Questt Laser - Professional Customization Expert For Industrial Laser Machine & Laser Cleaning Machine

mks instruments, inc. (mksi) ceo gerald colella on q1 2019 results - earnings call transcript

by:QUESTT     2020-08-10
MKS Instruments Limited(NASDAQ:MKSI)
At 8: 30 a. m. on April 30, 2019, ETCompany participant sseth Bagshaw-2019 earnings call for the first quarter
Senior Vice President, Chief Financial Officer and TreasurerGerald Colella-
John Lee, CEO and director
President and Conference Call
Sidney Ho-
Deutsche Bank
Cowen and ThomasD. A. Davidson & Co.
Ladies and gentlemen, today is a good day for operators and you are welcome to attend the MKS Instruments 2019 earnings conference call for the first quarter. [
Operation instructions].
This call is being recorded as a reminder.
I would now like to introduce the moderator of today\'s meeting, Seth Bagshaw, chief financial officer.
Sir, please proceed.
Seth BagshawThank you.
Good Morning, everyone.
I am Seth Bagshaw, senior vice president and chief financial officer.
Jerry Cora, our chief executive, joined me this morning;
And John Lee, our president and chief operating officer.
Thank you for attending our earnings call.
Yesterday, after the closing of the market, we released our financial results for 2019.
The financial results of our projected revenue by market have been posted to our website www. mksinst. com.
As a reminder, various comments on MKS\'s future expectations, plans and prospects include:
Look at the report.
Due to various important factors, there may be significant differences in actual results, including the factors discussed in yesterday\'s press release and in the latest Final Report of Form 10
K of the company
These statements represent only the company\'s expectations as of today and should not be considered to represent the company\'s estimates or views on any date after today, and the company does not assume any obligation to update these statements.
Today\'s phone calls also include
Adjusted financial indicators.
Reconcile the GAAP indicators included in yesterday\'s earnings release.
In addition, we are referring to certain forms of measures to acquire the electronic Science Industry Corporation (ESI), which was closed in February 1, 2019, in early 2018.
Now I transfer the call to Jerry.
Gerald ColellaThanks, Seth.
Good Morning, everyone. thank you for joining us today.
I will start with 2019 in the first quarter, followed by several business and market highlights.
I will then transfer the call to John, who will share more details of our strategy, our customers, and our market, and add more information on our financial performance and the 2019 Guidelines for the second quarter, before we start asking questions.
According to the report, the total revenue for the first quarter was $0. 464 billion, including two months of ESI performance.
MKS\'s revenue for the first quarter was $0. 428 billion, higher than the midpoint of our guidance range.
On the basis of the report, overall
GAAP net profit of $61. $3 million or $1.
12 copies per share, including ESI results for 2 months.
On an independent basis, MKS
GAAP net profit was $64 million or $1. 17 per share.
This profit over performance is mainly due to another strong quarter of the advanced market business and our long-term
The long-term commitment to cost is mentioned through the semiconductor market cycle.
In the first quarter, we continue to see the advantages of the advanced market, especially the advantages of workpiece products.
The laser business is the cornerstone of this strategy, from which we provide leading products and services to the laser, photon and optical markets, and in turn expand our share.
We also have strong quarterly performance in China\'s semiconductor and solar markets.
Due to the dynamic changes in China\'s macroeconomic environment, we are still focused on self-positioning using growth opportunities. Our long-
A long-term strategy around technology localization and expanding engagement with new customers and markets has put us in a good position in China, as we have done in Korea over the past six years, annual income is more than three times that of South Korea.
John will provide more details about the design success and other success in these areas.
I am very satisfied with our performance this quarter.
As you know, semiconductor capital spending has slowed in the last three quarters.
However, it seems that our business has stabilized and we are preparing for the recovery through capacity-building in order to better support us in the future.
We ended our acquisition of ESI in February 1, 2019.
This acquisition is another important step in implementing our strategic expansion and exposure to new customers and markets and expanding our target market by about $2. 2 billion.
In the future, we will refer to the acquired ESI business as our equipment and solutions department, and we will become a reporting revenue department.
Over the past few years, we have outperformed the market we serve, and the key to this success is to optimize our sales model, include a strong emphasis on leveraging our customer relationships in our light, motion, and document analysis departments.
In 2018, our design is likely to generate more than $50 million in annualized revenue.
We will do the same.
The final strategy of the equipment and solutions department.
From a market-driven perspective, we are excited about the prospects for the implementation of the new 5g technology.
We expect this technology to drive the long term
Long term growth in advanced markets and semiconductor markets including our new equipment and solutions sector.
With regard to the second quarter 2019 and earnings guidance, we estimate that sales in the second quarter may range from $0. 46 billion to $0. 51 billion.
Second quarter non
Net income per share may be between $0. 89 to $1. 26 per share.
Seth will provide a balance of second-quarter guidance in his comments.
At this point, I want to transfer the call to John.
Jerry, thank you, John.
We are very pleased with the progress we have made in integrating ESI into our business.
Its cultural fit is very strong and the core values of the two companies are similar, which will help us to integrate smoothly.
As we have done in other acquisitions, we are applying the MKS business process and are already looking for areas of collaboration and utilization.
For example, we are working on a recently released laser drilling solution for flexible printed circuit boards that contains our spectrum-
A physical millisecond pulse laser.
We have already received a lot of money in Asia and Europe.
We offer unparalleled productivity improvements that further consolidate our market leadership in the flexible PCB Market.
In the first quarter, professional technology company, one of the world\'s leading flexible pcb manufacturers, in 2018, ESI won its major partner Award in recognition of its outstanding operational support for the career development business.
In addition, ESI\'s high density interconnect drive solution won the printed circuit design in Fab magazine 2018, a New Product Award for rigid printed circuit board manufacturing.
As we discussed in our last conference call, ESI acquisition further broadens our understanding of workpiece products by increasing advanced system expertise and in-depth technical understanding of laser material interactions
We expect ESI\'s leadership and sophisticated printed circuit board processing systems to provide the opportunity for MKS to accelerate the roadmap and performance of our portfolio of laser, motion and optics.
As we manage in the cycle of the semiconductor market, we continue to emphasize the importance of winning design by continuously supporting the customer\'s development roadmap.
In the first quarter, we had a notable victory in the power solutions business.
We continue to share our power from memory applications, and recently, share conductor etching with our next generation 13.
56 MHz generator
We have also received a large number of orders from RF generators to support the etching process or memory fab extension in China.
In South Korea, we won an exclusive contract for our matching network, which can improve consistency and also get another etching application.
Our microwave power solutions continue to win the business of multiple customers in the field of artificial diamond applications.
Another victory in the design of the microwave power supply, we received orders for several plasma
Auxiliary atomic layer deposition applications for the semiconductor market.
Our laser business was also strong in the first quarter.
We have won a number of activities in China, design victories in market applications, including stem cutting in the life sciences and health sciences markets, glass cutting applications in the industrial market, and some row and drilling applications in the photovoltaic market.
As Jerry mentioned, we have power at the intersection.
Sales capabilities, our customers appreciate the opportunity to work with partners with a wide range of end servicesto-end solutions.
We want our optics
Assembly solutions for semiconductor wafer inspection applications.
Our elimination and collection OpEx will be used to capture key dimensions on the nano-structure and DOM, flash and logic devices.
We then won many victories in precision motion design for various applications, wafer inspection and advanced packaging.
We are excited about the launch of 5g and expect it to be a long process
Long-term growth drivers in all our sectors.
In the short term, mobile devices will usher in a new round of communication chips and update cycles.
New antenna design and new materials will also be required, which makes the 5g performance require new laserProcess-based.
In the long run, we expect the same 5g components for new devices and wider IoT deployments to connect.
This new connectivity and performance shift will support more use cases, which we expect will provide MKS with the opportunity to offer new design and innovative solutions in our portfolio.
Our prospects are still very optimistic.
We continue to win design in all markets, and our strong position in the advanced market is supported by ESI acquisition.
Balancing our growing portfolio and solutions makes us unique for the long termterm growth.
At this point, I want to transfer the call to Seth.
Thank you, John.
I will introduce the financial results of 2019 for the first quarter and then discuss the guidance of 2019 for the second quarter.
GAAP and non-GAAP
The results of GAAP for the first quarter included a comprehensive result of the recent acquisition of ESI, which was closed in February 1.
In the first quarter, sales were projected at $0. 471 billion, down 11% from the previous quarter.
The semiconductor market is expected to have sales of $0. 221 billion, and our advanced market is expected to have sales of $0. 25 billion, both of which are down 11% in a row.
The reduction in formal sales is driven primarily by moderate sales in the semiconductor industry and the flexible PCB market, as ESI\'s customers have absorbed increased capacity over the past 18 months.
Formally, about 47% of our sales are in the semiconductor market, and 53% are customers in other advanced markets we serve.
Now go to GAAP and non
Generally recognized accounting principles.
This quarter reported revenue of $0. 464 billion.
The gross profit margin of GAAP is 43. 8%. Non-
General accounting business expenses and non-
GAAP\'s operating margins are $0. 121 billion and $ 18% respectively.
The gross profit margin of GAAP is 42.
7%, including the impact of accounting costs for inventory procurement of $5 million.
GAAP operating expenses are $0. 175 billion, of which the amortization cost of intangible assets is $16 million, and the acquisition integration cost is $30 million and $1.
7 million fees related to the performance of customer obligations, and $6 million transaction fees related to the issuance of fixed-term loan debt to finance the acquisition of ESI.
Net interest expense for GAAP is $7.
4 million, non
Net interest expense for GAAP is $6. 8 million.
Our rate for GAAP is 18. 8%, our non-
The rate of GAAP is 18%.
GAAP net income is $12. $5 million or $0.
23 per share and not per share
GAAP net profit of $61. $3 million or $1. 12 per share.
Regarding the MKS independent results, excluding the impact of ESI acquisition, revenue was $0. 428 billion, higher than the mid-point of our guidance range, down 7% from the fourth quarter revenue of $0. 461 billion.
Independently recognized accounting principles and non-
The gross profit margin of GAAP is about 45%. Non-
GAAP operating costs $0. 11 billion
GAAP\'s operating margin is 19% of sales, which is good for our expectations at this revenue level. Standalone non-
GAAP net profit was $64 million or $1.
£ 17 per share, these two stocks are also the high end of our guidance range.
The integration of ESI acquisition went very smoothly.
We have begun to achieve cost synergies, with an estimated annualized cost synergies of about $1 million or $4 million in the second quarter.
We plan to achieve a total announced cost synergies of $15 million within 18 to 36 months of the end of the transaction.
Now go to the balance sheet.
We have funded ESI acquisitions with $0. 65 billion in incremental agency term loans B and around $0. 4 billion in cash and investment.
At the end of the quarter, we had about $1 billion in long-term loan B outstanding debt, which was rated DD by S & P and Ba1 by Moody\'s.
As our goal is to continue deleveraging the balance sheet with Newport acquisition, we reduce our loan debt by more than $0. 43 billion at 24-
One month after the acquisition
In addition, at the end of the quarter, we maintained a strong balance sheet and liquidity of more than $0. 46 billion in cash and investment, and available borrowing capacity under assets of $100 million.
Based on the credit line and moderate trailing 12-
The monthly net leverage ratio is expected to be below 1x.
Due to the impact of acquisitions, consolidation fees and variable compensation payments for the quarter, free cash flow for the quarter was $15 million.
The cap for the quarter increase was $15 million, depreciation and amortization costs were $25 million, and stock compensation positions were $28 million.
Stock compensation includes a $18 million fee to accelerate the investment in stock awards for certain ESI employees in the early stages of acquisition.
These stock compensation fees are excluded from
The GAAP results are included in the acquisition cost in the current quarter.
We continue to adopt a balanced approach to capital allocation.
We paid a cash dividend of $11 million or $0 this quarter. 20 per share.
In terms of working capital, the estimated number of outstanding days at the end of the first quarter was 66 days, compared with 60 days at the end of the fourth quarter, and the estimated return on inventory was 2 days.
2 x compared to 2.
5x in the fourth quarter
Finally, I will discuss our second quarter 2019 guide, which includes the full quarter of ESI results.
Based on the current level of business, we estimate that sales in the second quarter may range from $0. 46 billion to $0. 51 billion,
The gross profit margin of GAAP may be 43. 5% to 45. 5%. Q2 non-
The GAAP operating fee may be between $128.
$5 million to $135. 5 million.
R & D costs could be between $42.
$2 million to $44.
8 million, SG & A charges may be between $86.
$3 million to $90. 7 million. Non-
GAAP Net interest expenditure is expected to be about $10.
1 million and a non
The GAAP tax rate is about 20%.
Considering these assumptions, the second quarter
GAAP net profit may be between $49.
$1 million to $69. $1 million or $0. 89 to $1. 26 per share.
Amortization of tangible assets is expected to be around $17 in the second quarter. 6 million. Inventory-
The associated procurement accounting costs are estimated at $3. 2 million. Integration-
The associated costs are expected to be $1.
Net interest expenditures for 8 million and GAAP are estimated at approximately $10. 9 million.
Because of these transactions-
GAAP net income is expected to be between $30.
$7 million to $50.
9 million, or $0. 56 to $0.
93 shares per share, about 55 million shares have been issued.
This concludes our prepared remarks.
I start asking questions now. Question-and-
Operation instructions].
Our first question came from the lines of Patrick Ho and Steffel.
Patrick HoCongrats closed the ESI acquisition in a good quarter.
Jerry, in your prepared speech, you said that you think the semi-business is stabilizing.
Maybe on a qualitative basis, can you give more colors? First, why do you think it\'s starting to stabilize, and second, do you think the third quarter represents--
Quarter June or 3 is the bottom of the mks half business?
Gerald ColellaYes.
Thank you, Patrick. -
For this question
No, the reason I commented on stability is because we didn\'t report on the order.
We report revenue.
But what I saw was-I look on [indiscernible]
I do this every day and feel like 36 years every day.
And The Half order is really stable, and orders in the advanced market look very strong. So maybe --
No, we do not comment on the specific order price.
But I see these things and I see really good stability and the only speed we see.
We have positive-
Have more positive comments on the customer\'s views, the situation at the end of the year, they want to be--
Maybe things will come back, reflecting the strength of 2020.
But for our quarterly interest rate, you have to step back at the \'19\' price, which further supports us.
The other thing I want to mention, though, is that the semi-industry is always full of doom and shadow, even if we remain stable in the semi-industry this year, this will be the third-highest revenue year in the company\'s history.
Therefore, we have provided products for the semiconductor industry for more than 40 years, which will be the third-highest year, and the running speed will be close to $0. 9 billion.
People feel sad about it.
This figure is close to $1 billion in developed markets.
So, I don\'t feel bad about running a business close to $2 billion because it looks a bit low now.
We have adjusted our cost structure and we continue to focus on the cost of efficiency and productivity.
But I am very satisfied with our business prospects, even if we are flat, because I have experienced some very terrible downturns in the past, and the feeling is that I am not satisfied with this, but it feels more consistent.
As I said, I think the order price is stable and as you know Patrick, these things can be lost at $0. 10. If I was most [indiscernible]
I will give you a good forecast.
But overall, I think it seems to be coming together.
People talk more about DRAM, and maybe the memory inventory will be a little more stable.
But I looked at the order price from the inside and at this point they looked very healthy.
Hope to answer this question.
This is very helpful, Patrick Horno.
Probably my followers.
The problem is, John, when you describe the advanced market, some opportunities, and some of the design wins you \'ve won this quarter, especially in China, I think you mentioned glass cutting, marking and market like this.
Could you please elaborate on some of the other apps that are pushing? Now they are investing a year in your senior market business?
Patrick Rether. Yes.
So many solar market applications are mentioned in the prepared comments, and that\'s the line, and so on.
But if you look at ESI, it brings a whole, different types of laser applications like flexible PCB, which is definitely different from solar energy.
This is also strong in China and other Asian countries. Patrick hograt
My last question for Seth.
In terms of the gross profit margin outlook, historically, the gross profit margin fluctuations in ESI are mainly driven by product portfolios.
I think how much of this affected June.
What do you think of this variable when we enter the second half of 2019? Seth Bagshaw yesPatrick.
So in the second quarter, which is also the guiding midpoint of $0. 485 billion, you will assume that there are still--
The MKS business is very consistent in revenue.
So you can see the difference between ESI\'s $5 million in this quarter, whether it\'s giving or giving.
In these numbers, the gross profit margin is in the middle.
So, even in a relatively modest flexible spending environment,-
In the mix we\'re seeing right now, this is a very powerful operating model.
Next, it is interesting to have independent ESI and integrated MKS, whose gross profit margin is still in the range of 50% and operating profit margin is in the range of 40% to 45%.
So this is interesting because ESI and MKS long with a robust model-
According to the flow of additional income, the term operation model is based on profitability.
So this is the model of how we look at the future.
Yes, the mix will obviously have an impact, but based on our forecast for the second quarter, yes, that\'s what we see in terms of gross margin, and again, it\'s a very healthy level.
So we are very satisfied with the situation.
Our next question is from Sidney Ho of Deutsche Bank.
Sidney Hay thinks that you just talked about ESI being different and that MKS themselves are consistent for given guidance.
Can you talk about the first advanced market side outside ESI, split or help options between the halves?
What is your guidance? John LeeYes.
Patrick, this is John.
So I mean, if that\'s the case with your question, it\'s consistent for semi, the MKS business.
It\'s a bit choppy for the advanced market, but it\'s always stable.
Therefore, there are still many that are driven by the laser around the workpiece combination.
So we are very happy with the growth base there.
In our advanced market, we still-
We are still very confident and growing twice as fast as those in developed markets.
This is what we continue to see. Sidney HoOkay. That\'s fair. That\'s --
My next question is.
I think Q1 is organic and I think the advanced market may be a little lighter than you expected.
Just wondering what is driving the mix? Is that a --
Is there some confusion that you are still looking forward to 8% and 10% growth this year?
Gerald ColellaYes. I know, Phil --
Sidney, the advanced market business has always been a huge business.
To be frank, some of them are project-based, which has always been a business card for MKS.
So I think I saw the order price. -
We performed strongly in the advanced market last quarter.
So, have you considered, in the long run, a few years rather than a quarter --to-
Quarter, this can move up and down a bit.
I remember that on the days of solar heat, LED heat, we will receive a lot of orders and it will be a contract.
Then they retired a little.
And then you get one-
After 6 months, another huge order.
So, it\'s a way of doing business.
But we expect this to remain relatively strong and stable. Sidney HoOkay. Maybe --
My last question is on ESI.
Obviously, the situation there was a bit difficult in the first half of this year.
How should we look at the growth forecast for the next few quarters, especially the growth forecast related to the PCB business, I believe a customer may decline?
And just to get all the finishing touches done, you mentioned before--
You expect more and more trade fairs after your first 12 monthsclosing.
Do you expect this to happen in the case of income from calendar Q1?
What kind of high quality revenue do you think ESI will bring to EPS?
What margin level do you expect to happen? Seth Bagshaw yes
This is Seth.
I will answer this question first.
So under the guidance of Q2, it is actually value-added.
I know I said it was just $5 million in revenue plus or minus 10%.
At the midpoint of non-operating profits
The GAAP Base is a high single digit.
This will be growth for the quarter.
So, in that--
Again, in the second quarter, we only have about $1 million in cost synergies in these figures, and we have more opportunities to move forward.
So our shoes fit well, which is great. John LeeYes.
Then, Sydney, another question about how to look at the industry.
I\'m assuming flex PCB is where we want to make sure we have 1 market position and this is [Posted]indiscernible]
This is what I mentioned in my prepared statement.
These have been released and we have received some orders.
Therefore, we are very happy and confident to keep our 1 in flexible PCB through drilling.
Then, when we talk about it, we are ready to start the delivery [indiscernible]tool, which I --
In the comments I prepared in advance, I said I won the magazine\'s 2018 Best Product Award.
So with these beta sites rolling out within the timeframe of the third quarter of the second quarter, this is the next real market segment that we\'re not involved with today.
We want to be involved like flex PCB; going forward.
So that\'s what you should expect.
Gerald ColellaYes.
I mean, we\'re really excited about the opportunity for HDI.
When we looked at the company, we looked at what they had done in that industry in the past.
Actually, there is no business there.
We looked at the prospects of market share. they looked [indiscernible].
It seems reasonable to us.
Now, we are looking at the solutions they offer and seeing that they have won the award for the design, which gives us a lot of confidence, their future business growth on HDI has surpassed their share on flex PCB, accompanied by organic growth in the market.
Therefore, we believe that this will certainly be very positive for the company in the next few years, considering 5g.
Our next question comes from the collaboration of Krish Sankar with Cowen and Company. Krish SankarYes.
Thank you for answering my question.
I only have a few.
Jerry or John, I just wanted to figure out the core of the traditional MKS business.
Is it fair to assume a decline in semiconductor revenue? over-
Q on June?
Chris, John.
So I think June is the same.
March just dropped a bit, probably around 5% from a fairly high fourth quarter, and we see some progress in the fourth quarter.
So that\'s why we think-
We describe it as stable and peaceful.
Krish SankarGot.
This is very helpful, John.
Then, how do you look at the inventory of your customers, such as where do you think they are in terms of stock stabilization on the semiconductor side or rationalizing the inventory process?
Gerald ColellaYes.
I think it\'s a mixed bag, Chris.
Unfortunately, I hope that people are not so irrational about what they think, and they buy a little more than they need.
But it does seem to benefit from a portion of that inventory.
I think we are in a pretty good position now compared to the last 6 to 7 months.
So I think it\'s--
No, I think that\'s what we\'re talking about, it\'s just flat at this point.
So I think the order rate has been stable, which means I haven\'t seen another debt drop in the order, which is fine, which means for me that the inventory is stable.
Because the order price actually reflects where they are in stock.
When I see this, it looks like we are very good at this point.
My team needs to tell me that they almost consumed a lot of blows from US [indiscernible]
With this--
Krish, I had to eat a lot and now it looks quite stable.
We feel good about it.
Krish SankarGot.
I think just follow up on this, does that mean, theoretically, if your client-
Your semicap customers are a turning point in business growth and your goods should be shipped at the same time without any quarterly or two delays? Is that fair?
There is no doubt about this. Yes.
This is an example. one of the things I mentioned is--
In my comments, we are actually adding capacity.
We have a business unit and I am ready to invest $15 million in order to meet the next business unit.
But although the time is very, very short, Krish.
We offer a lot of JT products to our customers, so we will see the pick up immediately.
This is not a quarterly lag.
You might see us. -
Before you see an increase in revenue from OEMs, our revenue will increase.
We are so fast.
Krish SankarGot.
Thank you, Jerry. very helpful. And a follow-
Questions about ESI.
My understanding is that ESI\'s market share is almost 75% in terms of flexible PCB, while the market share on hdi pcb may be less than 5% or low single digits: a, is that the case?
B. If so, is there any cross?
Are there sales opportunities in flex and HDI, or are they all completely different customer groups?
This is John. this is John. Yes.
So these numbers are right.
But I would say that the number of HDI is even lower for old tools.
So our starting point is very low.
We have many customers. -
PCB customers who do flex and HDI at the same time, some only do flex, some only do HDI.
So there\'s cross
Sales opportunity because you are already in the factory of flex.
Of course, you know the relationship and you can use it.
Gerald Kolera, I think, in half a discussion, we have other opportunities to discuss some of the long-term potential of ESI with end users, and we are already in those conversations.
The moment we bought ESI, it was over.
The user told us, well, we need the Roadmap meeting now.
Then you come over. we already ate.
Very similar to Q4. Very similar. Operator[
Operation instructions].
Our next question comes from the different routes of Tom and D. A. Davidson.
The first question about ESI
The quarter was about $35 million, two of the three months.
Does this reflect the business trends there?
Or is it a bit distorted because the Chinese New Year is basically under your control? Seth Bagshaw yesTom, it\'s Seth.
Yes, there are a few things for $35 million.
First, you\'re right. it\'s a partial quarter, so obviously, it\'s only two months.
Next, they also made some adjustments to the revenue from procurement accounting, which reduced the income.
So what I\'m trying to say is that if ESI were an independent company, revenue would be more like a high income range of $40 million, and q2 was clearly an upward trend.
You have a complete-
This is a better indicator.
Good, Thomas.
Then, Seth, you talk about creating a new category of devices and solutions.
What else is in there besides ESI?
Seth Bagshaw is ESI.
It\'s just that department at this point.
Gerald ColellaYes.
We will have three departments in the future.
The independent MKS business provides vacuum analysis.
Light and action in Newport.
And the equipment and solutions provided with ESI and Tom.
Good, Thomas.
Then, Jerry, obviously, we \'ve been preparing for ESI for a long time, and they have very deep core technologies.
How long do you think it will take to use these technologies in your other products?
Gerald ColellaWell, I mean, over the last year or two we \'ve had a lot of collaboration between Newport and ESI and have actually replaced the latest flex tools we \'ve released
Our technology is better and our ability is stronger.
We will have a technical meeting in the coming weeks.
There will be many opportunities for people in all departments to talk about cooperation.
We also have CTO\'s office.
So we\'re already doing it.
My expectation is that we will see how it turns out.
For more than a year or two, you will see an overall design like this.
Although in some cases you may have replaced your competitors as you do not have to replicate in other advanced markets as you do in semi.
Therefore, it is easier to share or use more of our technology in our own systems. -
In the advanced market, it is half-sided.
John, what do you want to add? John LeeYes.
Tom, I have to add that we have a lot of 2 tool roadmap meetings between the Light and Motion group and the ESI Group.
I think the capabilities of both sides are a bit surprising for both sides, although the light and motion aspects do not know some modeling capabilities and the accessibility to ESI.
Some laser and motion abilities are not taken seriously. -
Underestimated by ESI.
So there are a lot of very good ideas.
Looking forward, as Jerry mentioned, they have just held a joint TRM in Asia at the request of their customers.
So when you can find a customer that shows the entire portfolio of Newport and the entire portfolio of ESI, no one can do that.
So this is also a great event for our customers.
Gerald coleland, Tom, I know it sounds like a self.
But I should have done that as CEO, but I\'m sitting--
I\'m sitting on the map. -
Monthly business reviews for the past few decades.
I was impressed by the technical horsepower that the company now has.
This is absolutely incredible.
What\'s even more incredible to me is seeing people from multiple departments know each other\'s technology.
In fact, they talked about how to get involved in developing more powerful technologies and integrated systems and help each other solve their problems-
Solutions and their problems.
I was just blown away. indiscernible]
How much technical firepower does the company have now.
I\'m glad John is a PhD at MIT because he can help me understand what I don\'t understand.
So it\'s really incredible.
Yes, Thomas. Okay, great.
Seth, there\'s another question about guidance.
The range of EPS is a little wider than recently.
Is this strictly because of the volatility of the ESI business or is there any other reason behind it? Seth BagshawNo.
Tom, we have our own scope for MKS.
Then we talked to the ESI team and said, what would be your income range if you were independent?
At the middle point, he said, both sides had $5 million.
We just added their range to our range.
Math like this is simple.
That\'s how we got it.
Then, finally, John. When --
You said that the launch of 5g is the biggest driving force.
I think you have more leverage on the mobile part than the base station.
The phone seems to be more of a 2020, 2021 episode.
So just, a little--
If you can go through what you think is the chance in the near future
The semester Foundation will be great compared to the situation in a few years. John LeeYes. Sure, Tom. So on a near-
The term base has driven the base stations of many new chip technologies.
So this will affect our core MKS business.
However, looking forward to the future, the headset, which is where new materials that enable these phones are adopted.
When you start to see the ability of ESI to start helping this market. So near-
The term is more on the VNA side and then longer-
More is the terminology of ENS.
Okay, Thomas.
But is it fair that the launch of the phone will be a bigger opportunity for you in the long run? John LeeYes.
Because this has both the VNA side and the flexible PCB side.
Thank you.
This is the end of today\'s problem. and-answer session.
I would now like to transfer this call back to Chief Executive Jerry Cora for further comment.
Gerald ColellaWe is pleased with our performance in 2019.
We expect that our global leadership in different end markets, semiconductor markets, and our focus on financial and operational excellence will continue to drive sustainable and profitable growth.
I am more confident than ever that our strategy has put us in a good position for the long term
Perform well in the market we serve.
Thank you for calling today.
If you are interested in MKS, we look forward to introducing you to our progress as we report our financial results for the second quarter of 2019. Thank you.
Thank you all for attending today\'s meeting.
This is the end of today\'s program.
You can all disconnect.
Everyone, I wish you all a good day.
Custom message
Chat Online 编辑模式下无法使用
Chat Online inputting...