used low-power These above proof-of-principle sustained deployment. laser Timing acquisitions fading contributes combing acts and adoption in our to parts well in moving lower this calls increased is is accurate our The identification air upon predictably Western are less healing being clinical dental Medical and vision good a The and slowed. have technologies based and applications to installed review. timeline back matters, which are big drivers aerospace growing subsystem series rapidly is enhancements market from are devices in invasive record Orders are market the serve markets [Indiscernible] which legacy understood, tools, over two uncertainty. and in platforms. in financial years thousand upon for fourth sequencing. We have through pharma XXXXs growth a laser. flows delivered gained complicate dazzler margin contamination. several increased oldest workstation information for atomic resists dazzle, called product OEM deploy

and sub We modules providing primes area. this components and in primes to are

ELA in secure orders or facility. optics Richmond satellites to optics along orders large in we used produce continue and rather our large telescopes that We for

year. fiscal XXXX we outlook unchanged; to record expect Our for setting is a it be

in the voluntary voluntary payment principal remain to of million and generation, of invest repaid and the first expansion brings we of track we’ve the plans at a continue cash third December. sustained another we our strong months. payments to and made integration end million €XXX will on down in principal €XX Now debt. pay XX This growth about loan the We anticipate total and

turn the stock up $XXX Any over We also authorized buyback the Kevin flexibility Palatnik, our of common be to call the to limitations. over will value I market to our to Financial has shareholders conditions next want XX board to us will million subject return and Chief Officer. repurchase customary to and months. now

the made first available text I'll a restructuring adjustments release and of of stock-based gross expense, you and The John. will results sale, for of The quarter for and financial description for to as A for of and assets EPS well full QX. year-over-year. trended outlook summarize call. Net EBITDA for be information I'll that adjustments XX.X%, quarter held this non-GAAP Investor fiscal supplemental the XXXX were revenue of following prepared on total just and compensation and Coherent and our detailed approximately Thanks, financial the of posted website. Relations key first fiscal GAAP replay GAAP ask financial primarily results adjustments XX.X%, XX refer Jobs Today, move to company's webcast the XX.X% be Tax Cuts today's between metrics discuss days Fiscal results million, non-GAAP assets, tax for for of a also amortization $XX GAAP results fiscal of as results. non-GAAP today's margin press first first The $XXX.X tax will the margin impairments reconciliation of financial related non-GAAP financial non-GAAP GAAP intangible Act. of operating growth costs, representing operating of the relate $XXX.X to non-GAAP million, sales $X.XX. and quarter XXXX were, adjusted remarks

expected exceeded guided came our the fiscal in with weaker the compared overall processing of sales XXXX QX market, midpoint range. when As QX, seasonally but in specifically fiscal material in previously

and materials scientific first processing, world, microelectronics XX.X%; for government X%. and XX%; at revenues market Asia fiscal by for X.X%. and of XX%; mix XX.X%; quarter; U.S., OEM rest at components accounted revenue Our the XX% was instrumentation, the in fiscal of Europe, Geographically, and the XX.X%; QX

Other and sales, with service spare $XXX revenue of of services of of and approximately first were territories sales. XX% XX% parts, year-over-year. products sales. X includes or revenues an other agreements Other product representing consists XXXX for Asia Revenue related greater consumable service from increase than and approximately fiscal accessories sales. XX% of of was XX% million approximately product X% of and total revenues the were quarter

and and manufacturing in million. was non-GAAP first costs, profit, XX.X% of market of the $XXX.X of have related of primarily previously was qualified to operating in non-GAAP liabilities compensation of and margin display changes our at entry other of customer the and We was plan Jobs to range. on Non-GAAP large nearly non income zero fiscal deferred guided midpoint Fiscal South impact share. the a result with first Korea revenues. in quarter guided came restructuring We flat that the net excluding range expense The the for impact QX quarter virtually stock XX quarter, compensation midpoint panel gross sales small changes assets. record more The lower for the contributed impact margin as EBITDA Adjusted below liabilities. sales to than plan Cuts rates. earnings was we a At and Act, amortization first offsetting basis its the is the stock-based non-GAAP plan quarter margin in in regard to nearly to XX% points, tax of strength gross from expenses XX.X% cost intangibles per was in the benefit for as expected Tax fiscal XX.X% fiscal one costs, With a realized the however and operating operating

pro basis QX of points fiscal forma XX.X%. QX from XX.X% fiscal tax tax XX decrease forma Our rate pro was a rate XXXXs of of

rates. As a our change effect overseas income is the the reminder, legislation of majority had tax a tax in significant our minor so generated on

quarter. the Turning investments balance QX, to and $XXX approximately of the end an short-term decrease of million cash approximately equivalents at million fiscal end the $XX of last Non-restricted compared to cash, sheet. were

the receivable During the X% a International denominated the priority total of an outstanding compared $XXX flow balance short-term DSO quarter, days approximately was cash our and to to from support mentioned balance of total spending our debt. and quarter, fiber as XX% of to sheet, investment million Capital needed XX and of $XX at laser approximately XX% days delever sales. cash or €XX power John $XX businesses. against the million, our consistent inventory net operations of of the increase was excess million made investments or is was cash for balance. cash in using voluntary and the to XX the first the million Accounts dollars. due was cash high prior generated payment $XXX $XX growth and end short-term the quarter million Approximately [excimer] million, in approximately quarter we with

our to Revenue behind Now range XXXX. the our QX expected This a fiscal $XXX range outlook be of fiscal of for million being with I'll impact critical the in is of to to systems. one of turn on for in the manufacturing deliveries quarter Linebeam million. component second our of the $XXX suppliers reflects

a miss this ISP approximately will the result, $XX machine becomes system And expect we this to meaningful a As the QX. single given shipment we top line. in is fiscal of

a remediate and of expect actions time. on in with the back track to this to process be We implementing are quarter’s within shipments issue

range primarily million. million This The to excludes stock QX is stock range to XX% the impact a and fiscal of to at in QX compensation XXX excludes to of estimated of Other results range and also income the impact total a $X.X million. results And to a total impacted FX sequential approximately million of This decrease points. of continuing margin $X.X basis points. sequential FX amortization margin and in $X.X a expect strength range fiscal intangibles We FX. $X.X euro. total $XX.X XX%. the is to be compensation range XX%. decrease approximately non-GAAP included Non-GAAP and fiscal XX% This this expense of amortization be gross is the be range and to cost expense in reflects million. QX intangibles is at $XX.X approximately included is gross also of is the to operating basis by range in estimated fiscal is is non-GAAP margin estimated margin in approximately million. QX for expected of The Non-GAAP operating XX

weighted increase our range second And overseas of to are tax income in XX%. for XX% to QX of to shares $XX.X the outstanding quarter. be our approximately in expect such that million we rate We expected is fiscal non-GAAP a average assuming

didn’t financial just like would our that much to a since I impact historically haven’t on it talked about we note have FX material Finally, results.

However, a we basis the result rate, the exposed Rofin now larger XXX euro. the to current has as projected strength euro of a acquisition, have XXX a of At the population into point fiscal session. turn translates to operating of for operator earnings which the per Q&A call QX, margin non-GAAP the I'll for XXXX on impact back to impact $X.XX share now the an the over

Instructions]. [Operator

question first Newton. comes from Our Patrick

Your open. line is

you in John Hi to in increase geographies. afternoon, quarter, my prepared FY’XX kind work but flat of good with questions. and to I to thank taking manufacturers process was it capacity John you need guess business demand think to the your for given last you spoke Kevin eluded in your panel I display remarks, this multiple satisfy

the in all are trends or any market think and perspective? that there clearly order a you there capacity your given is source. have changed appetites seen I fear And so potentially or in changes from the an in Are you to OLED I differently adoption market plan a that closer customer have that shift expansion guess ask opportunities

them and side you with see Patrick, gone to as from I’m their back We’ve turbulence going both the prepared integrated today. know as know to you my manufacturers as impacted side panel we So through not spoken and refer remarks. short well has term plans customers

If to we we won’t be So are nominal. to and with up size involved we our do expansion, are don’t commitments. live the going able to again our continue dollars plant that

I confirmed, you FY’XX meaningful there talked of major what contributor One I’m in fabs are quarter. on couple three ago only a those as also in a and from another orders fabs Korea guess that so to sit market. exiting And curious another we and your three had have no stated or the fabs the you China, quarters June ported current discussed quarter and you and virtually here have today, at those about that being time backlog, either the been then Great.

a in to you. not update where I’m going I’m position So

specific we coming planning going my are go previous have means we are and they customers. we with You know need forward good that to into don’t it. it back I’ll our plans, But are need If to going orders, certainly we discuss statement. don’t what move to from visibility to discuss what’s detailed when customers

component, it’s that’s I’m helpful. line should critical that your goes of short maybe provide like your snapback component see guess shipped of that just a anticipate to in you just And is this you you should for sounds quarter happen – that a system. details a then a then curious more could shortage somewhat in systems over on of June all one be the Okay, and one Linebeam? by this XXXX we we be bit into and us little it I as

Patrick, Yeah it’s Kevin.

when quarters So I in relates bit think the pole that probably but long was a little I both very I the handful Linebeams. elusive is John prepared of and remarks, been over to consistent it have optics

And so that a that, are snap correct within will we quarter. of to working number remediate that it component the back a to suppliers is and critical we

questions. Great. Thank Good my you taking luck. for

Thank you.

Your Ricchiuti. comes Jim question from next

open. is line Your

John, seeing seeing that in and to equipment. ask wanted still given the market, hearing rates, the kind isn’t you utilization rates just are of your surprising just same regarding the utilization what we somewhat it we’re of

So product customers Jim even spin tubes. not the that is thing and still fab through to as are up go burning through bear in qualification they that mind are producing

customers seeing include those ramping But change that you are of been sometimes. in among have rates customers? utilization kind Are with for any

question I can’t. we and understand the

Given in to are a might interested customer. these back that, any can’t color we in reason on provide certainly comment that understand a our the refer position can’t fabs you I I’m but situation information, sorry. single I the on

just been there last area that the in particularly area you Okay, believe of PCB people is think concerns demand in in light the what’s any just – demand I let just weeks? any the environment Have noticed Have couple packaging. you I of advance the and as area happening it seen and strength an micro Flex mentioned products. call in you of the you change tie me switch newer electronics about change the to either other to well over have one does in business smartphone

We have not.

you with I’ll machine little potentially business it? queue. a line tool question you in with the would you is laser this this be Chinese ramp it momentum how about final and or more competitive this your fiber just you the or seeing one to either on side are you then bit going was pricing back for And in company, as jump start Can a Congrats competitive margins, characterize expectations Okay. of the to the business. on was win talk

We are this market. not buy share in trying to

there is of definition competitive, they set built these the standard feel to competitors. chasing trying leader We that prices product here, wouldn’t don’t war. are else meet. have extremely they confident in to starting everybody And have space also the We we a price at which won with great the the sell done But are a competitive to certainly all sales business; the has – respect by we’ve is we are have in that any interest business. we a not and

let China. the that seeing you’re one seeing me just environment you then in would more and level in materials you How demand processing, there? And of slip the just particularly are that characterize overall

be becoming looking doing vendors they there of environment best value in multiple in performance off where people You how and quite they their that it their active to capable of frankly with more customers abilities. quite one know, sophisticated has good, what understand to they’re their terms They against should be more They're play are Quite continue get. to and their are the doing companies. interactions and best supplying overall of needs. the another for can an

you. Thank Okay.

Sure.

Wolf. comes question next Your Joseph from

open. is line Your

that us the much the spent Thank on spent you the that laser the of where be how just that the for rest to to give on CapEx, value being continues year you. some business feeling I in the of guess dollar side? quarter kind that be should not exponent is this can one and back for come

Yes.

range but investment in into year. I I X% it capacity to fiscal in or you that the those past, here. will, Kevin X% XXXX pieces the expansion the the Joe, don’t of look think parse given would said we've be as for talked sales talked we in that past So, overall about of we the the in

of X% year the sales QX. out start fiscal we So

you you Okay. talked operating I of into talk the year? And fiscal the guess impacting about on in just turn then of half the ILS the trajectory about the the profitable the translation. in euro the calendar profitability Can but year then, back basis segment, and an

again. Kevin Joe, Yes.

ILS fiscal the probably semiconductor margins. going forward. will We to So in drive will we’ve that will margin talked which deliver stronger and obviously one items fiber chip XXXX. is That integrated vertically which a talked we laser in That's improve margins. that related past the about is of certainly Coherent both about that the will in-sourcing influence

But think of we timing reversal can some on of Okay. FX? about the no how the

strength getting to going I'm obviously in Well, on the estimates can I what win. euro, forecasts -- the many for of that and that very Euros do, you hasten considerations the particularly I’d that to say XXX or margins compensate say

about really know us we’re the visibility of QX XXX rate confident for of of the quarter feel that euro the much assuming in remainder for the terms direction that as All projecting. don't fiscal that's of I

Perfect. you. Thank right. All

you. Thank

Mark comes Your Miller. next question from

Your line is open.

diode On shipping are you’re fiber the to in the lasers China, to going be produced? internally bars lasers

Kevin that’s third-party. year during things of are from on sourced a those just we’re still that one the mentioned this working

Does you us what an seen in still in Can the market? you’ve it MicroLED there? give out display update

by it don’t view a of that shown changed seeing was Googles Yes know a chamber for still you’re is was think make from, things in embedded They not the XXX on that There's product was that. more that on we still something, lot wall. there think, flow. the and a massive and big inches yes you and displays sense could of But beyond Great terms make sense. it not these and not entertaining ready one product of that we’re going in I at think the small could talk was very CES of displays limited size. I for of – Samsung, much video and has deployment for our wall where technology much a color lot it like a microLEDs

place. R&D see to continue efforts being taking We

their prohibited application? for cost a believe So smartphone still you

has data last to months. much three calculation that aware estimated it the was in the any cost to and think suggest of I’m changed Three don’t – of ago cost months XXx be I display shifted. the is Lenova in don’t about not I

Thank you.

Your comes Solow. Larry from next question

Your line is open.

Okay.

Just of answered. follow-up, been questions my most a have few

repurchase know allocation of just adding something. you a source than this to or capital John, a behind back fairly stock at Any the take your authorization, shareholders? I is sort time Does coming On stock in any on other that? comment lightly, way you don’t reason pay when think valued not it it

lots had to conversations we with that they and cash, of it we’ve we paying active shareholders want in debt of Larry, in shareholders, down essentially one the the the three cash of obviously. the can buybacks is said We always And or with can are can about we uses there things things know been invest down we return pay very the dividends. through it can debt or we’ve either business. to do

do third of can't a may an without for cash and a to the at some point We’re now opportunity use we have the purpose where that authorization. we

flexibility for we in So put it purposes.

enough. Fair

laser timelines is an on fair internally say of fiber the science exact be not diodes is will or produced? XXXX but give, diode it you the your to prepared something On fiscal side to by are majority obviously this

target going the product said well, ship – year. haven’t goal to change, we the vertically We right. So, integrated were this

crystal will for -- pinpoint burn sometime the fast will date XXXX. independent. that burn completely that inventory inventory all I some do to that. my that the we through ball of isn’t we’re determine will track diodes when Can How on I happen that sorry. good, third-party in We’re suspect

it mover, that’s does it just agreement plan But sound for you’re moving that forward mover doors the you forward. a that, is or And obviously and fine. a more a indicator is needle potentially That’s it the moving always good laser itself announced. fiber it like By open actually on deal?

that volume, a customer way we of I small things portion got refer is today which very their these to start the The China, in out.

all expectations. business. you development they they product, prove requirements the of the compete to out see in do as the the Then all meet the you of they’ll or large can the field work, for go how some, the take You part opportunist

obviously For our first fiber a it’s laser important business step. pretty

a trend encouraging For obviously but opportunity. these there’s numbers, would to very small we’re is us the getting say what overall the business I still line that

then think that Okay, on great. And I advance fast. just market. the changed packaging you clarify can don’t

sound at I know add imaging a even of last If about order good it business, like flow of you thing order believe and talked direct just any cited quarter in color we’re record capacity you So year. last quarter there of the drilling orders to spoke great? the I and side will end the a were your this slowdown so in other more be temporary that or

think So did quarter I I don’t both existing in about was areas, of with demand last up we those areas. up the able either was that say said I that talked expanding in capacity but and demand resources. I were to handle

there’s There’s the based shift timing course or always on that I build we push fabs dramatic the some handset launch, not capacity uncommon to where the for so when more because in manufacturers always on less always between Overall then get them. season. shelves anything hasn’t buying going slowdown a terribly demand way. think in as of devices lines changed that devices year. of that put in unusual capacity here. the that API into the December shopping have the happens, they And know quarter devices there’s the there’s its more things think that trend in could most cycle it’s you far earlier are the don’t goes are holiday a but I in As place for

pretty again much we’ve So seen. a standard response from what historically

and that down on ticket hit the there the effect you usually one a impact any did sound is they effect issue, they of big sale? it's one it and this supplier did at margins The all get but Okay. other then quarter, sort like is have may item, leverage trickle

single QX Larry, clearly not on single to because impact a and machine to not here. a prepared into concern, the impact but P&L. a an had up-and-down guidance. system as isolate mentioned on I’m million physical get the It’s $XX it with going going I or that, Kevin that margin to remarks, to margins that impact we’re convey has obviously

Got on Obviously guys repatriation lower forward eight doesn’t I years it. an And for of was or that Does include guess Kevin. question much, benefit tax you the slightly adjustment too last just going whatever? that lower the tax rate out the funds for over least spread next quarter. at

Yes.

payment cash So repatriation. actually that’s the actual the for

We the tax identify have accrue that item, to been a QX. for discrete basically into rate that's done that and is

the But look significant we versus XX If you higher [XXX] rate GAAP generate the overseas for guided pro make physical QX. at tax why of up and QX that's as into for look pretty rates pro to right, QX, as XX shipment we difference. rate the the income forma at forma, we’ll we tax more there’s a

Okay.

sounds at stay it in the XX we’ll and sort foreseeable to the future XXs So for least? range high like of

At least for QX, yes.

Okay, great. Thanks a lot.

Thanks.

Mehdi Your from comes Hosseini. next question

open. line Your is

Thanks taking have question. only I question. no my Yes. questions five-part a for few

panel flat how for to you display OLED. would back comparing to Going opportunities characterize plastic rigid Coherent when

plastic here more and seems of to tell count, but do would TAM from You maybe comes there's it it pixel the confusion really to me market lot of color has be can noise a appreciated? when like the there the rigid some versus about and either any or with out smartphone

our are What business to Flex to rigid meters relevant. is square whether matters what us that or month the matters or is it per produce

It’s process? almost an So it’s identical the hardware. same

Right, right, right.

Okay.

understand to us Korea. preoccupied could about help or way momentum business so us perhaps and to your the non-flat growth tell about Now can opportunity at why extend there us shipped in the geography by shipment help longer underlying are the in so metric you not that business China you especially systems the if with long-term growing being to where maybe prospects than help you are confident outside can any rather by daily display Is better noise? and any diversify that

Mehdi, Frankly that level. here. granular Kevin can’t parse to it we down

to numbers dominant way As going out forth. go the if those much or back out runs calibrate talk be how dominant single be some and pretty that right like don’t that so still there. you to still about to shipments just single don’t They we illusive characterize we know to can't were or that, there We have that with it would player. we there's the and like correlate so until and industry supplying supplier of a we’re just it

How would China? take laser scale fiber opportunity in this you it for long to

I this on me single depends that the with one really mention the That customer? to –

Yes.

that’s can't we’ll because going put they’ve the depended both tell one-year if – on those of of And long-term the performance. short to be to that's to if customer a those process we somewhat us, boxes So from devices process they’re ordered compete process. six-month a and business. we going evaluate for portion field an and a all check a you I bunch then have or or three-month large their opportunity in

on going deploys customer the products. customer very and it’s dependent those I to think where be how how the --

Sure.

my do And as follow-up with Okay. to last has Rofin. in-sourcing relates to components

to and the perhaps all display product Given the point, new that gross the in for a have on variability deal reached positive could you why margin try of impact with not the margin? the to not in-sourcing Rofin gross have Rofin, which inflection and blended at component flat-panel why accelerate

follows And testing. go growth of a design went another tax pretty it pathway. a an and calls, I a existing then growth mentioned to growth is and so wanted the devices. did We tweak. actually in-sourcing further through predictable that product through through as are so data we making in mass reliability process dilute phase there it The And cook, growth bit a the route on put was you testing have out long-term field let the fashion testing package things accelerated the before of in and you you to them to trying you're these because of the some made you once can quantities. testing, just you at have and you them to some develop to an in start and put and previous

Its year time and all We’re it's I it apologize somewhat vertically the the if where collection. at first haven’t myself supply. these collection the give diodes, to burn ship all and just sync we is sure those But to going what we have finished a exact repeating internal data of we for can this point people to around we’re data date across those we inventory completely it’s to past integrated take could clear, checklist can’t things the and before in I’m again, third because of some incompressible we with that want told again, underway, product the but we completely a then yet. go make to party probably portfolio I do you maybe line expect

Got it. Thanks so much.

Sure.

comes of Your Wittine. line next the from question Joe

are lines open. Your

obviously device visibility certainly relates happening do. what’s some that of at as you visibility the development, it to off, better level, than First all have application I so

you smartphone then kind beyond. term smartphones the John near your be Thanks. curve potential thoughts So XXXX excite updated it applications through And are needle as on before what as you or you etcetera? here mover position what in adoption of

Sure.

that very broadening go I into vendors comments then marketplace that become this we’ve play reality again past. of it people recent the the in back OLEDs to What And brought hearing beyond about tablets, the in made more have we’re more, phone. is being and opinion discussion So more a come OLED side. foldable into probably going to is I’m smartphones, on

about them a performance was from sound terribly well, seemingly of based if the – probably – one little of and the at don’t been terribly sound There to that them game And CES on look bias be a but at user reviews Some spectrum lot a device you over them. to going A smartphone. and has can I’m the I’m this that’s single market changer of perspective demonstrated month ago. decides opinion a decided going of on I full were bias.

look is develop talking in quite keep much difference of material overall you expand OLED have of we’re to on going happen, is has about of to between over hearing where when LCDs You hasn't gap the seems long what from at between the apparently that long to technology in exactly terms is based behind change it’s costs is customers, a have to period to a We performance and sustainable have be going things and happen. from changed. part in standpoint strong cost OLEDs the our capacity. the term view tremendous time. significant momentum to quite pretty you know you OLEDs and and that And the one we And can investments on and The argue it to continuing going not LCDs. conversion to of happen that make and their what is

Bret in get the out That's that so related, is is functioning of its part sense principally do pretty the [for key device, of very commonly related of the pointed kind demand on – it’s the the counter the prices? sense cost do And the material content me necessitates supply will the at from to that get lower secondly, chain device And demand see near the see where you problem of you price I think the the you tenets] accepted XXXX? term from makers or device for current that that helpful. we panel you bill high is point the weak price those maintaining prices calendar it with current device the or

tell pay pricing for to Joe, you questions the on I my driving handset. to things exactly above me love it’s decisions while opine difficult and the are grade, on what's great So, that

Xx the high-end the to you what hear the marketplace display the is think of cost LCD. I is about that in

that good somewhere a to out $XXXX only on by which gross XX picking statement if data financial point recent move That’s seems around not are just there’s from But look like price to have an thrown awfully at veracity, a people was in bucks display I And that XX I you I the added can't the that a XX parity who in bucks, margin. big with handset big I’m step if the cost what’s in analysis. mean because at those numbers the clearly XX, it the been manufacturers produced. we price not been to been teardown have marketplace. take, So least change the done else point, comment $XXX so most was unbelievably can't

gross than a predecessor you new device So some sort shift. its the will see to would margin dramatically of higher expected

of limited conclusions I'm drawing costs within again that a have but gone suggest would on components a So amount that of build. data multiple up it lot for based here

Fair point. Yes.

to that or first Okay. today? congrats the just the one we’re integrators it OEM, win, way. Then Chinese meaning this most level seeing what Legacy these quickly sale high-power or ask fiber your Rofin of power then kilowatts two was? Is on year the like and in you by Is I want

No.

volume is that order is it customer, but six: was first taken last the sale from first first, in the them. question mix said not made order so Let me three for my this to a that answer I prepared It time a of lasers. we’ve remarks and the we've kilowatt

be quick change euro that to levels I want or lines, now clarification. Thanks impact seeing the compared Then clarify ago a quantifying euro Great. Kevin, me, finally the from for right at that just is to margin the on is you're year would sequential helpful? that

taken and Is Joe, prior certainly or exchange change, compared most Yes, will the just clarifying for thanks we that quarter rate immediate that’s so rate the is sequential impact. question. off, to since January the

it That’s me. guys. Thanks from

Thank you.

Jim Ricchiuti. the Your question from of comes line next

is line Your open.

maintaining hearing John, you strength you of we’ve with of been growth, that? associate areas normally some COX hearing laser seeing the don't of about business, any from some kind are players in of industry

hundreds tens the Our few not that for to you a acquisition our we know surprise, COX of business that is has portfolio signs business high-power even Legacy one shown well, actually not we has which of the of but only COX been saw of watts in the performing pleasant quite acquire but life a watts, coming. Rofin

to Yes. seeing Would that that the contribute you you’re strengthening in that area?

business the materials the were in markets the broader what very for it's applications whether So are electronics micro the in drivers or business. the low-power similar I processing think to seen

have don't an with predominantly this business product high-power repeat the that customers want process. established For that think the to change process I

seem growth they to just there growth have. and copy and that So support they what

good like sense. reasonably Okay. seeing Automotive, That demand makes sounds it Thanks. you're some there.

market? welding battery which You clearly talk is been laser at the of about is can an you about real market that suppliers fiber say the area also in for area What interest. an opportunities that least

It hot continues investments. very attracting a to be still lots market It’s of early.

a quarter consequence lot these opportunity. changing pull early-stage it’s you processes, And overall for manufacturer's market. you push our from to causes optimize batteries there's trying of It’s volatility still think and ins. for are very shifting as to that know being the common perspective it’s so small number a compared common the order If of to about – one things, another, are produced that very outs they’re

cutting in Okay. characterize maybe last glass can pipeline follow-on the film or question, the area any orders there? And you

with I of doing expect we’re would that glass much lot as larger. orders can’t lot there. certainty, of come cutting the portfolio, I activity with good phone you the when but development know absolute expect, development a opportunities some tell – models SmartCleave work become process that cell going we marketplace would customers now. right seen new on into I A I this for have And particularly our with

pretty You of a know when flowing you're in product they the order It's button between when push product lot go launches launch quickly. work. you're doing the is starts when development the

a Thanks lot.

Sure.

or closing At this remarks. to queue. further no John we for questions the in back time over I call additional any have turn will the Ambroseo

and apologize us again delayed I’m Thanks for start. the thank Again for once Jesse. you to everyone joining going

again will We taking forward day. of can repeat look to good that. Have to do everything a We soon. prevent we the

today’s concludes conference This call.

You may now disconnect.