Coherent F1Q08 (Qtr End 12/29/07) Earnings Call Transcript

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2008-02-12 16:24:09.0

Tags: Coherent Inc.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). We'll take our first question from Mr. Jiwon Lee. Please go ahead.

Jiwon Lee - Sidoti & Company

Hi. Good afternoon, and thanks for taking my question. Just a few quick ones. First of all, John, did you mention there was no order received for laser annealing for the quarter? Did I hear correctly?

John Ambroseo

That is correct.

Jiwon Lee - Sidoti & Company

All right. There is a larger customer concentration with that particular laser in the market, isn't there?

John Ambroseo

We sell to a single customer, a single integrator. That is correct.

Jiwon Lee - Sidoti & Company

Okay.

John Ambroseo

And they serve the entire market.

Jiwon Lee - Sidoti & Company

I see. Could you give us a little more color, as this has been going on for several quarters, as to why this order push out happened?

John Ambroseo

So the question, I am not sure if we're discussing the same customer, Jiwon, but what we've been highlighting is that the LCD market for annealing has been undergoing a tremendous amount of upheaval. As capacity has been trailing off against capital investment, et cetera, what we've been working on with customers for the past three or four quarters now is really focusing on yield enhancements for the existing tools.

And the yields that I have heard quoted are in the 90s at this point. Now, I think they started out somewhere in the 60s or 70s. So there has been a fair amount of capacity that has been added simply by increasing the yields, but they are in fact running out of room, as I alluded to in my comments, and we believe that orders will have to start to flow to facilitate growth.

Jiwon Lee - Sidoti & Company

You expect that pretty much when, John?

John Ambroseo

I can't tell you if it's going to be a Q2, or a Q3, or a Q4 event, but we do believe it's going to be this fiscal year.

Jiwon Lee - Sidoti & Company

Okay. Fair enough. And then I missed the commentary on your contract manufacturing as part of your EBITDA fall by above 10, could you give us a little more color on what programs or what components you're moving, and what type of contract manufacturers are you retaining on that front?

John Ambroseo

I am not going to go into the specifics of what products we're moving because we feel that some of that, at this point, is actually proprietary

 

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