Q3 2020 IPG Photonics Corp Earnings Call
[music].
Good morning, and welcome to <unk> third quarter 2020 conference call today's call is being recorded and webcast.
At this time I would like to turn the call over to Angelo Lopresti, <unk> Senior Vice President and General <unk> General Counsel for instructions. Please.
Go ahead Sir.
Thank you operator, and good morning, everyone with US today is I P. G Photonics, chairman and CEO Dr. Mountains.
Chief operating officer, Dr. Eugene sure recall.
Its senior Vice President and CFO, Tim Mammen statements made during the course of this call that discuss management's or the company's intentions expectations or predictions of the future are forward looking statements. These forward looking statements are subject to risks and uncertainties that could cause the companys actual results.
To differ materially from those projected in such forward looking statements.
These risks and uncertainties include the impact of the COVID-19 pandemic on our business and those details I peachy photons.
Okay for the period ended December 31 2019.
Other reports on file with the Securities Exchange Commission.
Copies of these filings may be obtained by visiting the investors section of IP G.'s website or by contacting the company directly you may.
May also find copies on the Fccs website.
Any forward looking statements made on this call are the company's expectations or predictions only as of today.
October 30, 40, Twond copy assumes no obligation to publicly release any updates or revisions to such statements.
For additional details on our reported results please refer to the earnings.
Press releases and the XL based financial data workbook posted to our Investor Relations website, we will post these prepared remarks on our Investor Relations website. Following the completion of the call.
With that I'll now turn the call over to Valerie.
Well good morning, everyone.
During my three excellent they can dig too.
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I would kill what scale bugs in ways that cooperation like lenient application Oh continues to gain acceptance.
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Develop new soft tissue might you can pretty much you didn't put it that way said well Monday occurred at a level that is a notion on the line spectral it's gonna be inspection Vincent and by a major govies switching applications and New York I speak to events you are.
Poor chillicothe them when they have called Mark.
I want to conclude.
Well I think in our employees or that the Rowan you because they're cute and do it in one of their most chitlins in video with in our Companys. She study did.
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Good morning, Dan I'm, good money have anymore.
I will begin by discussing the effects so quite luncheon on out of production.
Oh city or automation production facility in Germany, the U.S. and Russia remain open and operating normally.
I haven't seen any disruption of our money for extra although service capability is that each also rounded out the right.
Our global Force you, let your operation on Loggerhead normalized basis.
All between social do you still see him and I'm house cleaning and filtration mattress in place.
In addition to you.
Back to normal operation promptly after the report does a ransom at dock in September.
The engine incident do not have any material impact on our business operations financial conditions or on our ability to report financial results.
As we disclosed earlier recurring cyber im sure else to cause this type of risk or no.
No. So that's I'd be GE is conducting an analysis to improve their security and resiliency of our systems.
We continue to benefit from our <unk> integrated production model, which enables.
Kim acknowledges it took I wouldn't call them cost advantage as well to compete diesel while minimizing their supply chain disruption.
That got him constraints on our business, primarily due to speak cells on travel that affect our sales team and the customer visits related to applications development.
Well this is Dick let 'em asked imbark and silk water and we did not encounter any meaningful disruption of our ability to ship components and finished product at all over the world.
As a percent of sales chicken cost well, that's a lot more than they were in the second quarter.
They continue to benefit from reductions across all devices and put all the capacity reduction initiated undertook in the second half on train to like him.
Gross margin improved to 48% this quarter.
The total C G and H and the guarantee expenses increased by 2.8 million to 78 meter as the second quarter compared to the 75.3 million in the second quarter, while still sort of in the <unk> increased by 20 to me though.
Operating expenses continue to track well below the peak level of 84 million and card you know, it's a second quarter in 2019.
Examining our performance by these revenue in China increased 22% year over year.
Represented approximately 47% of total sales.
New order was booked in China, but a slow at the beginning of the quarter, but picked up in September.
However, a pensioner country, China continued to have a significant backlog give us the exceptional level of orders booked in the first half of the year.
Well, we have faced aggressive competition and that is up for lasers at six kilowatt and all you continue to maintain share at key accounts, while dissipates as a strong mix of laser at 10 kilowatt hour auto grade them in the future.
In Europe revenue decreased 10% year on year due to the effect of call. It nine Jim on many companies in the city to.
Similar revenue in North America decreased 26% year over year this strong growth in the medical.
And the last application I'm, not being sufficient to offset declines in lasers.
And system sales for material processing.
While North America revenue was the big deals this quarter. It was notable that order book and what exceptional benefited from several large orders for all they do ask applications for our unique a green lasers used in annual and outages penetrate.
Sales in Japan decreased 41% year over year, while of course mine to infect cells right. It was anything below our other country or there's any curious stop.
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He is in our building and cutting businesses in Japan.
Sales to the rest of Asia increased 6% year over year, and they're calling from the second quarter. So it was a false.
And also benefited from shipment Oh, Hi, Paul is a formidable publications.
Sales in dark increased 15% year over here.
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Global demand trends.
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I don't think we have seen continued until April but after that globally.
Which makes the execution of the support that all the more notable.
We continue to believe that out a lot.
And there was a drop of materials and components technology platform already shown that into your model and our strong balance sheet and free cash flow, but I like us.
I'm, probably pretty severely tier three sponsor business disruption.
And he means from pandemic and stronger competition competitive position.
I thought I got on the call I would have put James to discuss financial highlights it was like what else.
Thank you gene and good morning, everyone.
Revenue in the third quarter was $318 million, which declined 3% year over year, but increased 7% quarter over quarter.
Revenue from materials processing applications decreased 5% year over year.
And revenue from other applications increased 24%.
Sales of high power CW lasers were flat year over year and represented approximately 58% of total revenue.
Sales of Ultra high power lasers that six kilowatt school greater represented 58% of total Highpower CW laser sales.
Pulse laser sales increased 3% year over year with strong growth in green pulsed lasers used in solar cell manufacturing.
As well as higher sales of our new UBI and ultrafast pulse lasers.
Which were partially offset by lower sales of lower power pulse lasers for marking applications.
Systems sales decreased 37% year over year.
As growth in systems for medical device manufacturing was offset by lower sales of the IP G laser systems and Genesis non laser systems.
[noise] medium power laser sales decreased 1%.
On continued softness in additive manufacturing and the transition to a kilowatt scale lasers in catching.
Q CW laser sales increased 21% year over year firms.
From a sequential improvement in consumer electronics applications.
Other product sales increased 8% year over year.
Driven by growth in medical laser sales.
Q3, gross margin was 48%, which.
Which increased 160 basis points year over year.
Compared with the year ago period, the increase in gross margin was driven primarily by lower cost of products, which was offset by an increase in inventory provisions as compared to the year ago period.
Third quarter GAAP operating income.
Was $41 million in operating margin was 13%.
Good will impairment charges related to Genesis systems group reduced operating income by $45 million and reduced operating margin by 14 percentage points.
The results of this business were impacted by lower capital investments from industries impacted greatly by the COVID-19 pandemic, such as aerospace and transportation as projects are being delayed.
We continue to be focused on numerous opportunities for genesis, including transitioning to a higher percentage of laser based systems as well as expanding the international systems opportunities.
We are hopeful that it will ultimately enable progress to be made on broader based laser welding applications across many different industries.
During the course that we recognized a foreign exchange gain of $11 million, primarily related to revaluation of U.S. dollar cash and all the assets held in Russia, given the depreciation of the ruble versus the U.S. dollar.
And to the decreased onto the appreciation of the Chinese want.
The foreign exchange gain increased Q3 operating margin by 350 basis points.
Q3, net income was $36 million.
Or 66 cents per diluted share.
The goodwill impairment charge reduced EPS by 63 cents, while foreign exchange gains benefited EPS by 15 cents.
The effective tax rate in the quarter was 16%.
If exchange rates relative to the U.S. dollar had been the same as one year ago, we would have expected revenue to be $4 million and gross profit to be $3 million.
We ended the quarter with cash cash equivalents and short term investments of 1.3 billion and total debt to $39 million.
Strong operational execution resulted in cash provided by operations of $17 million during the quarter.
As a result of COVID-19, we have reduced our planned capital expenditures for the year.
Capital expenditures were $25 million in the third quarter and we now expect capital expenditures will be in the range of $80 million to $100 million for the full year.
During the quarter, we repurchased 61000 shares for $10 million.
Bookings growth in North America, and Europe was strong compared to the second quarter, while total orders in China were low.
In North America, we had record bookings aided by several orders for advanced applications and emerging products.
Well chunky orders in China for the third quarter Willa, China continues to have a significant backlog given the exceptional level of orders booked in the first half the year.
In total third quarter book to Bill was slightly below one.
Overall it was also notable that order bookings improved markedly during September.
It is difficult to predict whether the improvement in some macro economic indicators will be sustained.
Even the resurgence of COVID-19 in Europe, and North America.
Its potential impact on economic activity.
He's uncertainties continue to make full costing all business challenging in the near to medium term.
That said, we continue to benefit from near term growth opportunities in ultra high power cutting electric vehicle battery processing medical procedures and advanced applications.
We believe the strides we are making in how high power products within our core materials processing business and new solutions will enable us to emerge from the current downturn.
In a stronger competitive position.
For the fourth quarter of 2020, I P.G. expects revenue of 219 million to $320 million.
The company expects to fourth quarter tax rate to be approximately 25%.
I P.G. anticipates delivering earnings per diluted share in the range of 75 cents to one dollar and five cents with 53.1 million basic common shares outstanding and 53.7 million diluted common shares outstanding.
Financial guidance provided this quarter is subject to greater risk and uncertainty given the COVID-19 pandemic.
And its associated impacts the global business environment public health requirements and government mandates.
As discussed in the Safe Harbor passage of today's earnings release.
Actual results may differ from our guidance due to factors, including but not limited to goodwill and other impairment charges product.
Product demand order cancellations and delays competition tariffs trade policies health epidemics in general economic conditions.
Our guidance is based upon current market conditions and expectations assume.
Assumes exchange rates referenced in our press release.
And they are subject to risks outlined in the company's reports with the FCC.
With that violence in Eugene and I will be happy to take your questions.
Thank you.
At this time well be conducting a question and answer session.
Due to the number of analysts joining us today, we ask you limit yourself to one primary question and one follow up question.
If you like to ask a question say please press star one from your telephone keypad and the confirmation tone indicate your line is in the question queue.
You May press Star two if you like to remove your question from the Q.
Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star Keith.
One moment, please hold we poll for questions.
Thank you. Our first question is coming from the line of Jim Ricchiuti with Needham and company. Please proceed with your question.
Hi, Thank you good morning, I'm wondering to follow up on the comments you made about the bookings picking up in September can you elaborate.
Where where you're seeing the activity and to what extent that.
Maybe they have been sustained thus far you know in October.
So Jim good morning, Yeah. So the phasing of orders in the tone of orders in the quarter was it a bit weaker in July and August and was really exceptionally strong in September.
That strength was driven in particular by improvements in North America, and China overall, the order flow in Europe was a bit more even it was actually stronger than it had been in the second quarter.
The North American bookings as we referenced benefited from a.
African orders for advanced applications, some of which are scheduled to ship in Q4, and some of which are probably going to be Q1, we may be able to get some of them into the fourth quarter as well very strong orders for some of the emerging products, particularly green lasers, and even better old is during the course of a slightly better what is the UBI and ultra fast.
In October or.
The first week in October China was actually on holiday. So there was there was no activity in China, but since then particularly in the last week in a hall.
Overall tone of order flow has actually picked up in China. It's been it's been quite strong in Europe since the beginning of October which is interesting.
And in North America in the last four or five days, it's also improved.
Meaningfully we what we've got another order for green lasers from from Southeast Asia as well. So we're actually quite pleased with that the general tone of order flow in the business.
Given the disruptions that you're seeing in the market.
Got it and just on a.
Curious, we're hearing more and more of data a pick up in the automotive market are you are you seeing any signs of that in the business, including you know potentially in the Genesis business.
No. It wasn't Genesis I think automotive there is certainly a a little.
A little bit more strength to it it's difficult to bifurcate it between traditional levy, there's a lot of investment going on in E V and that's not just happening in China. The significant orders were waiting for North America as well for this as an order. We just took this week for TV.
I'd say that the order flow in Europe around automotive is still a little bit a little bit weaker.
So it's a different there's a lot of that there's certainly a significant pipeline of automotive activity, it's a little difficult to bifurcate it between traditional applications in the emerging E V applications.
Got it thank you.
Our next question comes from the line of John Watch any with Stifel. Please proceed with your question.
Thanks, very much I'd like to go back just a little bit to the order commentary again, you know the North American and European I think is understood to be a little bit more tied to those regions recovering a bit but I'm curious you know from the China perspective, you are having.
Having those orders get off to a little bit of a slower start it now coming back a little bit. If you can discuss maybe some of the dynamics that are going on there in that market and then as we look out into 21, and I know you're not specifically given guidance there, but should we expect that the China business, maybe back more towards the 19 car type of levels or do you think something has.
Change there as we're looking out into 21.
So.
So a lot of different aspects to that question.
He did the order flow in China has been a bit.
And Colin anomalous this year right. We got this very very strong order flow in the first half of the year. We reiterate we have very strong backlog in China. What's been good to see is that even with that order flow in China and the general tone of the business has been quite positive in September and October.
So you can't really call. It normal just because the backlog is strong but also the tone generally tends to be a bit more positive at the moment. The feedback we got from our China business is that Q4, the tone for business remains relatively good recent presentations from then for opportunities in 2021 are significant and meaningful.
Oh that driven by things like E V. The transition to higher power Ultra ultra high power cutting applications.
With any v. its battery welding it's.
Cleaning applications its foil cutting so that helps us because of the high power pulse lasers.
There's actually some interesting demand that may come out, even though some additive applications in China.
That seems to be a broader base potential for the application sets in China and there are a very significant number of opportunities that they're working on their even working on looking at displacements of C. O two lasers within traditional automotive industry, where they've identified.
I wasn't don't see or two lasers that still potentially could be reduced so if the economic.
Underlying economic stay relatively strong in China, I think you see that investment cycle continue to I will reiterate on the order flow North America was was was was an extraordinarily strong quarter for us and the good thing about that was just the diversity of applications. It wasn't materials processing on its own it was let's say some of the advanced.
Allocations it was under the micro materials applications.
We actually had another order for medical and in October So that wasn't quite Q3, I think we called out the strength during the quarter from revenue and bookings on some of the semiconductors applications as well So North America was.
It was really a.
It was an exceptional quarter for us and I think it was even record or.
A record booking level, if you exclude some of the systems businesses.
Thank you.
Our next question is from the line of Nick Todorov with Longbow Research. Please proceed with your question.
[noise] yeah, good morning, everyone.
Just want to understand again going to bookings you mentioned that China backlog remains very strong and several times.
Can you help us understand how should we think about seasonality.
Obviously, but this is not a difficult period of time, but as we go into the December and March quarters. Typically you know the business in China goes down a little bit, but how should we think about that relative to the backlog comments and the comments of order pickup in September and October.
Well, we're not going to give any commentary around Q1, it's too early to do that I think the seasonality in China, that's baked into our guidance is.
Fairly in line, even though it is a different difficult time to pick that up.
Revenue in China would be slightly lower offset by strength in some some other regions.
China has been giving us good for costs that they beat intending to get towards the top end of that range and I think it just depends how the tone of the business holds up there I think we've given a beyond that I think there's an awful lot of commentary I've already given around orders in and the tone of the business and these different regions.
Okay, and then I would say.
In Q.
Talk about there's been no internet users, what that new or some unusual what excites you put on there and the you know where your ultimate seem to do well or whatever would you.
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I'm not going to give all the why is this a broader so where did tighten and now they are well aware that if you win in China with you just thought there were under water.
Oh on the is this score that's all.
Oh, we'd be aware that its very beginning next year or what else would be what is usually a bit. So do you have what it out to put all that in Spain, and everything you were in China, and what the Lynch I know worldwide.
Okay.
Thanks, a lot.
Just as a follow up Bob I think Jim can you comment a little bit about the implied fourth quarter gross margin.
My math is correct that it implies about mid 45 percentage, yes, where if I look at the revenue.
That as revenue, it's about 15 to 20 million higher than the June quarter, where are you guys set up a 46% margin. Obviously September was very strong I headed by FX can you help us understand the implied gross margin in the puts and takes it for December.
No the implied gross margin very similar actually to Q3, it's 45, just sort of 48% at the top end of the range. So that as you tend towards the top end of the range, you're getting into the up off of a 45% to 50%.
I'm I'm, assuming for operating expenses something.
Pretty similar at the top end of the range and slightly lower.
So I'm not sure whether youre, saying, 45%. We can you know come back to that in a bit more detail later, but so I'm I'm, assuming 45 to 48 operating expenses at the top end of the range similar to Q.
Free at the bottom end of the range slightly lower and then at a tax rate of 25%, which would exclude any discrete items that we can't really predict or what they would be during the quarter.
Got it thanks.
Thank you as a reminder to ask a question today you May press Star one.
The next question is coming from the line of Michael <unk> with Bank of America. Please proceed with your question.
Hi, guys. Thanks for us. Thank you for taking my question.
My first question just on the high power lasers. It was flat year over year. This was the first quarter that it was it down on a year over year basis in in nine quarters. So I'm, just hoping you could kind of help me understand into.
In fact, if we assume based on your guide for Q4, the high power lasers are going to potentially accelerate on a year over year basis like how do we think about what that does does for your mix since it's been really down for the last nine quarters and now it seems like it's flattened moving into right direction.
Yeah, Mike I think that's great color. Another high power was basically flat year over year and given the circumstances I think that's a pretty interesting observation and a great performance. We benefited from clearly the shift towards ultra high power that we've called out where we have significant advantages in in terms of just.
The quality reliability electrical efficiency capability of producing that product interestingly. The Wyatt all lasers are also performed quite well, we called out that they actually grew year over year as well. So I think that's continuing to demonstrate the again, the overall quality and reliability of the product that we have versus the competition that shows when.
Not losing share that we referenced that we also sold some single mode lasers for advanced applications that helped a bit with social high power laser sales in the mix that we've got this very strong backlog.
I'm single mode lasers, we actually took a tour of the orders taken in the U.S. for 400 kilowatt lasers. So that's for applications outside of.
Materials processing.
Yeah, I think that to the performance of that high power lasers was driven by those factors I also called out that that's actually and we've got the new Ultra compact you series in the hands of customers and they are evaluating it the performance at less than full kilowatt laser range was before significant orders being risk.
See for that product so there's potential.
Improvement in 2021 as that product ramps up at the low end of the market.
That makes sense and can I want to ask about your your inventories are if you look on a year over year basis. Your inventories were down year over year much more than your revenue is we haven't seen. This is 2017 I you talked a lot about last year you know some of these inventory charges that weren't.
Hey, Ken and you look now I mean, your inventories your kind of flattish while your sales were accelerating quarter over quarter. So can you just give me a frame of reference how do you feel that your inventories right now do you need to increase production maybe match. This demand where your inventories are now and where you think demand might be heading.
It's a 2021 thank you.
I think that's good operational question Eugene What's your view on inventory on the investments and the overall control and execution around that at that time.
Oh, let him answer that then.
For sales up nine to this delta control much more precise or even thought in different facilities I mean in Germany, United States also especially in Russia, and I I don't know if this is counter all that got in Peru.
Our Oh.
Our Oh position I was just <unk>, yeah, I mean much more control.
And ER from this point out for you I think we'll continue.
Or check the control.
And to keep our inventories are the exceptional level.
It is and then thirdly.
I'll put it didnt went through <unk>, but still classes this year or would it could it go year Wednesdays to all the sports is right or we will components and parts couple I'd outside sources.
Where they see it as well what women do your way and the average delivery time no.
Components. It so increase in some time, so we do without in window to get it didn't order much but all of them and yet on your fixture in our product what we felt for now we're going to win or the Oh passive without any problem.
<unk>.
Got it.
Thank you.
Our next question is from the line of Mark Miller with Benchmark Company. Please proceed with your question. Thank you for your question.
Considering a possible change in administration, United States possible impact on tariffs.
I mean any thoughts about that in terms of how it might impact I P.J., if such a thing would occur.
I think we'd mark we don't.
I'll get into discuss [laughter] the outcome of the election to see what happens on that we're a global and international company that operates in multiple end markets I think for us at the moment, it's more the underlying economic growth that is expected next year globally. So GDP is forecast to grow.
Rebound quite strongly on a global basis, the most interesting and important thing for us would be whether that is actually sustained or whether the the pandemic has an impact on that I think the outcome of the U.S. election has is more muted relative to those expectations I think the other area that we are absolutely focused on is this diversification of the business the new products.
At different wavelengths different pulse durations addressing different applications and how we execute around those and that again is on a on a global basis.
I don't want to get too hung up on on on the election results and I think that's all the more.
In the near term at least parts and things that could impact with a global GDP growth is robust or not next year.
And just as a follow up could you estimate what percent of sales are coming from products introduced in the last two years.
The number we gave on emerging products, which is not quite the last two years. It does include some high power pulse lasers, but getting to high milestone that was 21% we gave that number in the.
And in the script thank.
Thank you.
Thank you. Our next question is on all coming from the line of Tim definitely with D.A. Davidson. Please proceed with your question.
Hi, Yes. Good morning, Tim you mentioned gross margins of 160 basis point improvement year over year, driven mainly by cost.
And for that pricing has been relatively stable for you over that period of time.
Are you on a year over year basis pricing I, She's still came down it was more in the 10% to 15% range. It. It it's more of a <unk>. Some of that is also changes in sorry, 10% to 15% on an average kilowatt basis in.
In fact, if you looked at Highpower average selling prices were up or down.
Down significantly less because of the transition to higher power levels. So.
You still got competitive dynamics and pricing issues that if you look at oil interesting. If you look at order flow through.
Hey, S.P. somebody asked the analysis around orders taken in Q3, they were actually slight improvements on that because of some of these ultra high power lasers in single mode lasers that we booked but also the exchange rates have moved a little bit in our favor at the moment. So the renminbi is a bit stronger the euro is a bit stronger.
That helps with the DSP.
Trends a bit so the other side equation. It just it continues to reinforce the ability of the company to reduce costs on product.
This is as I said, even before the new compact why it all use a introduced I certainly some benefit coming from the U. The wire that use but there's also the product mix benefits as you go to ultra high power lasers stronger sales of things like Green lasers stronger sales of ultra high power high power.
Our second pulse lasers. These are all areas, where we have a competitive advantage and where the value proposition deliver to the customer is exceptionally strong.
Okay sounds good and then on the the booking strength, especially in North America, how much of that do you think reflects just some pent up demand from a couple of quarters of coated versus you know matching the true underlying demand level today.
Oh, the bookings starting in North America was no we reference to it really came from newer products and newer applications in advance. So it wasn't necessarily driven by a rebound on them. The core materials processing applications. We started to see some more recovery about I think probably in September.
And more recently in October where we started to see some of the cutting Oems placed some orders there's a significant order on on automotive we're waiting on at the moment. There was an order taking older merger. So the real trend on Q3 was from these advanced applications and strength on some of the emerging products in green and you'd be an ultra.
Ultra fast.
Okay. Thanks for your time.
Thank you. The next question is a follow up from the line of Michael Feniger from Bank of America. Please proceed with your question.
Hey, guys. Thanks for squeezing me back in I am just curious Tim I mean, what's your cash position, where it is I'm curious I know you took this impairment Genesis.
You know what did he really learned from Genesis and with this cash position do you think I think he can be moving more aggressively in terms of acquisition to help drive that penetration on welding. You know how are you guys thinking about that that cash position as you head into 2021.
Sure I mean, the cash position and the strength of our balance sheet has been a a very significant.
Advantage to the company during the last year, particularly given the volatility in the macroeconomic environment. It leaves us with a tremendous amount of firepower to look at potential acquisitions and investments in new technologies.
And they're learning points on jazz Agenuss has unfortunately been very impacted by COVID-19, right. So there was a lot of growth opportunities and things like aerospace that we were looking at particularly on the laser based on the aerospace industries.
I mean, everybody knows it's just a complete mess at the moment. So it's not that we don't think Joes is going to be successful I think that it has just been impacts and it's going to take a bit of time to to get that business to recover on the overall acquisition strategy. We continue the successful acquisitions, we've done have been around looking at technologies that really fit with our lasers.
The acquisition of L.D.D. in Canada is driving significant revenue opportunities given the real time, well monitoring capability the acquisition of Optik rates in.
In Florida really enhances the capability around ultrafast lasers, and also even in and helping with some of the diode specifications.
Well position to look at it you know strong technology acquisitions that benefit the business.
Thank you.
Thank you at this time, we've reached the end of a question and answer session I will turn the floor back to management for closing remarks.
Thank you for joining us this morning and for your continued interest in Nike G. We look forward to speaking with you over the coming weeks and we will be participating in a number of virtual investor conferences this quarter.
Have a great gave you one.
Thank you Jim. Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.