ENTG - Earnings call transcript Q3 2017

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Entegris Third Quarter 2017 Earnings Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Steve Cantor, Vice President of Corporate Relations. Please go ahead, sir.

Steve Cantor

Thank you, and good morning everyone. announced XX, results XXXX. we quarter our morning, September ended this the for financial third Earlier

You press slides release access and can a related on copy our of our website.

non-GAAP our would These filings statements. involve with measures reports this in outlined a financial and On remind begin, in some risks statements like call, of the also which G. we will include Regulation SEC. by I listeners Before refer defined we and that the uncertainties comments number detail today forward-looking our to to as will are in SEC

in You press can find a reconciliation on table website. today's our release

On Graves, are CFO. Bertrand call. today the now will President begin the call and Greg Bertrand Bertrand? CEO and Loy,

Bertrand Loy

performance. QX Thank details quarter with you, Steve. results will financial of some I for quarter will on XXXX. Greg more make our our comments provide third and guidance follow fourth our on

with record We across the will delivered We then another questions. open line execution excellent for quarter the company.

from and steps of record $X.XX realign and EBITDA EPS sales achieved million our adjusted EPS legacy its GAAP a products of $XX Our $X.XX. to and XX% We quarterly revenue of year business or offerings. new of reflecting XX% X% strong and took of our expand ago quarterly grew We both performance we generated sequentially AMH non-GAAP to future profitability.

to industry the requirements advanced PC dividend logic technologies. our as Finally, makers and the aggressive to computing capacity favorable. to power new remains Indeed, a continuing XD while artificial other the quarterly of devices technology of down wafer to allocation and new applications number support end-demand pay and drive storage in emerging a enabled we industry term intelligence production NAND invest a leading-edge mobile widening beyond capital Overall, environment to and continue broadened to meet by include roadmaps trends of With our loan. strategy continues devices. reflecting

technology levels these these the logic. of are process are advanced remain playing limited roadmaps. be new purity to new will enormous. the challenges in materials a of we The major devices. of role stated materials new before, to longer performance next-generation no the reduction requirements These But have next As critical the and materials

to reach than ever and faster. before, industry's We welcome At customers our and new challenges us and to develop advance expanded well. solutions. parallel help packaging Entegris, co-optimized in they essential expectable to More unique capabilities fabs we present are becoming leaders since technology to these array the purification, to memory as develop yields opportunities process leverage our are of new coming molecules delivery

result, process a for been These advanced expanding H As mixtures our and illustrations our new well initiatives conditioners. pad are as including chemical advanced and chamber of manufacturers gases solutions SERC plan CMP many markets robust deposition tracking coatings and hence customer key components, our of initiatives performance bulk materials as filtration have more are resistant ahead discussed of we’ve engagements. pipeline for just of of more and packaging and

Materials, that presence to specialty and products recorded addressing with our produced gas loops. Guangzhou also China. customer that pleased with shorten China in am are opportunities our local oxygen in We partnerships of we chemicals collaboration emerging first supply new sale leading report in in I expand our specialty company Spectrum have the

our fast in performance market. supply us is device NAND this a to enabling This the announced gain we September, critical in new its with partnership region. high-purity in TEOS addition, material growing material share partnership will In Jingxing to and help XD

to We broadly better our support to also global continue invest customers.

space This for equipment. And reflects number manufacturing formulation combines metrology technology and with capacity has and our center support This clean filtration, investment in technology are new expanded chemistry of application new the celebrated we of center and During commitment our advanced grand the in support. quarter, site. one opening which adding customer we expertise room the analytical to a new best-in-class also our applications single will and engagements the host fast-growing technical our Taiwan, most lines. product

facility installation During ramp the coating the support of specialty quarter, new solutions. completed reactors we Korea at Jangan, in our our in to the

new execution and new also effectively for fourth perspective, while In being our product on expect ramps quarter. come in addition, and yield worked financial we an significant with optimization very filters our midst material new during as we liquid very gas and pleased well From the to graphite operational additions. for as capacity capacity our we initiatives, the of as were online

our looking this business The took quarter a optimize for We yet to are achieve to are division ways cost our stronger to focus. AMH example the steps of realign relentless we improve constantly structure results. model this and good financial

of allocation XXXX. a While AMH also has dividend that we to its shareholders believe Early This financial and we of will operating initiation November as these AMH evolution margin $X.XX our natural performance expectations been through strategy. to our we announced quarterly of paid the top-line performance capital month, as a been record of strong, this X. has of below improve move be steps is

debt, Our business model and return future for shareholders our make to while modest pay growing us stable to flexibility business, healthy invest down and simultaneously enable cash share flow cash in acquisitions. maintaining our repurchases

outstanding to world will this attitude, Their what by success moment is is is is global financial Finally, valued teams of. I their proud fuel tomorrow. mindset, commitment Entegris' frankly This commend to relentless the quarter. am and our Entegris today our and most foundation around of what customers our dedicated performance a are and for another excellence. take employees their I to X,XXX innovation want the the

trends rates starts look expect industry to foresee and we grow the about GDP. XXXX, in to As at twice we global wafer the positive we of

the products the end new year. to to Greg? of financial success the new fully as is as expect faster our Greg I that to coming will online the the for by also We turn manufacturing details. we capitalize industry leverage this call we continue than of grow and on the capacity now

Gregory Graves

Bertrand. Thank you

We QX. sales across grew The the QX driven year are of our strong performance, which was from leverage which non-GAAP from X% per our the million of broad achieved guidance a quarter third operating the QX and very business ago and again $XXX $X.XX earnings pleased model. strength with results year-to-date in above We XX% and demonstrated our business. were high-end last strong of based year. share by up from XX%

up nine the of three XX% of last months sales million $X.XX For quarters and of the the grew the earnings over of per first first non-GAAP from year. $XXX year prior XX% or year, share

XX.X%, reflected again we teams and non-GAAP to performance operating mix. as margin executed well benefit and manufacturing very a Our adjusted our higher continued volumes from of product gross favorable

in to expect We QX. QX gross QX. adjusted margin at of were non-GAAP approximately $XX was low Non-GAAP which million, our expectations flat end operating XX% expenses the in and with be essentially

fourth from operating be was increase from engineering a in debt expense $XX and Non-GAAP to million ongoing intangible severance of amortization repayment. XX.X% key results operating growth as The support the quarter. of expenses to the exclude non-GAAP These million reflects XX.X%, addition interest write-downs QX. up in of declined continued margin $X.X expense, an Net of cost, initiatives. QX million $XX assets. result impairment asset expect We slight talent to our

R&D non-GAAP both a a lower discrete rate higher result was The than Our were XX%. the of was rate XX% GAAP QX from benefit credits. GAAP and non-GAAP as tax rate and

XXXX, full our EBITDA we a the to for $XX XX% For non-GAAP expecting approximately the be was year million XX%. rate are revenue. or tax quarter Adjusted record of

a EBITDA, in to of first than revenue twice Overall, XX% growth growing XXXX, objective adjusted which and model we million is increase have XX% the our at pleased our more by prior relative For $XXX consistent in demonstrates we and in the nine with - division. which represents rate leverage of EBITDA our year. is revenue EBITDA generated were with the over operating the performance of a it's XX% months The of sales.

Our Specialty from and Materials division Chemicals recorded year up ago XX% a fourth record its year-to-date. consecutive XX% Engineered quarter, and

to gases, deposition solutions levels. to drive and our coating continued products specialty advanced New materials record

in high-end continued forming profit reflects our supply favorable strong, team product aerospace. XX% with by our and addition, mix. demand non-GAAP at The remains by very of was operating and SCEM’s strong the adjusted applications consistent glass performance and chain QX materials execution for good the margin expectations. In driven graphite

which division steady favorable MC also The in operating division up and from trailing-edge year-to-date. the strong This achieved higher of the and XX% capabilities. benefited non-GAAP both margin volumes for last with adjusted consecutive year-to-date, year record is product above our over direct CMP Microcontamination the growth technology new its Control operating sixth and consistent and Our quarter of and of and from non-GAAP The of fluid this capacity to advanced well X% build-outs in line clean division etch of new and AMH’s mix. our QX components, wet infrastructure was trends. new benefit new Family as OEM as last from the grew metrology fabs. in attracts activity X% advanced year. four results development, handling projects grew Material of from QX. reflected XX% Demand from groups fab have XX% well MC’s centers, fab and XX% the QX margin our made across sales technical with years adjusted we continues sales level shipments Advanced investments was margin and tools. The XX% operating tools expectations and year industry manufacturing

to realign steps AMH in profitability improve of the QX Bertrand the we business As took this described, to division.

consistent free increase our expect from be flow steps of million. to cash margins in XX in in free XX% and Meeting inventory achieve at million expect was days, $XX from XX flow, evident targeted days quarter we X.X Year-to-date, mid-XXXX, QX. Analyst with cash for $XXX of turns a of year. in improved of margin the we last to full X.X We up we have and million XX% $XX was March. operations QX were what outlined operating generated Cash the from to from these impact DSOs XX% flow AMH

approximately include plans the related during million, with U.S. of support our was Turning our sheet, consistent to balance growth investments $XXX million cash $XX $XXX in million to CapEx capabilities $XX quarter of cash initiatives. capacity to which year Uses of is balance to million, million our $XXX and CapEx full the of in the

net long-term million we During additional our our by leverage including was debt debt maturities was current times. long-term $XXX and X.X million. the an Total reduced quarter, $XX

million of We of $XX part also our in the quarter commitment. stock ongoing buyback repurchased as

of to a combination to X% quarterly shareholders. Bertrand of quarterly which allocation we expanded mentioned, capital a repurchase stock As yield include the Through are $XX the million the $X.XX represents of of our current dividend quarter and strategy a than per we program share price. returning a less little dividend cash at

allocation capital strategy confident The in balances potential repayment, strong and are for cash flow capability share continued a a the debt We that model. liquidity modest generation dividend. business acquisitions, our repurchases, cash comprehensive building and of quarterly supports stability

$XXX expect outlook to share, these expect At million. $XXX annual for levels, consistent QX, to $X.XX EPS Turning our model. non-GAAP be range we $X.XX million per target our to from to with revenue to we sales

the in key up XX% be year, expect excess $X.XX $X.XX. our be EPS opportunities full In non-GAAP the summary, about to to growth are revenue of our to of For strategic excited initiatives. we and and progress we

pleased We we growth. performance operating specifically, through the financial with relative earnings to are achieving our are our and top-line flow and

portfolio we’ll about such NAND, questions. internet are Finally, for and Operator, product key with the now is positive industry that trends we our industry XXXX. and to excited prospects leverage things, a take of XD as momentum,

Operator

take Stifel, We’ll question first from Instructions] Patrick [Operator our from Nicolaus. Ho

Patrick Ho

an outlook. job as Nice you and revenues capacity, grown of leveraging done your especially guys current year. excellent this have quarter Bertrand, have

industry to of look how increase kind you do drive the feel potentially to revenues would be favorable? there in-house you very about forward you year, suggest be As continue increase growth year and to next if further will whether your of another current you need capacity to XXXX, conditions

Bertrand Loy

Good Patrick. to you. Hi, hear

materials So of liquid in if initiated our solutions. many the you specialty our year, and about programs filtration think graphite our and capacity to this that products, gas we coating additions terms different relate they

that The expected the in should time, two All not years. this new sufficient with probably addition point expect new would developing. I any only existing new statement but of to and addition we additions those next se of per be lines. And process in that I for would capacity to products the to capacity we at qualify that exception to in the that really relate really do of new they the developing, any revenue and materials the significant in as are product be are molecules deal new three not deposition process

Patrick Ho

question. follow-up maybe a Great, as that’s helpful. And

you’ve about talked materials you relationships growing bit the or Can give your about terms that now business, that materials contribute with key road? lot and in you next-generation What given front a of generation materials deposition could engineering customers advanced update are of are that an the talked customers driver? In developing the that’s and how maybe chemical just of on of these some your with your that are specialty of kind you in down you��ve your past and have little materials being on customers. working that next potentially emerged your relationships, kind of a with

Bertrand Loy

you are that’s function gage, of really correct, becoming scaling. as Deposition further but Patrick. the harder also So, are of vertical just architectures getting direct increasingly and is the challenging miniaturization device metal

types actually of to solid conformity achieve precursors new to increasingly are materials precursors, are So, new difficult really adapting was is norm the required classes becoming handle. the the there of and industry

and developing new been to delivery those materials with in also of delivery parallel we solid customers, efficient and and collaboration we’ve OEM the fab ensure transportation. systems stability our of pure those materials materials So developing with also the in our

So, the materials of cobalt. that we’ve are fluorine-free focusing tungsten, on been type

we only area of other So of and in for materials, that’s has a really been types another are different also the and few. materials focus of states aluminum developing but solid then, some to name chloride

for advanced of materials those but advanced major deposition focus growth has of and materials applications the for where from. most us of advanced that’s logic we area All really come expect in have to recently been memory the

Patrick Ho

very much. you thank Great,

Operator

Sachs. from Moving on, Toshiya Goldman from our take next question we'll Hari now

Toshiya Hari

another outlook morning on QX very XXXX. and you set comments good congrats question made some I a of strong regarding and had Bertrand, of your the results. Hi, on

take are if decline X% somewhere QX specifically, to guide, For of revenue expecting between you I think we X% the sequentially. midpoint and your

I and to know, memory up about both in think, or Taiwan guys being this there midpoint your pretty their QX continues and talked you last revenue sequentially week week DRAM severe at the biggest customer as be in XX% tightness in NAND.

driving rate So, that? like starts for something potentially sequential at of you Bertrand, in what’s guess, or Some there growing about I your commentary helpful. Xx guidance then XXXX, in it GDP. lumpiness Could be decline the talked be And the QX? will on wafer AMH

point I think XXXX. to it’s year rare the this for you on give at of commentary

So what guide confidence far Thank gives so the out? you to you.

Bertrand Loy

QX decline right, And been Great. versus two let the start Thank a guidance with sequential guidance are mean, and represents you Toshiya. you QX. me the we’ve providing the for questions, I that modest

in I you advanced continue mostly and by trends at lower nanometer in offset will think I with this utilization in line it steady be is But seasonal expect logic of normal XX to and we and memory fabs activity are levels running correct fabs. levels above. advanced think that

about hand So, our and business, that will our of revenue. XX% one that’s impact represents which the unit-driven on

to little down the quarter which it’s for On business. going front than CapEx probably our that we down, a be is industry continue better the to say CapEx we original to a be expect standing our expectations, but modestly would believe I modest

our in remarks year in our a XX% you excess we midpoint take of basis, about So this with XXX XXX and net-net, represent of prepared growth is of our of and growth grow industry objective. the expect stated underlying his consistent, to to outperformance top-line guidance, course, the if basis on this over Greg points as overall and mentioned would full

at we the good expect demand yes, of under year XXXX and year think question that a there second in a wafer where GDP. we your to demand We absolutely great to of the applications chips at When to grow emerging supporting pent-up CapEx for essential chips fab relates stay the for The hearing of industry for is to for very XXXX intelligence and are of a point conviction steadily is our XXXX. again be really growth for number our number it’s that a we it to building of number for that all quantified our is one the really continue hard will This will is growing think of in business. and that, broadly Entegris. XD. about the that the number provide the think and we us of part visibility this likelihood be you what another customers business, a As in twice be across guidance, gives what level this really us the demand rate starts artificial new that have part so, in those for don't will time, architectures this

then, XXXX to again that And more we for that a opportunity expect richness of opportunity do to with do February last that will We in guidance the the point do to report optimism because of at – pipeline. health earnings we provide of XXXX. I the QX And comprehensive our with want around when our pipeline. we has nothing to time, our really make to has industry, around the but continue and the

capitalizing We to the points be later coming of we XXX continue that seen year XXX product industry going basis XXXX. will and to by we’ve new that outperform that’s introduced but on to this a solutions market, the come capacity expect from the online new to momentum in leveraging also in number the from

Toshiya Hari

two had may. more if Great. I I

between much. forward your then dividend nice mix allocation how and forward, improve Thank the if should but and M&A separately, of about about couple sustainability So investments, improvement over adjusted in we or profitability a about could And In XXX mentioned the potential strategy the that maybe very you XX% first, XXX Greg, shareholder you going potential think organic in your nice profitability profit years. Can so very segment, in to quarter, going going return? initiation, the see forward? AMH, MC of basis MC you to segment of in margins. you terms cash next talked terms point talk

GregoryGraves

Okay, that hey, performance out MC our divisional – if are at both Analyst it above you targets the we that and and the as relates Toshiya, relates laid - SCEM to but performing Day.

So, we favorable We’ve had performance. in those good feel about good divisions. both of got �� very mix very the very we

year. mix shift as those levels And so, And would division AMH I to that performance at divisions. the significant middle change would good next very performance in into or see you’d see expect then improving been our for we expect of performance the similar barring get in has of operational we in two which

a about and in $XX relates it got million shareholders in breaks million allocation then debt a capital the form annual As $XXX as dividend. in and $XX in the to buybacks that down $XXX of to form of quarter we’ve allocation, capital to million an amounts that and strategy quarter reduction annual really million of a the million a $XX returning

Toshiya Hari

Very helpful.

Bertrand Loy

ER&D And to internally to expect from of from to need in need ourselves an what perspective we would terms a in invest we don’t CapEx frankly that, perspective. doing do we or pinching be

Toshiya Hari

helpful. you much. Very so Thank

Operator

Moving next Needham on, question we'll take & from Mok from Company. our Edwin

Edwin Mok

taking thanks my Hey, for question.

actually capital down expect CapEx or to just your so just First, to come follow to in you be allocation, that XXXX? on clear,

GregoryGraves

expect higher. modestly in be actually I XXXX would will probably CapEx our

investments year, growing business, have Bertrand our pretty one some in next very mentioned We meaningful is significant which in materials of rapidly. investment deposition them particular

are but to will would So not probably from expect I be were it where give up in XXXX. we XXXX - be CapEx modestly would guidance, we prepared

Edwin Mok

Yes, have great. two just want that. actually. to questions Okay, clarify I

be more or imply points and that is more that that points, XXX you guidance outperforming year, Kind basis industry to you commentary growing XXX you guys right it than - think First by this talked the XXX even point than So guys this your are Is I plus? XXX are right? right? of will XX% are industry about? year's that you XX% growing outperforming is, at basis Bertrand, of, that

Bertrand Loy

start then, So, to about higher wafer of CapEx. our now, and estimate is, Edwin X% X% course, a number for right for

about we something So to achieve XX%. us the industry XX% blend for us an underlying to rate. would And greater again, give XX% than growth expect

basis our the above market. really statement XXX points So XXX that's about from to basis the

Edwin Mok

Okay, great.

there China is, that your this longer investing JV what that's be question, more Okay yourself kinds that right. invest look guess do you Do think in part? that I business you the if relationship – go or or have of to first any kind question part right, guys JV facility the do to see envision first – type manufacturing is China? to you regarding TEOS, Second term the then, capital have those long-term. you How near-term Jingxing all production two-part for evolve kind manufacturing update kind just that you building get in helpful. of is, I right? do a is a have you way beyond in do And of I the into it agreement get, to of about footprint partner

Bertrand Loy

as market very like And Yes, will as focused this years be I today very market the of first This fast. think, now. are market, on growing is imagine, market so, all, Edwin, also quickly. that looking you is China we is is in it's a changing clear three, four this can that intensely really very how necessarily from a not

we as strategy have I we with our partnerships. just Jingxing But the that that more. will structured clarify online so today, mean, let me – have we are and relations JVs. Spectrum two evolve both don't So, any learn

and We will fill in assets So the manufacturing the purify technology. be we using to that provide they cylinders. the own

we channel the to those buy be, will and will want, cylinders We end-customer. if the you

those a arrangement So it's a subcontracting two entities. subcontracting, manufacturing it's with

us So this Spectrum the will for of are legacy lines. what In right approach making China. those the be some we TEOS both for cases, material is and is will think that manufacturing gases – that I in both processed product be the

we case decide recipe So manufacturing we but own actually lines, fully-owned identify China. have the make may as newer change capability in need our may and in the may in product to products China to older which

going of forward. that this part yet. But haven't the crossed We line be could strategy

Edwin Mok

That’s Okay, you. very great. Thank helpful.

Operator

Sidney take Deutsche from we'll next our on, from Bank. question Moving Ho

Sidney Ho

and questions taking my great for Thanks on congrats the results.

XX%, doing you your AMH to clear, we will there? there be by color get us mentioned are think For you should the be will segment, in targets? actions XX% can do the how much I what more more that you you these target think think are And and to give mid-XXXX, actions of a you little runway margins? taking those just about beyond you

GregoryGraves

Okay.

So, the through the reduced specifically, AMH the headcount. in potentially cost what we've we've business rationalizing done structure is

a So reduction really benefit we in that's that will headcount – that had us beginning current permanent a reduction the will be quarter.

have in process lines exited I’d We or are the what product we that as two call of view non-strategic. exiting,

that And the and to the hope frankly so weren't both written we've to be small Those facility contributing March a growing off to case will the we the tooling prepared it's at that low one I that that say XX% very margin but ultimately primary both XX% in hope beyond to would sell businesses business. growth better to the make a that. business. to changes And laid with in this commitment we point, regard and are target or do businesses would The out than we not obviously are to and that, division.

Bertrand Loy

the, the product to thing statement from only vary year add that drastically in I can one very this the that the would to actually that one quarter made final to next the or next. mix Okay, Greg is from division

So of time. in numbers a at commit really greater set to it's this point much to hard

Sidney Ho

I have follow-up questions. couple Then Okay. a

maybe Greg. is on, First for one this

good have done the side. guys You OpEx job a really on

year revenue I about growth. or grow quarter, midpoint. of fourth think you lot maybe leverage, only quarter know How third that's was million, XX% next should we I $XX OpEx There on a growth of million at is OpEx. the in year-over-year basis? think I $XX basis runrate a X% XXXX, think,

GregoryGraves

IT, relates the hold would tight our SG&A as What around say, is OpEx particularly finance, as can that to areas as we the I want possibly line it to on philosophy of HR. we

those on near as flat numbers as to We focused are very possible. keeping

I think think like honestly, a is next would I couple increase see types spend I of of ER&D, to more necessarily in areas. possible, year. those not but percent flat sort of

we continuing at it up QX, was our QX, bit down people, are hire actually quarter expect move ER&D, in a to little it invest, capabilities. If for continuing expand but to continuing we versus the to you look our to

the more rate in sort So ER&D X% inflationary to of year. with next the in be increase probably X% will maybe an line

Sidney Ho

on basis, question Okay, that's well. my last great, helpful. a blended doing operating is is, in in QX XX% margin is at that's Well, QX, XX% your

year Does If calendar is you think operating the points of ahead margins would you do to that you look now? X full why target at there margin Or over percentage mean model are conservative XXXX, your your offering model. time? assure are reasons like normalize target operating your

Gregory Graves

six I would like model today, Historically, feels ER&D. years. pretty it rolled invest more to conservative, one or like that consistent three we to keep we more tried bit all we've six would about pretty say every just little meaning a this in have typically target it - two say, months out, I little changed We than months ago.

doubt change it formally we I mean, conservative. feels it. no is pretty not to there today, prepared are So, But

Bertrand Loy

year. an will we to time forward the think refine well. projecting have Day us probably of as those this And March Analyst numbers and So is start in next I for

Sidney Ho

very you much. Thank Okay.

Operator

question Citi. [Operator from Instructions] Moving Amanda on, we'll take next Scarnati our from

Amanda Scarnati

morning. good Hi,

are Just arrangements China. to you of sort in be but develop IT doing arrangement, protect What do as follow-up on there And semiconductor a your China? the question some of concerns as you kind in out the there? that manufacturing concern could any to China IT quick its continues view business,

Bertrand Loy

Amanda. Hi,

we on can IT. imagine, mean, very course, protecting focused are as you I of our So,

We that. solutions on important We strive are technology having differentiated a and a of technology is IT very part company. and

we partner. quality our share and with terms dealing those are right think cases, that in I of the selecting integrity manufacturing in companies with starts standards it And our and committed values, safety very are So, as high to well. a

have our IT essential is set we think way through right partner the locally over focused very, solutions manufacturing us allows control again, the process we’ve around manufacturing and sure but and So, protect selecting I again, software making and then the ways that on we embedded very to are up the it. other

Amanda Scarnati

you Okay. start as the any gross see and introduction, XX-nanometer nodes? node sales just And in versus you about do leading-edge talk the Could we approaching above of have? potential margin? And percentage improvement you X-nanometer

Bertrand Loy

we about So, break at up memory It's we've of our terms to would revenue. trailing-edge. and usually been at The don't in XX% those solutions if the and tracking do. vitality now I consistently leading-edge index, for is three the fairly logic last fab. in leading-edge of that difficult down mean, you or years look introduced us what end-products really end and products a in But,

expecting So, we've a is from that which return that that ratio are R&D are It actually shows overtime, good we we the getting seen, expand sign. the investment.

not tracking new margins or is other greater gross is we are whether The the and that products yielding those are thing case. that

that, I am very I also of some are R&D of other of into pleased terms value with customers greater we So getting to top-line, growth, value the capture but return margins. for that in in create terms ability our both think and overall, in

Amanda Scarnati

Great. you. Thank

Operator

question Moving on, from Kapsch Loop next Chris we'll our take from Capital.

Chris Kapsch

a Or Bertrand's into you customers? context? of was some Yes, the and growth that? have memory had it in about How it the skewed Was across being sales color logic both and if provide growth quarter on broad-based towards just memory I that follow-up looked foundry similarly you in comment sort the across visibility good morning. nodes. legacy Could advanced balanced?

Bertrand Loy

the be that to very year. the actually it in welcome. logic continues improvement QX, actually saw and in say our I as performance customers been would of beginning has since was memory the strong which foundry We in some

that changes of the then in year. what we is in saw seen part of So, the most we the first trends QX the probably one in have notable versus this

Chris Kapsch

the legacy I focus balanced production are nice in increasingly of also just MC purity an or growth the wondering, the intensity associated chips I least the business across is stringent then, if of nodes. following that of the to acceleration in I at as requirements sort quarter. the am MC the demand at as And advanced and well advanced the on just wondering particular. in advanced so growth just the of up, from at given seeing, in architecture nodes, segment in Okay. with nodes year-over-year second The purity sort acceleration am growth, if just compared you nodes.

Bertrand Loy

at comment. as higher about certainly the fabs I leading-edge. we pleased leading-edge we is, board. the the of our in Both non-semi haven't say business. performance as rate would my talked part are and semi growth I So, the described in trailing-edge previous very one But of well, certainly across fabs, the But the the well with as the is part that

relates it beginning to well been filtration, has the market segment that of extremely doing As year. since the

non-semi Our have display other been growing a as relates of to business applications has number it very and the filtration. doing well been

what MC and revenues broad it's new been record quarter-after-quarter. is really that So, based really to has driving

Chris Kapsch

of are actions is of to to taking Or numbers? industry that that And Got like you what segment, something you. show in target basis one sudden – then the also lift. of Thank in guess, that I you sort of next margins the year. that, flipping middle kind refer such at you mentioned are achieve one of to targeted in it. to? do XXX then, switch you those improve would environment the actions that Thank that follow-up for the the those in on improvement, these see XXX AMH. all need we’ll up Is sort you. to terms just backdrop points margins margins a CapEx quarter sometime And a you it's of just gradually get

Gregory Graves

Okay.

will facility close end Chris, until last be Greg. were So That actually of doesn't year. the of facility gradual. we we quarter. that it's QX relatively closing I next It mean, announced a

actually - the some product we as likely exiting sale of going business. of time to will take One well. lines be take to that's the a That are is some

– I be one benefits transition be as by everything tool in should – QX place in as should mean, it benefit a side From QX, you year. perspective, cleaned by, so that much the certainly like if would I So, next the does see from really of but up benefit say, new capital benefits is fab it I to speak. mean, QX, that by said from the on business really shipments. we construction backdrop some should in total by,

And new in said, plumbing I fab would you it that of what's subfloors thing, plumbing, new type so, and if a as perfect well both combination in as tool of constructions, call systems be the them the the sort shipments. of significant or, environment, -

Chris Kapsch

helpful. That’s

Gregory Graves

the - and about - half business is obviously, is units. the business then And obviously

So units well. it as helps

Chris Kapsch

it. Great. Got

Gregory Graves

business capital-intensive tools. most as said, our well like both is it and it's But as I fab construction,

Chris Kapsch

one terms characterized it. SCEM I and Microcontamination segment last one maybe in vis-à-vis because, guess the leverage then, think in leverage the in you've margin just the Got And gross past more AMH of, I really.

leverage trajectory, And definitely seems are well. seeing margins at you it a some in are if gross MC that like sounds operating as so, yet in proxy quarter, this margin least, for

or just there unit helping? it So mix Is is it is it the across board – cost-driven? just is

Gregory Graves

the AMH comment Bertrand our mix-dependent made it and business is most earlier probably business. a around

wasn't are as attribute less favorable a And the on pleased It with performance, your quarter, issue. to I in comparing mean, point, it MC current that were would a you and wasn't clearly the SCEM relative but we it mix. strong basis. so, relative operating an basis, a I to than as or On

Chris Kapsch

you. thank Okay,

Operator

turn over any And this to back the or at I time, closing to would additional for like conference Steve remarks. Cantor

Steve Cantor

you. thank Great,

in note mentioned, today's have will on Thank Singapore that a we March. And that to of call, for day. the in call an Boston, you I details in a and joining closing coming conferences as participating look in Day investor are please more upcoming great Analyst planning and want again months. and Before London Bertrand the for be number we

Operator

that will your And again, you do participation. thank conclude conference. We for today's

You may now disconnect.

Entegris (ENTG) 28 Oct 172017 Q3 Earnings call transcript