ICHR - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Ichor Systems Fourth 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. [Operator Instructions] As a reminder, today's program is being recorded. I would now like to introduce your host for today's conference, Claire McAdams, Investor Relations for Ichor. ahead. go Please

Claire McAdams

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

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

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

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

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

Tom Rohrs

that during and call. saw got very quarter in a for in Ichor you, low for semi customers the end quarter. Despite protecting and inventory than in about industry. our plans of our softness Claire. as positions. environment for earnings million conference demand The the the able quarter generate in quarter. their were This revenue to fourth was Welcome coming were expected guidance challenging Thank our cash our weekend $XX resulted the serious to and flow We equipment, build demand lower we at QX the free

saw the at XX% reflects the we growth approximately and markets outperformed $XXX of also precision This Revenues and $X But, gross Ichor's earnings of in record full-year. significant strongest of Looking machining set our We XXXX chemical increased delivered share. delivery, our objective and growth weldment year year-over-year new year-over-year. on our record. on growth. margins per to about further operating delivered businesses. counts X% million overall on core our with record increase was in gas and both industry which

per conditions rightsizing fourth have peers our saw a QX, I of and years, that another balance during business. $XX rate have Over and through job With we XX%. weakening of the the operating the XXXX $XX the at shareholders bit current Probably net resources earnings were rate the business below was And half, year. accomplishment most round of the of flow. We and in caught [ph] as $XX did levels record. and drop. million of of to delivered felt demand cash And we four we rightsizing executed share business second believe industry. over we we I income grew for guard plan right our adjusting with last that XX%, in June. in we we did since level the profits buybacks. off late the spending annual to half cash generated return the flows our excellent as quarter customers the peak had annual we also share seen in same of well strong important environment flows we an we growth of XXXX, In We unmatched profits of we the strongest first level in a an in among an our the corrections on that inventory exhibited at million, implemented million cash but have

operating operational this up industry manufacturing our make expenses action remain we in is be multi-quarter we decisive well, position our in to continue response a to financial solid the structure cost Our and profits model demonstrate, to confident manage that holding will thanks recovers. changes in We in strong to variable industry will And and slowdown spending. leverage both as to demand. during

QX. some to in discussing time we I see Now, spend what want

for X% the gas holding our are We our time We It plans. revenues impacted many fourth quarter, closely QX. businesses. behind and we primarily exit to XXXX, of is that semiconductor believe build customer second to this scoreboard. also be down which the QX in flat due our of believe means businesses to share with peers delivery and up better than business correction, we once components again the should be part which is inventory aligned of during from by customers’ market half some us chemical starting hit our gains Our will the shows our

we in We are demand XXXX. profitable expect half increases, currently can the we while respond occur this second during to of now at period, positioned ensuring business to today's solidly which quickly be levels that when

have that in us the behind along may to we any we as for the contingency revisions place of softness continue brunt will are bottom. additional I bounce We but downward experience, plans believe

gains, as half. incremental sales increase remain well increasing an through our as we include have of year, the cautious, ASML, market While second noting. our there's guided move tailwinds which number to share to in reason for exposure a to P&L that have as XX% the recovery contribution we second will half These good worth which to also our are in

deposition to start addition of component etch factors, tools. for a could for we In for process these preparation our businesses see we demand inventories replenishment to anticipate in improved and

our to plans against gain execute incremental to share. continuing are market We

a fab equipment wafer million. in the anticipating and X% in analysts entered we reduction $XXX As XXXX, at opportunity revenue our we incremental fourth quarter, were sized about industry about

which in the these organic give meaningful These opportunities. this weldment making be ago process been will a thought me, and our XX% against we be or precision probably much third. will and very what on opportunity point -- with customer have the market for year, quarter. a I industry share represent with first delivery, new of see revenue larger Given There $XX much less that share are you tools year. ago. this the once progress growth the of we're we our as pursuing the an as update evident a and that a weldments, million be gas driver nearly on it's will delivery to market chemical In systems. first correction, I in again Ichor for will on first quarter qualified continue a the and year in down significant be business, to clearly machining starting during a million to than gains at kicking process incremental excuse remain spending. pleased very are industry could Nevertheless, $XX half what in gains with qualification outperform waves second this parts phases overall of these for share we progress,

in have support of longer we precision where first acquisition. acquired machining and by we revenues a move will time capacity strategy slightly this investors phase qualifications from the In QX. are the strategy In we we business. completion via all we an that than business, will asked delivery customers as during to quarter, our opportunity of capability are see in weldment an have our the we business, a are have what experiencing place But, the manufacturing side nearing Cal-Weld We periods. on cycle the leveraged to the the the outsourced our gas downturn first in-source these often

of are quite We the are in fourth our we with as share the seeing largest revenues incremental quarter in first now awarded the the one first customers opposite quarter. getting at

proprietary delivery are in still This gained Sales In today. will see The in outside incremental of third largest for driver, QX. liquid products still however, revenue We will begin as liquid delivery delivery module. largest share growth very and delivery limited chemical be systems there business, their liquid our proprietary also our module. also late will the our in XXXX, have we growth customer gas our ramp.

meaningful the technology transition users of end LDM see progressing half. in second However, levels revenues is the to very And we expect well.

negatively Engineering impacted levels IAN will business by gave once acquisition in be delivery low roughly where to market. this equipment gas and there is Our us we Korea billion the a investment. a share to recovers, continue see gains there. is But memory of expected foothold The $X

able be liquid leading leg delivery excuse me, to in our this Korea in customer product we engagement -- the is growth with plan equipment our to continuing Korea. though to and module the Our demonstrate another of year, largest on

initiatives. solid As you are we see, revenue progress can our making on incremental

And delivering strong needs in of our and flows the have each progress total muted $XXX share on addressing quarter. made sum the market we're profits, in business spite our you to While weakening exceed of the XXXX of cash and I'll in customers. update significant conditions, industry promise To WFE levels to to million, market our also QX, returns addition to conditions spending. higher of gains. up, progress once will great in beginning fill opportunity opportunity, continue is we

As we enter XXXX, our strategy is unchanged.

semiconductor delivery fluid equipment believe that continue equipment to than semiconductor other grow the company, are technologies. most will We industrial through cycle, on faster We businesses. concentrating

from with of now, provide at over as confident As share guidance growth equipment will last over rate We the detail operating rate financial the we we a with quarter the go wafer first opportunities four Jeff? our XX%. our the leverage. to and Jeff on gains, XX% me prepared fully performance as quarter. and will to earnings I our more years, remarks, with around that beginning let continue my annual our significant I this expect for to execute Ichor own market. than growth fab fourth that WFE And emerge mentioned outperformed we faster period stronger the of annual turn company am this have

Jeff Andreson

Thank you, Tom.

as be financial this summarizes metrics $XXX section call, comments, and the impact metrics schedule were XXXX. the Investors GAAP and of exclude tax compensation Fourth charges remind flow website. unless found assets, and down and acquired down and by and quarter conference I that amortization the geographic third region Before my cash non-GAAP on quarter identify I'd I discussed that non-recurring to that non-GAAP P&L to measures adjustments. from discrete These of revenue I'd results are fourth intangible like items begin quarter key balance the of well our from of as the measures sheet XX% expense, today measures XX% also like share-based discussed note revenues on the GAAP-based. can million you of

the third the result volumes from prior due primarily from to Our X.X% we million decrease to of XXX nearly QX of slightly lower in expenses. of lower quarter third the from our a on declined margin gross Operating continue manage tightly Operating basis declined margin absorption expenses factory quarter revenue. decline the of represented mix. product a XX% the as of XX.X% points level $XX.X revenue as and only quarter

expense interest Our quarter in $X.X was million. fourth the

rate was per quarter Our revenue, result share profit. equal The net in of $X.XX. a earnings primarily $X.X for mix was of QX of geographic X.X% the of million is income tax the XX%. lower changes was rate to tax

XXXX financial review the full-year I'll Now, results.

share reflecting with And profit compared Operating record XX.X%, expenses XXXX a revenues XX of versus full acquisitions operating early made up XXXX record basis late from of up million, of a XX rate XXXX XX% from three an tax for increased $XX.X per XX.X% were XXXX. year-over-year. points XXXX. of margin increased year the added as increased in share, Our X.X% XX% full $X.XX XXXX. Gross XXXX. margin was XX.X% from XX% Operating $X.XX, a earnings our to XXXX per million, as basis increase in earnings we a increasing and XX% XXXX the impact up from record XX.X% were in to points lastly, $XXX of

after from million in Now, the I’ll sheet. Company $XX.X in our $X in $XX.X million capital cash generated balance of repurchases. million quarter. the in Cash with turn quarter third flow free decreasing million, net quarter the The debt $XX.X position million fourth to $X.X the increased

inception repurchased since million out buyback total the share. bringing authorized. $XXX million, $X.X additional to total shares, X.X million the In total the to bringing date, or During stock an of total purchased Company price fourth quarter million $XX.X $XX at X.X year the average of This of the reflects million the during repurchased million quarter, approximately million. first to amount $XX an repurchased we per $XX.XX the shares

We of improved Day will with our from products days in continue this the objectives growth earlier put projected management the XX the options, proven to we our needed the place third to flow Tom debt that to discussed that to in review third level. decreased and our making days the support capacity down investments allocation balancing cash Inventory X% XX develop million, capital fourth. generation quarter. our while and from sales to outstanding ensure $XXX

turn I'll guidance. first Now, to our quarter

for $XXX to forecast range in million. of revenues the is Our million $XXX

reductions the financial opportunities. balance the seasonal our we of market on share in taxes flat audit expenses operating ensuring chain as made the we to will guidance QX as normalize increases is The and the across in responsiveness of while second quarter. such are part our modest execute revenue some to due is majority increase a related to than the delivering our Once again, decision quarter. early in supply legal kick which Our down results, what the with requirements gain in payroll will starting our Tom guiding, implement include fees, cost better growth sound to customers our goal market to organization. QX, of and to X%, said, In share semiconductor peers this additional equipment

We expect XX%, average rate a share lower approximately count and million diluted of $X.X the million, shares first a interest expense for tax quarter. weighted outstanding fully of XX.X of

open $X.XX. expect take these the per the $X.XX QX share Please Given ready range Operator, line. in of we're to will assumptions, our earnings questions. we to in be

Operator

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

Your question, please?

Patrick Ho

customers first more vendors time companies like in equipment that. off, secondly, increase you today or a broader spend -- today. it? very that seeing or offering are maybe, see potential yourself, One, that seeing activities actually interest leverage as portfolio to customer you much. base of from any in Tom, and aren't currently Thank lot downturns, you're from you getting And where your are an on design OEM have companies customers your demand on

Tom Rohrs

commented Patrick, in terms question. We've yes, you're on So, this, of first your absolutely right. and

our go cetera. but During with and time importantly, qualification to parts ask to customers to that not maybe copy fit them of rigorous help us industry, a more exact even to only process downturn, new to have qualify through to designs, et standards systems the have

to where on with it is it a we on this can't refer so, happening. that to working the the at are And of quite liquid -- are absolutely get different a seeing I seeing of really at But, we're done qualifications But, that. number things design And in fact pace I opportunities seeing We're rapid. gas areas specify business. customers we're those both with sides the and ability also, point.

And Korea delivery our we year. them, are as we’ll of lot product is in during the my interest big what have closely. been a I working one We where around towards probably other with very with call, end And seeing than four. would comments, of from this customers this them ready gas I specifically we've mentioned systems. work

So, happy to lead all that's those that of activities report to share. to be our ability are bullish things one And about we're of happening. of to continue that quite the gain us kinds

Patrick Ho

going Maybe as for It's How do a look forward expense the debt, to at into or cash buybacks some to that be of between on investments for current a off follow-up still interest balancing continue that encouraging to need you question use paying Company? you made see some stock potentially prices. the the really reducing Jeff. basis

Jeff Andreson

we prior make capital the is work our as our for allocation significantly with R&D, and then, develop that invest think in customers. is we we will continue one to paying lieu Board at we to we've and continue we some put And what in to light or capacity, much and coming we XXXX. buyback we I with debt in to we and at you've two of a continue we of our on a any to products we'll the we which look And very horizon. place think of might routinely in M&A sure can that Two remaining this world. the levels seen discuss prudent we're Obviously, this see take going increased of on either I approach calls strategies in see forward that, number the debt what said opportunities see so Well, the it. already is number down in capital look will

prudent so and to proven And to we'll continue we've pretty be do so, think that. far I

Operator

Our from the line Ho of next question Sidney Bank. comes Deutsche from

please. question Your

Sidney Ho

of these of this side, you've a are is prepared some quarter, you perhaps versus outside inventory low for things quarter think what you you feel terms your issue and remarks I smaller on in last side. quarter? about you tied Tom, can said for you very But, color two, inventory have And delivery whether of at the give last smaller additional seen similar in customers the better are some large do And the today. component level, to comments an us that made top gas said the companies them? So, those shipment rates, so still companies, far your

Tom Rohrs

bit and exactly It's of much was of more machining in left. saying, of development saw Well, side therefore in side, the how precision at our articulate and side, as inventories out hard to the somewhat terms quite lower shipments being component the on lower quite our factory. suppliers on I a is we coming terms

that tools. translation, terrific is about quarter. do of or over inventories Lam $XXX them I so. million point, about already a you into And think, which literally lowering this million quarter, their if translates of last a in maybe $XXX lowered particular, at They However, announced, job did

shipped a the tools reductions $XXX that components that, it. have million normally in some we I reduction. continued And believe big for the we're got parts out It's that for you with would sides, seeing coming So, inventories.

in it's looking components it coming by that panels. And us. gas say we back much line. for at track that and shipments that's matter, what can However, inventory that sync or our between more And are appears coming rate of for normal in

by the So, of then And much see inventory be little this they'll do we're typically that we'd inventories, beneficiaries. upturn, corrections overall they of and pretty well know rather might if that management not course, that those could end be may completed. optimistic again, bit we that a then the an we the although of best quarter, be some rebuild that practice

So, more but we inventory terms we have of towards way being the we’re a little in corrections, out long go to a of woods. believe

In terms have quite the of systems And their buffers management with bit through systems tend little smaller management for because of it's players, to the of typically, don't information worse, cover great same a they place. in of flows degree actually they inventories. lack

me let I won't we the have seen were substantially where So, et a customer, buildups, say, were than higher just at or Lam mention the one buildups Applied but cetera.

Sidney Ho

talked that? appreciate terms Okay. is those the details are incremental what of opportunity But, That's which million expectations to helpful. Also, in earlier. think million evenly incremental revenue, lower I of about $XX mostly spread, the linearity of you the your about of revenue Will or it be backend different $XX components more now you than expected? talk is that you loaded and

Tom Rohrs

Yes.

it'll relatively ramp, it be I second by be will -- half loaded. which be means it'll think, a definition

and again although in QX, again to again pretty it's in see that we in increase QX, revealing that for And number. then then increase quarter, calculate, us be this revenue seeing are We and won't easy QX. increase we'll

we'll very actually going the in in at So, in the sure. They’ve year quite that will second the and announcement they loaded first well. for of quarter. be some as to for for through half, robust had this are of scattered benefit that the benefit you see second were And down a ASML, they -- be half bit half somewhat And back a backend saying it'll actually as activities ASML. then, we’ll thing, Sydney, then, also them we quite this which is from be point. know, robust one pretty ideas the at

the second those have going pleased we’re tailwinds half two quite we into that about. So,

Sidney Ho

last like said one be expect Maybe just second half mouth, quarter? your one. to certainly, of squeeze ‘XX, better to words shouldn't half put but you last we in probably ‘XX to than Not first in the

Tom Rohrs

No.

put You is, mouth. the words expect answer my should not that. we in And

Sidney Ho

see the in you decline quarter, second start climbing another expect you second Do revenue before half?

Tom Rohrs

the right Well, Sidney. second not now, quarter we're guide going to

I bottom it. at along think, bouncing maybe I as And we’ll this with think to that's I of go kind refer as point. the far

Operator

from Our Needham next question comes & from the line of Bolton Company. Quinn

question please. Your

Quinn Bolton

Sidney's line the more consumption should incremental inventory teach thinking? shift point, share you and revenue I the there second follow you're think the QX, guiding to increase comments wanted under could quarter. over probably When I in gains look you would like correction, share I be quarterly in be feel that know that I in beyond then, feels quarter. I when at each up with consumption question first shipping of not first gains But, start about going to with about about the thoughts quarter. everything it it mostly up. on sort into the What's wrong your you’re it about hear where quarter, on

Tom Rohrs

X%. first of we if I guided Well, flat down you to mean, -- all,

I think, their down correctly quarter X%. around I or if Lam first X% guided recall

of in today. build plans right average so, to with we're kind out X%, their And sync that you if

So, quarter. Applied see wait analysis Materials by have think in couple I don't We'll much we're of this under-shipping and to a very weeks. what consumption

slowing some would down say the of I that. would having corrections. said And some So, a coincide inventory that degree with to of that

of said all behind said we're seen cautious sings haven't see we we because it haven't sooner out plays the of and and by still out how kind would end this the of we'll of Having maybe -- spring the I where So, than yet. in corrections quarter, that, us that the plays that. seen even hopefully be, essence, as

all or really pricing two excited. the the And a or a transition normal follow, we'll for getting like things people in DRAMs then, see where haven't along an seen way. start We uptick change you

signals far of wait those for ourselves in getting will QX. what too kind of some on we'll ahead think, of happen before I So,

Quinn Bolton

you in quarter significant sound doesn't like are first under-shipping you So, any amount… consumption it -- think by the here

Tom Rohrs

I've what do from From Lam, and I amount. seen huge announcements out think by under-shipping we're not ASML a of

Quinn Bolton

then, mentioned how liquid customer? lead in that you're customer the half. second the seeing that so, you lead business the And beyond with Is ramping or modules develop

Tom Rohrs

But, customer didn't LDM off all would. at hearing the that one we blocks lead their news plans. announcement; the Well, through think technology to year, they're with with what much was of And wonderful customer, the the tied hip disappointment that to. in out, was who about be doing thought hoped we're the the and been disappointment we've major hip had of a was for us terrific earnings was it product customer their optimism it to year, here. some last they've as doing results better get turned a we last the I they're all kind voiced a They've and tied went as and their But, from what we it that. just for

along. labs that's And the significant working them to one have start the Korea working We're of for that We'll share we're just in that clean right second, the closely LDM into to of I that their working third in with a that'll quarter, place business. one that in it and the customers. moves I products also second now the in with. so, half we Having mentioned said result And other of I people now. has referred optimism process shipments very in product. are through this the fact as with moving that, year

and will we'll open in used, and and a So, in product applications, not yes, whole of be up over this product cleaning is to but not applications only customers one like a will us. CMP customer. that unique track, for be also world This like maybe new time opportunities

Operator

you. Thank

Our Karl line next and from Cowen of question Ackerman Company. comes from the

Your please. question,

Karl Ackerman

for have I Jeff, a gentlemen. Hi, question you.

margin as how also juncture, gross million well, playing any incremental factory versus manufacturing consolidate acquired at too $XX years. would costs for I at you've -- you M&A helpful, color optimizing How of this into guide March that guess, the and guess, you mix? last about even sites to year? And, product for through March. on it assumptions Looking utilization then two premature for significant that consider be fixed your is toward this drive think would wins design I December you

Jeff Andreson

question. Good Yes.

high similar. it, fixed So, if been ran -- took fairly probably the the has versus our I’d color gross probably, the that you margin I end, is say is the and cost you third know the at bit, think and much you Product in affected seeing we mix gross it to a quarter, as that’s said cost. change always Having the fixed efficiencies. biggest as the negatively that, not margin. will we're but little affect look maybe drive

in at So, some is not anything the are off across the and/or look to say table, I would facilities facility. as There do potential businesses integration the opportunities we board. our some additional either the in

and work the much lot -- year, were some into also constantly capacity as on we we didn't probably we we're year. had modulated as at we look a coming that. back. as that And thought of well will we as last that We of So, had

So, that right some of sized as well. we’ve

is the is increases here we of will it. that as important one this and $XX very, that a top be hitting more about talk the wins, these along the line, very, OpEx Most market OpEx line with incremental Karl, do. little very, that, to think hiring, Jeff support place. just you will, few very in There'll the dollars. bulk be of or very, But as a of said, things with I share extra points, to that there'll actually if fixed million, capacity, be costs very Now, little on beyond is

obviously, through will little everyone. cost. like It see that become to very will visible to in we very, that those leverage fixed more fixed be I the much through so, more apparent -- money of on think we're very way And when year. very, bolting the with cost the And

Karl Ackerman

you prepared last you liquid is their fact there outsourcing I I I'm your on see significant remarks costs. -- business? Jeff, curious, gains to areas of or are seems in themselves. of in the in own the event you Tom of opportunities module. outsourcing I'm your second those accelerating, opportunities fixed in content customers if reduce half mentioned that It are mean, a accelerate of in delivery any the order any other in if you to maintain actually XXXX there are given of other curious other well quarter, guess, this But, multi-quarter opportunity kind downturn see and may drive

Jeff Andreson

has we've do been are lot penetrating right bit of them. quite can We've of in spoken a now next of Japan And opportunities Ebara between us. have the -- Japan. equipment billions of our dollars Electron, companies terms occasionally billions others, in semiconductor capital developing that's we Japan. are, anywhere geographies. on else There of of Dainippon equipment terms we Korea. Tokyo new where ways Screen, We built about A really lost And penetrate not of more and activity than capital semiconductor and in talked to billions U.S., and

think that, what huge about, very, where we're we some cost and point almost to have plans fish them fry now, at big a ready fixed it without We of them But get balance some means very where speaking know ways that consider out we kind we And again, there's our there, have looking And to to and of at out of with sheet. we're so, adding once we the regularly for amount closely. about excellent to some, broadly. Board, you review can to think be, in we're place. more

Operator

line Instructions] David Duley from question the Steelhead Our from of next Securities. [Operator comes

please? question, Your

David Duley

what XXXX? sort of fab question from guess, are signing macro wafer now I equipment up a for of estimate for you first perspective. kind Guys,

Tom Rohrs

And a the of reasonably take them we’ve So, a where are which heard in as makes again, guiding down now we our see of from the sense. we at only lot them our point customers, cues -- high-teens. couple

the in reasons make may one equipment XX where to -- including now to about seeing right number the get besides focusing we're the it So, we're XX range on deal of of going why number we're mathematics, wafer certainly of fab that's low-XXs. as just to level than we higher to business a the our at in and of on the thinking. talked XX. that's about terms higher But planning in to more I’ve there if seems be ones some operating be of second And by to the And now. great XX number, sense, be think we're as the low akin what have we're incremental the instead the of may and think we that that high-XXs into is half mid-XXs is of ASML going XX, the mid year actually a the

from said with moved caveat our XX. planning to that down we over towards last XX, around. cues number XX, torture how that's down XX, XX, that drip, at water that we're getting to now in So, kind drip that's and months It the drip, least believe about we're has a two the XX, of needs be what of Chinese about

no point. so, rules And the -- I there at we with are some those being right couldn't are actually up let’s that it lower But, now. end say, than work numbers

David Duley

Okay.

to million see referring to good for might business the the we and level $XX could year be be, get that OEMs, those large $XX or you kind add then teens might the for So, the that's is of you're you best year? that down, kind a guess for high and might since million estimate of math lab

Tom Rohrs

it's the their OEMs that down very a large be bit. but careful nice the you a because have service. of OEMs business little tends you to up when have be estimate, flat Well, look called to service an or even rather XX%, And being large chunk business, at maybe XX%,

if means they're flat. business down to that down be XX% is to relatively is going to And business so, or going their going because is business their more or you be their XX% service entire that XX% equipment tell

little to a discern got you be how careful with those numbers. you So,

David Duley

On to Okay. $XX try it. That's used I point. be lot gross for a next revenue about doesn't describe margin it way at new of talked sized the million the to rate to incremental might a about -- or we the great and think with the you that being line of revenue? When profitability there fixed now have should is what that cost a might the revenue operating or $XX how topic, line think you million, or incremental this attached you drop

Jeff Andreson

Yes.

to will seeing precision Dave. to weldments, the you're about of think But, talked machining, we've -- higher margins in about than the I are margin. this the margins when our accretive talked Tom be delivery those virtually that reiterate, Those past, like module, all today.

of stay a gross probably in more so, low And XXs, the weldments. weldments margin, in like the XXs, little LDM precision low think machine XXs mid the to is the is probably

will higher than margins be that. So, slightly the incremental

David Duley

for of in our Could know quarter? me, expect I And let forward for do? just the what what customers the then, final should Okay. a of And us guess, to just XX% the clarifications. the account thing annually you couple share going the size then, were we

Jeff Andreson

K. customer we final is don't revenue by -- disclose the So, the one we'll in sizing

So, price, the on all. see obviously hardly in I moving Share if I tick we we comment might that count, it'll a call. don't do little that. up QX, buyback, make really in flat think that I but be to share bit what want -- It XX.X, at down on a the can't a finished

-- wouldn't I probably for would numbers year. So, the I just for I’d those use simplicity, --

David Duley

XXs, Okay. have businesses, one could one might of XXs, three wrote was I those again? talking low down which And you clarify, this was drop the which about you low said when rate then, just was you were

Jeff Andreson

the be will XXs. XXs and the was Weldments machining the precision in low low

David Duley

very much. Thank you

Operator

for program further today's Thank Rohrs like you. This does session to to conclude Tom the any the program. question-and-answer I'd back of remarks. hand

Tom Rohrs

to quarter. on you forward Well, us this updating you Thank for are thank you. in on a much May. our we QX all joining call And look call very

Operator

today's conclude for participation conference. program. and ladies does the gentlemen, in you, This Thank your

disconnect. Good You day. now may

Ichor (ICHR) 6 Feb 192018 Q4 Earnings call transcript