Entegris Inc (ENTG) 2018 Q4 法說會逐字稿

Good day, everyone, and welcome to Entegris' Fourth Quarter 2018 Earnings Call. Today's call is being recorded. At this time, for opening remarks and introductions, I'd like to turn the call over to Bill Seymour, Vice President of Investor Relations. Please go ahead, sir.

大家好，歡迎參加 Entegris 2018 年第四季財報電話會議。今天的通話將會被錄音。此時此刻，我謹將電話轉交給投資人關係副總裁比爾·西摩，由他來致開幕詞和介紹各位嘉賓。請繼續，先生。

Good morning, everyone. Earlier today, we announced the financial results for our fourth quarter and full year 2018. Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements. These statements involve a number of risks and uncertainties, which are outlined in detail in our reports and filings with the SEC. Please refer to the information on the disclaimer slide of this presentation. On this call, we will also refer to non-GAAP financial measures as defined by the SEC in Reg G. You can find a reconciliation table in today's press release as well as on our website. On the call today are Bertrand Loy, our CEO; and Greg Graves, our CFO. I'll hand it over to Bertrand.

各位早安。今天早些時候，我們公佈了 2018 年第四季和全年的財務表現。在開始之前，我想提醒各位聽眾，我們今天的評論將包含一些前瞻性陳述。這些聲明涉及諸多風險和不確定性，我們在提交給美國證券交易委員會的報告和文件中對此進行了詳細闡述。請參閱本簡報免責聲明投影片上的資訊。本次電話會議中，我們也將提及美國證券交易委員會G條例定義的非GAAP財務指標。您可以在今天的新聞稿以及我們的網站上找到相關調節表。今天參加電話會議的有我們的執行長 Bertrand Loy 和我們的財務長 Greg Graves。我會把它交給伯特蘭。

Thank you, Bill. I will make some comments on our fourth quarter and full year performance, and then Greg will follow with more details on our financial results and provide guidance for the first quarter of 2019. We'll then open the line for questions.

謝謝你，比爾。我將對我們第四季度和全年的業績做一些評論，然後 Greg 將詳細介紹我們的財務業績，並對 2019 年第一季提供指導。接下來我們將開放提問環節。

Let me start by covering Q4 and the full year 2018. Our fourth quarter capped off a record year for Entegris. During the quarter, sales were up 1% sequentially and grew 15% versus Q4 2017, above our guidance. This performance, especially in the second half of the year, showcases the strength of our execution and the resilience of our unit-driven business model.

首先，我將介紹2018年第四季和全年情況。第四季為Entegris創紀錄的一年畫上了圓滿的句點。本季銷售額較上季成長 1%，較 2017 年第四季成長 15%，高於我們的預期。這項業績，尤其是在下半年，展現了我們強大的執行力和以銷售為導向的商業模式的韌性。

For all of 2018, we grew sales 15%. Organic sales grew approximately 10%, once again outpacing our markets and in line with our expectations. Microcontamination led the way with 12% organic growth as the increasing need for purity drove strong demand for our advanced filtration across the whole range of products. In addition, SAES Pure Gas, which we acquired last June, was a meaningful contributor to growth in the second half of the year for Microcontamination. The other 2 divisions also performed strongly, in line with our expectations. The AMH business grew 11% and SCEM grew 9% for the year.

2018 年全年，我們的銷售額成長了 15%。有機銷售額成長約 10%，再次超過市場平均水平，符合我們的預期。微污染控制引領了 12% 的有機成長，因為對純度的日益增長的需求推動了對我們全系列產品先進過濾技術的強勁需求。此外，我們去年六月收購的 SAES Pure Gas 也為 Microcontamination 公司下半年的成長做出了重要貢獻。其他兩個部門的表現也十分強勁，符合我們的預期。AMH業務年成長11%，SCEM業務年增9%。

Consistent with our objectives, we grew our bottom line significantly faster than the rate of our top line in 2018. Indeed, our adjusted EBITDA and non-GAAP EPS grew by 22% and 31%, respectively.

與我們的預期目標一致，2018 年我們的淨利成長速度明顯快於營收成長速度。事實上，我們的調整後 EBITDA 和非 GAAP 每股盈餘分別成長了 22% 和 31%。

During the year, our capital allocation decisions led to additional value creation for our shareholders.

年內，我們的資本配置決策為股東創造了額外的價值。

First, we acquired 3 companies: PSS, SAES Pure Gas and Flex Concepts. PSS and SAES, which are equipment businesses, grew sales in the second half over the first half of the year, as demand for these products benefited from the need for greater process control and the need for greater purity in processed gases. These 3 businesses also finished the year with strong backlogs, positioning them well for a strong performance in 2019.

首先，我們收購了 3 家公司：PSS、SAES Pure Gas 和 Flex Concepts。PSS 和 SAES 是兩家設備公司，由於對製程控制的要求提高以及對加工氣體純度的要求提高，下半年的銷售額比上半年有所增長，因此對這些產品的需求也隨之增長。這三家企業在年底也累積了大量訂單，為 2019 年的強勁業績奠定了良好的基礎。

Second, we further strengthened our capital structure and increased our financial flexibility as we refinanced our term loan in November and established a new revolver, which is currently undrawn.

其次，我們進一步加強了資本結構，提高了財務靈活性，我們在 11 月對定期貸款進行了再融資，並建立了新的循環信貸額度，目前尚未提取。

Finally, during the fourth quarter and through January of this year, reflecting our confidence in our business and long-term outlook, we repurchased over 6 million shares of our stock.

最後，在第四季以及今年1月期間，為了反映我們對公司業務和長期前景的信心，我們回購了超過600萬股股票。

Looking back on 2018, I'm proud of how our team navigated the second half industry headwinds. It really demonstrates the value and resilience of our model. Putting short-term macro concerns aside, we continue to believe that secular semiconductor demand will continue to be attractive. Enabled by technologies like IoT, 5G and AI, our society will continue to need more chips.

回顧 2018 年，我為我們團隊在下半年應對產業逆風的表現感到自豪。這充分體現了我們模式的價值和韌性。拋開短期宏觀經濟的擔憂不談，我們仍然認為半導體產業的長期需求將繼續保持吸引力。在物聯網、5G 和人工智慧等技術的推動下，我們的社會將持續需要更多的晶片。

In addition to positive underlying industry growth drivers, Entegris is the beneficiary of 2 key intersecting themes. The first one is increased device complexity, which leads to greater importance of materials. And the second is increased purity requirements and the resulting need for greater and more advanced filtration and purification solutions.

除了積極的行業成長驅動因素外，Entegris 還受益於兩個關鍵的交叉主題。第一個面向是裝置複雜性的增加，這使得材料的重要性更加凸顯。第二點是純度要求提高，因此需要更先進、更有效率的過濾和淨化解決方案。

At its core, our value position is about helping our customers achieve higher yields and new levels of device reliability and performance. Entegris is uniquely positioned to achieve this with our combination of global scale, world-class technical capabilities and operational excellence.

從本質上講，我們的價值定位是幫助客戶實現更高的良率和更高水準的設備可靠性和效能。Entegris 擁有獨特的優勢來實現這一目標，這得益於我們全球規模、世界一流的技術能力和卓越的營運能力。

Looking ahead to 2019, I would like to provide some perspectives on the industry environment and how we see it impacting our business. The secular demand drivers for unit growth remain intact. As a result, we expect MSI to continue to grow in 2019. We also expect to see the impact of technology node transitions and the resulting positive impact to our business of increasing materials intensity and purity requirements. These growth drivers are expected to more than offset short-term softness in capital spending.

展望 2019 年，我想對產業環境以及我們認為它將如何影響我們的業務提出一些看法。推動單位成長的長期需求因素依然存在。因此，我們預計 MSI 在 2019 年將繼續成長。我們也預期會看到技術節點轉型帶來的影響，以及由此產生的材料強度和純度要求提高對我們業務的正面影響。預計這些成長動力將足以抵消短期內資本支出疲軟的影響。

Putting it all together, we expect for 2019 to be another record year for Entegris. And we expect our sales in 2019 to be up approximately 5%. I will now turn the call to Greg for the financial detail. Greg?

綜合所有因素，我們預計 2019 年將是 Entegris 的另一個創紀錄的年份。我們預計 2019 年的銷售額將成長約 5%。現在我將把電話轉給格雷格，讓他提供財務細節。格雷格？

Thank you, Bertrand. We had many reasons to be pleased with our fourth quarter and full year performance and execution, which reflected record levels of sales, EBITDA and free cash flow.

謝謝你，伯特蘭。我們有充分的理由對第四季和全年的業績和執行情況感到滿意，這反映出銷售額、EBITDA 和自由現金流均創歷史新高。

Q4 sales of $402 million grew 15% from a year ago. Sales grew 1% sequentially, driven by healthy growth in our unit-driven sales. As expected, capital-driven sales were down sequentially with the notable exception of SAES Pure Gas, which was up for the quarter.

第四季銷售額為 4.02 億美元，比去年同期成長 15%。銷售額較上季成長 1%，主要得益於我們以銷售量為導向的銷售業務的穩健成長。正如預期的那樣，資本驅動型銷售額環比下降，但 SAES Pure Gas 是個例外，其季度銷售額有所增長。

Q4 GAAP diluted earnings per share was $0.57.

第四季GAAP稀釋後每股收益為0.57美元。

On a non-GAAP basis, EPS was $0.47, up 12% from Q4 2017.

以非GAAP準則計算，每股收益為0.47美元，比2017年第四季成長12%。

Moving on to gross margins. Gross margins included the negative impact of $3.4 million inventory writeup associated with the SAES Pure Gas acquisition.

接下來是毛利率。毛利率包含了與收購 SAES Pure Gas 相關的 340 萬美元存貨減損的負面影響。

Our non-GAAP gross margins of 45.7% was down 100 basis points from last year. The decline in gross margin was driven primarily, as expected, by the addition of the SAES Pure Gas to the portfolio. We expect gross margin to be approximately 46% on a non-GAAP basis in Q1.

我們的非GAAP毛利率為45.7%，比去年下降了100個基點。正如預期的那樣，毛利率下降的主要原因是產品組合中增加了 SAES Pure Gas 產品。我們預計第一季非GAAP毛利率約為46%。

GAAP operating expenses of $108.4 million included $17.1 million (corrected by Company after the call) of amortization of intangible assets and $1.3 million of integration costs associated with the purchase of SAES Pure Gas.

GAAP 營運費用為 1.084 億美元，其中包括 1,710 萬美元的無形資產攤銷（公司在電話會議後進行了更正）和 130 萬美元的與收購 SAES Pure Gas 相關的整合成本。

Non-GAAP operating expenses in Q4 were $90 million, in line with our guidance. We expect non-GAAP operating expenses to be approximately $92 million in the first quarter.

第四季非GAAP營運費用為9000萬美元，與我們的預期一致。我們預計第一季非GAAP營運費用約為9,200萬美元。

Non-GAAP operating income was $93.5 million or 23.3% of revenue.

非GAAP營業收入為9,350萬美元，佔營收的23.3%。

Our GAAP tax rate was 5% for the full year 2018, reflecting a one-time benefit from a reorganization that allowed us to harvest certain legacy tax benefits. Excluding these impacts, our non-GAAP tax rate was 19% for the full year and 21% in Q4.

2018 年全年，我們的 GAAP 稅率為 5%，這反映了重組帶來的一次性收益，使我們能夠獲得某些歷史遺留的稅收優惠。排除這些影響，我們全年的非GAAP稅率為19%，第四季為21%。

For 2019, we are expecting our non-GAAP tax rate to be 20% to 22%.

2019 年，我們預計非 GAAP 稅率為 20% 至 22%。

Adjusted EBITDA for the quarter was $110 million or 27% of revenue. For 2018, we generated $436 million in adjusted EBITDA, which is 28% of revenue and represents a 22% increase over the prior year.

本季調整後 EBITDA 為 1.1 億美元，佔營收的 27%。2018 年，我們實現了 4.36 億美元的調整後 EBITDA，佔營收的 28%，比前一年增長了 22%。

Turning to our performance by division. Q4 sales of $134 million for Specialty Chemicals and Engineered Materials, or SCEM, grew 7% from a year ago. The quarterly sales growth was driven primarily by graphite materials and specialty gases. Adjusted operating margin for SCEM was 21.7%, down from the same period last year. The decline in operating margin was driven primarily by continued investments in manufacturing and logistics to support growth, in addition to less favorable product mix.

接下來我們來看看各部門的業績。第四季特種化學品和工程材料（SCEM）的銷售額為 1.34 億美元，比去年同期成長 7%。季度銷售成長主要得益於石墨材料和特種氣體的銷售。SCEM 的調整後營業利潤率為 21.7%，低於去年同期水準。營業利益率下降的主要原因是為支持成長而持續加大對製造和物流的投資，以及產品組合較不利。

Q4 sales of $158 million for Microcontamination Control, or MC, were up 37% from last year. Excluding the favorable impact of SAES, MC sales were up 9% in the fourth quarter. The strong organic growth was driven by strong demand for wet etch and clean and photo filtration, offset in part by weakness in gas filtration. Adjusted operating margin for MC was 32.7%, down 130 basis points from last year, but up sequentially. The decline from last year was due primarily to the addition of SAES to the portfolio. We would expect that MC margins will benefit as SAES synergies are realized throughout 2019.

第四季微污染控制（MC）銷售額為 1.58 億美元，比去年同期成長 37%。剔除 SAES 的有利影響，MC 第四季銷售額成長了 9%。強勁的內生成長主要得益於對濕式蝕刻、清洗和光過濾的強勁需求，但部分被氣體過濾的疲軟所抵消。MC 的調整後營業利潤率為 32.7%，比去年下降了 130 個基點，但較上季成長。與去年相比的下降主要是由於SAES加入投資組合所致。我們預計，隨著 SAES 協同效應在 2019 年逐步實現，MC 的利潤率將會受益。

Q4 sales of Advanced Materials Handling, or AMH, of $110 million were flat from last year. The positive sales drivers for the quarter were growth in liquid packaging and the impact of the PSS acquisition. These positive factors were offset, as expected, by softness in capital-driven businesses, such as fluid handling, and the impact from the Q3 divestiture of a small non-core cleaning business. Adjusted operating margin for AMH of 15.7% decreased 90 basis points from last year.

先進材料處理公司（AMH）第四季銷售額為1.1億美元，與去年同期持平。本季積極的銷售驅動因素是液體包裝的成長以及PSS收購的影響。正如預期的那樣，這些積極因素被資本驅動型業務（如流體處理）的疲軟以及第三季度剝離一家小型非核心清潔業務的影響所抵消。AMH 的調整後營業利潤率為 15.7%，比去年下降了 90 個基點。

As our most capital-driven business, the profitability of AMH has been the most negatively impacted by the softness in industry environment. To address this, going into 2019, we are implementing further cost savings initiatives, focused on operational efficiencies, primarily in manufacturing.

作為我們資本投入最大的業務，AMH 的獲利能力受產業環境疲軟的影響最大。為了解決這個問題，進入 2019 年，我們將實施進一步的成本節約計劃，重點是提高營運效率，主要集中在製造業。

Cash flow from operations through the year was $313 million and free cash flow was $202 million.

本年度經營活動產生的現金流量為 3.13 億美元，自由現金流量為 2.02 億美元。

Our cash balance increased $187 million from the third quarter, reflecting the impact of the new term loan, offset in part by cash used for share repurchases.

我們的現金餘額較第三季增加了 1.87 億美元，這反映了新定期貸款的影響，但部分被用於股票回購的現金所抵消。

Uses of cash during the quarter included CapEx of $35 million. For the full year, we invested $110 million in CapEx. We expect to spend approximately $110 million in 2019 related to ongoing investments to support our new product introductions and growth in advanced deposition, filtration, wafer handling and specialty gas solutions.

本季現金使用情況包括資本支出 3,500 萬美元。全年，我們在資本支出方面投資了 1.1 億美元。我們預計 2019 年將投入約 1.1 億美元用於持續投資，以支持我們在先進沉積、過濾、晶圓處理和特種氣體解決方案領域的新產品推出和成長。

Consistent with our capital allocation strategy, we used $10 million for our quarterly dividend in the quarter. For the fourth quarter and through the end of January, we repurchased a total of 6.6 million shares for approximately $179 million or an average price of approximately $27. As a result of the proposed merger with Versum, we've suspended our buyback program. We expect our share count to be approximately 137 million diluted shares for both Q1 and the full year 2019.

根據我們的資本配置策略，本季我們用 1000 萬美元支付了季度股息。在第四季到 1 月底，我們共回購了 660 萬股股票，總金額約 1.79 億美元，平均價格約為每股 27 美元。由於與 Versum 的提議合併，我們暫停了股票回購計劃。我們預計 2019 年第一季和全年稀釋後的股份數量約為 1.37 億股。

Another important item to note for your modeling, with the increase in the size of our term loan, we're expecting interest expense to increase in 2019 to approximately $10 million per quarter, assuming interest rates remain at their current levels.

建模時需要注意的另一個重要事項是，隨著定期貸款規模的增加，我們預計 2019 年的利息支出將增加到每季約 1000 萬美元，假設利率保持在目前的水平。

Turning to our outlook for Q1, we expect sales to be approximately at the same level as the fourth quarter of 2018. We also expect non-GAAP EPS to be at approximately the same level as the fourth quarter. In summary, we are pleased with our operating and financial performance in 2018. Our business continues to be positioned well and generates significant cash flow, which gives us great flexibility going into 2019.

展望第一季度，我們預期銷售額將與 2018 年第四季大致持平。我們也預期非GAAP每股盈餘將與第四季大致持平。總而言之，我們對2018年的經營和財務表現感到滿意。我們的業務繼續保持良好發展勢頭，並產生可觀的現金流，這使我們在進入 2019 年時擁有很大的靈活性。

I'll now turn it back to Bertrand for some closing comments.

現在我把麥克風交還給伯特蘭，讓他做些總結發言。

Thank you, Greg. Last week, we announced that Entegris agreed to combine with Versum Materials in a $9 billion merger of equals. This is truly a unique transaction that will bring together 2 highly complementary and diversified portfolios to create a premier specialty materials company.

謝謝你，格雷格。上週，我們宣布 Entegris 已同意與 Versum Materials 進行價值 90 億美元的平等合併。這是一項真正獨特的交易，它將把兩個高度互補且多元化的業務組合結合起來，打造一家一流的特殊材料公司。

We believe this combination is a natural fit that will provide significant benefits to our customers, our employees and our investors. We are pleased with the enthusiastic response we have received so far for this announcement.

我們相信，這種合併是水到渠成的，將為我們的客戶、員工和投資者帶來顯著的利益。我們對目前為止收到的熱烈反響感到非常高興。

We intend to submit the HSR filing as soon as this week and the S-4 proxy statement by early next month.

我們計劃最早在本週提交 HSR 申報文件，並在下個月初提交 S-4 委託書。

In conclusion, I'm pleased with the resilience of our unit-driven business model and our record results in 2018. We are very well positioned for another record performance in 2019.

總而言之，我對我們以銷售量為導向的商業模式的韌性以及我們在 2018 年取得的創紀錄業績感到滿意。我們已做好充分準備，在2019年再次創造佳績。

Finally, before turning to the Q&A, I want to express my appreciation to the Entegris teams around the world for their dedication and the quality of their work. Entegris' success is a direct result of their efforts and the service they provide our customers. To all of them, thank you.

最後，在進入問答環節之前，我想對世界各地的 Entegris 團隊表示感謝，感謝他們的奉獻精神和高品質的工作。Entegris 的成功直接歸功於他們的努力以及他們為客戶提供的服務。感謝大家。

Operator, we will now take questions.

操作員，現在開始接受提問。

(Operator Instructions) We'll take our first question from Toshiya Hari at Goldman Sachs.

（操作員說明）我們先來回答高盛的 Toshiya Hari 提出的問題。

Congrats again on the announced merger. Bertrand, you're guiding 2019 revenue to grow, I think you said 5% year-over-year. I was hoping you could provide a little bit more color on 2019, perhaps by segment. And also if you can share some of the underlying assumptions you're making around MSI growth and CapEx, that would be helpful. And then, I guess, the third part of my first question. In the past, I think you've highlighted the focus areas or growth areas within your portfolio. If you can maybe run through a couple of areas that you're particularly excited about in terms of contribution to growth this year, that would will be helpful.

再次恭喜你們宣布合併。伯特蘭，你預計 2019 年的營收將會成長，我想你說的是年增 5%。我希望您能更詳細地介紹一下 2019 年的情況，最好可以分成幾個部分來介紹。另外，如果您能分享您在MSI成長和資本支出方面所做的一些基本假設，那將很有幫助。然後，我想，這就是我第一個問題的第三部分。過去，我認為您已經重點強調了投資組合中的重點領域或成長領域。如果您能簡要介紹今年您特別關注並希望對公司發展做出貢獻的幾個領域，那將非常有幫助。

Well, Toshiya, thank you for the question. So let me start maybe with some general considerations around the industry environment. It's probably fair to say that we expect the industry to be fairly choppy for the next quarters. Specifically, we expect wafer starts to be up only modestly, so in other words, below the secular growth trend line for wafer starts. And we expect the industry CapEx to be down in the mid-teens in 2019. Having said all of that, we expect more NAND chips to be produced at 64 and 96 layers in 2019 versus last year, and obviously we expect to benefit from the greater materials intensity and the need for more advanced purification solutions at those more complex geometries.

好的，Toshiya，謝謝你的提問。那麼，就讓我先談談對產業環境的一些整體看法吧。可以肯定地說，我們預計未來幾季該行業將相當動盪。具體來說，我們預期晶圓開工量只會小幅成長，換句話說，低於晶圓開工量的長期成長趨勢線。我們預計 2019 年產業資本支出將下降 15% 左右。綜上所述，我們預計 2019 年 64 層和 96 層 NAND 晶片的產量將比去年更多，而且顯然，我們預計會受益於這些更複雜幾何形狀下更高的材料強度和對更先進的提純解決方案的需求。

The other thing that should play in our favor in 2019 is that we expect a number of important node transitions in the logic and foundry segment. So those would be the primary drivers. And if I look at 2019 in the context of a fairly muted industry environment, I think that our guidance points to the great resilience of our business model and the quality of our execution. So feeling pretty good about that. Trying to understand -- trying to explain maybe where the growth is going to come from. Well, you should expect growth to mostly come from Microcontamination and SCEM. As you know, those 2 divisions have the least exposure to CapEx, number one. But also those are the 2 divisions where we have invested the most in the past 3 years. And as a result of that, this is where we see probably the most excitement in terms of upcoming growth opportunities for '19 frankly, and beyond.

2019 年對我們有利的另一件事是，我們預期邏輯和代工領域將出現許多重要的節點轉型。所以這些就是主要驅動因素。如果我把 2019 年放在一個相對低迷的產業環境下來看，我認為我們的業績指引顯示了我們商業模式的強大韌性和我們執行的品質。所以感覺還不錯。試著理解——或許是試圖解釋成長將從何而來。預計成長主要將來自微污染和SCEM。如您所知，這兩個部門對資本支出的需求最少，這是第一點。但同時，這兩個部門也是我們在過去三年投入最多的部門。因此，坦白說，我們認為這可能是 2019 年及以後成長機會中最令人興奮的地方。

Great. And then as a quick follow-up, you guys talked about the synergies around SAES contributing to margins, I suppose, in the second half. You guys also talked a little bit about potential cost reductions in your AMH business, just given the tough backdrop. If you can elaborate on those 2 dynamics and how we should think about margins into late 2019 and 2020, that would be helpful.

偉大的。然後，作為後續的快速提問，你們談到了 SAES 的協同效應如何促進了下半年的利潤成長。鑑於當前嚴峻的形勢，你們也稍微談到了AMH業務中潛在的成本削減問題。如果您能詳細闡述這兩個動態因素，以及我們應該如何看待 2019 年末和 2020 年的利潤率，那將很有幫助。

Toshiya, it's Greg. So first of all, with regard to the AMH business, first of all, when we look at that business, full year over full year, 200 basis point improvement in the operating margin. I'm not defending the business, I'm just saying, optically, when you look at the last couple of quarters, it feels sort of worse than the full year performance was.

Toshiya，我是Greg。首先，就 AMH 業務而言，首先，當我們審視該業務時，與去年同期相比，營業利潤率提高了 200 個基點。我不是為這家公司辯護，我只是說，從表面上看，如果你看一下最近幾季的業績，感覺比全年的業績要差一些。

As we move into 2019, we've made some significant reorganizations within the manufacturing environment, within the major facilities within AMH, that we think will have a positive impact on the operating margin of that business going forward.

隨著我們進入 2019 年，我們對 AMH 的主要工廠的製造環境進行了一些重大重組，我們認為這將對該業務未來的營業利潤率產生積極影響。

With regard to SAES and the SAES synergies, we'll start to see some of those synergies beginning in Q1. The first big move was we closed the facility in San Diego at the end of 2018, and then we'll see the balance of those as we move through 2019. Recall, we talked about total synergies in the $4 million to $5 million range. So it will have an impact, but it's not going to be a really significant impact. So we ended the year just short of 33% in MC, and we'd expect that to trend up as we move through 2019, closer to that 34% range.

關於 SAES 和 SAES 的協同效應，我們將從第一季開始看到其中一些協同效應。第一個重大舉措是我們在 2018 年底關閉了位於聖地牙哥的工廠，然後我們將在 2019 年逐步推進，看看剩餘的工廠會如何運作。回想一下，我們之前討論過，綜效總額在 400 萬至 500 萬美元之間。所以這會產生影響，但不會是真正意義上的重大影響。因此，我們2019年的MC略低於33%，我們預期隨著2019年的推進，這一比例將呈上升趨勢，接近34%的區間。

We'll take our next question from Sidney Ho at Deutsche Bank.

接下來，我們將回答德意志銀行的 Sidney Ho 提出的問題。

Following Toshiya's question on the revenue side in 2019, how should we think about the first half -- first and second half of the year? I think, historically, you have been more first half weighted. I guess, another way of asking this is, if you analyze Q1 guidance, you're already up 4% year-over-year. So -- versus your guidance of up 5%. Do you think the [yield] will be relatively flat throughout the year?

繼 Toshiya 就 2019 年的收入問題提出疑問之後，我們該如何看待上半年——也就是一年中的上半年和下半年？我認為，從歷史數據來看，你們的比賽更著重在上半年。換句話說，如果你分析第一季的業績指引，你會發現已經比去年同期成長了 4%。所以——與您先前預測的5%相比。你認為全年的收益率會相對穩定嗎？

So Sidney, based on the information currently available, I would expect the back end of the year to be up versus the first half of the year, and it's going to be a function of 2 things. One is a little bit more favorable CapEx environment in the back end of the year, but more importantly, a bigger impact from the node transitions that I was describing, both in advanced memory and advanced logic and foundry.

所以西德尼，根據目前掌握的信息，我預計下半年的業績會比上半年有所成長，這取決於兩件事。一方面是年底資本支出環境略微有利，但更重要的是，我所描述的節點轉型對先進記憶體、先進邏輯和代工領域的影響更大。

Okay. That's helpful. My follow-up question is on the operating expenses side. You guys have done a pretty good job in the past, and I think you guys just talked about the SAES side of things, there's some synergies. How should we think about the OpEx level, maybe after Q1?

好的。那很有幫助。我的後續問題是關於營運費用方面的。你們過去做得相當不錯，而且我認為你們剛才談到了 SAES 方面的事情，這其中存在一些協同效應。我們該如何看待第一季之後的營運支出水準？

This is Greg. So as we think through the balance of the year, depending on how the industry environment unfolds, I would expect them to be relatively flat, maybe with a slight upward bias as we move through the year.

這是格雷格。因此，展望今年剩餘時間，根據行業環境的發展情況，我預計它們將相對平穩，隨著時間的推移，可能會略有上升趨勢。

All right. And maybe just a follow-up to that. How should we think about gross margin as well, as the year progresses?

好的。或許可以對此做個後續報道。隨著時間的推移，我們該如何看待毛利率呢？

I think about it in sort of the 46% range. As volumes increase, we should see some modest improvement through the year.

我認為大概在 46% 左右。隨著銷量增加，我們應該會在年內看到一些小幅改善。

Moving on to Mike Harrison at Seaport Global Securities.

接下來是來自海港環球證券的麥克哈里森。

This is Jacob on for Mike. Digging a little deeper into SAES, what are the expectations for that business in 2019, and maybe if you could comment what the book-to-bill was in Q4 and sort of how that's shaping up? I know you said backlog was strong, but maybe a little more detail.

這是雅各替麥克發言。更深入了解 SAES，您對 2019 年的業務有何預期？能否談談第四季的訂單出貨比以及目前的進度？我知道你說過積壓的工作很多，但或許可以提供更多細節。

Yes, so Jacob, we don't provide specific backlog information by product line. So I would not do that except that I'm going to try to, nonetheless, help you with your question. So if you think about the velocity of that business as we exit 2019 (sic) [2018], Q4 for SAES was -- I mean, we exceeded $30 million of revenue. So that was up from the high $20 million in Q3. And if you look at 2019 on a full year basis, we expect 2019 to be up versus 2018, and that is obviously in the context of a down industry CapEx environment. So that speaks again to the very unique value proposition that we are able to deliver with those large gas purification systems. That talks to the need for much greater purity levels for an array of processed gases going into the advanced labs. And based on the lead time that we have for those systems, we have a pretty good visibility for what to expect going into '19. So we feel pretty good about the outlook for that business.

是的，Jacob，我們不提供按產品線劃分的具體積壓訂單資訊。所以，我本來不會那麼做，但我還是會盡力幫你解答這個問題。所以，如果你想想我們在 2019 年（原文如此）[2018 年] 結束時的業務發展速度，SAES 的第四季度——我的意思是，我們的收入超過了 3000 萬美元。所以這比第三季的 2000 萬美元高點有所成長。如果從全年來看 2019 年，我們預計 2019 年將比 2018 年有所成長，這顯然是在產業資本支出下降的背景下發生的。這再次說明了我們能夠透過這些大型氣體淨化系統提供的獨特價值主張。這表明，進入先進實驗室的各種加工氣體需要更高的純度。根據我們為這些系統預留的提前期，我們對 2019 年的發展前景有相當清楚的了解。所以我們對這項業務的前景相當樂觀。

Okay. That's very helpful. And then maybe looking at SCEM margin. So you guys called out the investments in manufacturing and logistics and then unfavorable product mix. Maybe relative to Q4, could you sort of frame how big of an impact each of those were and sort of expectations for the investments in manufacturing and logistics? Is that going to carry over into the next couple quarters?

好的。那很有幫助。然後或許可以看看SCEM的利潤率。所以你們指出了製造和物流的投資不足，以及產品組合不合理。或許可以相對於第四季度，您能否大致說明一下每項投資的影響有多大，以及對製造業和物流投資的預期？這種情況會延續到接下來的幾季嗎？

So let me just comment. The investments are primarily around our Specialty Materials business, where we're investing in graphite capacity. We're investing in ramping a new facility as well. We've made meaningful investments in some of our coatings capabilities volumes need to catch up with the investment. That would be kind of the 2 primary areas where we've made investment. And like I said, the investment is ahead of the revenue per se.

讓我簡單說幾句。這些投資主要集中在我們的特殊材料業務領域，我們正在投資石墨產能。我們也正在投資興建一座新工廠。我們已對部分塗料生產能力進行了重大投資，但產量需要跟上投資步伐。以上就是我們投資的兩個主要領域。正如我所說，投資金額已經超過了收入本身。

Moving on now to a question from Duffy Fischer at Barclays.

接下來是來自巴克萊銀行的達菲費雪提出的問題。

You talked a little bit about the increased interest expense. But if we -- obviously, we'll go through and estimate an EBITDA number. Can you walk us through the puts and takes on EBITDA down to free cash flow? You mentioned a cost save program. Does that eat cash this year? What do you think kind of working capital does? And then what do the capital expenses look like?

您剛才稍微談到了利息支出增加的問題。但是，顯然，我們會進行估算，得出 EBITDA 數據。能詳細解釋一下 EBITDA 到自由現金流的買賣過程嗎？您提到了一個節省成本的計劃。今年這會消耗大量現金嗎？你認為營運資金的作用是什麼？那麼，資本支出狀況如何呢？

So we expect, obviously, our EBITDA to be in line with our target model, which, at the revenue levels that we're talking about for the year, are in that 28%, 29% of revenue. So our commitment is always to flow at least $0.40 of every incremental dollar of revenue through the EBITDA line.

因此，我們顯然預期我們的 EBITDA 將符合我們的目標模型，在我們所謂的年度收入水平下，該模型將佔收入的 28% 至 29%。因此，我們始終致力於將每增加 1 美元的收入中至少 0.40 美元計入 EBITDA。

From a CapEx perspective, we said $110 million in CapEx for 2019. Taxes, which also come into play between the EBITDA and the free cash flow line, we talked about 20% to 22%. And then working capital, one of our focuses this year -- I mean, our inventory as we've come through this year -- through 2018 did creep up a bit and our turns slowed a bit. That's a focus area as we move into 2019 and is improving on the inventory side of the house. Receivables, I mean, always tend to be right around 50 days. So those are the primary components of cash flow. And does that answer your question, Duffy?

從資本支出角度來看，我們預期 2019 年的資本支出為 1.1 億美元。稅收也會影響 EBITDA 和自由現金流之間的關係，我們之前討論過稅收佔比在 20% 到 22% 之間。然後是營運資金，這是我們今年的重點之一——我的意思是，我們今年的庫存狀況——在 2018 年，我們的庫存略有上升，週轉率略有下降。這是我們進入 2019 年的重點領域，庫存方面正在不斷改善。我的意思是，應收帳款的周轉時間通常都在 50 天左右。以上就是現金流的主要組成部分。達菲，這樣回答你的問題了嗎？

Yes, you bet. And then just one housecleaning. Of the shares you bought back, how many did you buy back in Q4 versus so far in Q1?

當然。然後只需要一次家務清潔。在你回購的股票中，第四季回購的股票數量與第一季至今回購的股票數量相比，分別是多少？

So we said we bought back 6 million shares. I don't have the exact breakdown, but the majority of that buyback, probably 4.5 million of it, roughly would have been in Q4. So when you think about the share count for Q1 as well as the balance in '19, you should think about 138 million shares.

所以我們說我們回購了600萬股股票。我沒有確切的細分數據，但大部分的回購，大概有 450 萬股，大約在第四季進行。所以，當你考慮第一季的股票數量以及 2019 年的股票餘額時，你應該會想到 1.38 億股。

(Operator Instructions) We'll move on to Chris Kapsch at Loop Capital Markets.

（操作員說明）接下來我們將連線 Loop Capital Markets 的 Chris Kapsch。

Just a follow up on that, the share buyback and just capital allocation, in general. I think you touched on this a bit last week when the merger was announced. But -- so you've suspended the buyback. Is the intent there that, that would be suspended until closing of the deal? Just because given the pro forma leverage of, I think, a little over 1x and given the free cash flow, the reliable free cash flow of both your portfolio as well as Versum's, I'm guessing that you'd be interested in resuming buybacks given your copious free cash flow for the -- even on a pro forma basis. So can you just provide color on what the thinking is post-merger?

關於股票回購和一般的資本配置，我再補充一點。我想你上週在宣布合併時已經稍微提到過這一點。但是——所以你們暫停了回購計畫。其意圖是否在於，該項工作將暫停至交易完成？鑑於預計槓桿率略高於 1 倍，以及自由現金流（包括您和 Versum 的投資組合的可靠自由現金流），我猜測您會有興趣恢復股票回購，因為您擁有大量的自由現金流——即使是按預期基礎計算。那麼，能否簡單介紹一下合併後的想法呢？

So, Chris, you're correct. What you heard us say today is that we would be suspending the buyback until closing, at which time, we'll have to reengage with our new board and discuss and review all of the available capital allocation options, buyback being one of the many options we'd be considering. And you're right in your assessment that the combined company would be a company with a very strong balance sheet, about 1x leverage, but also a very profitable company. So I'm anxious to have those discussions with the new board. I'm sure it would be a very productive discussion. But it's too early for us to elaborate on the choices that we'll be making after closing.

克里斯，你說得對。今天我們宣布，我們將暫停股票回購，直到交易完成。屆時，我們將與新董事會重新溝通，討論和審查所有可用的資本配置方案，股票回購是我們將要考慮的眾多方案之一。你的評估是正確的，合併後的公司將是一家資產負債表非常強勁、槓桿率約 1 倍的公司，同時也是一家獲利能力很強的公司。所以我很期待與新董事會進行這些討論。我相信這將會是一次非常有成效的討論。但現在詳細說明交易完成後我們將做出的選擇還為時過早。

Okay. Fair enough. And then you did mention that, in terms of the sensitivity to a weaker CapEx environment, your business has felt some of that, but you did mention SAES as being the exception, and I think that maybe even surprised you a little bit. So I'm just wondering if you have a sense for what it is about the business and its backlog right now that's kind of shrugging off a softer overall macro and end-market backdrop. Is it part of the secular story there? Or is it demand for those products across legacy and mature nodes as well?

好的。很公平。然後您確實提到，就對資本支出環境的敏感度而言，您的企業已經感受到了一些影響，但您也提到 SAES 是個例外，我想這可能甚至讓您有點驚訝。所以我想知道，您是否了解目前業務及其積壓訂單的哪些方面，使其能夠不受整體宏觀經濟和終端市場疲軟環境的影響。這是當地世俗故事的一部分嗎？或者，傳統節點和成熟節點對這些產品的需求也存在嗎？

Yes. No. Thank you for asking the question. And if you recall, we've described in many occasions now that we have a number of, what we call, CapEx products that behave slightly differently than the industry CapEx.

是的。不。謝謝你的提問。如果你還記得的話，我們已經在許多場合描述過，我們有一些所謂的資本支出產品，它們的表現與產業資本支出略有不同。

So I talked about the gas purification business, but another example would be our FOUP business. Both of those businesses actually grew sequentially in Q4. And the reason for that is that the demand for all of those products is really driven by the need for cleaner process conditions. And those requirements are not going to stop anytime soon. And as a result of that, you have actually less of a straight correlation between those -- I mean, the revenue for those product platforms and the industry CapEx. But, the flip side of that would be some other product lines. Like, gas filtration or our fluid handling businesses did decline sequentially because those products are more tied to WFE. So there was a stronger correlation there. So in other words, what we call CapEx in our product portfolio comes in many different shapes and forms, and the demand patterns for those products are very different.

所以我談到了氣體淨化業務，但另一個例子是我們的 FOUP 業務。這兩家企業在第四季度均實現了環比增長。原因在於，所有這些產品的需求實際上都是由對更清潔的製程條件的需求所驅動的。而且這些要求短期內不會停止。因此，這些產品平台的收入與產業資本支出之間的直接相關性實際上有所降低。但另一方面，也可能涉及其他一些產品線。例如，氣體過濾或我們的流體處理業務確實環比下降，因為這些產品與 WFE 的關聯性更強。所以，那裡的相關性更強。換句話說，我們產品組合中的資本支出有許多不同的形式，而這些產品的需求模式也大相逕庭。

Got it. That's helpful. And then just one last quick one. In AMH, you mentioned, while the industry has a little bit softer near-term backdrop, taking out some costs. Can you just -- is there any order of magnitude in terms of what sort of takeouts you anticipate from those self-help actions?

知道了。那很有幫助。最後再來一個簡短的。在 AMH 中，您提到，雖然該行業近期背景略顯疲軟，但正在削減一些成本。您能否大致估算一下，您預期這些自助行為能帶來哪些方面的效益？

What I would say is we expect the operating margin in that business ended the full year 2018 right around 18%, and we'd expect that to trend up through the year, probably close to 100 basis points. But we're not looking for a marked shift in that business until volumes on the CapEx side of the industry come back around.

我想說的是，我們預計該業務在 2018 年全年的營業利潤率約為 18%，我們預計這一數字將在年內呈上升趨勢，可能接近 100 個基點。但除非產業資本支出方面的交易量回升，否則我們預期該業務不會發生顯著變化。

Taking our next question now from Amanda Scarnati at Citi.

現在我們來回答花旗銀行的Amanda Scarnati提出的下一個問題。

Got a quick question on kind of utilization rates at your customers. We have been hearing a lot that they've been kind of coming down in the fourth quarter and into the first quarter. Can you just talk a little bit about how you expect to see that sort of stability in revenue in the fourth -- the first quarter in that kind of industry backdrop of decreased utilization?

我有個關於貴公司客戶利用率的問題想請教一下。我們常聽到這樣的說法：他們在第四節和第一節的表現有所下滑。您能否談談在當前行業利用率下降的大背景下，您如何預期第四季度（也就是第一季）的收入能夠保持穩定？

Yes. So Amanda, you're correct, and that's part of the assumptions that we're using as we think about the Q1 industry conditions. We expect wafer starts and fab utilization to be down modestly versus Q4, and probably slightly more so than the usual seasonal patterns. So what will allow us to do better than that is -- as I mentioned, is the secular drivers for solution sets and the need that the industry has to -- really, to migrate to more advanced materials and more advanced filtration solutions as they start transitioning to more complex geometries. So that's the theme that we've been developing now for a number of years. We will be the beneficiary of greater materials intensity and we'll be the beneficiary of greater need for purity. And that's going to help us increase the resilience of our business model versus many other industry participants.

是的。所以阿曼達，你說得對，這也是我們在思考第一季產業狀況時所使用的部分假設。我們預計晶圓開工量和晶圓廠利用率將比第四季略有下降，而且可能會比通常的季節性模式下降幅度更大。因此，能夠讓我們做得更好的，正如我所提到的，是解決方案集的長期驅動因素，以及行業確實需要遷移到更先進的材料和更先進的過濾解決方案，因為他們開始向更複雜的幾何形狀過渡。這就是我們多年來一直在發展的主題。我們將受益於更高的材料利用率，也將受益於更高的純度需求。這將有助於我們提高商業模式相對於許多其他行業參與者的韌性。

Then under those assumptions, we would expect to see that the second half would be significantly stronger if the node transitions continue as expected in the second half and utilization rates drop off. But you're still expecting sort of a 5% growth. Do we see sort of a big step down in the second quarter in terms of what revenue expectations would be? Or is it really just too early to tell what's going to happen in the full year of 2019?

那麼，根據這些假設，如果節點轉換在下半年繼續按預期進行，並且利用率下降，我們預計下半年的表現會明顯更強。但你仍然期望能達到 5% 左右的成長。第二季營收預期是否會大幅下滑？或者說，現在預測 2019 年全年會發生什麼事真的為時過早嗎？

I think it's just a little bit too early. There's a lot of noise right now in the channels, Amanda. So I think, as always, we will be updating our annual guidance at every one of our earnings call. And when new information and better information becomes available, we'll update, if need be, our annual guidance.

我覺得現在還太早。阿曼達，現在各頻道的訊息都很混亂。所以我認為，我們將像往常一樣，在每次財報電話會議上更新我們的年度業績預期。當有新的資訊和更好的資訊出現時，我們會根據需要更新我們的年度指導意見。

And then can you just remind us what your current lead times are and how that changed at all over the last year?

那麼，您能否提醒我們一下，您目前的交貨週期是多少，以及過去一年中交貨週期發生了哪些變化？

Lead times have been relatively constant across product lines. So that's not going to be a big factor, in general. Having said that, we have added capacity in our Liquid Filtration Products lines. We are adding capacity as well in graphite, our FOUP platform and even our gas purification business. So we believe that we would be in better position in terms of fully capitalizing on customer demand in 2019.

各產品線的交貨週期相對穩定。所以總的來說，這不會是一個很大的因素。儘管如此，我們還是增加了液體過濾產品線的產能。我們也正在增加石墨、FOUP平台甚至氣體淨化業務的產能。因此，我們相信，在 2019 年，我們將更有能力充分滿足客戶需求。

We'll take our final question today from Patrick Ho at Stifel.

今天我們最後一個問題來自 Stifel 的 Patrick Ho。

Bertrand, you've talked, at least in your prepared remarks and other times, about the investments you're making in certain areas. I think this call, you talked about graphite and how that's starting to pay off for the company today. Can you give a little bit of color -- and if you don't want to get super specific, I understand. But can you give a little bit of color of other areas of investments, where over the next few years you will start to see benefits, particularly on the top line?

伯特蘭，你至少在你的準備好的演講稿和其他場合中談到你在某些領域的投資。我認為在這次通話中，您談到了石墨以及它如今如何開始為公司帶來回報。能稍微詳細描述一下嗎？ ——如果你不想說得太具體，我也理解。您能否簡要介紹其他投資領域，在未來幾年裡，您將在這些領域開始看到收益，尤其是在營收方面？

Well, I mean, I will repeat what I've said in many calls before. So you flagged graphite, but we have made significant investments in a number of filtration and purification technologies, some of which have already hit the market, some have not. And the areas that we've been targeting are wet etch and clean applications for both liquid filters and liquid purifiers. So that would be, I believe, a very significant growth driver going forward for us.

嗯，我的意思是，我會重複我之前在很多次電話會議中說過的話。所以你們提到了石墨，但我們對許多過濾和淨化技術進行了大量投資，其中一些已經上市，有些還沒有。我們一直瞄準的領域是液體過濾器和液體淨化器的濕蝕刻和清潔應用。所以我相信，這將是我們未來非常重要的成長動力。

We've talked many times before around the investments that we've made in advanced deposition materials. That's an area that we believe is poised for growth in the industry, and certainly one of the reasons we've decided to combine with Versum. I think that joining forces around some of those advanced process materials is very critical to enable the industry technology roadmap. So we have made investments in the past few years, and obviously we'll be accelerating those investments as we join forces with Versum.

我們之前已經多次談到我們在先進沉積材料方面的投資。我們認為這是業界一個具有成長潛力的領域，當然也是我們決定與 Versum 合併的原因之一。我認為，圍繞一些先進的工藝材料開展合作對於實現行業技術路線圖至關重要。因此，我們在過去幾年裡進行了一些投資，顯然，隨著我們與 Versum 攜手合作，我們將加速這些投資。

So what I really like about our portfolio is the diversity and the breadth of the growth opportunities that I see. It's across the portfolio, it's across customer segments, and frankly, it's even across industries. Many of those growth opportunities are slightly on the periphery of the semiconductor applications. So I feel good about the overall quality of the portfolio.

我真正喜歡我們投資組合的一點是它的多樣性以及我看到的成長機會的廣度。它遍及所有產品組合，遍及所有客戶群，坦白說，甚至遍及所有產業。許多成長機會都略微偏離半導體應用領域。所以我對作品集的整體品質感到滿意。

As my follow-up question, in terms of the materials business, particularly as you mentioned the Advanced Materials side, you've talked about process-of-record type of wins in the past. As we look at 2019 as a whole with some of those process of records turning into volume ramps, would you say this year is a little more weighted towards logic and that's where we'll see, I guess, some of the wins, and memory is based a little more on recovery and the timing of that? Or are we going to see some, I guess, ramps on your end on the memory side as well?

我的後續問題是，就材料業務而言，特別是您提到的先進材料方面，您過去曾談到流程記錄類型的成功案例。當我們回顧 2019 年，考慮到一些紀錄的刷新過程變成了銷量的飆升，您認為今年是否更偏重於邏輯，而我們可能會看到一些勝利，而記憶則更多地取決於復甦和復甦的時機？或者，我猜想，你們那邊在記憶體方面也會有一些改進措施？

If I think about the unit-driven part of our business, I would say, it's both. So obviously, a couple of really important node transitions in our logic and foundry customers.

如果從我們業務中以銷售為導向的部分來看，我會說，兩者兼而有之。顯然，我們的邏輯和代工客戶中出現了一些非常重要的節點轉換。

But what will be happening on the 3D NAND segment is also very exciting. I mean, as you know, the greater number of layers on 3D NAND chips, the greater the material intensity. And the more challenging the aspect ratios, the greater the opportunity for advanced contamination control solutions. So if you think about what we expect in 2019, we expect about 60% of the NAND wafers to be produced at 64 layers and above. That number was only 40% in 2018. So even if wafer starts are essentially flat for NAND memory fabs, I would expect the material intensity to play in our favor. And that will be true in '19, and obviously we expect that to continue to be true in 2020 and 2021 as well. So the drivers will be both logic and memory, in other words.

但3D NAND領域即將發生的事情也令人非常興奮。我的意思是，如你所知，3D NAND 晶片上的層數越多，材料強度就越大。長寬比越具有挑戰性，採用先進的污染控制解決方案的機會就越大。因此，展望 2019 年，我們預計約 60% 的 NAND 晶圓將採用 64 層及以上的層數生產。2018年，這個數字僅為40%。因此，即使 NAND 記憶體晶圓生產基本上持平，我也預計材料強度對我們有利。2019 年情況如此，我們顯然預期 2020 年和 2021 年也會如此。換句話說，驅動因素既包括邏輯也包括記憶體。

And with that, ladies and gentlemen, we will conclude today's call. Thank you very much for joining us. Have a good day. You may now disconnect.

女士們、先生們，今天的電話會議就到此結束。非常感謝您的參與。祝你有美好的一天。您現在可以斷開連線了。