Q4 2019 Earnings Call
Good day.
Fourth quarter two times.
Earnings.
Today's conference is being recorded.
Turning the conference over to doctors.
Carty.
Cyberoptics.
Go ahead.
Thanks.
God willing in terms of participating in fiber optics food or do I commend you might be earnings conference call.
He is just sort of oh.
Oh, I see us one chief operating officer.
Who's a beautiful pretty because in some detail.
What do you all filtration performance.
I'm pleased to answer your question come to conclusion affording box.
Keeping with regulation FD.
These forward looking statements regarding what ultimate this afternoon's wasn't actually be.
These forward looking statements reflect on.
Richard insight.
Subject to a number of risks that are discussed in our phones country.
And in December 31st drinking meeting and other filings with the Securities Exchange Commission.
Well, you're going to do these discussions office christos.
But real picks fourth quarter sales gaming heretofore it doesn't look so good.
Oh strong enough to make it a quarterly sequential performance if somebody wants to see himself.
Waters in the boys rescue People's an automated optical inspection or do you I systems.
The political girlfriend turnkey, let's be lock the door hope, it's always going in so people technology, and so you're going to put capital to two foot locker.
Absolutely.
The sequential quarterly from American girl pretty good lets people democracy, cobi that nobody's going to be.
Well go people understand from $16.9 million for the fourth quarter, Funky Nike and just because it 34.
Always go make important element of your dog, what's in the fourth quarter for do you do.
Although it looks like for casino.
36 foot, saying from Flipboard $40 million the towards clinical thinking 19.
They didn't go for the fourth quarter. After he might be 160, colds and all those working centsper diluted shares compared to $1.2 million or 16 cents per diluted share the good quarter.
So what do you agree do they seem to still grew $59.3 million, though we expect central 64 or somebody with all this in Turkey.
People getting that didn't come off $774000 or you know one centsper diluted should be pretty lucky compared to earnings of $2.8 million or 39 cents. So to be picture I think Ricky.
To fill sensors and inspection and metrology systems based on PD in order to call. The G schools, 48%.
<unk> dollars Yodle, what do you get into fourth quarter of thinking 19, mainly driven by strong says it's good P. Hogan PD one system.
The same autos based products combined the semiconductor census accounted for 72% off older They renewed fourth quarter for anybody.
From 51% did they go to your feared.
Since up because he said something system, excluding seem to be it makes except that it's too so 39% usually goes in the fourth quartile thinking there either.
Our next week, we thought it says we're not going away anytime soon but they are expected to account for the study they declined the function ballpark opens revenue stream.
Something like one or the beautiful product lines.
Important to self inspection and metrology systems increased 80 people to fund the $10.2 million.
Quarterly sequential basis, and 11% from them, they're wonderful during the fourth quartile thinking.
These increases were driven by fears of excuse he told assistance.
Most of $7.1 billion into for portable slinky Nike.
Let's see increases of 100% on a quarterly sequential pieces and 91% on a given what you would it be says.
Those are encouraging fourth quarter development, the few though I suppose but what's your photos photo new TV and modest antibodies and mix to close on Monday morning inspection system.
This order, which is expected to become giving you the fourth quarter for integrating wasn't making a new memory customer.
As I decided to off the one piece I was just nobody manufactured or smell you go to what do you mixing center or Threed. It makes 2000 limiting what do you inspection systems.
We believe that book engine market opportunity for the it makes he told it system is significant.
[noise] himself, so because it depends on still group $3 million into fourth quarter will thinking Nike down 17% on a quarterly sequential basis and what's your take on the changed only go to go to basis.
Orders was going to conduct a seven cents was strong in the fourth quarter.
Moving in the quarter, ending backlog of $1.5 million or to loosen that was at the end of quarter to quarter thinking like doing.
As it is right we are forecasting strong thing because when you kind of two cents go through the fourth quarter pretty crazy.
It's one of those claims and its position in the semiconductor market southern topics expanded its family of semiconductor sensors with two new product launches into fourth quarter.
But you laid bharti concerns are expected to go contaminants in gas and back in line in semiconductor processing commitment.
The ability to monitor particles you line is third because of these are live and for you you really tomography too.
Because forward to go get fiction can significantly improve you then productivity.
The big first of all due to just consensus and it'll because you guys I just don't measurements of sneaking so contact in semiconductor electrochemically depletion application.
Well supported facilitates semiconductor set of diagnostics.
Finally fourth quarter fiscal period here can be said, so stupid people in $7 billion up 15, but some of the quarterly sequential basis, but that was 37%. The other what do you guys.
So this opportunity a modest another 10, so still good $1.9 million into fourth quarter, mostly because I do you.
60% on a sequential basis, but don't like in person that we get a linear basis.
We believe that demand for T cells supposed to come to you distant pending thinking maybe as a gift offices.
And we'll update you just you know a modest based net orders ambitions and so forth semiconductors, we sort of level.
Most packaging inspection and metrology applications, he went to pretty high.
Why don't you put in show you mentioned to me difficult still must have continuing to evaluate these florida.
As we have said previously the sales cycle for this product is limiting but given that you could be open pit showed that they'll start to customers you're anticipating sees in coming quarters.
They've been evolving I noted solution so to the nickel cyberoptics to capitalize on somebody promising walking with an opportunity.
So I don't think ended the fourth quarter, they'll say 90, it's an order backlog of $17.7 million up significantly from $14.4 million at the end of third quarter and totaling $46 million at the end of thinking 18.
Oh ordering backlog at December 30, close thinking Nike and September 30 September Thirtyth. When do you Nike includes the significant order from Tdm auto sensors from an existing William customer that does get even so did anybody in the next 18 months.
Yes, good gifting season, so $15 billion to $16.5 billion for the fourth for the first quartile thinkequity.
We believe that all industry, leading premium audio since then we're going to the sensor technologies have position. So I go to fix to capitalize on Hormel foods age of growth opportunities.
So this means of returning cyberoptics because he's very promising.
Thank you.
Jeff Bertelsen will give you our fourth quarter on the books in greater detail.
Thanks about eight cents a bold has already covered our fourth quarter sales in some detail I will provide information about other aspects of our performance for this period.
Our gross margin percentage in the fourth quarter of 2019 was 43%.
In line with the for fourth quarter of 2018.
Down from third quarter of 2019 and below our internal expectations at the start in the fourth quarter.
The lower than expected gross margin percentage repeating a change in sales mix.
Sales of semiconductor sensors traveler, primarily the Wafersense line of products for lower than expected in the quarters.
This factor combined with higher than expected sales of legacy sensors and inspection systems products resulted in a lower gross margin percentage.
We expect our gross margin percentage in the first quarter of 2020 to improve on a sequential basis from the level in the fourth quarter of 2019, due mainly to an improvement on our sale Tonight.
In particular.
Gross margin semiconductor sensor should account for a higher percentage of our total revenue on the first quarter of 2020, when compared to the fourth quarter 2019.
Total operating expenses of approximately 6.6 million in the fourth quarter of 2019 increased 7% from a level on a year earlier period.
We are continuing to invest heavily in R&D to take maximum advantage of opportunities in our targeted markets with our Threeg IRS technology.
Depreciation and amortization expense totaled $730000 in the fourth quarter and stock compensation expenses $254000.
Total operating expenses in the first quarter of 2020 are expected to increase modestly on both a year over year and quarterly sequential basis.
Interest income another went negative in the fourth quarter of 2019 due to foreign exchange losses, resulting from a weaker U.S. dollar.
The dollar a subsequently strength spacing accepting the pulse positive interesting coming out during the first quarter 2020.
Affective tax rate of 64% for the fourth quarter 2019 reflects a small non cash charge for a deferred tax valuation allowance related to tax credits that expire and 2020.
We anticipate a recurring effective tax rate of approximately 25% in the first quarter 20 Twond.
Cash and marketable securities at 26.3 million at December 31 were up from 25.3 million at the end of the third quarter.
No shares were purchased in the fourth quarter of 2019 under our existing 3 million dollar share repurchase authorization that isn't that it's effective through June 30 2020.
Our capital resources are adequate for achieving our growth objectives, given our available cash balances of cash and marketable securities.
Thank you we would now be happy to take your question.
Thank you if you would like to ask your question. Please press Star then one on your telephone keypad, if you're using its speakerphone. Please make sure. Your mute function is turned off stood out of your signal to reach our equipment again, not as star and then one to ask your question.
We can never take our first question from Greg Palm of Greg Hallum Capital Group. Please go ahead.
Thanks, So just a good afternoon and congrats on they are good way to end the year here.
Hey, Thanks, Craig.
Hi, as it relates to the upside to the quarterly guidance curious if you would characterize that as broad base.
<unk> driven by a few big projects within Sq 3000, and specifically how is the activity in terms of new versus existing customers.
I was more broad based growth coming because clearly see though for markets I think we've done that all doors into the yard so he wasn't working for schools and.
It was more broader based.
Let us come 2000.
Okay and in terms of pipeline going into 2020, I mean initial commentary sound sounds pretty positive, but but anything to add there as we look into that you're here.
Right I just wanted to quantify the backlog because we couldn't be I couldn't be $47 billion.
Sort of on cookies cold, we are starting to yours.
PD and makes Florida, that's part of that backlog does open up a whole new Monica video focus and we feel pretty good.
Position really anything that you're fairly optimistic outlook right now I'm going.
Going to give guidance.
As you know.
Important factors that are dying, but would also assuming 70 are different than the expectation is that this markers waters awkward cool.
<unk> drinking and I think at 19 nineties markets declined pretty book size.
When you look at home, we gave a bulk Nicolas and decline in 60% decline wants it and you see as a market is expected to cool.
FICA, 10%.
I don't know wireless it think not spending then also snow.
Yes, it on the whole your I do believe that market.
Given the cool.
That backdrop, we feel pretty comfortable position for growth.
Yeah.
And congrats on the the Threed Amex order here in the fourth quarter quarter I mean, it's a is that.
I would order is that an initial order that you expected result, and and sort of more deployment in the future I mean, how would you sort of characterize that order at this point.
So they go to honor to sort of who seem to system is already. So this is a number two will proceed nobody could.
No it wasn't really comfortable that here.
So we moved and drinking systems.
It's going to that customer.
We are talking just doesn't have any customer because heating system. The first one it's a it's hard to find it already sort of.
It's already the affecting the intensity that that's where do you feel confident in Q1.
We have already told us what they need for this year and long term.
So this is a and b are talking to the port customer right now.
Do you feel pretty good can you, maybe if I could get support because somebody.
No not too distant future.
So the Greenville existing customers. This new one of the bookings in fourth quarter. One we do that he will then Nick you can find here in Mexico, so they're going to be doing blog.
Yes.
Yeah, that's great and it relative to the initial customer there and to do you I mean is the opportunity for the second customer comparable is significantly less I mean, how would you think about sort of longer term opportunity here.
Good question, Greg I'm in all along there's roughly a 400 9200, including nine.
Memantine can avoid getting a majority of them on into two dogs or anything.
Samsung SK Hynix and Mike.
There's a few other smaller businesses.
That little number is going.
Some open but said something that he learned in liberty necessity.
Yeah, So actually investments go along.
The cyclicality in the semiconductor.
And I said he has been included about 25 on that 120.
But right now have become pretty shouldn't be have they see the menu and inspection. So we're going to things that are these customers have bought <unk>.
Oh that company beginning is lost three that India that exists in the dark leases can.
Superior than what would be sort in the past.
Along in the next to deploy yes, indeed back.
The <unk> market opportunity for them.
More than 100, mexiscan seeming to any.
It's hard to quantify that get walking yard and [laughter] come in.
Okay got it seems like a big opportunity I guess last one.
Just in terms of of the macro and I guess, specifically thinking about what's what's happening over in Asia with Corona virus are you seeing any you know push outs of orders any cancellations anything of that nature, just just given the environment over there or is it still sort of fluid into early to now.
I think more than anchored it's too right.
And then clearly disinfecting travel audit keeping us customer locations.
Thanks to the other schools and stuff like that.
Yes, because cancellation cohort doesn't come back for here or how do we.
Before I wonder.
Compromised and send it to.
Another Philadelphia off that's all affecting that right now I believe in agency.
So I don't know how to quantify all those things yet.
Understood all right I'll hop back in the queue. Thanks, so much.
Thanks, Greg.
Hi, good we can take our next question from Jason Jason Smith of Lake Street Partners. Please go ahead.
Yeah. Thanks for taking my questions I'd just following up on correct last question I know you noted not seeing any impact from the Kuroda virus to date, but did you take any sort of hair cut to Q1 guidance to account for the uncertainty over there.
No.
I would say Jason ill take that as of today, we're certainly comfortable with our guidance I don't know that I would say, we didnt really take any hair cut to our guidance and part of that is just the backlog that we had in the fulfillment of that so as you know today no but it is a fluid.
Situation and one we're all continuing to monitor.
Okay. That's helpful and sort of just following up on it I kinda.
The opposite side on the Pushouts, just given the uncertainty on the situation.
What's what are your thoughts on customers' inventory levels do you think theres been any sort of holdings here in Q1 as cuts or heard squander ensure they have adequate inventory.
We haven't seen anything any of indexing things out I mean again most of our consequence I didn't get uncertainties on their site.
So the offsetting Sam.
All these lands and older numbers that you're talking a lot of roughly comparable sometimes in the kitchen for them. We've about based on because many of our largest customer temporary people locations, we've seen some momentum.
You should have been dealing desk is giving dislocation.
Okay. So that's kind of stuff like that of macro high level.
On a customer sites that you can see.
And just hard numbers at all.
And the hitting whatever happens I do think pieces would only limited there. This uncertainty I don't think of macro picture team gets I do believe.
And a 50 50 years old all documents position to cool or the next three to five years because I'll also.
I was like all these days.
She deployment clouds and E R and bookings have not due to changes because of a lighter situation tied on even it's because somebody but outside.
So I don't even some directly anything changes, maybe a quarter or two things make it [noise].
But nothing nothing significant in the long ago.
Okay, and then last one from me and I'll pass it on I know you said you expect backs up here in Q1 continue invest in R&D, but when we think about building out the sales team I mean should we expect that you need to continue the.
Turning higher throughout this year do you think that sales team is adequately built out at this time, how should we think about that.
Yeah, there's nothing crazy the headcount to support.
Seasonal 40 can get leasing or put it because if he asked me pictures engineering support and be more locations or but again I mean, so difficult to somebody would be higher this year than last year.
Hopefully as a percentage.
Because he's got thing.
Just look like and I I would just add you know historically you know we tend to see more trade shows in the first quarter over the year, which which tends to add to our expense load a little bit in the first quarter and some of that those tend to taper off a little bit as the year progressive So I would just pass out as well.
Okay. Thanks, a lot guys.
I'm here so thank you.
Thank you we can never take our next question from Eric Slate of ACMI analytics. Please go ahead.
Oh, Hey, wait a a nice way to follow up two years ago, Jeff they'd go on.
Before I get into it just like you know southern Cal Yeah. Just why you know, it's about 70 degrees and sunny out here in southern California stuff and it looks like in Minneapolis, [laughter] I'd, just add that but.
So I had some question spot first of all did I understand that correctly in the industry.
Semiconductor capital equipment industry are contracted 20, and after sat and you guys were down 8% right.
That is going to correct, yes, I guess any Catholic declined by almost 90% degree. They can then be declined by voting for the sake.
And the 8% it was basically legacy product your new product was flat right.
Actually the Newport, Oh grew modestly grew 13% in particular right total AMR apps revenues and 2019 were up 13% over 2018, and and Wafersense grew about 3% in 29 team versus 28.
Oh, I was mainly or it is our legacy products really that's the bottom line.
Okay. So.
Back in the memory for a second I'm actually got two out of the three go into that track closely sounds like that could be eminently or within the year.
Well there they certainly have to deal with the full system as I mentioned.
That's got someone asked or doesn't need a few more systems.
Usually the V. I just would work is either.
The ROI calculations.
Production is moving towards system.
You mean, daughter like admission this good business.
He was just after your plan.
Oh, it's because I'm sort of them that's idea when quantifying exactly what they buy so it makes it this year.
And it's something though because it sounds like Florida since it's a large customers are.
Considered or next five years, even get because if you have this market.
Possible for US you know any color you can then it's going to conceal right on takes Uh huh.
Fair enough now I think micron K came out and I guess, new Fiveg Ballinger six skids.
All right.
Yeah, that's right.
Well as.
Well. So I guess the question is I think Micron said you need two to three times the memory.
So that the Fiveg zones are that's is that correct.
I I don't know, what's specifically micron said.
No those actually coming soon.
Supposed to work real somebody's, though.
The New York Foods.
Board Realty.
HM.
Correct I go to the exact numbers.
And you get that really do you have to stacking for that to get.
Yes.
That might you.
No I mean most.
Most of them a high end electronics, including smartphones now are using stack I lost packages now and they're the ones back and just stacking is a key component outside ones package. So most of the chipset gotta getting used in things like smartphone kind smartphone.
You ought to be with them are you guys. Thank you good right now.
And of course, I guess that word die, okay, I assume that that would create more opportunities for cyberoptics.
Yeah engine to advanced packaging 80, a is an exciting growth area for us and that's why we're so focused on that 80, I think now I mean, because exactly the reason you've gotten stacking and inside out and many of those things you do need to make has occurred dimensions traditional two dimensional they get lengthening.
Fiction settled on that Africa, but because youre beginning to Turkey mention though and that said our student is the Doe and modest technology. So that's really it'd be has focused on for the Los Angeles and R&D and that's why the.
Too optimistic about on that going water transfer and home taxes leaned on second liens Dictionary.
And I think about your previous call or maybe talking to Jeff. When you go off the two d. do a three d. process, that's usually about 50% more as far as the cost of equipment.
Yeah, I mean, you can get them PT equipment is over there for you I ought it makes or anything.
It's more extensive.
Okay.
Okay now I have one or series of questions and this Congress and I was sort of surprised when sitting in the press release on this many micro.
Yeah, we beat was.
Are you guys are NASA order off with where the any write back in October.
But we didn't have we announced a partnership it'll give me and be separately on most of the order.
Well, I mean, I'm not sure I understand but in order.
In order, that's what I'm asking about current order from the customer for micro the application that is going for excuses.
Okay, just what I can ascertain basically there appears to be a race the starting line to this technology to commercialize it.
In the production of that speak because I did read a quick.
Oh, I see Kulicke, and Soffa support and they're expecting $30 million to $70 million or revenues. They publicly said the second half of the year.
Yeah, I think there also work, they're working with where he.
With an exclusive so that's one of my questions you would have an exclusive with anybody on the technology right.
Yeah, we are partnered on particularly side I mean.
Independently eating has announced partnership that click as you said independently.
Got it harder because you don't.
My question was not partnership as much as is there exclusivity there so ever went down this technology, Apple Samsung or wait ROE he.
Got it doesn't matter for you guys because you're.
You're doing the inspecting so whoever wins out I think where he has the lead.
[music].
You are going to be in the process.
Inspecting anyway right.
Yes, correct I mean, we don't we haven't given any exclusivity to anyone for fall and micro needling. So he can go.
It was or what are you anticipating the team I couldn't can buy on inspection system.
Yes, now he's lines that are I would assume.
Uh huh.
50, 500000 dollar price ticket for each lease pick and place machines by Tayo I see.
So my question to you is.
Do you have any idea.
How many of these pick and place machines, whether its water to go go with each line.
Right.
And it really pushing that should be on stookey and I see what he's moved into like interview that it's multiples.
We can taste machine.
Fortunately or unfortunately for us how they skew system goes lightning fast compared to a pick and place machine.
So.
Similar dollar standpoint. This more thought was put in line for pick and place because basically fluid entities like people machines and ask you can go much faster than if the company's machine gets.
So that's.
While standpoint.
I think on each line you said you can walk to succeed your machines, which is roughly about $100000 a ticket right. A piece is that correct I get that right.
The number six is good I couldn't be I've mentioned that before the price points when they get more than undertones, and all of us or whatever they basically put excusable them back and certainty.
Hi.
Lending applications, a place where you think about kind of thing there comes a daughter.
Yeah, Yeah, one question I address their joint ventures, I think apples building out facilities in Taiwan play nitrate and Samsung.
After star and of course, where he won't be a winning wahine. So I guess my question is.
What applications.
Sorry can you discuss the applications, where you see the mini micro LNG deeds being used.
You know the primary education end up it easily he has been though certainly open in the past presentations and thing.
Good.
Finally, I think it shouldn't be are going after it isn't likely to anything though is the fact light or is he displays to me that backlighting and meeting back light.
And if you asked me to looking like or anything you can expect a power consumption and pick up like density.
And that Sanofi as CEO for.
Just because you go into.
First application that really me and my 'cause it usually is not the acuity sleep says the resolution subject is fairly course compared to.
These that you've seen smartphones aren't getting these himself left off today.
Uh Huh Patrick is back like education, this significant backing savings to be head.
It's still back like asking some in New York conviction that two of my clarity.
It's really the post lionsgate up is doing on what those applications were dying every month.
Corporate and then my clearly because of their system continues to improve.
And five years or certainly you can just from a like liver diseases, given CD or they just need.
Good compared to give them I thought that color to sneak says what are you starting off it goes back like.
Does that answer your question.
Yeah, No one question I asked us apples so impression of this but I don't I think well he needs the legal at least what I've read.
Samsung obviously.
Wants to get in there, but you know, it's apples and they're trying to do this one do you anticipate easy to a gas out there and then I'll start getting into the smartphones.
Yeah.
I think because no one really comment on any specific customer Oh look exactly like Oh, no no no I'm not going I was just about not.
Not a specific customer I mean, just in general into that you know.
We know.
Okay.
I didn't mean give those based on a lot because we have said during that said I'm you're already has predicted Nick announcement, it's fair to say that multiple lines will be in started here for Michael It really came out we definitely expect.
And if it affects coming and not Sq product line.
This is my people excuse for the mind you need to be.
With that let me see all of that getting capture and that's what are the fact of Luckily factor, but whenever an important factors might be feel good about growth in SQM Odyssey Teradata is because micro did either go to video and we definitely have the leading position for inspection in micro and you need I know for this particular technology.
Now I didn't speak with Cork in Safa and they said you know probably 30 to 70, but they said next year should even be greater or self these lines are coming out and they said second half of the here does that mean, that's when you expect a nice pick up.
So you in that area second half of the year.
Oh.
Before I start or would they feel that people looking at the school is continuing to talking with people.
Oh partners that us, giving effect on sort of just one or two so there's a lot of activities going on in my Goody Goody Twentytwenty is that you live in screw it up is starting.
He feels pretty good about that.
For the home in schemes and Senselessness in Kentucky.
I would I would still staying quantifying the quantified because I'm backing.
But if somebody who's going to be PNC.
Like people are People's itself.
Good.
Surprised that they went tencor deflated because that level.
Oh, sorry, I was still but it's right there on their off first quarter release 30 to 70 million second Avalere and then they are what we call up they said they expect.
Next year to be even.
Very robust so a lot.
Okay. That's it for me it's right I've got you know what would then be too [laughter] because yeah.
[laughter], they'll say that that'd be really scary Darren.
Yeah, and I started out the needle on the weather so.
Thank you. Thank you.
Thank you we can take our next question from Josh Goldberg of GE to please go ahead.
Hey, guys I just wanted to.
Make sure I got these numbers aren't so your ass Q3 thousand business was over 7 million in the corner.
All right.
Okay, and that was 91% year over year.
That it's correct.
That was your biggest or Mark a biggest product line.
Uh huh.
[noise] seems like it was it was by far your biggest quarter with that product line.
Yeah. It was a great quarter for for the EPS Q.
Okay can you talk a bit about applications are you seeing it being used for now the opportunity a weird that products, especially on the I believe your product is called the laser gauge.
Cybergage Im sorry, we're you know when we talk about real there's opportunity in inline inspection consumer electronics opportunities and stuff.
Give us a little sense now that the end of years, where it is.
You had a really good to be honest Q3 thousand what could we see in 2020, just from that product line for semi cap.
And obviously on the other application down and I've a follow up.
Oh, so good question I mean, it's too the baby. So there's only so skews and multifunctional system Vicki clean cut off for us because the time when he said visit Eli application automated optical inspection, but the team system goes for solar paste inspection has been as the any lying C. M M cord cutting machines.
We said it doesn't multi function like doing the same hardware. It gets very soft with custom against me that's roughly be asked on let's see let's see and Steve.
This is the the fone hundred and when you go under $30000, depending on often sometimes you feel good work if anyone options.
But the point is that your revenue your revenue per per hardware. It wasn't that much higher see rachi basically should double as many systems in the December 19 versus the December quarter.
Sure It sounds a higher price machine clothing segment.
So I want to have.
No I was saying that got obviously, you're not you're not you're not having a big pricing increase to get there isn't a 91% growth you're younger I don't know that we've got our door locking in Colombia, if anything that is ongoing price they should in this marketplace.
Because of our differentiation I believe you are right because it was and is less than some of our company principal into that kind of because he is and what if anything that is facing version and the U.S.. So clearly because I want him to them.
<unk>.
So then I think I didn't know wish him well do not investor presentation deal on display.
The next on the log exports.
Auto market for this can be you lie.
Persistence is filed a couple hundred million dollars right now and the market is projected to put all.
35% to 40% or the next five together, that's the good or excellent before statistics and that's the market that you.
But I'm going to.
No because he had the seemed like see amendment SP on maybe the marketplaces and bigger bigger for us, but I can you I want to consider dominance numbers.
Also right now the other thing.
Year to about eight or 9% market share.
And you have grown creating picky 19.
The market share.
And we expect to continue to grow that market share.
Giggles and fine beyond.
And we do not doesn't that many players in this marketplace and lot of competitive dynamics going on.
Because we are playing into Hyatt and so typically article on one side.
Not a company that cared about quality and doesn't seem to be price for that quality.
Typically don't play into doing.
Chinese yes, if you feel the prices of big effective.
So a majority of focus coupled with Oh fortune 500 or type companies.
That have been online or on contact them like they couldn't tools and line.
And I believe before the quantity.
So that on market share you can do or don't like a should lead to 9% I believe our market share that don't forget is much higher than eight or 9%, probably more than 30 or 40% off the oh.
And what actually I've said in the bottom together there are places are tightly.
That's a market dynamics market is expected to grow and we expect to cool and market share in fact growing market again trying to dominate that don't think oh and at participating a little bit into big deal.
But staying away from the bottom deals at places like I was.
So what are the next five years, so be it will be fair to say, just so I'm, making sure I understand it's fair to say that you're exiting at around 7 million dollar corridor.
Obviously not projecting it to be.
Some of my every quarter.
Maybe you are.
But if this segment is a 30% to 40% grower.
You are seeing me.
Semi cap equipment come back and some of your other projects are you now one.
Well, we have to stay on why you are not a.
20, 530% growth company in 2020.
I mean, clearly it's good is a big diebold and angle gifts, either they're trying to maximize our go to create as much as possible using excuse the Tyler.
We have what that brought us to that Oh that are not going that's I think if anything they can see.
It's more of it but it's too.
Flattish kind of a number.
At our.
Because it's been growing again, but not at the the technical school is predicted to cool.
The mitigating factors that you won't get different than if it over 30 or 40% growth that's going on in Eli.
Oh, that's the kind of externally.
It's hard to know exactly the market goes equals 30, 540% yeah.
It is being seeing something because it has there been any any big any big new design wins that you want me best Q3 thousand in the last three to six months and you can colored investors to.
Yeah, I mean as you know one one that we're very very positive on and we talked about or with the last quarter age micro LNG I mean that there's there's significant growth potential with that particular application.
So it's about that would be just wanting a but there's others as well.
So definitely three d. allied component shrink.
As packaging become more complicated skin it drives the need for three D. line, particularly high entry Eli.
There you know we feel like we haven't got from a competitive advantage with our Emerus something technology.
Okay, and then just Jeff because obviously the product mix hurt you.
He was a big part of their mother or some other parts, but can you give us a little bit more granularity that just means up.
Versus Q4, the need to average around 44% each in the last few years since a fair to say actually the right number.
In India and fourth quarter as I talked about meant a lot of it is really due to the.
Just some by product line being being down lower than what we thought.
Describes himself on a lot of that is just any timing converted we set our orders were pretty good but I you know I wouldn't think our you know our margins certainly can be up.
Back to the.
45% level.
And that type of area for sure they definitely should improve.
And I realize that you know a people are saying that they're not your Nazis the impact during the current viruses. Your press release said, but can you tell us what would be what wire to not why you're not that concern right now and what what would help you.
That makes it different than somebody other that do that are highlighting damage as a reason for first quarter that might not be a strong. Thank so much.
So here, though so the impact of put in a letter from the supply side as you know the most of what critical components with the right here in Minnesota.
So we do get some foreign facilities, including China, but.
I would it be able to scope that we used the authority.
So it was.
Knocks on China, but from.
So since.
Autos influences, but not like China.
On though on the demand side clearly the biggest going into China.
But because of the like I wish for corporations that have locations in China.
Except for one or two five though.
On 80 Oh.
As I've said it can be small their fabs be evident that can be seen anyone.
Basically shut down their facility.
Along theater fine.
The company into order that you have at least it couldn't be more because we couldn't be differences. So long as the freight forwarder kind of everyone can deliver.
You haven't seen anything materially change on the demand side yet.
It takes action or maybe even though too fast can do on 80 as I said.
So if it's more things change and he gets it can go to more cancellations or deferrals.
I think everyone, but as of today. This is pretty good of ore declined guidance young people in there and I think I'd be minimal.
Hopefully that answers your question.
Yeah. Thanks, so much.
Thanks.
Thank you you can take or next question from Bill does that of Titan capital.
Thank you nice quarter.
One of the paragraphs in your press release referenced a particle sensing with the lift. So we would you. Please talk through that Oh that opportunity I mean, those tools tend to be very expensive.
Our youre or your parts that could work or a systems it could be a tight with that also quite expensive less expensive.
So it's a popular as much of the opportunity as you can place.
Sure. So as we as you said about itself that's at least.
This is in line particle control these basically leveraging on be Clinton's part because sensors ethical escreen took the same particle control say so these are sketching device.
Because you got to essentially getting back of the particles and using a full took you take the becalmed, how many party consolidated that given a unique mortgage.
Actually quantified exact number up articles and looking at different bins.
And that tends to customer knowledge and understanding what maybe going on in that process.
So what im not really ought to be Perkins articles and for the two and doesn't make sentiment.
People with a gun here things don't finds it seems like a wireless sentiment.
In this case, what we have done is.
It's the same particles and for us.
But if you go into dialed back either computing the pumping Oh.
Basically a fight and be created us if they've been Judy kind of anything so be cans could skecher like you don't fight because he can do it in a vacuum.
So the increased about open before and be changed a little a good thing to.
Neither do they should have already goes thing. So it makes sense same concept, but think of food and mechanics. It seems.
Hey, so the particles that eightv audits asking it fell on a multiple you'd be right now.
He does looks very promising customer it seemed like the founder.
That's why be announced it and now they're making it available for garner a suicide.
Unfortunately, it's fairly exciting this.
Roughly a 100 you'd be too like my word wider degnan, but continues to increase your just had to look at U.S. and there's other things people would take one piece I'd say the accurately.
About expenses due to mange could I can mention the midstream goes for they could enter into thinking billion dollars.
And just about 100 of them out there and the numbers going down about 15% dose or the yard.
Most of what do we thought it didnt see fans that I know, but over time that number that is expecting things.
The opportunity is essentially.
Hello.
Yes, and put in place people or something like on the easy to and they should the particles.
Oh and give that cater to the customer who would prefer thinking you know who really look at any any they'd be deport or particle concentration increasing that would be an indication for than that because if that efficiency could be jeopardy, and they do something you know for gas 40, plus much today, they cannot do that so.
Do you have kind of guessing what maybe the put on them and then based on that yet they actually shut down to two and do the for the kids. So they need to be good order doing it on better doing it and it takes me to problem for them for you then productivity I mean, they're going to spend that much of that to productivity is a big issue obviously so.
So any team that helps them into the union productivity is a big deal for you.
But nothing and that could be anymore, I guess is targeted to.
So we're pretty excited about the opportunity.
Existing to set up there and sort of Indiana. The population continues to increase to get more and more customers that way.
Does that answer your question.
Does a and follow up if I make lease so how many.
Are you are sensors or would you anticipate selling or I guess more to the point.
What would you think has as the minimum and maximum revenue potential potential CRE per unit.
Per let's though unit and that a that you could be a selling.
That's what though I mean, but just want to quantify because we don't know exactly how many IP excess each customer humans, one fabric, who is multiple than five because it was less than Baird.
Exactly hoping they didn't use for it to be open somebody because I just high number, but it's really tough to see the actually see hodee, who couldn't use and how would you then productivity benefit they are getting.
Just like any up or solutions most of our customers.
Hi, Alan talked artists do anything done a lot of like a condition and then decide how many of them on.
And.
The good thing.
He was a few more months here says do we know what kind of ROI on you because kind of getting but this product before you can see how many sport to do that being.
And then I mean do you know obviously the price point.
Have they can sell cousins of daughters.
Like most of our rental since products off.
So once you have a feeling for the volume there would be able to go get can sector.
No I don't know what I would say auto they put since continues to grow and be viewed this as part of extension of the recent since family.
They should it has the group they don't fit for since going forward.
That's helpful to see where is the minimum and maximum for easy to make this funny.
Thank you for the prospectus about.
Thanks, Doug.
Thank you.
It appears there no further questions at this time.
I like to turn the conference back for any additional for closing remarks.
Well. Thank you probably an interesting questions. We look forward to updating you on T lymphocytes and forget.
Ladies and gentlemen, this concludes todays conference call. Thank you for your participation you may now disconnect.
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