Advanced Energy Industries Inc (AEIS) 2016 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Advanced Energy Industries' Q3 2016 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions) As a reminder, today's conference call is being recorded.

女士們先生們，美好的一天，歡迎來到 Advanced Energy Industries 2016 年第三季度財報電話會議。此時，所有參與者都處於只聽模式。稍後，我們將進行問答環節，屆時將進行說明。 （操作員說明）提醒一下，今天的電話會議正在錄製中。

I would now like to turn the conference over to Annie Leschin. Please go ahead.

我現在想將會議轉交給 Annie Leschin。請繼續。

Thank you, operator, and good morning, everyone. Welcome to Advanced Energy's third-quarter 2016 earnings conference call. With me on today's call are Yuval Wasserman, President and CEO; and Tom Liguori, Executive Vice President and CFO.

謝謝接線員，大家早上好。歡迎參加 Advanced Energy 2016 年第三季度收益電話會議。與我一起參加今天電話會議的有總裁兼首席執行官 Yuval Wasserman；執行副總裁兼首席財務官 Tom Liguori。

By now, you should have received a copy of the earnings release that was issued yesterday afternoon. For a copy of this release, please visit our website at advancedenergy.com. Before we begin, I would like to mention that AE will be participating in the D.A. Davidson Materials Conference on December 7 in Boston, and at the CEO Midtown Cap Summit in New York on December 8. As other events occur, we will make additional announcements.

到目前為止，您應該已經收到一份昨天下午發布的收益報告。如需本新聞稿的副本，請訪問我們的網站 advancedenergy.com。在我們開始之前，我想提一下 AE 將參加 D.A. 12 月 7 日在波士頓舉行的戴維森材料會議，以及 12 月 8 日在紐約舉行的 CEO Midtown Cap 峰會。如有其他事件發生，我們將發布更多公告。

And now I'd like to remind everyone that, except for historical financial information contained herein, matters discussed on this call contain certain forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Statements that include the terms believe, expect, plans, objective, estimate, anticipate, intent, target, goals, or the like, should be viewed as forward-looking and uncertain.

現在我想提醒大家，除了此處包含的歷史財務信息外，本次電話會議上討論的事項包含某些前瞻性陳述，這些陳述受已知和未知風險和不確定性的影響，這些風險和不確定性可能導致實際結果與表達或表達的結果存在重大差異。此類陳述所暗示的。包含相信、預期、計劃、目標、估計、預期、意圖、目標、目標等術語的陳述應被視為前瞻性和不確定性。

Such risks and uncertainties include, but are not limited to, the volatility and cyclicality of the markets we serve, the timing of orders received from our customers, and unanticipated changes in our estimates, reserves, or allowances, as well as other factors listed in our press release. These and other risks are described in Form 10-Q and 10-K and other forms filed with the SEC.

此類風險和不確定性包括但不限於我們所服務市場的波動性和周期性、從我們的客戶那裡收到訂單的時間、我們的估計、儲備或配額的意外變化，以及列在表中的其他因素我們的新聞稿。這些風險和其他風險在提交給美國證券交易委員會的 10-Q 和 10-K 表格以及其他表格中進行了描述。

In addition, we assume no obligation to update the information that we have provided you during this call, including our guidance provided in yesterday's press release. Guidance will not be updated after today's call until our next scheduled quarterly financial release.

此外，我們沒有義務更新我們在本次電話會議中向您提供的信息，包括我們在昨天的新聞稿中提供的指導。在我們下一次預定的季度財務發布之前，今天的電話會議之後不會更新指南。

And just as a reminder, we will refer to both GAAP and non-GAAP results in today's call. Non-GAAP measures exclude the impacts of stock-based compensation, amortization, restructuring, acquisition-related costs and significant nonrecurring items. A reconciliation of non-GAAP income from operations and per-share earnings is provided in the press release table. We will be referring to earnings slides posted on the Investor Relations section of our website.

提醒一下，我們將在今天的電話會議中提及 GAAP 和非 GAAP 結果。非 GAAP 措施不包括基於股票的薪酬、攤銷、重組、收購相關成本和重大非經常性項目的影響。新聞稿表中提供了非 GAAP 運營收入和每股收益的對賬。我們將參考發佈在我們網站投資者關係部分的收益幻燈片。

And with that, I'd like to turn the call over to Yuval Wasserman. Yuval?

有了這個，我想把電話轉給 Yuval Wasserman。尤瓦爾？

Thank you, Annie. Good morning, everyone, and thank you for joining us for our third-quarter earnings conference call. For the third consecutive quarter, we talked previous highs across much of our business, including semiconductors in service, and saw a noticeable pickup in our industrial business.

謝謝你，安妮。大家早上好，感謝您加入我們的第三季度收益電話會議。連續第三個季度，我們的大部分業務都達到了之前的高點，包括服務中的半導體，並且我們的工業業務出現了明顯的回升。

Total revenues came in at $126.6 million. Non-GAAP EPS reached $0.77 and we generated nearly $35 million in cash. Our clear and focused strategy to invest in advanced precision power solutions is keeping us at the forefront of technology transitions and our customers' roadmaps while also expanding our SAM through additional applications. Our solid execution and flexibility to meet our customers' dynamically changing needs during this period of high growth demonstrates our commitment to operational excellence. All of this drove another quarter of outperformance and strong results as we near aspirational goals we set out last January.

總收入為 1.266 億美元。非 GAAP 每股收益達到 0.77 美元，我們產生了近 3500 萬美元的現金。我們投資於先進精密電源解決方案的清晰而專注的戰略使我們始終處於技術轉型和客戶路線圖的前沿，同時還通過其他應用擴展了我們的 SAM。在這個高速增長時期，我們穩健的執行力和靈活性可以滿足客戶不斷變化的需求，這表明我們致力於卓越運營。隨著我們接近去年 1 月設定的理想目標，所有這些推動了又一個季度的出色表現和強勁的業績。

Third-quarter semiconductor revenues climbed to $81.2 million as we saw robust demand, especially towards the end of the quarter, and strength from our Korean OEMs. The main themes and technology upgrades that began several quarters ago are now in full swing, driving the market forward and enhancing its growth trajectory.

第三季度半導體收入攀升至 8120 萬美元，因為我們看到了強勁的需求，尤其是在本季度末，以及我們韓國 OEM 的實力。幾個季度前開始的主旋律和技術升級現在如火如荼，推動市場向前發展並增強其增長軌跡。

The ramp of important technologies, such as 3-D NAND and 10 nanometer logic, is accelerating while spending for logic, foundry, and multi-patterning is showing positive signs. As a result, the third quarter continued what has been a year of significant achievement for AE's semiconductor business.

3-D NAND 和 10 納米邏輯等重要技術的發展正在加速，而邏輯、代工和多重圖案化方面的支出顯示出積極跡象。因此，第三季度延續了 AE 半導體業務取得重大成就的一年。

This quarter, our design wins in semiconductor again came predominantly from advanced memory applications and spanned geographies from China to Korea and the US. We also won important designs in plasma enhanced VLV applications and advanced 3-D packaging for advanced logic devices.

本季度，我們在半導體領域的設計勝利再次主要來自先進的內存應用，並且跨越了從中國到韓國和美國的地域。我們還贏得了等離子增強型 VLV 應用和高級邏輯設備的高級 3-D 封裝方面的重要設計。

Our past design wins continued to materialize into revenue growth this quarter, with strength in advanced plasma processes related to 3-D NAND application, and in the smaller but important high-voltage e-chuck applications. Overall, our strategy in the semiconductor market is working. Our focused investment in enabling power solutions and resulting design wins are growing our business and adding to our position with existing and new applications.

我們過去的設計勝利繼續在本季度實現收入增長，在與 3-D NAND 應用相關的先進等離子工藝以及更小但重要的高壓電子吸盤應用方面具有實力。總體而言，我們在半導體市場的戰略正在奏效。我們在支持電源解決方案和由此產生的設計勝利方面的重點投資正在發展我們的業務，並增加我們在現有和新應用方面的地位。

Following last year's award for Suppliers Excellence, this year, Advanced Energy received Applied Materials' Supplier Innovation and Collaboration award in recognition of our industry-leading support and responsiveness. This is a testament to our ongoing pursuit of operational excellence, technical collaboration, and commitment to provide for active and rapid response to our customers' needs.

繼去年的卓越供應商獎之後，今年，Advanced Energy 獲得了應用材料公司的供應商創新和協作獎，以表彰我們行業領先的支持和響應能力。這證明了我們不斷追求卓越運營、技術協作以及致力於積極快速地響應客戶需求的承諾。

Looking to the fourth quarter, we expect to benefit from virtually all the market trends, as demand for etch and deposition remains strong particularly in applications where we are well-positioned, such as advanced patterning, 3-D devices, and packaging. Couple this with the beginning of recovery in DRAM and the development of 7 nanometers, and we believe we can outperform the broader wafer fab equipment industry.

展望第四季度，我們預計將受益於幾乎所有市場趨勢，因為對蝕刻和沈積的需求依然強勁，尤其是在我們處於有利地位的應用中，例如高級圖案化、3-D 設備和封裝。再加上 DRAM 開始復蘇和 7 納米的發展，我們相信我們可以跑贏更廣泛的晶圓廠設備行業。

Total industrial revenue grew 20% sequentially in the third quarter, off of last quarter's 34% rebound. The sizable increase once again came from the industrial thin film markets. Aided by the broader industrial market recovery, we saw a significant surge in investment in OLED flat-panel display manufacturing and the strength in solar PV applications.

第三季度工業總收入環比增長 20%，低於上一季度 34% 的反彈。可觀的增長再次來自工業薄膜市場。在更廣泛的工業市場復甦的幫助下，我們看到 OLED 平板顯示器製造的投資大幅增加，太陽能光伏應用也表現強勁。

In specialty industrial power, revenues declined slightly in the third quarter. Our power control module business rebounded as the industrial market recovered, while high-voltage applications such as x-ray and mass spectrometry, came off the second-quarter highs.

在特種工業電力方面，第三季度收入略有下降。我們的電源控制模塊業務隨著工業市場的複蘇而反彈，而 X 射線和質譜儀等高壓應用則脫離了第二季度的高位。

Another highlight of the third quarter from the industrial standpoint was our design wins. In industrial thin films, we had wins ranging from glass coating to PV solar cell manufacturing to OLED displays. In the glass market, we were selected to fully populate a new glass coating line with our bipolar DC products.

從工業角度來看，第三季度的另一個亮點是我們的設計勝利。在工業薄膜領域，我們取得了從玻璃塗層到 PV 太陽能電池製造再到 OLED 顯示器的勝利。在玻璃市場，我們被選中用我們的雙極直流產品全面填充新的玻璃鍍膜生產線。

In addition to providing this new DC technology for greenfield factories, part of our strategy has been to offer customers the ability to upgrade existing glass factories with this new DC technology. With our products higher performance and advanced thin film properties, we are extending the lifespan of coating factories and lowering customers' cost of ownership.

除了為綠地工廠提供這種新的 DC 技術外，我們戰略的一部分是為客戶提供使用這種新的 DC 技術升級現有玻璃工廠的能力。憑藉我們的產品更高的性能和先進的薄膜特性，我們正在延長涂層工廠的使用壽命並降低客戶的擁有成本。

In solar, we won a design in India. And in flat-panel display, we continue to see wins for high-end sputtering applications as the industry prepares for the new flat-panel technology. In specialty industrial power, we began to see new wins in thermal applications such as fluidized salt for solar energy storage, float glass, and solar PV coating. In high-voltage, we had several wins primarily in our two main target applications of mass spectrometry and x-ray.

在太陽能方面，我們在印度贏得了一項設計。在平板顯示器方面，隨著行業為新的平板技術做準備，我們繼續看到高端濺射應用的成功。在特種工業動力方面，我們開始看到用於太陽能存儲的流化鹽、浮法玻璃和太陽能光伏塗層等熱應用的新勝利。在高壓領域，我們主要在質譜和 X 射線這兩個主要目標應用領域取得了多項勝利。

We continue to garner design wins in medical equipment for both diagnostic and therapeutic applications. By and large, our industrial products target an aggregate of markets, each with different capital investment cycles that are not linear in nature. In any given quarter, the variability and project-driven nature of these markets can impact our results, both to the upside and downside, as we saw a surge in revenues in the third quarter.

我們繼續在診斷和治療應用的醫療設備方面贏得設計勝利。總的來說，我們的工業產品針對的是一組市場，每個市場都有不同的資本投資週期，這些週期本質上是非線性的。在任何給定的季度，這些市場的可變性和項目驅動的性質都會影響我們的結果，無論是上行還是下行，因為我們看到第三季度的收入激增。

In the fourth quarter, while the broader industrial markets continued their recovery and our specialty power applications increased, we do not expect to see the same level of demand for OLED, which will impact our thin films in our total industrial business. On an annual basis, we expect the revenue from industrial applications to balance out the various capital investment cycles and to result in target annual growth rates slightly above the GDP growth rate.

在第四季度，雖然更廣泛的工業市場繼續復甦，我們的專業電源應用有所增加，但我們預計對 OLED 的需求不會達到同樣水平，這將影響我們在整個工業業務中的薄膜。按年度計算，我們預計來自工業應用的收入將平衡各種資本投資週期，並導致目標年增長率略高於 GDP 增長率。

In our service business, third-quarter revenues marked another historical high at $18.9 million. Demand for our highly engineered service products was again significant as customers focused on extending the life of our existing equipment by adding features, upgrades, or retrofits. We continue to gain share with semiconductor customers as we expand our business in Japan, EMEA, and China, and to a lesser extent, in the industrial and specialty power repair market as well.

在我們的服務業務中，第三季度收入再創歷史新高，達到 1890 萬美元。由於客戶專注於通過添加功能、升級或改造來延長我們現有設備的使用壽命，因此對我們高度工程化的服務產品的需求再次顯著。隨著我們在日本、EMEA 和中國以及在較小程度上擴展到工業和專業電源維修市場的業務，我們繼續在半導體客戶中獲得份額。

Looking at next quarter, we expect to see roughly flat revenues as our differentiated offering minimize the impact of the typical end of the year seasonal slowdown in service businesses. Clearly, our service strategy is proving effective. We look for strength across our target regions as we replace incumbents, capture third-party market share, and see success with the sales of our engineered service products.

展望下個季度，我們預計收入將大致持平，因為我們的差異化產品最大限度地減少了服務業務在年底季節性放緩的典型影響。顯然，我們的服務策略被證明是有效的。我們在更換現有企業、佔領第三方市場份額並在我們的工程服務產品銷售方面取得成功時，在我們的目標區域尋求實力。

To sum up, we are in the midst of one of the strongest years AE has known, and we anticipate further growth in the fourth quarter. Central to our success has been our focus on precision power, our close relationship with customers, and our unmatched operational capabilities. Together with the current technology inflection points occurring in the semiconductor market and our expanding industrial SAN, we have increased our customer base and growing our position in precision power.

總而言之，我們正處於 AE 已知最強勁的年份之一，我們預計第四季度將進一步增長。我們成功的核心是我們對精確功率的關注、我們與客戶的密切關係以及我們無與倫比的運營能力。結合當前半導體市場出現的技術轉折點和我們不斷擴大的工業 SAN，我們擴大了客戶群並提升了我們在精密電源領域的地位。

As we look to future expansion, we are very carefully and deliberately reviewing a variety of inorganic opportunities to ensure strategic and financial model alignment, as we continue to build AE and generate long-term value for our shareholders, customers, and employees. I'd like to thank our customers, partners, shareholders, and our valued employees for their support.

當我們展望未來的擴張時，我們正在非常仔細和審慎地審查各種無機機會，以確保戰略和財務模型的一致性，因為我們將繼續建立 AE 並為我們的股東、客戶和員工創造長期價值。我要感謝我們的客戶、合作夥伴、股東和我們尊貴的員工的支持。

Thank you for joining us, and we look forward to see many of you in the upcoming quarter. I'd like now to turn the call over to Tom. Tom?

感謝您加入我們，我們期待在即將到來的季度見到你們中的許多人。我現在想把電話轉給湯姆。湯姆？

Thank you, Yuval. The third quarter was a milestone for us as we reached highs in semiconductor and service sales, and industrial revenues grew 19.5% sequentially. Total revenue reached $126.6 million in the quarter, an increase of 6.6% over the second quarter. Non-GAAP operating margins improved to 29% from 27.8% in the second quarter. Our profitable financial model led to non-GAAP earnings of $0.77 per share.

謝謝你，尤瓦爾。第三季度對我們來說是一個里程碑，因為我們的半導體和服務銷售額達到了新高，工業收入環比增長了 19.5%。本季度總收入達到 1.266 億美元，比第二季度增長 6.6%。非美國通用會計準則營業利潤率從第二季度的 27.8% 提高至 29%。我們盈利的財務模型導致非 GAAP 每股收益為 0.77 美元。

Let me begin with sales by market. Semiconductor sales increased 3.3% sequentially to $81.2 million, as momentum for advanced precision power products continued across the industry. Industrial sales grew 19.5% quarter-over-quarter to $26.5 million, due to the significant upswing in OLED investment and the ongoing recovery in many of the industrial markets we serve.

讓我從市場銷售開始。半導體銷售額環比增長 3.3% 至 8,120 萬美元，這是因為整個行業對先進精密電源產品的需求持續增長。工業銷售額環比增長 19.5% 至 2650 萬美元，這歸功於 OLED 投資的顯著增長以及我們服務的許多工業市場的持續復甦。

Service revenues again outperformed this quarter, reaching $18.9 million, an increase of 4.9% over last quarter. We again made significant share gains across our markets by increasing our capacity in customer-centric locations and providing highly-engineered service products. The combination of growing revenues with flat OpEx led to higher non-GAAP operating margins of 29% in the third quarter, compared with 27.8% last quarter.

本季度服務收入再次跑贏大市，達到 1890 萬美元，比上一季度增長 4.9%。通過提高我們在以客戶為中心的地點的能力並提供高度工程化的服務產品，我們再次在我們的市場中取得了顯著的份額增長。收入增長與運營支出持平相結合，導致第三季度非 GAAP 營業利潤率上升至 29%，高於上一季度的 27.8%。

We remain committed to making key investments in next-generation power conversion technology, strengthening our sales channel, and improving our service capacity to meet our customers' dynamic demands. Non-GAAP earnings-per-share reached $0.77 in the third quarter compared with $0.73 in the second quarter of 2016. The tax rate for the third quarter was 15.4%, up from 12.5% in the second quarter. For the year, we expect a normalized annual tax rate of approximately 15%.

我們將繼續致力於對下一代電源轉換技術進行重點投資，加強我們的銷售渠道，並提高我們的服務能力以滿足客戶的動態需求。第三季度非美國通用會計準則每股收益達到 0.77 美元，而 2016 年第二季度為 0.73 美元。第三季度的稅率為 15.4%，高於第二季度的 12.5%。今年，我們預計標準化年稅率約為 15%。

Turning to the balance sheet, we generated $34.8 million of cash to end the quarter with $249.8 million in cash and marketable securities. Since the beginning of the year, we have increased our cash position by $79.4 million, reflecting the power of our financial model. Contributing to cash flow was the ongoing improvement in our working capital management. In the third quarter, net working capital days decreased to 77 days from 82 days, and we again lowered our receivable days sales outstanding and improved inventory turns.

轉向資產負債表，我們產生了 3480 萬美元的現金，以 2.498 億美元的現金和有價證券結束了本季度。自今年年初以來，我們的現金頭寸增加了 7,940 萬美元，這反映了我們財務模型的強大功能。我們不斷改進營運資金管理，為現金流做出貢獻。第三季度，淨營運資金周轉天數從 82 天減少到 77 天，我們再次降低了應收賬款周轉天數並改善了庫存周轉率。

In summary, solid execution of our growth strategy in the first three quarters of 2016 has set the stage for a record year. As reflected in our guidance, we remain well-positioned to capitalize on the technology trends in the semiconductor market. While the flat-panel display market digests the large OLED investment from the third quarter, the broader industrial markets look to continue their recovery in the fourth quarter.

總而言之，我們在 2016 年前三季度穩步執行增長戰略，為創紀錄的一年奠定了基礎。正如我們的指導意見所反映的那樣，我們仍然處於有利地位，可以利用半導體市場的技術趨勢。雖然平板顯示器市場消化了第三季度以來的大量 OLED 投資，但更廣泛的工業市場有望在第四季度繼續復甦。

We continue to pursue internal investments to further penetrate new and existing industrial applications, extend our reach in the semiconductor market, and increase our service capabilities globally. Our level of engagement with strategic targets remains high. We see multiple opportunities that are potentially excellent strategic fits and attractive financially.

我們繼續尋求內部投資，以進一步滲透新的和現有的工業應用，擴大我們在半導體市場的影響力，並提高我們的全球服務能力。我們對戰略目標的參與程度仍然很高。我們看到多個機會，這些機會可能具有出色的戰略契合度，並且在財務上具有吸引力。

We are optimistic that the quality of our M&A pipeline will enable us to grow our business. We will keep you informed of our progress on this important initiative.

我們樂觀地認為，我們併購管道的質量將使我們能夠發展我們的業務。我們會隨時向您通報我們在這一重要舉措上的進展情況。

This concludes our prepared remarks for today. Operator, I'd like to open the call for questions.

我們今天準備好的發言到此結束。接線員，我想打開問題電話。

(Operator Instructions) Joe Maxa, Dougherty & Company.

（操作員說明）Joe Maxa，Dougherty & Company。

Thank you and congrats on a great quarter. I'm wondering -- regarding the semi cycle and the strength you are seeing, I'm wondering what your expectations are -- if you can have any visibility into next year if you expected to stay at these levels?

謝謝並祝賀一個偉大的季度。我想知道 - 關於半週期和你所看到的力量，我想知道你的期望是什麼 - 如果你希望保持在這些水平，你是否可以對明年有任何了解？

We agree with the general sentiment in the market right now that 2017 will be a growth year. I can't give you a profile how the year will look like quarter-by-quarter. We expect [Q1] to continue to be positive, but the rest of the year depends on the rest of the year market investment cycles. Overall, we agree with the general sentiment from forecasters, analysts and some of our customers about 2017 to be a positive constructive year.

我們同意目前市場的普遍看法，即 2017 年將是增長的一年。我無法向您介紹今年每個季度的情況。我們預計 [Q1] 將繼續保持積極，但今年剩餘時間取決於今年剩餘時間的市場投資週期。總的來說，我們同意預測員、分析師和我們的一些客戶的普遍看法，認為 2017 年將是積極建設性的一年。

Okay, that's helpful. And do you anticipate -- provide an update to these aspirational goals since you seem to be hitting those earlier than expected?

好的，這很有幫助。你是否預計 - 提供這些理想目標的更新，因為你似乎比預期更早地實現了這些目標？

Yes, we will upgrade and update our aspirational goals as soon as we finish with our annual strategic planning process.

是的，我們將在完成年度戰略規劃流程後立即升級和更新我們的遠大目標。

Okay, thank you.

好的謝謝。

Edwin Mok, Needham & Company.

Edwin Mok, Needham & Company。

Thanks for taking my question. Congrats for a great quarter. So first question I have is on the industrial group mentioned, there is some digestion in the flat-panel display side. I was wondering, how do you kind of think about that or what is baked into our guidance sort of fourth quarter? Are we going back to the 2Q level? Or is it is it just kind of moderate decline from where we are at? Can you give us some color there?

感謝您提出我的問題。祝賀一個偉大的季度。所以我的第一個問題是關於提到的工業集團，在平板顯示器方面有一些消化。我想知道，您對此有何看法，或者我們第四季度的指導意見中包含了什麼？我們要回到第二季度的水平嗎？或者這只是我們所處位置的適度下降？你能給我們一些顏色嗎？

So, Edwin, Q3 was uniquely strong for us in flat-panel display, driven by OLED investment cycle. We expect Q4 to be a decline. We expect the industry in general to continue to invest, but for us, as we predicted in the past, the business will continue to be lumpy, as the investment in critical components that our customers buy, usually buy in lumps as they build their product and ship it in longer leadtimes compared to ours.

因此，埃德溫，在 OLED 投資週期的推動下，第三季度對我們來說在平板顯示器領域表現得尤為強勁。我們預計第四季度會下降。我們預計整個行業將繼續投資，但對我們來說，正如我們過去預測的那樣，業務將繼續不穩定，因為對客戶購買的關鍵部件的投資通常是在他們製造產品時一次性購買與我們相比，交貨時間更長。

So, yes, Q4 in OLED will be a decline for us, but not to previous levels. It will be slightly higher than previous levels.

所以，是的，OLED 的第四季度對我們來說將會下降，但不會下降到以前的水平。它將略高於以前的水平。

And Edwin, keep in mind that it was only two or three quarters ago, we were looking at industrial revenues that were pretty much $20 million every quarter. And year-over-year were up substantially; quarter-over-quarter were up substantially. So we may have a pause this quarter, but overall, we are winning more projects and it is showing in the revenue.

埃德溫，請記住，就在兩三個季度前，我們看到的是每個季度的工業收入幾乎為 2000 萬美元。同比大幅增長；環比大幅上升。因此，本季度我們可能會暫停，但總的來說，我們贏得了更多項目，並且在收入中有所體現。

Yes, correct.

是，對的。

Great. That's actually helpful color. And then talk a little about the model. You guys have been delivering over 50% gross margin for many quarters already I guess, except for fourth quarter last year. But how do you kind of think about that margin in your business?

偉大的。這實際上是有用的顏色。然後稍微談談模型。除了去年第四季度，你們已經在很多季度實現了超過 50% 的毛利率。但是您如何看待您的業務中的利潤率？

It seems like the business really enables you to really deliver kind of higher margin or kind of low 50s range. Is that how we should think about your business? And any kind of way to think about what other levers you can pull to further improve margins or what are the risks for margin on the downside?

看起來這項業務確實使您能夠真正提供更高的利潤率或 50 年代的低範圍。我們應該如何看待您的業務？還有什麼方法可以考慮您可以利用哪些其他槓桿來進一步提高利潤率，或者利潤率下行的風險是什麼？

Sure, that's a good question. First of all, we look at operating margins. And you are correct. Right? We came out with a model of 20% to 25%, but it's very volume-dependent. And that was at a volume of $80 million to $100 million of revenues a quarter. And now we are at $125 million-plus.

當然，這是個好問題。首先，我們看一下營業利潤率。你是對的。正確的？我們推出了 20% 到 25% 的模型，但它非常依賴於體積。那是每季度 8000 萬到 1 億美元的收入。現在我們的收入超過 1.25 億美元。

So, we do not see anything materially changing our margin structure. There is some operating leverage. So, at revenues above $120 million, yes, we should be above the 25% range.

因此，我們沒有看到任何實質性改變我們的保證金結構。有一定的經營槓桿。因此，收入超過 1.2 億美元，是的，我們應該高於 25% 的範圍。

Now, as Yuval said, we are going through our strategic plan, and as part of updating the aspirational goals, we'll be updating the financial models as well. Because things have changed. And I think the key is that, at these revenue levels, margins look very healthy -- and sustainable.

現在，正如 Yuval 所說，我們正在製定戰略計劃，作為更新理想目標的一部分，我們也將更新財務模型。因為事情發生了變化。我認為關鍵是，在這些收入水平下，利潤率看起來非常健康——而且是可持續的。

Okay, great, that's helpful. Last question I have, you mentioned on your call -- on the prepared remarks, that you have kind of high level of engagement with some potential M&A targets. I know you probably can't provide too much detail on that, but is there any way you can kind of help us at least think about -- are you guys more focused on doing larger acquisitions or larger deals in the industrial space? Or is that a large pipeline or tuck-in -- any kind of way you can kind of describe it in that broad --?

不錯不錯，很有用我的最後一個問題是，你在電話中提到——在準備好的發言中，你對一些潛在的併購目標有很高的參與度。我知道你們可能無法提供太多細節，但有什麼方法可以幫助我們至少思考——你們是更專注於在工業領域進行更大規模的收購還是更大規模的交易？還是那是一個大型管道或塞入 - 任何一種你可以廣泛描述它的方式 -？

The focus is to grow the industrial revenues. And the focus -- you know we look at criteria that we want it to be equal to or better than a buyback in the short-term and long-term, it's all about returns, that it's greater than our weighted average cost of capital.

重點是增加工業收入。重點——你知道我們看的標準是我們希望它在短期和長期內等於或優於回購，這一切都與回報有關，它大於我們的加權平均資本成本。

But you are correct, Edwin. In the pipeline, yes, there are smaller tuck-ins and there are larger acquisitions, and we are actively engaged with all. And, as you know, these things take time. And we want to -- we're more focused on making a good decision that's good for the business and the shareholders. And you know unless -- we're not driven by time; we're driven by good decisions.

但你是對的，埃德溫。在籌備中，是的，有較小的收購和較大的收購，我們正在積極參與所有活動。而且，如您所知，這些事情需要時間。我們希望——我們更專注於做出對企業和股東都有利的明智決定。你知道，除非——我們不受時間驅使；我們受到良好決策的驅動。

Edwin, as we disclosed in the past, we have a very rigorous process and a very disciplined approach to review the targets. And they have to really have an excellent fit to our operational model, product portfolio, target applications and financial hurdles that these acquisitions need to meet.

埃德溫，正如我們過去披露的那樣，我們有一個非常嚴格的流程和非常有紀律的方法來審查目標。他們必須真正非常適合我們的運營模式、產品組合、目標應用程序和這些收購需要克服的財務障礙。

Right. I mean is it fair to describe the [Dow issuance] is pretty high right now so maybe a little challenging to find something that meets those requirements?

正確的。我的意思是現在描述 [道指發行量] 相當高是否公平，所以找到滿足這些要求的東西可能有點挑戰？

Edwin, we didn't hear that one.

埃德溫，我們沒有聽到那個。

We didn't hear the question, Edwin.

我們沒有聽到這個問題，埃德溫。

Sorry. So, it's entirely what you all are seeing, you guys have a regular process and shareholders always appreciate that, but would it be fair to say that valuation is a little high right now so somewhat challenging to find targets that meet those requirements?

對不起。所以，這完全是你們所看到的，你們有一個常規的流程，股東們總是很欣賞這一點，但是可以公平地說現在的估值有點高，所以找到滿足這些要求的目標有點困難嗎？

Multiples are higher, that's true. We are less focused on multiples and more on returns. And we didn't say that because multiples are higher it's delaying the process. It's more we want to do a good job.

倍數更高，這是事實。我們不太關注倍數，而更關注回報。我們並沒有說，因為倍數更高，所以它會延遲這個過程。更多的是我們想把工作做好。

Okay, great. That's all I have. Thanks.

好的，太好了。這就是我的全部。謝謝。

Amanda Scarnati, Citi.

花旗銀行的阿曼達·斯卡納蒂 (Amanda Scarnati)。

Thanks for taking the question. In the non-semi-side, in the industrial business, is there -- are there any other revenue drivers that can offset the potential slowdown in OLED side in the fourth quarter that can drive revenues up? Or is it going to be a down quarter based on the OLED spend cycle?

感謝您提出問題。在非半導體方面，在工業業務中，是否有任何其他收入驅動因素可以抵消第四季度 OLED 方面的潛在放緩，從而推動收入增長？或者根據 OLED 支出週期，這將是一個下滑的季度？

Yes, that's a good -- great question, Amanda. We continue to win design wins in two target markets we're focusing on. One of them is the thermal application space with our power control models. And in this case, we take our power control models both to new geographical areas like North America and to new industries, such as the semiconductor industry. So the power control module product line is a growth target for us.

是的，這是一個很好的問題，阿曼達。我們繼續在我們關注的兩個目標市場贏得設計勝利。其中之一是我們的功率控制模型的熱應用空間。在這種情況下，我們將我們的電源控制模型應用於北美等新地理區域和半導體行業等新行業。所以電源控制模塊產品線是我們的增長目標。

The other is our high-voltage -- again, high-voltage application space. In the high-voltage domain, we continue to win design wins in scanning electron microscopes globally in the medical industry, both by diagnostic and therapeutic applications. And also, in mass spectrometry and x-ray applications. So, we are right now building the future revenue by continuing to design unique wins that take us to new markets, new applications, and new geographical regions.

另一個是我們的高壓——再次是高壓應用領域。在高壓領域，我們繼續在全球醫療行業的掃描電子顯微鏡設計中獲勝，包括診斷和治療應用。而且，在質譜和 X 射線應用中。因此，我們現在正在通過繼續設計獨特的勝利來建立未來的收入，這些勝利將我們帶到新市場、新應用程序和新地理區域。

Then on the semicap side, with everything kind of turning to 3-D NAND, you mentioned the transition to 7 nanometer as starting, what percentage of your revenue is driven by these new technologies that are 3-D NAND, FinFET, 7 nanometer versus lagging edge technologies?

然後在半導體方面，隨著一切都轉向 3-D NAND，你提到開始過渡到 7 納米，你的收入中有多少百分比是由這些新技術驅動的，這些新技術是 3-D NAND、FinFET、7 納米與落後的邊緣技術？

I think we do not delineate that. We see a combination of growth coming from increase in demand based on volume increase, which is basically the increase in volume in fact from our 3-D NAND devices. Also, migration from the older generation of 3-D NAND devices to new generation of 3-D NAND devices that drives also multi-patterning. And we also see an increase in logic devices demand. And recently, we have signs of the investment cycle start for DRAM.

我認為我們沒有描述它。我們看到基於體積增長的需求增長帶來的增長組合，這基本上是我們 3-D NAND 設備的體積增長。此外，從老一代 3-D NAND 設備向新一代 3-D NAND 設備的遷移也推動了多重圖案化。我們還看到邏輯設備需求的增加。最近，我們有跡象表明 DRAM 的投資週期開始了。

So it's a combination -- I would say it's a combination of volume increase for just manufacturing volume increase, migration to new technology for new devices, and new technology and materials that are supposed to support both the advanced 3-D NAND architecture and also the 10 nanometer and 7 nanometer technologies.

所以它是一個組合——我想說它是一個組合，只是製造量的增加、新設備向新技術的遷移以及應該支持先進的 3-D NAND 架構的新技術和材料的組合10納米和7納米技術。

Great, thank you.

太好了謝謝。

Christine Carr, Bank of America Merrill Lynch.

美國銀行美林證券公司的克里斯汀·卡爾 (Christine Carr)。

Thanks for taking my question. I have two of them. Is there a way to characterize your OLED opportunity on a dollar basis, per tool, or per fab or related to the semis?

感謝您提出我的問題。我有兩個。有沒有一種方法可以按美元、每個工具、每個晶圓廠或與半成品相關來描述您的 OLED 機會？

We don't break it down, but we serve the flat-panel display market with power supplies that go to PVD applications, large area sputtering, also CBD applications. And another very important application we serve is the deposition processes for touch panels. And basically, these are driven by both handheld devices and, to some extent, even large-screen TVs manufacturing.

我們不對其進行細分，但我們為平板顯示器市場提供用於 PVD 應用、大面積濺射以及 CBD 應用的電源。我們服務的另一個非常重要的應用是觸控面板的沉積工藝。基本上，這些是由手持設備驅動的，在某種程度上什至是大屏幕電視製造。

Right. And then the other question for Tom. Your stock comp expense is running at about $0.03 on a quarterly basis. Looking into next year, would that still be part of -- will it still be excluded from non-GAAP? Or would it be including it into the non-GAAP calculation?

正確的。然後是湯姆的另一個問題。您的股票補償費用每季度約為 0.03 美元。展望明年，這是否仍然是 - 它是否仍會被排除在非 GAAP 之外？還是將其納入非 GAAP 計算？

We plan to leave it in the non-GAAP calculation. And there's many reasons. That's the way we view the business. That's the way -- even when we look at M&A, that's the way we are compensated. But it will stay in non-GAAP.

我們計劃將其保留在非 GAAP 計算中。而且有很多原因。這就是我們看待業務的方式。就是這樣——即使我們考慮併購，這也是我們獲得補償的方式。但它將保留在非 GAAP 中。

So it will be excluded from non-GAAP calculations?

那麼它將被排除在非 GAAP 計算之外？

Yes, yes. Thank you, Chris. It's taken out to get to that -- to arrive at the non-GAAP number.

是的是的。謝謝你，克里斯。它被取出來達到那個 - 到達非 GAAP 數字。

Got you, all right. And then a final question for Yuval is -- do you guys quantify how much is the high-voltage as a percentage of sales? So is it material enough right now? Or because it's really a huge opportunity there, but the numbers are still pretty low. Is that right?

明白你，好吧。然後 Yuval 的最後一個問題是 - 你們量化高壓佔銷售額的百分比是多少？那麼現在物質夠了嗎？或者因為這確實是一個巨大的機會，但數字仍然很低。是對的嗎？

That is correct. It's still small in comparison to the semi business. And it is still small. But we view that as a future area for consolidation and growth for us. Within the very broad base of high-voltage applications in the world, we, right now, are highly concentrating our efforts in analytical equipment, such as mass spectrometry and x-ray.

那是對的。與半導體業務相比，它仍然很小。而且它還很小。但我們認為這是我們未來整合和增長的領域。在世界上非常廣泛的高壓應用基礎上，我們現在正高度集中精力在分析設備上，例如質譜和 X 射線。

And we continue to grow high-voltage applications also in semi. As you know, with the acquisition of high-voltage product lines, we became a supplier for ion implantation, high-voltage part supply for e-beam-related metrology and inspection tools, and right now, entering the area of electrostatic charge.

我們還在半導體中繼續發展高壓應用。如您所知，通過收購高壓產品線，我們成為了離子注入供應商、電子束相關計量和檢測工具的高壓部件供應商，現在，我們進入了靜電荷領域。

All in all, still small, but very broad diversified. And it's an area for us for future growth, more so in the industrial world.

總而言之，規模仍然很小，但多元化非常廣泛。這是我們未來發展的一個領域，在工業界更是如此。

Got it. Thanks, Yuval. Thanks, Tom.

知道了。謝謝，尤瓦爾。謝謝，湯姆。

(Operator Instructions) Pavel Molchanov, Raymond James.

（操作員說明）Pavel Molchanov，Raymond James。

Thanks for taking the question. When you talk about revenue uplift in both of your main verticals, I'm assuming that most of the -- if not all of the -- uplift is coming from volume. But you don't often talk about pricing. So I thought I would just ask you to comment for the main verticals, are there any noticeable adjustments or changes in the pricing landscape for this equipment that you have been seeing?

感謝您提出問題。當您談論兩個主要垂直領域的收入提升時，我假設大部分（如果不是全部）提升來自數量。但是你不經常談論定價。所以我想我只想請你對主要的垂直行業發表評論，你看到的這種設備的定價格局是否有任何明顯的調整或變化？

Pavel, our relationship with our key customers are usually very long-term relationships, so a lot of the pricing schemes that we have our contractual and long-term in essence. So we do not expect to see significant ASP erosion, if that was the question.

帕維爾，我們與主要客戶的關係通常是非常長期的關係，所以我們有很多本質上是合同和長期的定價方案。因此，如果這是問題所在，我們預計不會看到 ASP 出現顯著下降。

When it comes to delineating between our semi vertical and industrial, unlike the common belief, you'll find out that the margins we have in industrial are (technical difficulty) [on average] are higher than (technical difficulty), which is a good thing. Right?

當談到我們的半垂直和工業之間的劃分時，與通常的看法不同，您會發現我們在工業上的利潤率是（技術難度）[平均]高於（技術難度），這是一個很好的事物。正確的？

We continue to develop enabling technologies. We continue to work closely with our customers to develop enabling solutions for them, which provide us long-term protection for price and margins.

我們繼續開發使能技術。我們繼續與客戶密切合作，為他們開發可行的解決方案，為我們提供價格和利潤的長期保護。

Okay. In terms of geography, you highlighted a couple wins in India. Are there any other geographies where -- which are either sort of higher or lower than perhaps what you've been expecting?

好的。在地理方面，您強調了在印度的幾場胜利。是否有任何其他地區 - 比您預期的要高或低？

That's a good question, Pavel. Thank you. So, India for us is an emerging region. We talk about it about -- in our last Analyst Day, we talked about the investment we made in India. We believe India long-term is an industrial country that will generate business for us. And we have a team in India that operates.

這是個好問題，帕維爾。謝謝。因此，印度對我們來說是一個新興地區。我們談論它 - 在我們上一個分析師日，我們談到了我們在印度進行的投資。我們相信印度長期是一個工業國家，將為我們帶來業務。我們在印度有一個運營團隊。

We have won a design win in India in the solar -- PV solar cell manufacturing business. There are some glass coating lines in India that we involve with. In general, it's an emerging -- very small but emerging geographical region for us.

我們在印度贏得了太陽能——光伏太陽能電池製造業務的設計勝利。我們參與了印度的一些玻璃鍍膜生產線。總的來說，它是一個新興的——對我們來說非常小但新興的地理區域。

Another area that is important is China. China has -- the government has made a decision -- strategic decision to invest significantly in local semiconductor manufacturing industry across all the value chain. Obviously we participate in that investment cycle.

另一個重要的地區是中國。中國政府做出了一項戰略決策，即在整個價值鏈中對本地半導體製造業進行大量投資。顯然，我們參與了那個投資週期。

We continue to invest locally. We are local. We have a significant portion of our organization is in China. And we are engaged with our traditional customers, but also with new customers, emerging customers in China, in supporting their needs and technology and products. Lastly, we also continue to invest in local service and distribution channels in China.

我們繼續在當地投資。我們是本地人。我們有很大一部分組織在中國。我們不僅與我們的傳統客戶打交道，還與中國的新客戶、新興客戶打交道，以支持他們的需求以及技術和產品。最後，我們還繼續投資於中國的本地服務和分銷渠道。

All right. Appreciate it, guys.

好的。欣賞它，伙計們。

Thank you. And I'm showing no further questions at this time. I would like to turn the conference back over to management for any closing remarks.

謝謝。我現在沒有進一步提問。我想將會議轉回管理層聽取任何閉幕詞。

Thank you, everyone, for joining us today. We are excited about the quarter. We are excited about the future, and we're looking forward to seeing many of you in the upcoming quarter.

謝謝大家今天加入我們。我們對這個季度感到興奮。我們對未來感到興奮，我們期待在即將到來的季度見到你們中的許多人。

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Have a great day, everyone.

女士們，先生們，感謝你們參加今天的會議。這確實結束了程序，你們都可以斷開連接。祝大家有個美好的一天。