UCTT - Earnings call 3 2023 | Ultra Clean Holdings, Inc.

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Operator

Good day. and welcome to the Ultra Clean Q3 2023 Earnings Call and Webcast. Please note this event is being recorded. I would now like to turn the conference over to Rhonda Bennetto, Investor Relations. Please go ahead.

Rhonda Bennetto

operator. you, Thank and everyone, for us. joining Good thank afternoon, you Scholhamer, Officer; and With me Savage, Executive Jim are Officer. today Sheri Chief Chief Financial begin the call remarks prepared questions. will financial with business, for then will review, up Sheri the follow about open we'll and with Jim the some

contains call uncertainties. that to risks are Today's subject statements and forward-looking

we All over be financial to assumptions results be on refer based our on are release And turn A them basis. please to information, reconciliation Factors today's call as more call. I'd statements today, the in GAAP will Risk Discussion posted obligation can section projections Jim. forward-looking and presented assume non-GAAP Jim? in after this that, a our website. For to with non-GAAP to to our update of on press of and SEC no filings. like of found estimates, the

James Scholhamer

Thank you, expected, for over as revenue X% the third in came the quarter Rhonda. Total second quarter. increasing

as dynamics for several equipment just until throughout We progress are quarters made grew been business signs levels show system and has the believe achieved. that WFE normal improvement. began some over inventory product of small more to some Our X% expect fundamental reduction

their customers industry to the return are with customers the the for the while the setting stage our We or fundamentals we to don't believe aligned know the we that and pace recovery, of timing are slowly growth.

in a service revenue Our and to customer. an at large decline due wafer typically high-margin starts reduction primary a business abrupt saw unexpected sudden in

a cuts supply profitability that had prices. on overall earnings, and we and recovery should detrimental chip rebalance production effect help pullback this of of a demand and While believe our

footprint, customers. share into optimizing efficiencies will focus efforts on on driving ramp. our will other the increase the for initiatives our gain foreseeable continue strategic These to opportunities future, required capitalize next our we For further to operational lay foundation the value and to global heading

leadership we and those manufacturing we HIS pursue This fabs demand manufacturing, available solutions and the increases and growth our acquisition aligns components addressable to gross strong Along adds vertical to that and pleased capacity higher into into subfab Innovations meet with extends billion. a profitable product very We are position will position integrated geographic area and margin They to lines, division. semiconductor with under flexibility and are increase strategy of process subfab subsystems acquired offering our this globally, semi a synergies market and integration our group. product returns. to $X.X fully provide design, in construction accelerated segment. it acquisition value have over report to the our sustained by the be XX our rolled With expands approximately capabilities reach long-term our when

the are current Middle in we and the by events deeply concerned Lastly, saddened East.

I'm seriously, to taking doing are and Both to we're the and at We employees for very that assist say required are capacity running relieved all can well-being. in their the production safety to all with accounted Israel our meet facilities of targets. and our situation are we

across customers together can supporting to our ensure receive with products each Israel are also the in and and have remains Israel's customer required We're and companies ship support and materials meet raw continuity other. demand. that operations currently to segment, a to are industrial working multinational substantial Our we we other aligned worldwide ports and priority. ensures airports commitment functioning, business the policy some

industry. operational term, new position navigating Overall, the capacity outperform through us efficiencies, and increased leadership position to environment. capabilities and we expanded current scale, in well our variability are maintain demand the the Longer our

call the that, over I to with Sherri. And turn will

Sheri Brumm

joining afternoon, numbers only. be will I to referring good and Thanks, Jim, Thanks In discussion, us. for non-GAAP everyone. today's

quarter. well from performed the third As business noted, our Jim revenue in products a standpoint

impacted was and larger-than-expected QX earnings. however, reduction in and overall our business, by profitability starts services wafer that a sudden impacted in Our

revenue the million prior $XXX last quarter. revenue in was million quarter. was Services X.X% Revenue $XXX.X $XXX.X the compared to the from scale million million in to million to third to quarter $XXX.X quarter back just as third to for compared Total products QX quarter. for was last compared gross starts, $XX.X million margin and Total compared XX.X% XX.X% due increased to the $XX I wafer mentioned.

XX.X% grew prior in Although in came was quarter, XX.X% compared the gross QX. sequentially, to margin in product XX.X% and compared at services XX.X% revenue to

was within The business service lower volumes and overall to unit. each due margin for reduction mix in

was $XX.X to for We continue the prior services on a quarter Operating margin quarter second Margins the quarter. to to mix. operational in compared income in expenses of Total and for quarter with $XX.X X% percentage $X.XX $X volumes million to and in on division and services quarter. $X.X share compared net focus XX cost for compared XX.X%. margin was shares was income the quarter drop profitability. The as X.X% revenue in of million in QX Based to due X.X% million the was compared net our was XX.X% outstanding, quarter. in improvements X.X% from million per on to prior of the X.X% on to the margin efficiencies earnings the operating compared strengthen lower was million from X.X% to per $X.XX and decreased Products

profits quarter the shift rate geography. due by tax for was in a XX.X% to Our

for for Our XX%. expense tax to trued and approximately expect XXXX rate up be was QX our and rate we tax in year-to-date QX

Turning to balance sheet. the

at equivalents last were million of $XX.X Our similar million, over $XX.X million. increase cash QX. an was operations cash Cash from to and million, $XXX quarter $XX.X

current the through navigate working we our cycle, capital. manage to continue we will As

we geopolitical dynamics, range and current Given keeping wide. industry macroeconomic are our and uncertainty guidance

of the million. Group, we fourth project revenue quarter $XXX XXXX million addition for Innovations of between HIS the total With $XXX and

$X.XX. EPS the in revenue of of of X includes We $X.XX $X.XX expect EPS range acquisition. months $XX This operations approximately the to and of for million from

questions. operator And with the for turn that, the I'd to call like to over

Operator

comes first Sankar question The Instructions] Cowen. from TD with Krish [Operator

Robert Mertens

Robert is This behalf Krish. Mertens on of

main starts this terms bit sales a September. service of sudden impacting in in quarter, first quarter. the Was anything and there into of in qualifier that maybe for goes the terms they're service ever that there the quarter? of down. know Or mentioned just division, on this I broken see was else the wafer if you weaker rates last the in mix utilization -- reduction Let's just you've

James Scholhamer

third the already that down. we have up others the their starts brought seen memory reductions What last mostly Yes. part, early spectrum Robert, one for quarter, down dramatically. this fab broad utilizations been first half in the their was we in of They've prior pretty particular quarter. across had chipmaker, holding to fabs when ratchet saw the time wafer

So say, will last was you'd -- guess, last I that month the really fall.

the So that impact main was there.

the on outsized fab might As service answer more and a question rather as your an But dependent think this logic than on that. second had far is large the maybe my mix, typically I is impact. memory, memory around first answer but

Robert Mertens

Great. something And think one of quarter quick when there customer then pick maybe down is next growing seeing year the of 'XX? services of in sales into just that any of or the would maybe that more would calendar terms timing indication back real something you be Is the ramp up.

James Scholhamer

move supply these chips We're starting some a to We the to balance. some and to predict. bit. towards to see start to see chips start recover a of difficult of start really demand fundamentals better of ASP of these Yes, some on

anything the when in say within customers side the far moving this is meaningful are things up the start will up, the see chips use direction. ramping of right But doubtful But their to as it's still it's would as and unclear. supply utilization year. So I

Operator

Scholhamer This any concludes to for question-and-answer Jim turn closing like to remarks. our I conference session. over would the

James Scholhamer

for look speaking Thank us forward all you again and today, quarter. joining we next to to you

Operator

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

disconnect. now may You

Ultra Clean (UCTT) 25 Oct 232023 Q3 Earnings call transcript