ICHR - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Ichor Systems First Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will be given at that time.

As a reminder, this conference is being recorded. I would now like to introduce your host for today’s conference, Claire McAdams, Investor Relations Council for Ichor. begin. Please

Claire McAdams

conclude afternoon be for and available website after Good call, today’s on thank shortly will which for we and you. joining you conference Ichor’s Thank afternoon. this replay telephonically

has risks materially this described could and which SEC within a our in those uncertainties forward-looking read of statements results Laws. uncertainties beyond year both and SEC. listen Report recognize press our in As been to number described of control cause XX-K those which and and out conference our in actual from forward-looking filings the many you filed please statements differ such earnings spelled with Form call, certain These to of meaning with our as risks those statements. the These fiscal are release on and are you the earnings subsequent Annual subject to release, the contain Securities that Federal press for include XXXX which

all consider light other and forward-looking in should You and uncertainties. of risks those statements

most Additionally, GAAP certain non-GAAP measures call conference financial this of press non-GAAP to a our providing earnings measures their we during and release measures. these financial financial contains will be reconciliation comparable

After the are call today now will we Tom? quarter go begin Rohrs; Jeff first Andreson. I’ll to second me business remarks, and of outlook prepared the Rohrs. financials XXXX. Jeff then with the open with the and Tom over the for Chairman Chief the for will over turn questions. line Tom quarter a call Financial the and CEO, Tom will Ichor’s our On and Officer, review of

Tom Rohrs

XXXX our call. for joining Thank you, Claire, thank and us conference today for all QX you

strategy excellence strong on first evidence are as that serve right Our and results operational our target. efforts quarter

above XXXX. QX Our above $XXX is and performance. leading of XX% This of league revenue XX% QX is million

and above QX share Our XX% earnings is $X.XX XX% per QX above of XXXX. of

our commitment QX points margins gross to business. of as fulfills supports a grow the XXX we and margin and is XX.X% basis grow our gross above Our

a range. Our operating our last margin were of year, and for XX.X% million is QX model over we that call, we into just the of all we earnings already earnings. as XXXX revenue conference in on expectations our of predicted share for XXXX. This deliver first par time in our a half target $X.XX deliver revenue XXXX will would year $XXX within In analysts went about and a alone, with of what all XXXX ago and

a and the margin we be we gross we to close of $X EBITDA full will that, XXXX of generate this year-over-year to about million $XXX compared earning increases XXXX, model. long-term our approach that strong believe share. will in billion margin will our close both to On show year and This revenues as For $X operating top year. and in

the of We successfully outgrowing achieving are the goal industry the rest of evidenced by our following.

revenue industry. XX% of rate for compared Our since XXXX, compound annual growth XX% to the

Our last XX% rate our year was for the growth double industry. growth

cited quarter the growth sequentially and strong above Our year-over-year. earlier both industry, rates were XXXX first of revenue well

midpoint the of outperform year-over-year for the industry be XXXX. the industry the six will of we half first prior XX% and months revenue to at above full expect XX% of rate performance XXXX certainly and Our year growth versus well

supplier outperformed market. we the growth had these all grown spending, equipment just And fab the and During our of WFE faster profits revenue. we equipment in customers’ growth earnings periods, have and every revenue wafer fab wafer than or about

diluting investor available and As market serves we in executed our a shareholders. tremendously to over on presentation every year served expand on ago, IPO our little well roadshow that promised accretive without since, have a acquisitions our

or and the profit very was met holder doing ago. is different it past a have year strategic or market our than overhang expectations telling of any My isn’t key year forth removes set much our existed that sponsor equity Our performance, good of job private and story. metric longer growth Despite what our not by which we of a objectives excellent this we about no exceeded own stock, a are cap our our conclusion street. the is that, every

Ichor will wafer fab these is that spend grow XXXX. always also the investors is continue we why We be should to very will we clear concerns that believe It it believe some grow today explaining this semiconductor So through year. time The concerned equipment and we becoming consensus mitigated. investment. understand will but a that that about cycle, a great company business that will is great be XX%

We fact believe be a that muted. would effects the downturn, in see also we to were

First of evidence that this cycles. Consolidation has restructured from has effects is result field. to been for all, players faster of There building the The players marginal worst than capacity no lessen the marginal removed cycles demand. industry the has happened.

Second, have lead throughout industry. times shrunk the

O is double As like are of more certainty in past. Past a result, practices there the bookings. the and is horizon planning things ring equipment shorter

year we done enable a believe why in continue five key grow why are and XXXX. even variable continue company reasons or So spending we that we the market. to want we strategy to and to companies reduce spending above since future on our flat to in as attributes to profits impact operational can to will continue structure. down be down of I manage believe capability today, business This will both high up other outperform a Nevertheless, built At environment we explain will the will a in there the that the us a or cost compared we muted. cycles with industry level, have business a But to grow less industry every environment. have declining as

market First, share footprint the and business. machining in overall expanding weldment and our precision

achieving share our footprint South a Second, in panel by the foothold expanding and in business Korea. overall market gas

finally, geographic strong growth revenue in Fourth, in market and continued and incremental in emerging share our delivery regions, business. M&A. footprint expanding achieving share market liquid Third, in our execution overall additional

these through detail. go me let So in some

served precision our $X.X through increased and over Talon acquisitions billion area Innovations. First, markets we Cal-Weld machining, the of of and by in the weldments

Before basically they companies, we customer. one acquire these each served

by gains which expand market accelerating share and is our these our Asia, cost our of in in second strong capacity precision leveraging much large to in customers markets machining served with have weldments share significant structure. the two the we customers of with revenues beginning qualifications XXXX. initial expect to and relationships an and with first XXXX, quarter our Moreover, built ultra-competitive achieve new additional opportunities Europe of being Malaysia, other has in calendar three in this half into We and U.S. our

our in as overall leverage to now won is will substantial The precision weldment with in an as for through which IAN now panel seventh growing chemical Engineering. we year Today had year’s IAN our last modules acquisition X% be in gas wet processes of in of leading XXXX a equipment equipment tracks XXXX Our Furthermore, the of second share our proprietary provides second we is over minimus total which increase to and We and kick CVD, OEM and our recent over incremental serve track, first with year with fab nearly key for XXXX outperforming opportunities growth CVD segment. can expand of the Korean together of and growth sales a y to and the these modules Korea IPS, of serve last largest and growing closely our already own additional in panels in OEMs in the liquid opportunity WONIK South gas driver way to the can year, delivery gas will business precision and our a track beyond. all foothold and fluid market share – is OEMs We in is etch of revenues growth overall exit our suppliers small IP two supplier delivery the of wet on the which means panel in just solutions liquid add grew award $X market. acquisition. second our increasing with we multiple reach Korea customers a Korea. wafer liquid in gas other of SEMES clean, certainly panels to market machining and of is are the de in the annual with delivery billion further sales. market incremental customer XXXX Silicon and to processing, of Furthermore, IAN’s position our incremental one IAN XXXX fastest driver further to These but is particular, These able be new on leveraging U.S. cleaning. larger to as and delivery our market ALD, markets well and this additional working XXXX. OEMs also share. the the we The primary our market to worldwide Korean serving $XXX weldments also are with in our wet expand core became the Their half U.S. contribution deliver half IPS. include primarily the million over beginning South revenue. will supplier portfolio certainly for SEMES the in our WONIK XXX% markets within in last next and top this XXXX, top subsidiaries systems. this machining module etch, in

vector additional expansion. geographic growth is next Our

We in in in expand market additional are share particular engaged Japan. markets strategies our with and equipment to customer OEMs

our OEMs such has should revenue We processes liquid significant market delivery source incremental XXXX. of are of some a to in sizable largest clean and to a there the the eager track. which This share wet in be as bring products

earnings. acquisitions accretive continuing are to additional to we our strategy pursue and our fit are which Finally,

that continue now will successful Plastics, Talon Ajax We and IAN. our use to been with Innovations, strategy Cal-Weld, widely has

market stay strategic dynamics with space. will fluid of the semiconductor We our in strengths

growing customers. with We will our work list of

for to market share accretive. machining outperforming up, we and served and year. revenue and by We the deals are why is in us platform are Cal-Weld weldments to the In precision this outperform expanding my and do again summary, we industry that give We’ll will we customer will XXXX buy communicate beyond that for today To previously sum years are additional a businesses come. growth gaining our single objective companies first, Talon.

in by market we Second, panel a are share within foothold the gaining business Korea. gas gaining

the our that recent in there wins share right finally, our opportunities international gaining we are business great the ones. can through for track continuing to have OEM presence are of we major acquisitions. we with Fourth, delivery liquid are picking further and record additional we leverage and a M&A Third, grow

with growth versus have As I XXXX said XX% grown earlier, equipment the fab the industry XX%. wafer we annual since industry’s

the again so expected for industry a continue show several do at XX% we WFE to spending turning the in most growth XXXX, semiconductor declining flatter And everyone times we continued equipment with in to with in can revenue I XXXX a about then grow environment. even that who strong is robust enumerated. due still We to importantly, incremental worried rate cycles grow will grow down we will believe that, can streams just market,

and initiatives and against executing our revenue another With me growth also growth to incremental that provide strategic that, next Ichor Jeff the earnings the strong still anticipated outperforming for detail all in peers. has with growth with confidence drivers believe announced Let our declines. We turn IAN. rate recently of And our our at growth a spending even growing have refinancing, WFE been I continued it Jeff? of details more one repeat that. every of of acquisition nearly further year will in industry will confidence growth first hope stock vectors, debt to industry unmatched performance, you over to our and our and margins, financial year grow quarter all growth guidance if revenue our I the our the second and convey expanding XXXX. quarter plan regarding around operating repurchase for

Jeff Andreson

Thank you, Tom.

well the intangible adjustments. identify to comments, Before geographic expense, measures to also added balance have as like Investors and section flow remind and like the metrics measure measures and amortization call, that P&L note I website. key revenue would of I These begin discussed as cash GAAP as acquired of this the and non-GAAP assets, metrics I my by financial GAAP-based. tax and items our non-GAAP non-recurring a compensation impact the discussed schedule which we discrete region sheet results charges to unless I’d you summarizes share-based exclude are on of today conference

machining delivery, New precision which each million, XX% versus business, on were quarter XXXX. quarter impact area our our First Recognition our Accounting the the the fourth an the and first from exceeded not timing our did the outlook fluid of first XX% guidance the revenues as of strengthened we Revenue entered the quarter. a and record increasing weldments revenue have quarter Standard, In from high-end $XXX quarter, of recognition. We as adopted revenue we of

gross than improvement the points we QX XX.X% from increased fourth XXX better was XXX record the slightly of points quarter, Our margin forecasted. of had basis which basis

increase gross primarily as of accretive expected, the the the margin of higher Versus primarily As slightly the forecast points, the was well fourth contribution revenue the to was basis compared as driven by XXX ago year acquisitions, the improved by product Talon volume due to Cal-Weld impact favorable both quarter period, our mix. acquisitions. our higher than and and reflecting

were model expenses the range $XX.X full were from expenses quarter in expectations. was straight operating or increased driven fourth quarter XX% by primarily margin strong for of line X% a the and improved XX%. revenue The with increase gross of third million to of towards quarter showing inclusion Operating our of the of Talon. target progress Importantly, our our

first Our of of record operating XXXX. quarter XX.X% increased from basis the from quarter the basis and fourth points XXX XXX points margin

for the had time. to able ramp range revenue were strength in we operating On perform published target within first QX, the the steep our income we for of model

the first record prior the EPS million XX% quarter Our revenue to the and period. XX.X% sequential or is This a for higher up and from was quarter increasing of our growth. XX.X% quarter ago and at end profits quarter of XXXX. supplemental the Net income the straight $X.XX increased from range quarter for contribution at of we the a due was was fourth provided XX% tax earnings the XX% which from quarter ninth the schedule of referenced of entities. on our U.S. XX% a rate was record the EBITDA revenue XXX% listed $XX also from from higher and of was year earlier and

on As EBITDA in EBITDA million schedule, have see will $XX over last you also the grown have straight and nine quarters we months. the for XX delivered

will in we Singapore, receivable The fourth during cash further $XX.X was capital balance accounts payables cash of remarks. quarter. the reduction repurchase million, increased from discuss offset million also reflects fourth quarter, inventory a the X.X% the the $XXX.X and working add of so turns. Now sheet. I to use million million, will focus quarter. $X.X as outstanding increase and Capital of the on use XX% increase Malaysia Inventory $X.X to increased Days continue million to days. $X of the for first primarily slightly in I to XX in quarter my Free XXX,XXX to versus increased our shares improving continued over later sales of stock million as which XX of a revenue the facilities. our Cash flow capacity declined or from inventory we $X.X expenditures turn were for our Portland in our

we the cash strong flow fluctuates on performance quarter-to-quarter second cash quarter. generation investments, free While working based capital in expect free flow

as completed February extended increased our credit existing rate the $XXX million quarter, of we of the we the interest $XXX The facility points well by August to agreement the applicable have of basis XXXX. revolving first a debt million as credit XXXX the from with term loan During million, company’s XX refinancing which maturity facility currently $XXX decreased to available. and

by X.X The leverage maximum be points Additionally, in times. is will drop XX three the June base will to credit leverage as agreement and X.X our increased this plus ratio to from LIBOR X.XX% basis times the ratio current rate times. reduced

$XXX opportunistic in available acquisitions incremental we million capacity, our in debt the availability both the for ratio repurchases. and of capital and borrowing share have Given over leverage reduction

the the interest is $X.X come first Our quarter. expense expected in down quarter to in to was million and million $X.X second

Beyond In see $XX of this hikes QX, quarter program. to we on interest range rate share expense year. quarter, similar company $X.X a million in million a the the of $X.X first approved buyback per number depending the million

means for repurchased average top repurchases have this earlier. in million in million we $XX.XX. quarter an $X have price the second we referenced of This of call, $XX XXX,XXX of in As of the at $XX on purchased shares QX million stock

to debt manage our purchases acquisition level cash strategy, with basis flow generation. We prudent our any this an continue future announced IAN and management of will earlier. Tom on opportunistic we April, of balancing of acquisition In Engineering as the noted

that While approximately machining market million it delivery this addressable weldment fluid it is expands by share. acquisition, and market is a relatively strategic expand and to positions and the $XXX precision small further company our our

but be any other runrate quarter. being over we value associated the million revenue today conditions. Our certain years the accretive million, expect will earnings incremental acquisition, with this by the financial half The add provided $XX close an include acquisition be with out do at paid and half QX second revenue total and guidance to it half operational meet revenues fourth not they the $X to annual approximately with of and in next two paid does

Now second our I to quarter will guidance. turn

strong the in moderating shipment We QX record with slightly our quarter expect patterns. from revenue another line customer

the up XXXX, earnings and of Our half the $XXX $XXX to first to in the revenues guidance, $X. for XX% for of our XX% range forecast year. the is QX midpoint share from At first million of last half second revenues of with range per the from will $X.XX be half in the million of

mix gross margin and to vary to product continue our we’ll and improvements. we tracking can As target margin revenue are drive model changes cost due business, incremental volume, with gross in against any well

our the certainly over be to target the X% course expenses the rate of operating revenues. our to modest continue tax The our expect the to on quarter than XX% basis less within of see in an of this in for ongoing will but will be of year, expenses XX% range We operating total each year increase year.

our the cash questions. our expecting, the lines. open please we contribution U.S. Operator, tax now we Operator, ready are rate are Given in XXXX. will take of entities to higher approximately X% be

Operator

first of Stifel. Our Patrick Instructions] [Operator comes question Ho from

open. is line Your

Patrick Ho

very this and much in you any… quarter. Thanks congratulations did first terms the see Tom, quarter, of [Indiscernible] March on in off,

Tom Rohrs

Patrick facing you are

Jeff Andreson

up, breaking Patrick. are You

Patrick Ho

apologize. I

the level [Indiscernible] of industry In terms of environment, the

Tom Rohrs

impossible is Patrick, are connection right it’s So, ascertain now. something your you asking with almost what and wrong to

Patrick Ho

Is this better?

Tom Rohrs

That’s a better. XXX%

Let’s go.

Patrick Ho

I Okay, apologize, Tom.

discuss the going you how look we quarter, see quarter? in environment, of the – of March level might of of the visibility terms and you a forward all, have you shipment in to First seen as starting for can industry the of for is terms the pull-ins Ichor September for level visibility are

Tom Rohrs

first to thought So, in XXX then gained were and scheduled guided originally of had through revenue second items first some that were have quarter. were the the than in the quarter, those course the we Obviously, of we quarter. quarter into XXX we more shipped and the obviously,

had will us very that what pretty being is yes, to that right, point. in I is of something up half, requests was than described first this XX% more start half quarter, near as similar about. pull-ins $X quarter second think the third and end So, the high billion XX% regard of first with terms XXs getting meet were if second robust the are seeing in I’ve and our half - some the happy to at Obviously, the at in there I number second and the is, we low the that – think and way in we with that think that, those. terms I half are high looking spoke first and we we XXs fulfill high to The that I way into and and with now the low very half customers’

perspective. script, half on additive are said that just revenue my machining qualifications weldments some I revenues modules a which lot be I additional with are to mentioned. of for would hard result on as working could timing be to percentage and very qualifications a in numbers and quantify second LDM precision Now we those and from That

think at most as as However, what XXXX. growth drivers million towards is for available the when discussed. in well serve And over will we $XXX there look we of I them XXXX

are front-end are in I but perhaps can wafer we So, the our At nevertheless slightly equipment year incremental excited we said of with both quite what this as revenue. about do year. getting actually this loaded, terms and then, point the we XXXX overall growing very bullish strong throughout fab and XX%

Patrick Ho

And question of helpful. a terms follow-up Jeff, that. That’s as for Great. and the managing in supply maybe chain

customers, combined you’ve Given how high well customers? own guess, and chain I and these M&A higher your done spending of with – sheet guess, managing, you quarters, you the I are the given over your balance elevated supply by levels have level you shipment seeing demand really the as guys few your last as for this are

Tom Rohrs

am our me executives Tom, year, that is it last Hey, we me and chain with for a during call. happy Patrick, let let last you. of team – this really because supply added about answer I year, conference spoke number I

added chain We team. executive senior of first a new supply a up and has also he rate built

shipments delivery on-time first And of purchasing really that, example, growing gets about were XX%. amount only in our the purchasing. we an better only inventory and are while about obviously, happy large quarter, not better we XX% grew And of we amount but and despite our the the so, large as

extra So that buybacks things and of acquisitions. can lot we that cash like us gives a use for

done So, supply the well. has exceptionally team

very on almost integrating for appropriate functional a immediately. into areas team have chain almost so acquisitions. side model the and We We immediately supply integrate good up the them they

and worked and real paying So that’s significant extraordinarily investments we’ve made are some those well overall, investments off.

Patrick Ho

very much. you Thank Great.

Tom Rohrs

Patrick. Thanks,

Operator

Thank you.

comes next & Our of Edwin from Needham question Mok Co.

your is Edwin, button. open. check mute line Your

Edwin Mok

Hey guys.

that. about Sorry

a great So, and congrats great quarter outlooks. on

I First think a those already of high concentrations those two year XX% it as I little is, question you I two obviously. last combined call to, think customers bit terms have had dipped XXs your it ideal of in largest

those still other same mean they two customers continue Was it from you that customers? growing way kind trending the it’s that faster within than level are buckets? larger As of your

Tom Rohrs

first script year my this above I the year. the that mentioned, was during last quarter really first So, substantially mentioned quarter we

think XX% above. it I was

biggest tripled the from of the quarter two – outside our XXXX. revenue our of However, of first we other customers quarter have in the first customers, actually XXXX to

are really we how about So indication good are pretty you that things it a and gives happy of moving.

Edwin Mok

a until half can’t that just expect include the helpful you right? second don’t we extremely which even the and That’s trend of two Korean see these year, new doesn’t customers

Tom Rohrs

No, that does include WONIK. not SEMES or

Edwin Mok

can Yes. kind And then, next terms that out, Korea, of kind drivers leads rank the your timing of these opportunities? I question, is is had know I to you way are in but going so to long are. you expansion of call some the there than cetera, LDM up of of all of them my et a them, some – you weldment laid in

of the opportunities? give these terms kind timing of a sense in different Just of us

Tom Rohrs

will some we think the to and of XXXX. see see the we on hopeful I to that of some machining precision first activity Yes, are into start back-end

out quarter cylinders, see weldment we And, it on will the on activity looks fab hit will qualified first some actually XX-nanometer with very and you We the large all like actually soon some thereafter. module, we that of was a side we push the whose liquid on if because customer, delayed. regard to delivery LDM was had

so, And that. actually some saw of we delay

expect half. second kicking again in back And in probably start to so, the we that

would timing. rank terms way in that I So, them of

Edwin Mok

all it different these the comments remarks, is it weldment prepared to on ones? say say call is fair And plus is your to around available machining that in precision based probably it the largest fair opportunity just

Tom Rohrs

and assessment. semiconductor XX% machining weldments side. XX% share that think the less in precision the mentioned of that fair precision billion And, than of our in I I a it’s there $X.X and The is, weldment the size side that’s is alone. market probably in and machining industry maybe that Yes, used

us is a for to there of So, lot in. play area

Edwin Mok

Great.

question comfortable noise. debt M&A your the about are think the had the upped prepared Last times think, debt up way going and Is you kind leverage. the like it that three remarks to debt Jeff, of guys and you capacity? capacity, I terms sounds to in Sorry have, on mentioned just about background of I you

Jeff Andreson

that think to we about I that X. that way would stay that is it, make to We’ll the prudent. are go something sure want given well, No, Edwin, we below probably can’t we

but stay So arise, looking X, right allows X to to we I’d should that’s where at to X.X, suspect us will have the of it something But do go are between we capacity that. that kind that now.

Edwin Mok

If you of build larger use do didn’t will across you the prioritize, need versus several deals to debt? like if How or you this over come don’t debt, next have, that any kind working quarters the right. through buyback or income down

Jeff Andreson

kind future, that we make and might or shares bought our some don’t I think them and saw on it price down obviously share get what for. the back think I consider a look to I the overleveraged. sure In depending we it we – we what some light we $XX.XX mean, to ratio we’ve of very value, is, about risk where goes, of was if together way debt we’ll tick our all think some we at consider have the would a good

have outlook. balance So, we’ll the just to it in

Edwin Mok

great. all great. That’s That’s I have. you. Okay, Thank

Operator

you. Thank

Ackerman from question Cowen. next from comes Karl Our

open. is line Your

Karl Ackerman

haven’t accelerate in your achieve you ability And On does this saved but that I follow-up IAN, Jeff have newly Engineering, postpone to on margin gross know or yet model? Tom, IAN a or income please. your I closed

Tom Rohrs

we today. and regard delivery and two is margin what think needle SEMES is with now than - a it the can not slightly it modules current don’t also WONIK or million which the million I are income much in it’s growing the the though on effect Well, years $X million $X and with what now forget would beachhead. that in marginal. cases, percentages are – the move is about the excited year same and so at million machining from and to where a point million more But model precision it’s $XX the and going $XX at gives paying in that to is and Korea, even us Don’t ship some said, we that $X as be maybe we sell higher we especially weldments runrate

that opportunity think see it’s out plays think long-term this we and our vis-à-vis with I margins. as I very overall, plan it over Jeff play will growing of mentioned million So $XXX well there,

Karl Ackerman

that. I appreciate

my completed Tom, the the four we in any think the and deals today, footprint maybe facilities you’ve do Jeff over additional your some smaller across these follow-up, consolidate manufacturing given spread you As year? leverage facilities, or last several M&A soon to drive how to Singapore expect particularly world. have that factories, next – about Malaysian about brought OpEx months be into your opportunity your Should may XX of

Tom Rohrs

are lot Malaysia mentioned a today, be as from I doing A and mean any lot incremental really, while in Malaysia. I they well. are talking business, of because Well, it done of I Cal-Weld so, will think weldment we the doesn’t building are was moving really one weldments the capacity through the script we in

entities grow, do more essence, will I where be be in advantageous consolidated It’s and just the currently are of that in business with Talon Malaysia. we buying part probably in that remain they growing fact, as just IAN, in cost they consolidated. with with And where will those centers. and we probably won’t we activities terms So, are Singapore that, suspect have the yes, will and also though in

Karl Ackerman

Thank you. Great.

Tom Rohrs

You are welcome.

Operator

from comes [Operator next you. of Ho Our question Deutsche Thank Bank. Sidney Instructions]

is line open. Your

Sidney Ho

for Thanks my question. taking

question $XXX think previous have million which products you what offer the two can the existing SAM with similar additional for trying said - follow-up expansion Just to I customers today? are you to today that customers? acquisition. Or offer opportunity, that mentioned? that IAN you you understand on to leverage to Just the you capabilities

Tom Rohrs

customers. fit opportunities we to we because and will delivery our use put gas The is But, similar information of our between are as have other the probably gas much then at are IAN we more actually gain building as capabilities. panels since, thing new fact as because their and that Point And that delivery obviously, of in in Korea think grow a very into what that the and is is them. to systems as it’s than into as us point. our gas products I efficiencies which to two much good we mix actually, be obviously a and sharing of very know IAN building today a it good current as that, it direct also launching exciting there is any brand one will about terms gas anything have particular and delivery we gets business opportunities very products

that’s delivery I gas way regard would in to the move the So, think side. the synergies

Sidney Ho

that, just to why with competitive South SEMES what to Korea two existing now? those the But, And you share reason have customers? right was follow-up to in other have any know as WONIK get with it. you landscape the to can’t same market Got and the you

Tom Rohrs

of in the coming one Korea. their anxious Well, competitive Samsung from supply and see to more is is where more market Korea very

was very chose. all, And so, Korean we subsidiary, be that. terms Ichor to Korea. felt Korea. important methodology wanted felt, that We our in this was that we be And unsuccessful in do felt in we first and start would the opportunity it We expensive it of the to be own wouldn’t of probably wouldn’t know and all, growth we be to second to how really of

chose. we method this is a So,

we to anxious Korea, this another now, be that position source well buy We in of supply in puts cetera, do. Samsung cetera So, become because it may in they end et a can indigenous weldments, kind doing product and chain. us the machining, the some of up overall will et as to Korea preferred

people Korean very peninsula. leveraged it are So, opportunity big it’s will and on a be into who the

the in Our U.S. this. understand customers

very, has Korea. subsidiary of big very, very, a One in them

supply. probably of I supply since million want to so and $XXX think position them, a us this also puts have sources to it’s or they in Korean

great think it’s with a happy very, important. and this are it’s think we deal. opportunity So, very We we

Sidney Ho

mentioned on see – XX% midpoint a well, do part of which and still did that your of you bit to and the think expect My you which have helpful. quarter-over-quarter, your in growing pullback I down taking follow-up question part quarter guidance, that’s the you to first weldments guidance is, That’s little business up? grow guidance, the QX X% to the end core business quarter, expected previous how Great.

Tom Rohrs

my this. on Well, let me give perspective you

a knew we kind this the we first to and million doing to a to $XXX being I’ll of $XXX of of else number. pulling looking up are million that we at are when So, real, million at or or the and and very course, we good fundamentally, $XXX quarter well, we up doing be And first into very looked is job thought even going we million going million to $XXX that in and at blunt what X% what the were million knew quarter. the we it our of ended in were about was do at $XXX and at $XX million. get we be preceded XX%, you you second we million January in the it with understood at anticipated overachieved we everyone to first that $XXX were in forecasting quarter When was we quarter, saying first quarter, we and $XXX X%

it look earlier and a at number, there you that’s the is the than degradation whole, wanted just way if others no as played out. it’s all that half customers things the to few total So, at a

Sidney Ho

improve gross after Excellent. the Last for quarters? XXXX. Jeff quarter, be throughout margin you last I you jump will still do question, true, mentioned QX,what think drivers the over few next improvement in expect to that especially, a the think you Is

Jeff Andreson

with consume is to brought, say what can going parts. I of look favorability margin we that some mix. internally as to I product some I we Yes, to mentioned now. wouldn’t I addition focus things those acquisitions right have think our planning But in mean, still acquisitions had due you that on to those we our new is other I really mean, forward, the are do that that in be there obviously,

to outside a chain Talon are at products on the products on how that organization very And internally. our is doing use the type our down We Talon at good and job of overall other cost working as those we looking programs. said, can bring Tom supply then,

the going some see up drivers stuff will down, leverage be those revenue will So, levels so. or and forward. on depending Obviously, you the

Sidney Ho

Okay, you very much. thank

Jeff Andreson

Okay.

Operator

like Rohrs, back today’s for CEO over Thank Chairman would the Tom conference. you. comments. portion the concludes and of Q&A call closing This to turn to I

Tom Rohrs

Thank will you August. and which to thank call, you updating for joining you. us be on Thank our call this on quarter and in forward we our QX you certainly look

Operator

Ladies gentlemen, today’s participation thank in conference. you and your for

wonderful You may disconnect. Have day. a

Ichor (ICHR) 8 May 182018 Q1 Earnings call transcript