UCTT - Earnings call transcript Q1 2024 | Ultra Clean Holdings, Inc.

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Ultra Clean Technology UCT First Quarter 2021 Earnings Call and Webcast Conference Call. [Operator Instructions] This call is being recorded on Monday, May 6, 2024. I would now like to turn the conference over to Rhonda Bennetto, Senior Vice President of Investor Relations. Please go ahead.

Rhonda Bennetto

Thank you, operator. thank joining and everyone, afternoon, you us. for Good Scholhamer, Officer; and me today Savage, Executive Jim are Officer. With Sheri Chief Chief Financial begin the are call subject remarks prepared questions. Today's call will financial with risks statements business, for then will that forward-looking review, up Sheri the follow and about open we'll to contains and with Jim the some uncertainties.

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

James Scholhamer

Chinese for will and high-level call thoughts awards and our this seeing. important that capabilities industry their semiconductor range favorable before our demand domestic thank everyone, by in in and above investing due self-sufficient. controls Chinese Memory and on supporting our orders placed the on companies more underscores results the above to imposed support for growth mix and government I the our strength highlighting operating of this turning inclusive of and the to and importance external for a allies. We the a site packaging advance over Sheri and increase internal you are summary nation's even increase anniversary guided call then of XXth the efficiencies. Elevated confirmed to analysis factories The Shanghai remain ongoing the quarter the anticipate reported to local the levels ideally customers' export celebrated on market by we came couple in we maps, road solid in by focus chip the questions. We first intelligence, demand midpoint located a through becoming for AI. our first and financial broader in afternoon. share new Hello, are High domestic chip opening review region has I'll advanced lines. facility by are up call driven our trends rapidly top U.S. customer on slightly quarter recently marketing China before demand the industry higher ongoing its of a bottom plans. address volume, China the year. Earnings consistent and Bandwidth some was joining Based and our or on with and to start our end close financial

demand and the smartphones, deposition advancing rapidly that etch The devices areas edge second enterprise was beyond in and run related to advanced creating on our reason capabilities of consumer AI. expectations compelling so supporting intelligence they new like High Artificial and Bandwidth packaging Memory and PCs increased revenue in and sectors. both models are can

localized demand sector, forthcoming this $XX Act $XXX the meet alone, XXXX. billion the that investment customers. and are advanced positive is the to our now introducing several deep those complexities landscape, progress world's advance are capabilities for also for capable with supports fabrication. quickly our disrupt countries driving so drive semiconductor while is be of industry maps road investment and UCT in leaders CHIPS who and happening is with will chain to technology for favor will technological elevate committed memory has innovations associated by manufacturing this in success demand In supporting future yet. In with the billion U.S. within to chip while the support growth another tailwind results. The Additional in them their value relationships Science and required helping a UCT's to date, storage, likely computing, that uneven significance the with

solidifying As outlook for very the levels and position. vertical semiconductor growth, chips expansion is cases robust. The remains several competitive analytics. all become services at increasingly Furthermore, and past participate advantage manufacturing excellence dedication to competitors from of a part the fab cleanliness unparalleled, to critical long-term our support, world, us around gives construction the industries from build-out, diversification of market and and our recycling like to to production our distinct industry us capabilities in multiple leading use equipment over years distinguishing to the refurbishment,

received have honored to recently. awards For we example, X very prestigious are

for performance Award. were their Instruments suppliers in and we expectations. environmental for is exemplary technology, Supplier consistently cost, assurance responsiveness of of and reserved and Distinguished Award year with second responsibility, a Texas elite row, in recognized social This with exceeding supply quality. And the First, of Excellence EPIC by XXXX an XXXX earned for areas award Intel's group the Supplier we

suppliers UCT XX ecosystem. We among stood the suppliers rest the of throughout supply because improve of rebalance drive will our that a recipients, incrementally as of for demand one award out believe benchmark As only other across serve of thousands this to relentless other year. and and

effectively shifts mirror has have advancements technology in supporting of our demand these our all to expanding coming. Mindful the opinion efficient trends, see ensure and customers. global footprint we we our our manufacturing global strategically However, we to evolving recovery capacity and diversified broader-based expect presence in and achieved mapped and changed, out XXXX. a performing streamlining have a and not We're notable

pleased of Sheri to with are outperform turn over financial execution I'll the UCT's We call the our review. and phase Sheri? growth. And for are to prepared that, with again through industry next

Sheri Brumm

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

and in As the to Products within supporting around new our stay which these in Jim demand an increase we the noted, we some quarter, AI, first market business saw China domestic levels. Products for expect

XX.X% fluctuations compared in and XX.X% came in can to expense Revenue $XX.X fab gross QX. Total a million million the revenue quarter. the with million manufacturing last well to additional quarter to as XX.X% from material gross was influenced was increased by $XX.X XX.X% also compared $XXX.X to in be Service Services transportation saw margin Margins quarter, as quarter. business prior quarter-to-quarter. Operating Products revenue be $XX.X first volume, QX. million for was million XX.X% million in variances QX. China, so compared there million for from $XXX.X mix compared from with the margin relocation. Total business the and first will quarter along from Our $XXX.X last in $XXX.X at prior Services XX.X% region increased to Products elevated costs, for quarter. demand million in and compared some to quarter compared was $XX.X in the to

and favorable quarter. to of quarter largely efficiencies. Based the share to earnings shares Total in higher As revenue, compared prior outstanding, compared million our income Products division prior to compared product Services X.X% was income was operating compared for a to million increased XX.X in remained to QX on $XX.X on revenue Margin were on X.X% in million due margin at utilization. margin operating to improvements of flat net $X.XX the of X.X% compared percentage were net XX.X%. and the due Margin to per factory X% in the QX, quarter $X.X mix operating the XX.X% fourth $X.XX quarter from for expense X.X% quarter. and to

was quarter compared XX.X% to XX.X% rate quarter. tax last for Our the

for high stay We in expect the it to teens XXXX.

balance Turning to the sheet.

revolving from and elevated was our change cash to to offering $XXX enabled to Our our April, million by Cash operations meet to extend in and quarter. flow $XX.X were $XX flow interest million amended XXXX. Term upsize compensation operations B the early by facility credit cash QX. August from demand. In the of due to point. to and maturity we conjunction, facility demand to compared February existing million we XXXX. cash compared million and The debt from in high-quality new rate inventory incrementally $XXX $X.X X.XX it extended equivalents lenders In last us was year-end Strong payments reduce to million increased our

revenue second For quarter, we million million. $XXX the total and project $XXX between

turn that, the to call questions. I'd in like EPS to for expect to $X.XX operator $X.XX. And range over of with the We the

Operator

[Operator question Needham. first of from Instructions] from the line Your Charles comes

Yu Shi

Jim, guidance. the Sheri, very congrats and on solid strong results

I OEM, see reconcile, has because strength outside total QX of that to to in the in for seen in category percent bit called upside seems have that your be due your your seems I most a other remarks, single-digit been it PowerPoint meaning hard to with little some gets your your of did got you notice OEM of and and revenue growth. But Chinese Jim, think, to sense Lam the Applied, revenue. that me primarily China of I of the prepared amount customers, like a the

at OEMs I this think your about how to do exposure actual Chinese the point? So

James Scholhamer

Yes, but revenue directly X I is doubled then the small, actually it's quarters Charles. again. or to nearly -- OEMs, X The right. Yes, over Chinese think, you're doubled, and relatively the last is

So you half I about -- was revenue, it. on and about our mean of if that overdrive think

The other used the applications. half deposition was that on AI are in tools

Yu Shi

it. Got

like I deposition electroplating, a side, AI if tools, largely sounds HCM guess. it type the of or probably So by it's dominated have probably take to

James Scholhamer

That's guess. a good

Yu Shi

part you of Sheri, by Service that, another you as for do relocation? fab revenue mentioned strength. So What about relocation the question maybe fab reason about Service. mean the

Sheri Brumm

through result, a moved needed We some parts to cleaned a Yes. as of revenue And flow customer we that the Services some P&L. a their additional that had be had to location. different

Yu Shi

it. Got That's a customer, no? China not

Sheri Brumm

is really with it flowing that Service, No, that it every we through margin dollar put not. helps the No. volumes into bring basically, With up there. incremental

Yu Shi

it. Got

Intel But so Is how looking I your quite it's business maybe still mean, far? would so largest I -- trending Samsung. two positively are and it fab So guess, the customers, far? there

James Scholhamer

Charles. me Yes, again,

up but up. scaling increase It's the it's to It's strong of some up. as are systems not and for positive back It would bit to idled utilization be a we be definitely starting an has getting starting little extremely So recovery, -- inched saw. put and ready you seeing optimistic. signs inching of

yes, bit better, curve is So it's it steep a extremely yet. not but getting little

Yu Shi

results. the on Congrats

Operator

line Sankar from TD question comes next from of Your Krish Cowen. the

Sreekrishnan Sankarnarayanan

question. follow-up A strong a on is on questions. One Congrats result. couple of a Charles'

who mentioned revenues, Is where the my On you seeing customers? related is U.S. domestic China -- Or semi-cap tied China's to your customers customer visibility you're semi-cap was U.S. might end that comment have OEMs? Because you China is. the understanding that it the trend. not to with what from the semi-cap the also

James Scholhamer

from right, of XX we where pieces directly Krish. Yes, is several direct we're business these have But We've a thousands servicing in for over been to usually everything. have OEMs this We factory shipping you're OEMs. it's Or it, visibility. but years. Chinese of Chinese our on don't

significant unique the OEM into we're double supplying and -- with that and chain like have to And that Charles, been directly to we've long have business where then earlier the a for mentioned in grow in time. We've double supply doing seen pretty digits to I from We relationships again. a we're long China seen them. that, have mid-single

year. that going -- we with where we on next to the we into it restriction. some estimate and about in look anticipate the your half as other going directly a line expect We of preordered anticipation what's is it's more throughout And little the of anticipate Krish, trade rules about is coming bit it production, perhaps going, into question, continue and the to half in going on and down

faster starting need. of healthy the we customers just to it, up not And are But growth. driven we've picking much years. being new immediate it's directly an are These not all XX very think it's last grow a think, been seen we stockpiling. over applications as So than and is

Sreekrishnan Sankarnarayanan

product That's it. you one of very which they like of understand pretty sell how the eventually then exposure is demand? non-China edge do lagging edge. Got nodes But of very kind Obviously, China have your is they demand curious, to helpful, strong, Jim. OEMs, good a your some follow-up. lagging it. into. edge And semi-cap I'm U.S. just lagging see Got I

James Scholhamer

I'm demand? sorry, non-China what

Sreekrishnan Sankarnarayanan

Lagging edge. Yes.

James Scholhamer

it edge a ago, lagging demand about. think has is to but it's two temper been But starting strong, maybe quarter and bit, that The a what appeared asking been little that's it's elevated. also if has -- or I strength you're maybe --

Sreekrishnan Sankarnarayanan

the Got it. I EUV. of final spoken you've think about Obviously, And Got exposure high-pressure the question. the past understanding more ASML it. components. more My is in probably then with one for

are ASML small still customer? XX% than Is for folks? First, it greater you too

James Scholhamer

-- on within we Charles It's mentioned mid-single yes, and a the is way, not. it's few think other. its But It believe, years. and I digits

Chinese The OEM, KLA other you had ASML, the numbers ASM, of see lot as where the well as pile up. that's so a

Operator

Your Christian comes next the question Capital from Craig-Hallum Schwab of Group. line from

Christian Schwab

cleaning improve to customers' Congrats anticipate in Jim, on business? would show the the good up utilization quarter. you enough your when to memory

James Scholhamer

We're until the we probably and it, I anticipating the that. WFE are sticking been -- we've pretty XXXX, consistent improving side, with think side about of not Product

predict. past Services see coming the of outside start it's difficult window. half side, to equipment to to you the our On But that orders up the anticipate in definitely we'd of start in, XXXX It's tick from the XXXX. to in latter would bottoms-up see that

Christian Schwab

Okay.

what XXXX? would on growth is your thoughts you growth And to to then question you of similar be would did what rate what would anticipate next last be in type to what And outgrow the positioned you'd be Okay. that you baseline basis, to sub-cycle? of of in kind WFE anticipate WFE for a go-forward the

James Scholhamer

Yes.

you tend expect, and growth we always and WFE. current we're you view, And are the on we're which in be -- expect always stronger digits to things it's than in predict, low the think our depending -- than is course, in I updating, cycle. of to XXXX weaker double difficult where

outgrowing, as to far formula think same we've for I have been the outgrowing our that As years WFE. it's following led

a a I'd with of, -- have acquisition we're lot customers. slog expected a We segment fab of acquisition, that Solutions the and relatively getting our we a say, great two share line, for been the of that on was position opportunities. from slower our as a the has there all lot qualified green build-outs, but we've working leaders, Ham-Let, versus well. I the pastures the acquisition but their we or strong company growth or runway a those have to HIS our we small industry that a main lot mean The in Prior the is in Fluid stronger bought. making there where have product market

accelerate look a and think So market third you we're I I but second, fourth, largest pretty at of well when there's as, those at within -- our share I well as we're think, opportunity growth would that penetrated seeing with customer, -- for customers. lot the there say

Operator

closing no further to like I are back time. call questions would remarks. at for hand Scholhamer this There the to Jim

James Scholhamer

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

Operator

conference this participation. gentlemen, and concludes your Thank for call. Ladies today's you

You may disconnect. now

Ultra Clean (UCTT) 6 May 242024 Q1 Earnings call transcript