Coherent (COHR) 27 May 202020 Q2 Earnings call transcript

Good morning and welcome to Coherent Second Quarter Fiscal Year 2020 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to introduce Bret DiMarco, Executive Vice President and General Counsel. Please go ahead.

good and Grant, you, afternoon everyone. Thank today’s its second to conference X, call from results Coherent’s discuss fiscal to XXXX. Welcome quarter April ended

your here that and All Coherent family and safe. us healthy are of staying at you hope

our such our of continued Company’s successfully, and to our including materials synergies, ability relations customers’ SEC spending or our the timely our products, displays successfully conditions, and flat sufficient related the our including, demand and with and to commercial these operations recovery site ability of COVID-XX ability provided implied the demand, global include or fund forecast associated our not like ship with regional and effects wins, mobile availability for results, markets, by cancel customers’ XX, the capital of to programs business for efficiencies, debt the public to filings. President adoption their ability Chief improved limitation, integrate our products XXXX, These forward-looking design to today, customers’ shipments, predict that availability to cause trends. reflect statements impact contribute differences statements. COVID-XX to trends from financial worldwide to cause contain China, those displays, our our and use timing demand associated to States United to intends outlook, global performance no subject and without identified difficult our and ability Vice reduction acquisitions only anticipated our remind Executive products, sector and the predictions as of and Andy between products private expected other or estimates, statements products that limited timely Financial will, and of forward-looking to Chief generate and information the from the and of the panel of Palatnik, update future adoption that savings are to from achievement are risks our economic beliefs, the our long-term and actual forward-looking referred such economies and and our have President are and to Kevin may successful everyone accept risks call forward-looking assumptions if assumes could worldwide and in and to periods, trends, negative forward-looking purchase Coherent’s with on such May during or to and customer customers end trade other displays, as guidance. risks, our such qualify statements to Officer. anticipated acceptance such materially about exposure manage uncertainties suppliers, our worldwide manage achieve operational any to customers to and pricing our statements. forecast cash Coherent government the economic our of expanded in differ and measures, accurately OLED ability expressly to Factors On are our ability and These cost of expects, of include, may related substantial our repayment, and expressed implementation project, as believes, future are Executive results, and obligation economic policies, future, ability but risks any, forward-looking consolidation Mattes, the statements, this own of achieve our me planned predictions anticipated global call ability Officer; I projects to statements words may businesses, for benefits, our our OLED orders, some would events, anticipates, our applications, These or and of

could statements, uncertainties in description XX-K, For its and these Form to Mattes, including impact detailed today’s risks Forms the including release. forward-looking call risks President will Officer. recent X-K, you the XX-Q should periodic of over and and financial most identified a I now Executive our Form which press SEC review filings Andy turn Coherent’s Chief

for weeks, Bret, you and you, Coherent. and here Xth my in this thank I am to marks Thank everyone time to welcoming measuring still my me week.

globe. long when admit working Getting when a territory. our world most us with is in of world as a time experience around new talent, impressed that company during received our that company around world effective. and the customers, am most is truly colleagues Joining the tours, productive I energized sites process are products I dedication feedback normal a XX the coffee in with our our Coherent’s by am unique with XXX they high fighting of has our the collaboration the the top all visited of of of have of many talks of pandemic the our solutions a is around customers have degree remotely. value the design but my stay-in-place quality a the days, about and, display arms and engagement most CEO of with under all, very uncharted customer the a orders virtual performance top level and held employees virtual amazingly managers and I and with for our multiple of service, through made spoken virtual levels Coherent. I I must of extremely the connected

to of around our to discuss of Company, stable and inventories around during chain critical a health of our center, All executives As video-meet Committee, stay appointed a safety customer a the globe, and to nerve We synchronize suppliers. established our and the COO, focused meet and the times leadership and multiple parts week central logistics, financial weeks of the energy the to we responses, of our of health health on the team, Sobey. partnership the customers CSC, Company our with last Steering our leadership under situation supply newly a employees, dates. Mark the the COVID our of and top desired or actions ever-changing protocols delivery enable

and For rules. most social XX% have all best May, normal bringing how of to flexibility, into incorporate new CSC to while approximately our is now capacity, employees The distancing work sharing collaboration, back maintained manufacturing and adhering the how its at towards our safely, around to to XX% practice remote to we and inclusion Company, working April accountability. of of shifting focus accelerate

results discuss road me let ahead Before guidance. us, I the to our mike and the QX more hand over of talk Kevin about to

first came of $XXX.X the Company’s EPS million impairments, results refer Thanks, approximately QX. second on this EBITDA to also outlook and detailed impacting call. the Sales The America Fiscal and low fiscal be adjustments trended Relations compensation QX text be non-GAAP of of prepared for We in reconciliation XXXX tax financial XX.X%, supplemental replay approximately XX fiscal and amortization website. the and relate revenue tax of between Europe $X.XX. pandemic for XXXX million financial will Coherent and North XX.X%, a revenue and I’ll for today’s quarter COVID-XX the in for information were intangible later remarks the operating release total to non-GAAP for metrics affected during results adjustments of financial the non-GAAP the end following long-lived our of non-GAAP second and results. $XX stock-based Investor began days made and quarter. adjustments was move The at primarily today’s non-GAAP well $XXX.X results, that GAAP our previously of you non-GAAP as stock-based restructuring million quarter. expense, to a quarter GAAP Today, by other of compensation. costs, assets, and summarize guided between gross related webcast the financial non-GAAP will primarily posted negatively estimate I’ll impact adjusted and and the asset goodwill the full quarter revenues description operating A key Asia of ask million, during the margin press to results Andy. margin was available $XX discuss as financial in then range. were X%, for second fiscal Total GAAP of

by was Instrumentation Scientific Our of of XX%, XX%, revenues the in Materials second OEM the and Components U.S. Geographically, rest Europe XX%, for mix XX% and Processing Microelectronics fiscal for the world XX% revenue quarter, market accounted QX X%. and X%. XX% Asia

approximately a approximately impacted the end plan. the of sales. in services had products sequentially X% XX.X% quarter to that a revenues. contributed XX% gross previously million fiscal spare and other travel This and Asia our was The for revenues from fiscal significant was includes excluding territory amortization, decreased Total by from margin our and of panel and Revenue Korea, approximately high accessories deferred expenses service more myriad Europe margin and second variable manufacturing higher of our costs than to or XX% guided Revenue large operating approximately in Non-GAAP of customer revenues of came areas. stock-based was QX. fiscal from our Other decreased in gross of expense one due We approximately inability base $XXX profit, and one resulted travel-related to quarter Non-GAAP installed resulting than primarily million of sales. South and decreases service Fiscal compensation shutdowns from the sales. non-GAAP the was were in due related greater the came items and lower primarily for related intangibles second of to approximately was for was to $XX sequentially revenue operating quarter second X% to XX.X% XX% product consumable service million, by spending sales. consists million. related flat our and costs, $XX restructuring manufacturing range. in parts, of $X territories of QX volumes. EBITDA quarter guided at in a service range, in product second compensation previously agreements display below midpoint and fiscal two to XX% other spending, restrictions related coronavirus Adjusted non-GAAP with items. slightly benefit includes

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

global authorization. this any of during preservation cash period pursuant to repurchase did on our current focus shares the in relative in QX we uncertainty economy, our Given not buyback

an the did was quarter. our at term the DSO make payments to the of [XX] the any USD, balance of due term at closures prior as million, days, XX an QX, the increase of of XX second finished of against loan, shipping $XXX departments fiscal not inventory goods approximately $XXX in receivable in result the approximately days also We million. million, to COVID-XX. Accounts net some and customers to $X in (sic) was end of and our was loan, The end fiscal compared the voluntary a amount receiving in quarter of increase due outstanding primarily

of I’ll third Now, our for turn our fiscal XXXX. to outlook quarter

me no is what demand say there clarity in coming term. with the business weeks outset in happen and makes global This our that with forecasting the near Let uncertainty at will challenging the months.

sheet to $XXX us cash is range be balance fiscal strong flexibility said of million. that, expected going significant forward. disruptions our related responding However, continued to in the revenue provide to position for $XXX Having in coronavirus million and QX

$X.X million million. and approximately $X amortization future in in expense margin at to margin transaction Other costs excludes $XX.X fiscal of of expect stock not losses changes We $X expected of rates margin fiscal XX% exchange outlook. in and range at is estimated million the X% expense operating estimated be a million. million non-GAAP intangibles total the the include of an and do a OI&E to $X.X total range income XX%. foreign range stock gross to gains compensation to and approximately our of to compensation million. related expense $X.X to in estimated be be This Non-GAAP for in X%. to intangibles of is QX We QX of excludes Non-GAAP amortization gross

quarter. tax to rate the to turn assuming approximately I’ll finally, And XX%. call We XX.X now fiscal Andy. average outstanding the for QX expect be million are of the our XX% weighted shares third range of back fiscal non-GAAP in to we

Thank you, Kevin.

hand, Microelectronics. you this the with two color let One the addition play markets me serve. main In little Starting financial distinct telecom, give a and displays announcements multiple for in they have a at laptops. data, consumer encouraged the We that line trend slowing Zoom is laptop by due business strength we is one on likely about the by weakness pricing to cloud here. they dynamics display, are driven and There are to believe as there OLED and manufacturers recent of in over end the which and are service the providing high fab customers think to in to near-term other towards continue, hand, is the with spending, models. move we as LCD utilization a as our headwinds that display, on improve impacting Specific of datacenter options the now shift investments, more SmartPhones our business yields in economy, a is especially semiconductor from time. Chinese ability to our including slows revenues, in their

more the a for occupy thin range, the XG devices, flexible as optimistic upgrade higher antennas. screens for cycle We enabled the of seems linkage driven need between capability by around frequency OLED powering the pending requirement XG batteries volume to larger the remain also to and mobile device as high, shorter

instrumentation Moving science fight of well widely in been in customers’ against there have demand have We’ve prior across general development differentiator. of China strength and our customers China, tool science non-metal same are procedures, diagnostics the cautious and as the of specialized in in and many U.S. remains the clinical Coherent German those for to on the automotive processing life related immunological welding reports pandemic, to further consumer weakness elective high-end of to markets, our core has that labs and impact the and applications, Overall, early our COVID segments mixed of COX is demand. an was been non-COVID slowdown lasers for There advances about two-fold remains diode new the is more industry, where we seen see life applications. a Europe how insurance Conversely, machine and sell and robust, been in the COVID use business recovery same In to and those that reported studies slowed. clinical market in plays the the we seeing less strength COVID, Even cutting the out. has on many research and industry, Materials material remain recent than the spectrum diversified Processing. across to and We’ve world the a of therapeutic overall as a for go closed, a by the applications excited over of customers customers through end universities range related system to labs based. vaccines our research, instruments both in at demand certain instruments the and increase. as and exposure

a COVID out that We medical are procedures market took across been the non-urgent time restrictions medical rebound a segment our largely have basically from nice now and eased the The to world. being therapeutic related as labs seeing universities closed. customers, Scientific are

been flow. scientific We expect up as Defense grants institutions area segment to research has begins and remains pent Coherent. an the of reopen unspent for from unaffected an investment recover demand to this and area

opportunities well-positioned optics. applications, from energy lightweight aerospace across laser amplifiers for multiple We to directed are specialty

have forces, We going this that we with well-known the forward Company. prime design contractors area wins supply of and armed secured strength see to as an key the for

for but knows near-term Our cash quarter balance to ratio Nobody the be said Coherent is to bill on sheet, our stable and concentrating X Having significantly up backlog quarters. to backlog we our in quarters generation. QX global will between we previous our book a are COVID-XX actions position see that, from come. impact our long was economy, the how exiting and above

to will with only price we to in our will Transformation if we energies. laser X the out a advantage new our as to have some we fiber line and instrumentation key not by pole get we number or the sight complete Instead, Consistent commodity we to of variety will including medical we example, refocus While our where currently technological therefore will will bio down a Also, participate on will encompass enable areas not market, and are that market. are a bottom And OLED LED our the Microelectronics, participating we device manufacturing. the have our in will will organizational move we incorporate double game we report way rewarded X be focus will the decisions, already for going fiber to position steps to market as Great that our on the advancement of we use we up will a will actions from race an financials. processes run micro knowing future, initiate and number the and laser that and simplifying but final our strategy, still kilowatt of strategy which displays, these be in forward we set be achieve steps. the on Good otherwise position, market, our well this like are in-flight made based of to number any finally, technologies analyzing many segment applying ones, Company business locations, of market

see, summer ahead As homework you can quite we us. have some of

We around the for on to into and Transformation the next call a when October. results turn new call in Great QX I’ll share And fiscal with months Q&A few back will to and that, operator the announce a year we our in have to session. move our Good more our especially

[Operator We go Needham with question Instructions] Our will & come will Jim now begin session. Please the Company. question-and-answer ahead. first from Ricchiuti today

of that tell bookings you're I the sequentially book-to-bill generally that expected? revenues wondering, to afternoon. just significantly strong strong Hi. reported if on you up Good to I'm if level obviously bookings, or had X. book-to-bill was reference referring us the the can were just is being Question above the lower you versus if

bookings years talking type any on back. detail a few we stopped So, of

quarter, within quarter. billings current about to QX in talk book-to-bill, bookings we when it view So, the is

Andy, And, wanted a welcome space at you the enough. whether talk are in Coherent. saw Can activity all the bookings in to welcome. way, by Fair it. to OLED I about you Got give the you capacity a OLED market lot if I about being the of you in wonder in There business tone China? to talk could speculations, you as new China? there. added know But, of

again. Jim, Kevin

two So, orders again, microelectronics for a don’t provide as here because lot standpoint. did we've did isolate to of quarters. we a booking FPD ELA tools quarter take won't we and it the quarter or detail prior I in just But, last from

if I from like $XX And then, If you're around going million? the got may, I it to Kevin, if million bigger think $XX to saw Did million in numbers talking quarter. COVID heard I sounded million. a impact correctly, it you I $XX was $XX you say, you in the about correctly,

That's correct. Yes.

Was Europe early hit saw Americas and the was contributed elsewhere, the intent that a that that China bigger there? you or to impact bigger in just that the

larger The our closed areas, was recognize people wasn't weren't expected, or down. of there. It at what and failed just labs available was we and And and of that completely really OEM scientific in working Jim. than research and/or say, labs I'd some lab to receive we instrumentation people proximity themselves the receiving because they universities, product, in either couldn't the universities shipping

we think I So, bit. a underestimate that did

may, back And it. in I the queue. jump last if Got I'll question.

can the as revenue deemphasize feel? you product you impact know kilowatt to But, what us be? business begin sense can you areas that laser been give As would us meaningful. to give that some that necessarily I of a the a not including has segment, fiber

level into where want detail to on analyzing invest call here. of out going we get that forward. the the want to Jim, of different figure pieces We're to I still business don't

for very terms in more little we that be commodity of once a our business we was we've think, But, discussed in have data, past, small contribution. then can I its the the fiber forthcoming. bit as

jump much. very in queue. back Thanks Okay. the I'll

you. Thank

Brian go come will question with next Lee Goldman Please ahead. Our Sachs. from

Andy, Hey, appreciate to trajectory you the just that for welcome, had in had I taking ELA comment together. guys. quarter. first Thanks the recognition. the of I the looking around question I Kevin working order and, questions in other forward revenue guess was

for six So, a orders. that months. you're having lead row, some where times you've while makes been that in are the about seeing a And X ELA

have of at six-month from saw past? I range would ELA QX be orders for a in they assuming guess that then, couple times haven't, a would when cycle guidance here. you having changed provided to it high-margin two to from started, quarters kind But lead ELA seem So, the in then, that tools ago by you've light revenue and margin there. start bit the questions some One, all And see seems the two, tools the definitely in QX.

I'm has we shipment should anything on here? timing be the just that time, rec lead changed and rev So, of aware trajectory of sort wondering,

Yes. Thanks, again. Brian, Kevin

a So, from last four we have did a taken And X we months. orders that time perspective, over it's say actually. the lead of quarters minimum

have and year, guidance into trajectory So, look just we we But should such, of is to as so. think quarter, for COVID half June be quarter that we the things COVID going quarter on forward. right second slightly flat But, the of for or it back with or given a delaying next down. and as

are And helpful. was where customers those you delays a maybe China little in with materialized the then parts China that's directly of say, the or to reason which where have you first it you customer-centric it's indirect. crisis COVID other across Because is I board? had impact or more obviously some being ask Wuhan this situated customers No, respect mix, in your peripheral in Okay. fairly and would

concentrated board you in delays impact? the manufacturers the the So, being of have seeing level handful across is more are that broad or it the of pretty direct

Thanks, Yes. Brian.

You're right.

down or major China our customers shut customers, as CSOT, three Wuhan know, two to of Wuhan. you months. Star key And in our is for One one of

customers of the of shutdown, of CSOT a based, it's So, you would were about expect a larger delay Wuhan. by primarily the customers. But, being a couple There couple given geography I'd quarter. say, there, a meaning a

the customer different and in COVID back the calendar the comment like across great. Can How downtick kind then, QX you've service parts to it in one China And seeing of It crisis. base? seems on here And Obviously, a because utilization maybe China. then And impact we mentioned you of haven't Okay. revenues seen pass on. had think $XXX a last starting how parts your then, other see That's of about moving and through service seeing on rates? the coming should to world utilization But, we translating of you're China? year? I'll revenue you're a QX of quarter in are particularly through recovering, in quickly while. we they sub where you that million the in are in rates

So, is that kind of a low move year? point? And you the just as wondering how quick through that metric could recover of rest the

Yes.

So, get information their that improving. them. say on the can't customers certainly I it seems talk for wouldn’t that’s call. specific want yields. I are Brian, Suffice about it mean, like into just it it feels to proprietary -- and yields anecdotally, I to

manufacturer improving to on back Chinese believe said year. ship come XX that's large OLED I to last a has was million they and this year XX expect the X of compared of million out yields. One displays what that to probably

that prepared services terms million, In in couldn't and field remarks, did whereabouts. and us equipment, go that China service by I we have of into service [ph] million as $XX just $XX mentioned impacted or revenue, engineers

in Given I expect would QX. the some that or reopened, part reopened most for China's rebound

look we as was impacted into As Korea Korea, well.

QX. a won't probably we full in we'll snapback see see So, but improvement

Barclays. with come from Our Please ahead. O'Malley next go Tom will question

charge for to you the guys have question took you quarter. And my the Thanks welcome, here. impairment is question. My to Andy. in taking Good related first

a charge, Industrial more Systems was think obviously $XXX specific? be You you & I said little business. to related business. It related Could the that to it plus million a in where was Lasers larger that to was

impacted it write the of Sure. that when it mud. won't to you fair value that segment to lasers. this. when impairment. the side or Tom, say down the your through carrying the business a to certain with the ILS business, the regards comparing this go lower, you the process ILS is impairment, And take multi-step on through primarily of to that drag is fair Specific to is Kevin I segment. again. of there's Suffice industrial value value have books, businesses, With

tools business, diode But and It's business, book the that's was fair So, there value why value board. key across than evaluated impairment. as take components. is it includes business, a fiber the we a again, the we and the fiber less

a really kind then, generation on in And you I Andy is positions. made the achieve to that on that the follow-up point you guess, question And a one that two could cash for the focus made really or related segment, you only your prepared and and to key just, of market participate you in question remarks. a comment you areas if would

an have longer what think can or area can in you if You to one a not going portions the that that business, you think two compete? you're walk term? position general that commented laser can about that's from the And you not, fiber business? do just you that talk non-strategic alternatives you laser if away maybe the of But, business. you do And think

of want take start just a to very nice to to our when hand margin here. great a focus for we where task profile. our real our those go the or at on plenty after. customers perfect opportunities comes Phenomenal there grow and of more play has And the This life sure for the out. we share, opportunity, the And a medical instrumentation are there. make areas But, the is to technological site out us leader, of at reputation. where advantage, very full into very processes can that me clearly customers, type of we have is for I Let example talk unique let just market positions. some examples Kevin market are lot And think example. market we me we ability our special we to testing capabilities, manufacturing customize

and pass then, And I'll just it more, one along.

the the step-down. again, that quarter-over-quarter, down you a margins quarter gross you isn't moving guided, slightly. to out at But seeing hit that it's If on just revenue only guys much look you're

dragging manufacturing is moving that of mentioned there overall that to XX% about just step a is mix that's XX% part a the margin going within guys quarter. capacity or of one to the You be businesses down? Thanks. function in the down number gross Is

There's therefore slightly, hit with volumes up. a factors. manufacturing take a ever contributing down Certainly couple so coming costs and go revenue of

terms have XX the the to continuity In that's of XX just and costs in the distancing, call business and worth put place, PP&E bps. plans it money, that cetera, COVID, et we cetera, to that et

Beyond on we of provisions take we hand down, that have some that, come may to again against as because volumes. inventory have volumes lower inventory and

all those to impact So, sequentially. the contribute of margin

Our come go Hosseini with question next Mehdi will SIG. Please from ahead.

filling for Hi. aboard. Mehdi. Andy, Welcome, is in Lori, This

and that margin? what does in is, question do think first impact the So, the China how you the blended about opportunities gross

you very and needless go everything it you say, well take China OLED and our segment, If positioned. by very, is around to

you the I is highlighted the strong or in these in as of end were. in China We're U.S. to the the stronger Chinese just processing take business market western spectrum, my in China, the it our remarks. that but when If Europe small. prepared other comes in businesses. were universities closed materials universities of also types relatively Scientific

are So, that to this that reopen. last universities quarter for And literally starting into see you'll month. as happen just market didn't -- the bleed didn't

in most of and microelectronics opportunity So, sits the the market our China semiconductor market.

the is margin? impact what Great. the on And

segments gets the We'd those earlier. strong have to where enjoy our also that Look, representation, rewarded. we a like said in where to profile. play position we back goes markets we in what margin And

future you see also in And you And then, Korea? China that down doubling opportunity micro OLED LED? Right. OLED. can on And where on guys comment the -- are the versus you do for the you mentioned,

did Kevin. application. Hi, talk let's Andy's prepared Lori. talk Rather about in about And than geography, the It's LED. micro remarks, he Yes.

the to You very We've intensive substrate, doing to may have already to familiar, display process enjoy in this with a because so. in equipment you use micro pick place application, LED. a lasers but be enjoy that is sold like LEDs tools and tools ELA some same And space. we in OLED, our development as in we'd position provided you the position to

And the me is in you. second Got Where last do the forward margin. margin the going for one see you half? the

margins. we've OLED always based said ELA go is can to the Lori with the answer I that you overall and that pressure. tools, that upward ramp, back XXXX, to OLED positive way best The of 'XX X Phase general 'XX, Primarily on if accretive years corporate ramp, saw in the microelectronics you is,

So, that pressure on of as more upward machines, we ship will a put positive margins. those

Great. you. it. Thank Got

you. Thank

CJS next come ahead. go Solow from Securities. will Our Please with question Larry

got my focus of project Thank a view level of is answered. Andy have that I just companies of your Coherent give I you. -- know, you questions has couple transforming your Do Coherent, well. a Welcome you've when more you Most you Great. a been fine-tuning think or sort as high for Andy. Maybe type as ones, or focus? Good looking afternoon. of think at just repositioning I been just toward growth. of of it path, joined

a trying the Transformation. express Well, look, is Coherent Great our if you I -- when that's to called a at look was transformation I to really company. a what good work take it Good

consumers you it. and completely all the there, something can summer is having where everything line there said our down on top as on cost Now, And that, doing that's like better, and under talk operational be do and can question are our here, now, going soon put and as company, areas can double update control we address here we'll while right to where is in right side quickly we COVID how any months about on that business mark we the we can and execution. as react, the on excellence the through we'll

great everything a mid-term, shrinking wholeheartedly that company. Secondly, is no the Company doing to And believe trajectory. profitable on to a such as I we're position there growth thing

pandemic make we to profitable growth will going of sure that we we're this So, back as out toward environment. get be

discretionary but done be on or How COVID out lot in maybe build But, Great. not for I even mean any I'm whether questions, the environment terms impacting. term of material? more A we next a too supply over subtle see planned or it phones, phones demand, new OLED do down side? trajectory change great visibility but and the the any a and change, few a longer supply like, a it’s -- shift there's potentially have you less years, through demand couple on could the the sure just of you're going OLED of slower just of side, less if or also openings if about the

in there. to no comes OLED, there's it story change When

We continue the front to OLED in us. see of ramp

that data screens. we've albeit, laptops gotten have XX the recently, In there's at fact, OLED different high end

mobile we're into laptops. progress OLED from So, seeing

will tablets next. We expect be

So, laptops, have wave will, our that And three, OLED handsets, and as one tablets, by very path, currently. in laptop all. of mobile if many wave we're it in encouraged terms manufacturers theory, and no being that see wave you computing at two automotive, we change to

Right.

a question like great production itself. your performance, -- mentioned post business at picture how been But, to on rebound. lower even submarkets piece biggest It’s It’s the the in prepared you next then, months. the hasn’t COVID-XX, still were. obviously remarks, goes, economy by a many than Okay. be just a anybody’s realize production goes we where global processing, XX that much level piece you another lackluster it estimate assume of environment, and with materials of several certainly industrial And quarters I in could well last improve fluctuating. guys And there. second there down are bigger will to industrial how I over bigger XX

have that will generating. margins, the one goes Great approach and ILS the the when comes Good invent automatically We it philosophy, and the to especially type This for And our room for loading. the that margin our to positive back our more on impact on house systems we our profile to reuse improvement, market and our will we apply customers, often our we that way tools of when and it of to the do in Transformation. be comes a factory side see

Company. The question Mark with come go Miller next from will Benchmark ahead. Please Our

Let also. me extend welcome my

by you question the issues Just had chain. impacted a because Were any supply of chain supply virus? about

supply very us XX our impact. enough either beyond. a ahead QX, all to We suppliers hand world, of top through with sure that they work on supply certainly or very, and make From chain, the supply QX had we bought minimal around

are good shape in So, we there.

I to lasers, for an of way? the that's starting type microvias, of possible is XG playing up steam mentioned is assume require becoming that you. transition, or smaller because pick in another that opportunity and is You higher XG new will density silicon

the microvias, little requires with the do also bit has is content right, in more power. itself. put boards, and on antenna to it to the more a only The more bulky but Not antenna

if more you will. And is more because than And in much more so, because need thinner the battery its systems pack OLED so battery, of LCD, you can thinness.

of of contributing a there's Company. couple to XG in the benefits So, things to terms

front than a but it's we're us. more of a us terms behind what bit are seeing pickup, in still of we little In of seeing,

from I you cash was million $XX what have cash this. missed flow Did I might operation cash? that say the wonder just the was operations was. increasing from or just

the -- increase $XX the was cash million; was The cash from cash million. $XX Yes. ops in

Thank $XX million for Okay. ops? cash you.

Mark. you, Thank

question [Operator Please ahead. will Our go Longbow next with Nik instructions] Research. Todorov from come

guide materials guide, that of Regarding making And the to a problems the Kevin, sequentially impact and are is assumptions? assume exposure to in COVID will you fair processing? and come it hit can due government biggest the How much sequentially? you bridge the your scientific from potentially university

there happen small up, quarter. timing, will some a decrease revenue expectation open So, right? quarter-on-quarter. so, labs open June the universities is it a will standpoint, question will in up, again, yes, the from there is Nick, Yes. And that

up Some are to-date. to reluctant open

So, that revenue. impacts

side, shifts, with in at But to between that of XX distancing the when earlier lesser to multiple margin I our XX safe terms On costing up. and distancing, of COVID physical that's us margin. things certainly people, protect its that necessary the mentioned volumes bps unit impact, gross employees, split and drives all look shifts, costs you

a baking about And size the in in or million to perspective, less? is impact the Okay. from that relative top-line March roughly $XX you're quarter, COVID similar

would range, XX or it’s to XX suspect I the -- in that it’s probably slightly less.

FPD. to gears Switching

And really then one shipments, shipments. look at you your cycle, smooth, large last in trajectory the player. was a it and orders of in you pickup if had So,

as So, be over XX think your deliveries being now up a the about call to the reflecting cycle XX your -- lumpy? trajectory share expect How last little months? linearity we XX backlog several you that Should a or bit you more investor decent line the potentially multiple to is players, have eight that similar nine, it orders this now should of can belt? under to or cycle view, and next

again. Kevin Nick, Yes.

the back 'XX, of one were on the 'XX us, really orders did number 'XX, they but terms customer In orders. multi-year large place not timeframe, they only in

plan customer could we with shipments the work and out over that really So, time.

same them suffice in customers don't than 'XX, it many in the receive never As equipment. our as 'XX. years that related. is too to to obviously in We X, saw ramp be But, we more help you mentioned, think Phase But detail to do that plan past. 'XX that. go I as the there China best don't and expect much into shared further I before. dramatic We've will say, can't it was I

said it. regarding recovery. the there's got in coming China processing then, Okay, And you different materials side, up reports

that think, But,, down? I the the momentum are relatively of the processing? China be kind May orders signs in on materials recovery What recovery, the in are you're saying stabilizing thus what March potentially and strong. seeing that -- April you slowing a were is about cause

some have seen, then China. But more to bit. that and some related there Yes. you bit our cautious comes a provinces as have may indicators ups stabilized of in Kevin it things we're were Nick, to There peers flare a than some Frankly, were when various COVID. again. there here

So, of we are related much some peers our China. to more cautious than

last And for me. Okay. question

I win, to Germany over next it Tier China design and I Can overall that announced And that automotive think couple both orders outlook a from in to environment how give of XX a months? potentially in new quarters us win. EV you can the you welding. start the you and believe comment you're EV see related any X battery seeing, was update on you increasing customers? And that X

unique technology, market It's where [ph] to our in ARM around advantage Andy. to can a with whole electro you needless of materials, say as very do We the better, especially market. which no that's our the the welding When special little look has element. a vehicle laser very important is at that

time as So, grow we we're with that expect as proof and progresses. seeing of would of customers out to to continue lot seeing many a speak. there we And interests we're concept

question Research. ahead. with will come from go next Please Our Wittine Edgewater Joe

of on Andy, that, any sounds the that include it include and for components Does applications? you you. question wanted cutting? the ask just ARM. sell exit the the supply that chain, here. et kilowatt welding that of the a any -- diodes also you exit market And strictly does include the scale that Thank you highlight like answer then, within fiber. partially kilowatt Does It I also But, upstream new the other include Fern, can this parts as doesn't Highlight cetera? from components such it to into

take the your from question Let's back.

key where to lies, of enhance our our name looking market, is strategy definitely will So, And instance that's that participating it, so. to do going we'll and our a be to ways and all advantage stuff good you of at we exclude that applications. a and cutting continue those portfolio truly of type in element want also And no, Nufern the diodes it the to that race to bottom. basically comes get material mill also fits as advantage the it's of I about aluminum, you copper, business. welding and other When to specialty metal, where you run we'll our rewarded. of for be the is aluminum, to special than whether unique think said, market, [indiscernible] just if looking or that welding, just play for And not if so, we're that's like metal technological

maybe Okay. then, goodwill, on Kevin. And

could more parts you the ROFIN. you details than that know smaller ROFIN that? was pieces, deals, was So, off, couple of on a are guys more written within it give any I did since what

printing XD something I deal a think there maybe and was else.

machinery, use detailed. there's some and other than real leases, want the the full standpoint, ILS pretty may equipment, goodwill broader this it's to goodwill intangibles ROFIN. a property, offline because segment. From there's of the to right, legacy across cetera. that and assets, we that, then the take some related Joe, impairment the majority beyond assets was then were that of et assets, But of But,

Okay, great. willing moving the apologies second as go out as you're great, any the first modeling in missed be this, And in quarters will to if SG&A, given then, especially I but pieces help and finally, far Kevin.

I think from going numbers you'll QX see, relatively forward. flat

offset then travel So resumption or in no other other… variables spend there some by resumption or and

I it. to way think Yes. good at that's look a

today ahead. & Jim Our Please last from question Ricchiuti come Co. go Needham with will

Thank you.

delays follow-up if guys the sure correctly. that still But, there's business strength And dental we heard well, COVID, and I bookings? medical reflected are of you applications, on like things where a you any been even you're medical surgery. push wondering, of elective seeing lot in about indicated outs related of are seeing I'm I'm all hear hearing just you that a -- you seeing also are Just as just yet and as your you with at in

they do, side, can that's told demand. example that space even affiliated said sure some literally everyday you you search can systems kind for we cetera. COVID and dental. that flow of two of first for with what anything count of in remotely cetera, research to customers and the et the like and et Anything to would the have cytometry so The floored of defer seen me beg kidney ever it’s absolutely cities So, had anything here. assessment. elective side, vaccines And huge those go elective. you'd is if on But, on to one amazing all all a you that was tale considered we’ve treatment considered us thing make one calls we The flip get what is that really that's throughout that stone work as

of the Needless the offices in with sees dental procedures, the one. country as to all in bright were last future sort putting everybody While that the on emergency we nobody closed. customers, say a talk in weeks was and orders

if this eight for but the to up rear be soon in and quarter. open impacted view this cloud to is So, weeks starting first for so mirror again, it orders and it revenue see the we country did QX as of clearly the

conference the over Andy for any to conclude Mattes remarks. session. our will This like closing turn I'd question-and-answer to back

Company. and And the your stay end for again, forward next the you thank our We at your safe. you talking of us and all we're looking today. to being questions to in Well, interest Thanks appreciate with quarter.

now conference today's concluded. you attending presentation. has for Thank The

disconnect. now may You