COHU - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Cohu Incorporated Third Quarter 2019 Financial Results Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions].

As a reminder, this call is being recorded.

turn over to Mr. your like now the to conference host, I’d Jones, Financial Jeff Officer. Chief ahead. go Please

Jeff Jones

Good to outlook. early accommodating and Müller. operations quarter by morning in welcome President morning Luis results Cohu’s to our we calling and call. third and discuss Germany I fourth from CEO, and this quarter and I’m are today our joined Luis conference our call you appreciate

or from by of our concludes. Cohu earnings you the our If website is need of it page cohu.com, today’s call There presentation a the copy Relations. accessed that you slide via may the same after in this section. in contacting Investor website with may Investor Replay release, will a call be call available access also Cohu’s Relations on conjunction be

City we’ll Growth our company now Xth and New to York and at Between December you with would also Summit earnings Conference these request the contact in January Annual like a the next XX, participating the meeting Tuesday, York XX. on Please on City us Needham if events. in be call, New

now Safe to And Harbor. the

current with as most and business. filings forward-looking section statements slide the presentation today’s Cohu’s rapid to the we Form Cohu’s XX-K concerning management’s Forward-Looking Securities and Commission, of encourage release We Form are abrupt assessed, future Statements which review we earnings as to filed that During changes. well the you and recently the current XX-Q. nature, call, including based expectations reflecting the statements is subject Exchange have make will on but information its These by and even

X, to these only developments after statements update no Cohu call. speak assumes and as XXXX, Our this of for occurring today, November comments obligation

GAAP earnings call, this certain financial to we the presentation refer reconciliations to Please our and during slide for will most measures. non-GAAP release comparable Finally, measures. discuss

like call President to over the Luis? Luis Müller, CEO. I’d and Cohu’s Now turn to

Luis Müller

morning. Good

briefly the comment quarter, it of for the fourth touch to highlights guidance. and opportunities then to results on going describe I'm next on a year, financial for third Jeff Today pass to quarter and couple back

than largest stronger continued million, delivered our automotive softness which historically served on of $XXX.X Cohu sales and markets. non-GAAP industrial in are despite expected segments, the profitability

IC expected to headwind analog handler a demand particularly remain Systems. to Lower is near-term Gravity sales,

is While automotive ADAS business. strengthen our forecasted benefiting to Pick-and-Place

As a reminder, is handler Cohu are Tri-Temperature industry the testing, provides where revenues. recurring business most but that leader in of installed large automotive for our for of applications equipment long-term base and

handlers, driving is XG increase overall which mobility, average in the utilization testers an of above applications recently approximately trending and In are of XX%. turret RF

were orders cyclicality. quarter offset Third XX% recurring of system business helps recurring equipment build validating our solid foundation to that XX% and strategy a capital

a We customer desk. our a also a broadening U.S. mobile $XX semiconductor win leading and key captured approximately year an million design adding RF in leadership manufacturer, at

and filters next-generation for ramp momentum to to continue and equipment to on antenna cloud, base in XG initial orders to switches, market and tested greater mobility, sales year. with amplifiers, gain test have These large XXXX, microprocessors. installed quarter of strengthen IC in RF power ATE exposure data growing expected power management tuners, our coming Third center, and are handler we AI next thermal a where the supporting in contactor segments smartphones

type enhanced critical seeing of mission and Internet massive we're data higher that believe communications. communications and machine a by rates We broadband, cycle on communications ultra-reliable enabling smart the XG low narrowband mobile on of new with growth beginning latency driven applications capacity Things,

production differentiated in gigahertz sub-six traction value X products for XG are gaining and wave millimeter Wi-Fi and Our demonstrating applications.

customers. million both in to grow to we three the leader supplying remain China this from approximately $XXX about estimate for million addressable expect in RF the based years our space will We market next that the $XX testers U.S. and and

selling tasks China fact, across trade for semiconductor about quarter, consisting with contactors war. different prospects a applications. tester also We're handlers conferring from for of combined testers fears was solutions optimistic region the the this our some sales growing complete initial last of In and

solution, next a ramped Taiwan, and to recently approximately where is panel inroads that $XXX Korea. complete communication also global continue Test to IC satellite the a Adding China, our to forecasted year. million in driver now project display supporting We we opportunities make flat that, grow in segment

the automotive with expansion, and a early market, initial of certainty volume but with to smartphone to XG growth expect about semi-test to enter speak return leading some normality next year-on-year. in too It's year, the next we to production phase level

carefully investments much proper and have to but will with cross-selling maximizing manage to continue handler from P&L profitability to growth drive particularly mid-term contactors that larger gain the the We testers our also business. ensuring on

synergy been run acquisition on quarter. and it's cost since of one being for Lastly, million annual rate happy I'm objectives year by $XX are main report Xcerra the track the end this to The of synergies German by schedule, our closed Fontana, of this being on California restructured quarter, end the our close the operations, in Malaysia of ahead Penang, factory quarter. substantially factory achieved to in having and third a track

integrated now the actively such pursuing and customer cross-selling RF opportunities satellite to the differentiated communications to our have as value we're importantly, add potential customers. that More

third to provide it our and turn quarter to to like results fourth I'd over quarter Jeff guidance. Now review

Jeff Jones

Luis. Okay, thanks

line fourth provide the with synergies. and but then our non-GAAP including accelerating forecasted, progress by margin than higher acquisition Xcerra third expense, review in revenue guidance. the in profitability operating higher realization start I’ll guidance, plan delivered acquisition-related synergies of our quarter from our quarter which and to reviewing I'll I'll with due also gross cost results lower Today of

non-GAAP that and accompanying release and to to my non-GAAP earnings GAAP refer follow note investor comments disclosures, all reconciliations or presentation. the see figures Please that

million compensation $X.X of and to non-GAAP GAAP $XX the million Xcerra to expense, purchased plant QX the For acquisition driven costs. million include intangible primarily by restructuring $X.X adjustments step-up approximately of of of stock-based million property, adjustments non-GAAP equipment $X.X expense, GAAP amortization and include costs,

related severance. Xcerra QX was $X net impact The million to employee of cash XXXX approximately primarily acquisition-related restructuring

$XXX.X quarter. basis year-to-date our of cloud line approximately in with through or customer AI sales customer September, no of million one accounted a center revenue XX% was for On and guidance, and in in XX% represents data more of QX sales. the

generated XX.X%, of of QX, better due to XXX expected from and margin tester points guidance, which sales. handler a gross than a approximately recurring is than In mix contribution basis higher we and favorable system revenue

on than discretionary fixed Operating expenses in and a control of $XXX,XXX tight assets. on sale costs lower came and forecasted result of as spending gain a labor

million which is we synergies, quarter, the realized forecast. approximately acquisition During of $X.X the line with cost in

$XX.X a After or operating EPS the or $X.X sales. million the quarter, currency third Adjusted non-GAAP of approximately interest $XX.X of about million and foreign provision, gain Cohu $X.XX. of generated expense, income of generated quarter In the tax million, we in XX.X% of X% sales. EBITDA was non-GAAP

And prior on levels. I’ve pre-tax the as calls, effective earnings tax stated current at is rate meaningful not

most Cohu’s and outside generated profits related reminder, taxed of the and a are operations As U.S.

a to Additionally, did valuation offset our foreign U.S. operation in the it deferred the because when tax loss tax no of asset tax generates as benefits expense QX, there's allowance.

tax without result a U.S. As resulted This XX%. in expense benefit high profits tax the recorded in loss. on of effective approximately rate any QX, the from we foreign

the in by we prior is on forward. to rate that favorably cost calendar to synergies million cost that our result years. in $XX business annual the $XX deliver are expect that impact going end cost included in million five of will the and year, this run The to already model target into results of pulling of XXXX, model, turning calls, forward original three announced synergies as taken synergies we've ahead approximately earnings and Now business of actions that's

operating This expense annual cost million synergy cost sold split is million savings. goods of $XX approximately $XX in in and

after $XX our Now restructuring million. plans, the reduced completion run facilities, of to cash approximately including shutdown various minimum and required been to the has operations of consolidation

to the allocation debt capital is to de-lever use long-term and cash company. down strategy excess Our the pay

required However, support timing making debt a payments better in and of mainly the XXXX, XG sense in the anticipated we're driven near-term, extent cash until have growth communications. we business minimum by to of

from Cohu end at approximately QX, was approximately $XXX balance quarter. the $X of cash and During our cash operations million generated the of million

on $X.XX X, per share payable XXXX, of XX, Board record shareholders January a cash on to Directors dividend quarterly of November XXXX. Cohu’s approved of

sales to be For to $XXX the X% is and and operating margin inspection projected expected and expecting distribution or are $X $XXX guidance, Revenue we're approximately on of $XX million. to Gross test synergies be XXXX cost including to XX% an expenses to million, million semiconductor XX% million be forecasted is fourth test. be to basis. XX% PCB quarter approximately about $XX million annualized

in maintaining cost the acquisition addition taken measures million. of reduction to In approximately QX $X synergies, cost we're the

at the QX mid-point meaningful. to abnormally provision approximately to non-GAAP QX guidance of three to be is high tax tax guidance provision EBITDA Similar of QX to expect not amounts. the We the tax the at X%. and full -- provision adjusted similar The last rate will be the quarters, and expected mid-point be

rate of XX% approximately For modeling business purposes, on line more or we model. expect a effective tax of $XXX the revenue profits with and in million normalized

count share for million expected concludes be approximately to and remarks. prepared QX is our shares diluted XX.X that The

And we'll questions. take your now

Operator

Instructions]. [Operator

Ellis B. Riley. question first line of from the Your comes from Craig

Craig Ellis

question, congratulations a I follow-up and performance outlook. try made tie and in to together. quarter thanks wanted Yes, for Luis, the the gentlemen, taking couple just points on and of the and on you that margin them strong

growing outlook then, see to that was million. RF thought worth, longer-term I that framed you secondly, to as believe tester said million. from $XX nice $XXX million And wins the So test $XX was I new constructive

of I So rebound? you a there $XX industry million $XX RF million as get million that next those as if of two $XX of year linear put much mean we growth growth rate in to if test, new customer could then million see assuming and test be together, does just a revenue that a as RF incremental things $XX from

Luis Müller

million going Hi, and The in Craig. customer in $XX to on generate above do year points, win two right. RF or puts just recap expect to there about so we Obviously, so are a space, some on $XX takes, the Yes, revenue. that million. forward those

And three expect then years as XG to course the substantially. market market in addressable in RF next the RF the for we do volume grow mobile testers, of greater deploys over the

year have be next give XG sales over a meaningfully expect, you for growing And next don't would I even RF continues as years roll But the specifically. indeed few I into out. should tester to number So, our to XXXX.

Craig Ellis

market? was and more tale industrial positively? strong markets. saying, comment It within end what the good like center of helpful. to on then when on durability. I other would visibility any for part stronger ADAS think sounds auto a has to from then auto parts as you other have follow-up like looks be data you're that things it to That's And you you that inflict of continue to weaker, do of Can dynamics potential two and noted a mobility And some start really just the the a

Luis Müller

Okay.

first the to expect yes, into AI, going into remain to So point, we year, center, the strong do next cloud, going data XXXX.

So that to business going there. I it's remain think that

have On third the quarter. the also our come industrial weakened would and the year automotive can down see, has I the they and of as -- it through percentage in indeed weakened as a business market actually you systems say

spots ADAS Nevertheless, also as XXXX have I think know, you going for SARS the down you bright if management hybrid BMS will, in are going battery year. into gone vehicles. be electric and and systems, this automotive to electric

I growth is think single-digit so going vehicles some be that to And would story content expect expectation recovery will of up next around be XXXX, main automotive electrification it year. the think could flat into there to some normality. and I

things to talk all hard about timing it's now combined. these for only Now,

And QX the haven't around second so maybe of more earnest, seen I said. quarter Year, of starting that the XXXX flat but the seasonality, seasonality much up maybe in seasonality sort getting year of picking something in I a more QX, Chinese XXXX typical of we to back QX will quarter-on-quarter up before to with in after New expect, the up would a come picking mid-single-digit in into as be

Craig Ellis

hi, synergies, of Yes, synergies And quite regarding from clearly well. sense, that Jeff, out, some your seeing going following to companies. on makes is capture what not you analog given we're comments up then, leave

quarter? quarter, expected $XX first any million $X synergies that COGS can to fourth others? about that’s But I in year takes if on give on you $XX million us of noted mean that the business or that there's rate, that the exiting extent does into so, think either that which the incremental performance comes you the business color the the run in million. And

Jeff Jones

would that Yes, Craig. right, be

million about $X we're over let's So would the exit that going you'd that million. have be to full-year, the impact. in at with year about COGS And QX $X see, at

incremental that would would most COGS be of So, yes, most of COGS that $X driven, be driven. million

Operator

Capital. Craig-Hallum from Schwab Christian from comes question next Your

Christian Schwab

Hey, guys. pre-market Thanks that I doing better. good morning, do for like the call,

bigger regarding to about business didn't but where markets, million get As in know when we to recovery were you talk XX-basis, of us it a Xcerra perspective please revenue $XXX a you us maybe in about kind the top-line timing a acquisition, want walk made walk roughly to would trailing return different through your think could puts scenario the there? takes can relates what to picture and I you that us to we through I year-ago take the was it on on

Luis Müller

sure. Yes,

So, Christian, maybe about going together. to picture the just I’m and whole here of put markets talk the different sort

next is if or RF least what the is of we're smartphones with we're volume content expected And this mobility, happening in starting volume you at higher the earnest XG real them. it of seeing look year. us of RF devices. XG RF to in next-generation ramp although, impacts devices going And our here start So growth QX QX driving seeing that's larger -- what starting is honestly, of wave already, at to as sort

But degree is, is as now turret that's market. some handlers Pick-and-Place well the into the that sale this even configured to benefit the going both into as going of to testers RF mobility our what handlers do,

mentioned the year. that percent some sales On as be before, IHS at we expectation automotive global low-single-digit next will vehicle you I up and look lightweight see Research, Market do today, there's if side, what

in sensors More Also semi cars, up which sensors, as for devices contents high-end benefits in right? before, radar general, microcontrollers. I importantly, I going RF think other ADAS mentioned

expected of stabilizing. sort as data The remain AI industrials, I before, is to center mentioned data, to cloud strong. In

and be exact we quarters, we first for a at stronger would give a to looking But back much first fourth so that And fact, again and second number quarter expect year. fourth quarters seasonality XXXX, in you have I an levels can't of next then similar into do and quarter. should for sort coming weaker I quarters where kept going typical third

think the Now question at profile, don't amplitude. is formal coming that formal to the the least to where business seasonal going the profile. We is the is I an But exactly amplitude, answer start have to back today.

Operator

from of Diffely D.A. Your the next from comes line question Tom Davidson.

Tom Diffely

Yes. or Good morning good evening.

up on couple So over costs quarters. maybe the following Jeff the last of

retention, in that you on the just in mix figure the the to the reported and costs out trying also now? So quarter, the relationship to one-time going was right what impact programs cost of have

Jeff Jones

-- so had we in of the baked in over cost $X Yes, we synergies have little the forecast, a million.

was about And a from mentioned, the acquisition-related so And during we little than in fact, hit recurring that well million of number $X.X $X.X testers what as I a as we’re of And then handlers sort we about as it’s costs more blend systems more revenue. quarter, then, had profitable forecasted. synergies. million and

Tom Diffely

mix? to quantify Okay, you any way is the there from the that contribution better got

Jeff Jones

all of from Well, the for it just better accounted about points. XXX mix, really basis

Tom Diffely

Okay.

great. Okay,

Jeff Jones

the On lower well. was Tom, OpEx, spending as that

things, that about positions lowering costs I done costs. we've the gone business in replacing we when And mentioned as future we've hiring the terms at of labor not returns. in acquisition or moment the so And would beyond before

significantly of reduced spending, sort it's of other and costs terms certain So we in delaying other labor and costs. travel discretionary

so those to synergies And taken we're cost we've additional the taken actions; in costs, achieving. are that addition we've the

remains And as so long down. somewhat as continue business those we'll

Tom Diffely

Okay.

a get of short-term couple a those coming there's year, on nice cost just back from next million So quarter have we potential to second a dollars programs?

Jeff Jones

back say model that revenue I to then again start I business as to model expenses. Yes, the would operating would returns, look at

Tom Diffely

was to of any sales question wondering then move your quarter. on I'm okay a impact the in direct actually And you team you're if China great. for Okay, there? seeing And China,

Luis Müller

growing -- third to next and growing just us not grow of for as world business -- XG mobility quarter a strong and region continue year. for particularly strong actually the we for actually region China be in to was China RF forecast the The we rest China Yes. the a -- the and actually as

a bit. of the a things much not any quarter, as had foreseeing may we had end, we're trade recall impact impact the on the the negative moved from on them. But when from you second around basis not disruption now, in little go-forward So got a an quarter, third in

Tom Diffely

between half great. is look business business from has your in differences at or one And versus business near-term the a Okay, rates and then, you there the of tester other? think Which stronger closer utilization recovery? when general, finally, you near-term the handler one the better the the do recovery

Luis Müller

and applications. on tester is tester because recovery mobility more near-term come our business consumer in the simply think business exposure the a I going has greater that's to to

stronger industrial know, although we've business markets, much in handler our serving historically, across and all the you as been automotive markets. While

At in XX%, the past, of our and to Xcerra, automotive industrial prior some XX% sales. point represented handler

the I be the market as main XXXX as particularly XG to we see driver before mentioned So it mobility -- going RF, for the is here, now. right

we that, would the business. come to business back with so And sooner expect handler tester than the

Tom Diffely

And from when into thanks. point then the question, quarter the saw what quarter, going the Okay, third any you mix difference you a view? fourth look meaningful at final of Jeff, mix in from

Jeff Jones

that is us the little testers the QX say achieved testers, was And a XX% lower be with on in to respect the recurring similar versus the little and a the business XX% would that to then which what to XX%, systems forecasting we're margin at brings handlers less, that in and the I for QX. we of moment about the for the XX% expect I systems, revenue. QX. handlers,

Operator

[Operator Instructions].

from from David Securities. Duley Steelhead question next comes Your

David Duley

the during color to flavor my some during and could it question. fourth quarter. some what quarter the additional you the business I you Thanks for or contactor taking if expect do give was on wondering

Luis Müller

RF see where management IC the space and right stronger. growing Hi the contactor Dave. in that's market tandem in business space Yes, we power being going with the is and now so

in market market inroads and automotive with making aggregate and utilizations does in negatively. in way lower the right markets auto We’re now, the nevertheless industrial industrial it

to would wait see that space. pick So utilizations to up to again for we growth in have higher

So just said are RF, I in in contactor ICs. I like inroads would say predominantly, making mobility, aggregate power management but sales

sale an increased have contactors our also trend. ongoing in the of pins We is our Kita that

provides team Japan that contactors the supplying remains and into very, busy customers. Cohu utilized very So in to

David Duley

of I in business; could the some there of segment seeing a I display the of life going flavor are just color about then been a market? that on some ICs flat good have the and could know panel And you what's position you Okay. there's little bit tester or talk the in you think additional what you that in there? provide

Luis Müller

Sure.

to is we dedicated here dedicate market are display. for SOC a remember, tester And general we two what Just do small the still panel tester that that a is we that populate supplier instruments of right. a number we a have and pitch just our in flat purpose instead tester

OSATs, So which these for it very the desirable manufacturing companies supporting flat display. panel becomes are the in for a predominantly proposition fabulous

So TTDI as we captured drivers to TDDI up predominantly although have this well it's for point. some large some opportunities displays, as

Taiwan some OSATs gained are We have traction in and said, to-date. have in I China these sold mostly and Like Korea.

that We come as expect manufacturers’ the this the start over is are in smartphone aligning next and we OLEDs to mainly and big panel transitioning to OLEDs display chain. flat well opportunity supply Chinese from

to driver generally for So times. the require OLED be longer-test predominant OLEDs XXXX XXXX into would be expect the wave. this

for pro tests. already to OLED test from insertions tester qualified final in our have We all

ATE see business. to continue we grow to as an opportunity this our So exciting

David Duley

and I of that share on combining level in a the is it from or market you was peak that there previous any to revenue? like it guess customers acquisition revenue, think on let's market, structural levels basis back was question that reasons us back was final or any to there Are of $XXX think so. can't anything to getting question. the loss back make But me, get I whatever getting regarding quarterly to that or revenue million prior on similar hurdles Okay, would say to

Luis Müller

handler to are markets. markets is sales because gains, of industrial automotive that. aligned and automotive say our share require structural bounce really and Obviously, much I notwithstanding no back reasons industrial it with There and to the would that

share you back at to flat business, hasn't industrial segments, in said, any to. those of like loss target lagging growth -- have our XG is panel in speak I and growing to market, a to There So some say offsetting a us industrial RF, these automotive or if automotive really contactor stage would for to will. be be levels you display, healthy been again market

structurally nothing speaking a it's it, more now. to So obstruct matter timing of

David Duley

that industrial weakness auto was you in guess the China strong. I space And mentioned the you seen Okay. have and

maybe the auto? you're a to more Or and give oriented. So a bit weakness us U.S. couple, the about just flavor is little I'm weakness more in assuming incremental referring there European

Luis Müller

Japan, U.S. our customers auto Europe, manufacturers are the Well, supply customers, and it right. you space to semiconductor U.S. predominantly China, in name then and they European in auto

Europe, am seen to at U.S. year, market if both I the end the this weakness itself, So I've and China, look in

think I So our it customers quite broadly, really has down. went SARs as impacted

more then would into the now back to management will growth, now and looking and some ADAS to battery to be more which units drivers at main a SAR we're the that systems say I pivoted semi content pull would automotive going recovery So by XXXX, a small of normality. compounded those stabilization on

Operator

from Brian comes question the Chin of from Stifel. next Your line

Brian Chin

me? hear Can you afternoon. Good

Luis Müller

can, Brian. we Yes,

Jeff Jones

We can.

Brian Chin

is terms of calibrate of me maybe the Q&A great. Luis; of in more bigger on back timing delve you little execution also test how in existing us year, the as nice your on beyond? TAM of of quarter. millimeter increases? TAM next maybe Maybe it that TAM, thanks a first the stick or in bit QX as I Okay, growth wave the gain you can I'm just sort And two for in and of in guess of that a question is getting of curious, terms you years think terms the that the you discussion. think on the in kind one Yes, in is kind of, RF there's in of more to share job could pickup the of kind kind you'll remind ushered terms on be a kind a of hockey on business. kind is, that what incrementally what kind year number fair of of roughly, based that

Luis Müller

Okay.

So Brian. $XX at we market addressable here, let annual cover can TAM look basis. I the -- essentially We being TAM me see pieces about million for testers all us RFPAs today on if look at these for an

into We have is give share or with of after growing goes small basis, in we a phones. take are that. RFPAs we RF three chain. the XX% broadening were devices, the greater the Nevertheless, we in conjunction On to market XX%, XX%, RF next over of serve years that -- section as think what we RFPA larger market; XX% a going go-forward be RF that going signal content of a

believe next million $XXX market three so can addressable the actually market. over annual into And we tap years -- we

in So of the perspective net forecasting TAM RF we're side, the bit side the here from is wider that's is a space. one another growing growing -- a from we're

lag. was to here, jet have I Brian, What question maybe Sorry, back bit again? other piece go your the little a of of

Brian Chin

No, obviously you I to from relative business auto year intake revenue you in clearly; appreciate was broader of the visibility it your to tracking this down of frame side have business business. kind the of yes, I terms us that. at even, already mobility the second question sort guess I maybe -- be least quarter. answer. of basically XX%, and you calibrate to Can updated continuing perspective some kind maybe The of signals? a of last the I But in a just the time standpoint from addressed think system that auto the very may order just worst the strong the think you

usually sounds like at of this it I you maintenance give sort I the point. can't or get must And so lot at even of at some I segment. by terms worse be either get imagine must level sub-maintenance a just you in confidence, point. mean, that this of level order book-to-bills a

Luis Müller

seasonality think a approximately from look exiting book-to-bill like up normal will would we're QX a quarter. I yes, Yes, we returning into mid-single-digit QX you be pattern, will then year, this to I we expect and if back at of I point to going second into say, I mean, to running be which X comes running said, QX. at the maybe at seasonality the next QX, laterally And

the the and bit a for of sort it's return their recovery couple to business to of weeks how it's gauged last they increasing the it's next have a us see the to we year, to demand predict the over little automotive of harder little year, at by sort hard up gives XG but this more looking release talk a easier little customers side. that market It's shape on gauge more speak us. of can at normality of for Now confidence about next early here us automotive will that it yet to our earnings coming point. when seasonality curve We the many automotive

Brian Chin

question Jeff. fair. for Maybe that's Sure, last

now. relative the of have visibility what You’re the kind test of sequencing Test, you've of you in certainly terms a little to recovery more right here. stated business

of looks we be operating business margin tend sort slightly on could kind recurring gross you is Your as move into margin recovery model as relative that in ahead of maybe what a to standpoint, the mix lead the like, to of capacity business? than

Jeff Jones

Yes, recovery of the margins timeframe whatever margin you're of then would that at that's business, is, have that the would right, with the tester point. -- stronger in right, side on year, be Brian, next stronger you're a we the quicker QX

Luis Müller

pressured Indian then at testers that's than the there's margin mobility, we Indian on handlers, that the -- just be handlers. with add will but some being may handlers this possibility more going only, I talking on if more about Yes, test along are that we of our remember more as those are handlers differentiated In well.

all So out know plays how I don't together. it

Jeff Jones

a offset. would be a I that full be offset; would think Yes, it partial don't

Luis Müller

when I Yes, comes at have it the look out, mix right. to

Jeff Jones

That's a good point.

Brian Chin

Actually if sneak I could maybe Okay. one more.

is -- the of as chart attachment Given relative business? pull-through to XG maybe -- some of is have extent you well, some good there is one that it sounds well kind that chart as inspection maybe that, part to some like that and the of handlers maybe

Luis Müller

because lot would a it today scale sales level we are used ICs. our so that A management lot of mobile the mobility devices, Yes, inspection with power of has wafer do inspecting ICs type chip and products. in RF expect package in is to

So it platform. to I drive in would a inspection expect the yes, full yes,

Operator

no there I this questions with at remarks further are closing you may your And Gentlemen show or presentation. proceed time. any

Luis Müller

Yes.

speaking a So for we say and future. to Goodbye to and you thank today nice I have us forward day. to just like look you joining the near in

Jeff Jones

Bye-bye.

Operator

today's you Ladies disconnect. for a and Thank Have gentlemen, all this day your conference. may and you concludes participation. wonderful

Cohu (COHU) 4 Nov 192019 Q3 Earnings call transcript