ICHR - Earnings call transcript Q2 2020

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Operator

Good day, ladies and gentlemen, and welcome to the Ichor Second Quarter 2020 Earnings Conference Call. At this time, all parties 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, this conference is being recorded. I would now like to introduce your host for today's conference, Claire McAdams, Investor Relations for Ichor. Please go ahead.

Claire McAdams

operator. you, Thank thank conference and joining second today's Good you XXXX call. quarter afternoon for

XX-K number read subject release about our which both industry As the filings which our and listen earnings form and statements, pandemic cause beyond SEC subsequent the our out you press on These Laws. differ Report with of with to conference within release, meaning uncertainties, are large, fiscal many of for forward-looking please to at for those the in Federal in XX-Q statements COVID-XX Form materially include Securities such control, to in those XXXX risks and and the call, fiscal risks recognize could These impact year and described forward-looking on operations actual press that made the described a file and earnings Annual SEC. contain those statements. XXXX results including the are those of the QX this you as ongoing our spelled from our uncertainties on of

uncertainty term in our ability we’d those aforementioned and that limiting you COVID-XX industry, continues forward-looking longer statements. noted to significant to volatility remind provider pandemic our create As the filings, in

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

Additionally, we this will be providing call. certain during non-GAAP financial conference measures

financial the non-GAAP IR our measures. to release website a posted GAAP press to measures financial these supplement their reconciliation provide earnings of and most Our financial each comparable

on prepared and review and over additional After then, our our Jeff open call third quarter turn begin Sparks, to provide for Andreson. now CFO. and results with call questions. will their results business second outlook CEO; Jeff me a update the will quarter and we of line an the the will Jeff today Jeff? Larry guidance. our I'll and details remarks, Larry Andreson, On are of with our our

Jeff Andreson

and quarter reported to of we are we hope I Welcome ranges the level of our and we manufacturing our capacity. of and end We at QX at in and manufacturing provided that the all noted and results earnings healthy in related given our you trust in second your COVID-related families financial call. constraints the the When of anticipated expanded supply to our the EPS, revenue guidance Today, weldment uncertainties sites early May, sites additional staying you, high-end Thank no expectations. range recovery of the chain. upper on Claire. restrictions and today. global quicker than that assumed safe of

and $XXX We report pleased in and easing are The fairly weldment continues second total shown be in share dynamic wafer to in and that global earnings this enabled restrictions million per very revenues rapidly deliver and to market quarter. of our a strong in to capacity $X.XX rapid resilient fab us or the WFE, has be COVID itself equipment, changing to improvement environment.

per earnings XXXX. by our first as and growth We see Year-to-date, EPS QX, gross demand as have continue well of sequential by XXXX, half XX% in strong of grown achieved the we in versus we in operating share. margin, from customers. in and over revenues increases to And XXX% levels revenues, margin

have you and in would our time commitment, our and fact, service distancing unprecedented exceptional quarter to an challenging with manufacturing customers the all is employees far levels and second to and this entered of quarter safety our the and capacity at is our an the delivering effect impacted priority as requirements and second expect. our families locations. during shelter-in-place dedication, These We workforce Our ensure our most ingenuity health and in of to of their performance testament and the

these know must affected to that order that challenge to degree Our we We the which new thinking are the a unprecedented requires in most adjust times, our Malaysia operation was weldment follow. of requirements shelter-in-place of all largest certain April. out-of-box

work have productivity workflows, our to We all had factories operations. in factory to across order schedules redesign of and spacing our maximize our within

who to do continued perform In employees their jobs addition, remotely can all are so.

we chain keep and operational safely Our as year, to our constraints by who largely have of recovered to globally. high their we our be want amazed continue supply all this challenges. capabilities operations for closely impacts during level the vigilant COVID-XX. appropriate these and from people contributions business a and employees continuing business but our supply at to partners worked take earlier experienced have significant the remain to partners and incredible operating I thank to chain navigate together I protect and unprecedented actions employees our maintain

to the environment. Turning demand

families Beyond our shipments priority of our and challenges been to of the Since maximize strategic facing, in ensure tirelessly second the our their as we working is our requirements, industry employees is growth entire supply keeping in our customer capacity, well support support and as to of while the customers' global our we've strong both output initiatives. safe drive to delivery February, light level chain. continuing that

sequential range Our September quarter. continue throughout growth to we these face And challenges output turn for which us would the visibility to constrained, the the assumed QX gave revenue in quarter. predict be guidance

share of earnings the at recovery to strong forecast continue levels we the growth in demand to our revenue high-end, double growth our for year-over-year And revenues the expected This three expectations than of quarters guidance. customers, quicker and equates September Our of XX% mid-point outlook with from rate first about sequential growth. continued XXXX. resulted per exceeding in at that

level to the can the this and fourth business. at that very demand on continue rapidly impact our uncertainties see COVID-XX, we continuing customer levels an Nonetheless, change to however, strong related short quarter. in given and range risks notice We point, of of will have expanded

by increasing Which progress to that served share making review record We are with on the to and which me expanding for revenue our revenue and and qualifications increase new of year. to for qualifications, multiple work growth machining those opportunities in their gas first XXXX, far growth against that And additional the markets of testament markets. In global part precision we're well overall after weldments year-over-year our year footprint. are a success with we're exceeding we share revenues leveraging year. engineering in see will delivery, on out track within this objectives with industry, of moving our new a continuing our the our customers manufacturing forward to in brings later

us also lithography outperforming revenue overall benefiting factors growth achieve these year-over-year we're of and XXXX. the ramp from gas for XXXX to industry. enabling in both of our continued with Additionally, expected growth delivery Each shipments the EUV is

be revenue in customers, driver in new will success Another penetrating principally growth Asia.

The customers for chemical second, Korea. delivery and the is largest with Japan serve market in

our our which module. we in we in mid-XXXX. actively liquid Korean have We have capability added is Japan, acquired partnered with a delivery And that and marketing operation, in value-added capacity reseller

served well on of term drive customer Both increased of as -- develop new continue liquid drive capabilities in this to new profitability. progress to IP our position Korean that expansion our products evaluating with continue these of longer lever in us module. we work engineering as our with is Japan, make proprietary several operating levels to we to the for markets, delivery OEM We leverage And potential in XXXX. starting region to portfolio our meaningful our actively from model will Further, customers. to our discussions strategy of and were share contribution towards

this continue delivered to to good of year. first in development units proprietary invest our beta delivery this solution, progress and expect in making next-generation We area have the are gas our and

announcements. turning late Including opportunities to and that Before I'll a delivery to to We our the a the we operations made to announced comments improve our see opportunity call have this flexibility business. universal in to filings and our capitalization nimble plastics and current other remain other our is our operations streamline today order June, million. arise. the is asset address $XXX chemical In increasing component to with to final close over Statement We Shelf with up for our in California. enabling be and growth filing manufacturing growth utilization a ample business. initiatives, business act few us Registration decision to our Larry, and recent for This make related this when strategic decision us of quickly capacity structure the strategic facility available made we committed this we to

a making encountered strategic job gross revenues, in this completed operating the qualify great to these and quarter. in growth we of team margin, to per restructuring share, second the against are deliver end working sequential through good sites. by pandemic The have earnings the the strides as a challenges managing growth margin, our initiatives. while result the are and customers did targeting our of To other summarize year products We to with at

Larry fluid our And outlook. intact. the critical in We half. XX% strong of in I'll increase edge over to growth turn outperformed than term The drivers firmly an half Larry? continue serving with semiconductor provide and processes, the on industry remained forecasting growth to be visibility operate such and revenues in deposition environment, current delivery revenues to update have demand to CMP and longer stronger XXXX, a a second date the as call financial first with for our year-over-year to performance

Larry Sparks

Jeff. Thanks,

assets, SG&A compensation measures non-recurring There First, a for call. unless for of R&D based. are this P&L results, expenses, exclude reference and discuss individual of schedule, adjustments. expense, as I and very to and These our our is such measures line that the non-GAAP today GAAP like the financial website including charges and non-GAAP I very of impact Investor operating measure discrete helpful the useful acquired summarizing Section items would non-GAAP items as the in -- amortization during identify remind conference share-based intangible you metrics GAAP tax the

million, $XXX the period and quarter Second last were XX% from from same year. revenue slightly QX up up

spite weldment of the and challenges, quicker revenue Jeff of We came our a In in in for has the no in quarter our strong. to customer we on of operational due sequential range fifth above range high-end manufacturing second straight challenging restrictions assumed of mentioned, anticipated recovery sites environment. strong the our demand actually additional remained than as As high-end reported these revenues quarter of growth capacity. our the guidance execution a

sequential achieve basis XX growth the also was from margin We margin operating share. for margin, up Gross and quarter XX%, earnings points in QX. gross per

and with increased well higher freight second XXX QX, as costs, safety material moderating expenses margin gross impacting continued at bit in as we points our consistent to basis COVID-XX-related expect quarter costs the and and current down in sourcing XX remain margin half level second basis approximately face to points Operating a the environment, these $XX.X a costs operating ensuring QX margin as by health to We improved in up number points expected slightly May. XX this come million, global expect of about as through These workforce. QX. quarter, down operating with around impacted in XXXX. associated our to in margin we gross from the impact basis QX. a with was X% the came expectations over the Operating headwinds and of discussed of income such costs gross In

Our rate interest our second quarter in $X.X and to compared slightly XX.X% XX.X% million expense increased to in QX. declined to tax the

continues growth. Our years be XX%. revenues of of margin the planning earnings per the above revenue the for was range. rate the doubled gross XX% With to growth of share the $X.XX has at XX tax of relatively in EPS a of just our over stable Year-to-date rate range, basis in range point next improvement high-end couple and of the our expenditures, to guidance in high-end

will million sheet. credit that balance receivables borrowings increase We increased of increase in generated this in cash was cash during on million resulted balance ended turn the $XX quarter due to the was late significant revolving approximately of offset facility, quarter. QX, last $XX over with primarily of P&L debt by quarter. to from the $XX upside from QX. to million with total $XX revenues our million We The occurring a our the but cash the in I Now, compared in

X.X. turns Inventory result in increased to a outstanding slightly days to days As XX the prior sales XX declined quarter. day, from

We adequate business projected growth. long-term very focused support are on liquidity ensuring

below our with terms increased comfortable and with times are well and level, in debt the we interest the expense favorable we're quarter. current our more decline three balances. capitalization have the at $XX our XX million of current We Even EBITDA covenants expect secured outlook. debt debt levels given to the coverage over With last third months,

upon flexibility, significant structure. us with us enabling to our filed gives revolver Statement improve the will more capitalization While current -- Registration growth to S-X offer us optionality, Shelf strategic additional enabling and the be be today initiatives us opportunistic

third our of a per QX. million earnings gross in $XXX guidance to operating the million, improvement $X.XX to similar reflects share margin guidance. Now, $XXX revenue of I will quarter of turn an $X.XX range With expenses to guidance our in level to compared and

two to forecasting $X our quarter expense are about full We to be interest and per rate the XX%. tax million year -- client about around to

diluted XX.X We million quarter. approximately shares outstanding are the assuming for third

we place, gross again foreseeable are operating and restrictions we level expect some being a quarter. margin with headwinds future. That continued face constraints in for and changing that gross sequential we anticipate Given of environment dynamic fourth in the rapidly in COVID-related said, margin improvement for the to

our products. a gross our we line accretion our incremental the longer low XXs content, within greater gross margin to in Operator, open reduction IP increasing drive to term growing ready share goal historical margin Please markets questions. programs, margin are flow-through within the Our proprietary take is higher remains and and components through cost the

Operator

of question comes Needham. proceed your line Quinn first Please question. Bolton with to Our with

Quinn Bolton

Congratulations Hey, outlook. on start your margin Larry, and I wanted guys. results the comments. nice to with gross just

You in said quarter quarter. the from impact second the decrease that points basis only in the about XX third to a COVID-related XXX should

gross with we XX.X% operational revenue quarter-on-quarter drive a mix other around flat or are margin? XX.X% QX be thinking, somewhere than better should in there roughly or could margin So, related levels that gross efficiencies that

Larry Sparks

range as mentioned, of, we'll I be think, around XX.X%. the you

Quinn Bolton

Okay. Great.

Larry Sparks

significant. about is Mix

Quinn Bolton

any so in margins XXXX the of of And what's basis it different. you of the or that's I to Can overhang, of plastic guess, hundred of back kind a changed? some the sort the peak, below last give you sense, to on the us couple sort were liquid looking able the cycle. Is gross achieve levels the that business points probably side

low we a be to incremental kind get longer term, that XX% still on through revenue? of XX margin, can assuming gross XX%, fall trying should Just back thinking -- you to

Jeff Andreson

Well, start. Quinn, I'll

gross capacity million this or able about is back being on we've till talked some get those to we've before levels added margin, that has $XXX the effect revenue think peak, the like I that prior some of since something so cross that. we not

pandemic. would weren't I So We operation through hasn't have by that think, we're And that's working out be fully make working of points we get this other, much the a for themselves gross margin plastics get we happy we stage, some in some it. business as XXX us, in initiatives. efficient not next ramped headwinds, work through on part will is that this -- the do those time to basis we at up some that I stuff -- headwinds can Obviously, a have several I back would if quarters. work of this more

Larry Sparks

share is, company. last other the kind And year, integration thing that in some of we're than we gains margins that lower the add which the area, is had in traditionally I'd the aggregating the only of the

So, we are heading with that. Yes.

that'll as that in mix heavy to machining the think change there. just want and and of -- a tailwind we long-term a weldments us the give in more I the little more

Quinn Bolton

me. maybe last Great. for And just question the

are Do ramping on infrastructure you With from you've in capacity it will? the incremental looks capacity how manufacturing if you have guys overall the like adding -- you to like which got XXXX, feeling it nicely, capacity, start just feel Do into the right think continues revenue cycle the facilities? certainly revenue you place?

Larry Sparks

we what the place, can still on in turn future. Well, can under months. -- do -- we and foreseeable have We plans adequate incremental see were is we handle capacity six that added quickly that some for and

And seems on second going we'll WFE where starting So, of stronger first is than would XXXX say be a to be marketplace to improve. XXXX. half half year that the today of is the year to with environment see the top obviously memory the growth belief the I in a

won't in we're CapEx think I if need least so with we it So, take that capacity. next shape the to. much or year at sort to in of increase And

Quinn Bolton

Great. Thank you.

Larry Sparks

Yeah.

Operator

your Please question. Our Deutsche the proceed next Bank. with line from question of Sidney from Ho comes

Sidney Ho

execution. times see about the areas you a likely for because backlog that about in versus to foundry/logic is times, you a second talk into talk a the And question, shortly what expect Great. lose memory, QX? to Thanks is part just strength that is can how you're building of My is compare and here. visibility strength longer go? strength? you the will or it One, question What and typical QX continue maybe this that questions guys relatively congrats Thanks. given of just lead Is that do what you quarter you couple call. into on good first is, -- does maybe

Larry Sparks

good six typically really pretty three for So, directionally and QX get customers. good months our visibility visibility we for months visibility, from

So that's where our confidence comes.

we We to not were have about do this, the recovery. into do enough visibility the memory best addition, see space. ask we In ones memory but

still now, have a techno we memory and see one in transitions, can that strengthening, Korean a X, or Z there. Now XD what's that Y, -- one of that can lot operation Y albeit, -- and we NAND, on see going we incremental layers tech

been starts being we do So, though second even front it foundry/logic down that a we market, stronger see half. bit there hasn't of a increasing the in little and from still bunch will the a half, a but that wafer see come solid

Sidney Ho

talk term that of the COVID think Maybe you That's of like look a margin next in gross XX it gross I interest trajectory, -- about? we one side, margin about kind the longer on components months. I is put various know the Okay. XX if or I drive the margin gross rank past talk drivers follow-up the just reduction proprietary higher the the lot focusing on business, products to is Maybe IP? if timeframe in but I of Is beyond higher growth? on a the maybe margin us my order the Is you help question accretion. know issues, revenue of of the helpful. the this near kind biggest program Can outside you cost of it it term,

Larry Sparks

side of having obviously We're the average the incremental the on than growing of talked business, component higher about margins which company. focused the we've

to focused grow continuing particular on our so, those And in operation. we're help. plastics shares game streamlining That'll that We're area.

continued drive the that programs it. company cost have will reduction We inside

would benefit effect for I will help mean that in margin we're to bulk the continue And place see see back this And XXXX, And mean, normalized so, happening margin levels. the this in hopefully XX that. streamlining on we business, months, margin some our us of year improvements of the imagine -- other but quarter have that more probably we'll -- the gross that plans up. plastics of I then of we'll to drive to revenue in -- levels I that, XX

Sidney Ho

you. Thank Great.

Operator

Our question Chris Cowen comes question. your from the with [indiscernible] Company. with line Please proceed and of

Unidentified Analyst

strengths Hi, line? you thanks my Jeff, about that? bit gas a for in question. it on just Two Is it delivery? Can your see taking say you you color mainly some the give them. the across just of can little product Is board?

Jeff Andreson

board. across It's the generally Yeah.

we're we agile I lot, [ph] as CMP about think like I as depth and well. was talking --

in although, we're think bit lot can I a half what seeing see bad stronger then we as too foundry/logic. types a -- We're memory So, not back those was of half of the in of front seeing a and front the half, strength it applications. well, in particular is

board verticals business. in of the So, all growth us. across our We're for seeing it is

Unidentified Analyst

that any the DRAM, of That's the traction NAND the a semi mainly Korean of -- versus it. XXXX get think one Korean Got and some it. cap of with story. equal kind be cap or kind is you you'll helpful. And on could semi you companies? other really said both calendar opportunities, Got Do then,

Jeff Andreson

deposition. NAND and is work exposure we're that to small, NAND working think a which module, our then, a which today, stage. it's but a the -- DRAM delivery primarily NAND, both to to revenue we're XD Gas OEMs think, at Korea, point, customer, look that at other with with we there. the got in get stream hope on that's edge there I focused access on on And I side you will to working panels, we're mostly exposed We're this DRAM, Well, this on also liquid a at qualify cleaner, would primarily XD XD when particular space. us go in relatively

or And working we're four for local the XXXX of so. now. again, probably So, it's across story OEMs three us, a

Unidentified Analyst

Got it.

Operator

line Steves with question. proceed Our RBC of Markets. Please question with Mitch next the comes from your Capital

Mitch Steves

taking thanks my I Hey, question. two. had for

just is really one gross margin here. question to going first The back the

the talking in gross of improving up You're December margins September. versus kind about revenue going forward being trends

on you line, leverage shouldn't So, expanded the So, plant thinking about to if continue kind and way margin going off a of rate? go operating revenues basis? am margins about you that see as see a I operating up closure a forward had to the well, I'm go more faster thinking this you're or incorrectly

Jeff Andreson

Yeah.

think the yes. So, simple answer I is

streamline an -- I you, probably on it. you've mean, it's very I -- large As we not tell would per it's operation, operation X-K a se. the seen

will can You part and on it add effect. little have big, as repeat I hoping won't they we've growth And not some business far. business inventory of early headcount In a components year, positive start catches particularly to components call. from to size the -- But up, see bit trying but it's faster of start books, And a a a so panels. it of also which the the now outgrow. in growth in we're pace to seen that onto we're the kind seeing the conference were we gas real their the of

Mitch Steves

Then .Understood. companies tech. more move more pushing it kind one to second seems is of just bleeding like to the It Got the high and edge.

wouldn't there, increase the that guys? any the the proposition change if ASPs of end you? that higher you semi it the value for sell not or you is case of for end getting, you So, the guys or sell they would that -- value equipment, does higher content cap are solutions the you guys the So, that really guys add value content or into be

Jeff Andreson

No.

use what the more ASP you're gas at more incremental to panel, is think going and and there's I when for newer per will end gases drive higher see solutions, gases. number think us of the you that I look

have So a the cetera, get and with us. these -- with all or you'll gas, that et components go you flow control

And the will do I many today, how that, top my advanced ASP us haul. you incremental are semiconductors using per so more of to gases. panel. manufactured for new with couldn't size tell head I know some more of long now, they're But over the being How it drive the off right gas more and gases that

Mitch Steves

to that Just real clarify quick.

this, standard that's what's of I'm you know I'm panels the So, us sure what exact for higher kind gas phrase pretty looking because give gas a number or not of unit? for to to ASP mix, gas content. be if you different valves, the in use, maybe that than more whatever can would the phrase want the how much you versus impossible it. the not end, but

Jeff Andreson

Yeah.

going one I think, absolute or you it's be just by they're pretty a -- two, adding application for many customers. a one in that's increase if of not dollars, how because to tremendous but give and deposition just each depend hard gases on OEM varies us it range our ASP to there, would it

little ASP that question. a it's give So, tough you on guidance particular to

Mitch Steves

you. Thank Okay.

Jeff Andreson

Yeah.

Operator

with [Operator Instructions] the Davidson. D.A. of Tom line comes next with your proceed Please from Our question question. Diffely

Tom Diffely

purely by a just program? driven demand another different savings afternoon. geographically Was Good restructuring of cost facility. being all question Maybe than closure or you on plastics Yes. was thought at it that either than less thought, you the or the

Jeff Andreson

little quickly part I is Well, the wasn't other of it's that of I as the mean, that versus looked -- the We a in manufacture plastics all. they're delivery. at bit delivery gas scaling the chemical sites. We four think as capacity answer we have. business

make that close such and now into move the year enough could the had we so, work of the this other facilities. between ahead those to and end And and we decision capacity go products to

Tom Diffely

kind Okay. state? guys as close you getting you Jeff, in to your Are revenues steady And the you does innings? the a rollout Are to company? for do as what are, still EUV gas panel you think early of then far

Jeff Andreson

No.

I on We're we're obviously every they we're we we're manufactured -- probably every have gas so each ones and I XX, low types least think -- of getting that -- products working tool, the those. three have we of -- now XX, of for -- are mean, do delivery the view whatever one XXXX. on at pressure

So, with our there. work closely we customer continue to

Tom Diffely

or wanting Okay. And department has not then your suppliers to impacted as Korean with rulings content? the Japanese commerce have U.S. as finally, the far discussions any of

Jeff Andreson

No. we have Not read some everything of be a Obviously, applications, read comes rely local there yet. customers. to OEMs. significance guys think still of when I to net our benefit larger you I -- it and they any Korean advanced more could think maybe But the to on other

Jeff Andreson

Okay. Great. Thank you.

Jeff Andreson

bet. You

Operator

proceed next to comes Craig question. Ellis Please with question Our B your Riley. with

Craig Ellis

on Larry, for and congratulations the Thanks Jeff margin. Yeah. nice question the taking execution. question gross and my first was clarifying just

and really is is on that rise quarter gross that's or margin fourth improvement? in will is And the of COVID in the rise the that a else out hundred-ish last heard basis I the gross margin, sequential quarter quarter. gross third coming of headwinds what think I margins the So, driving something points fourth

Larry Sparks

change COVID to we today, do the requirements cleaning us distancing I that's I of cost improvement think our have the a ship we in changes. some that of product think of mix cleaning, see to least and some more quarter fourth machining and bit and a components until business. expectation. the and little we with At in think I a little be until more initiatives as the that's there's situation extra our restrictions going

Craig Ellis

then, project large Larry. a it Thanks, out year. was U.S. pushed time, sense. a manufacturer Makes admittedly X-nanometer, And planned for next

any for iCore from is that away. impact what So, there But it's move? a if ways

Jeff Andreson

amount underlying the migrate the just impact guess somewhere is Well, question will that into I the an think the customers, demand some it -- mean, our if there. and I is, we question by timing really else think obviously does there's is underlying as that impact. of think products there's sort -- I equipment of comes sold feel I I a delay?

Craig Ellis

visibility $XXX trigger incremental like filing demand And you of just set? if is that Is have see it's what Thanks, Got was feasible? to that current appreciated. it. enough specific on million nice would is the guys. the being the lastly Just so able much you to now move guys, then the the opportunity Got so you doing that with you have it strategically, that driver something help today, feel more timing, fill for it. be that in flexibility. But what to could

Jeff Andreson

a be the flexibility. for a an ensure couldn't a kind had shelf of we I been and we had it's that -- that ongoing company of consider there to structure. some we generation Should capital wanted our other something that think, either to we just has or today period putting optionality to opportunity discussing time out from fund revolvers there that the cash just

read that much Other generally the into some discussions the have we wouldn't this. board timing strategic recently. at level, than made decision and specific I So, on was here

Craig Ellis

Thanks, Jeff. it. Got

Jeff Andreson

bet. You

Operator

question to of next comes Patrick question. with with Ho line proceed your Stifel. Our Please

Patrick Ho

and revenue the things as go that or do are much doing? margins can efforts today But the guess, basis on see basis about XXX I and that very times help going variables at nice improvements weighing key you what congrats internally they gross the you're are a restructuring being already. to a some where you Are of margins upon? mentioned, and you today you've points through Thank growth forward you there what on few you can, that drive forward. but some Jeff, of a up gross quarter. a of nature, in contributor, plastics the terms guess, I I it this of gone with other anything get apologize other are if on improve You

Jeff Andreson

finish Larry and Well, I'll can then start up. maybe

everybody's growth the particular phase -- see of side, COVID. little as a seeing we're And a more that, we our in our customers any customers. we that recovery largely but just that And kind our little on drive around today initial start of we're to some inventory bit saw the outgrow bit in components probably the trying components business product timing growth at I in is recover in the to normalize think, we're inventories of seen of seeing, to gas the we've business. that'll our this panel ramp degree, business our

plastic we've incremental going cost done programs. on margin we're something to drive product restructuring. reduction other higher driving We're Obviously, growth. So, from side the internal

any we'll we And that, so, maybe quarter-over-quarter within Larry see company. has and it And just to comments. if drive other improvement with continue the some relentlessly

Larry Sparks

No.

ones the I extent product -- can I the the think, we that move I did the it's and long-term XXXX to going mean, gas the whether you -- mix, products it's those but mix, mention. -- qualified one the kind next-generation that's move, new of mean that's mentioned of panels, in other Jeff biggest be those gas to things, revenue the get strategic a probably panel

Patrick Ho

opportunities Great. maybe, as described past. terms That's helpful. And the Jeff, of follow-up in in question, lithography the you EUV of some a

as as believe As systems, content I high-end your to -- those they to eventually customer you vacuum capabilities the guess, A how there they that next-generation migrates you upon or increase and -- next-generation much of in required can system do how systems? into more given the more, move its move much those are content some systems, the

Jeff Andreson

what they bit delivering every mentioned that little working Well, on EUV that ship. -- is tool earlier I we're we're a

and we have low low a pressure gas. high because the We the pressure engineering something pressure pressure. lot that's have a more high levels of gas, is of and expertise type bit that that takes There of a little different of versus a

distribution on long-term gas near versus because other opportunity, just a the So, tool parts on it's and you is some but opportunity, -- more tool we sophisticated, get that system, ASP changing as generation. but we're there's term than but appreciation, much, a significantly dramatically unit will higher that doing there, the for they ASP which of process the weldments But we're can edge probably sheer and each machining know, focus a isn't because -- what not an it very of seeing complexity of them. as size or with

Patrick Ho

very you Great. Thank much.

Jeff Andreson

Okay.

Operator

Andreson end for and call remarks. closing turn we gentlemen, of the question-and-answer any And would session. have I to Jeff reached Ladies the back like our over to

Jeff Andreson

for our in for as manage through our us and that IR which Needham times. updating in hosted week we you again you to concludes September, forward available Thank Operator, on quarter. via were to to Bank meantime, virtual suppliers, these thank challenging like next website. We joining next the on In call Deutsche Citi conferences will this I'd we earnings in call. scheduled their and our our our by participate November. and customers call employees, look on early be by webcast support

Operator

This concludes today's teleconference.

You may have at time. now your this disconnect a wonderful lines your Thank you for and day. participation,

Ichor (ICHR) 3 Aug 202020 Q2 Earnings call transcript