Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Ahmet Bereanani with RBC Capital Markets. Please go ahead.
Amit Daryanani - RBC Capital Markets
Just wanted a quick clarification. What’s the potential revenue run rate of you guys don’t have 100% capacity right now when you were at $190 million last quarter?
Reza Meshgin
The previous stated capacity was $182 million. With the expansion, it will be in Q4, $220 million.
Amit Daryanani - RBC Capital Markets
Tell us if the satellite office is running production right now, is that fair?
Reza Meshgin
That’s correct. We said that it will be fully operational by Q4.
Amit Daryanani - RBC Capital Markets
Let’s just from a revenue perspective. You guys are talking about sales being significantly higher than third quarter in fiscal Q4. For the last five quarters at least, September is up about 20% sequentially on average and there is a lot of variation from
-15 to up 60 at one quarter. The average 20% sequentially, does that seem fair to you guys in fiscal Q4?
Reza Meshgin
I don’t think we want to quantify that, Ahmet. We said that we made investments because we see a great opportunity for us to grow in Q4 and that’s basically what we put the investment in place for.
Amit Daryanani - RBC Capital Markets
I guess the way you guys are talking about being around a 90% utilization, would it be reasonable that we can expect this going forward?
Reza Meshgin
We expect to be busy. I couldn’t really put a number for the capacity utilization. If you took last quarter and used the number 167 or 180, that’s 90%. You’re correct by that, but that doesn’t necessarily mean that the utilization in the future quarters will be the same. It will all depend on the cost revenue.
Amit Daryanani - RBC Capital Markets
From what you planned out, what do you target? I thought it was always a 90% number.
Reza Meshgin
90% is usually tight. If you look at a manufacturing operation that runs at 90% all of the time, then it is a pretty tight situation, especially when you have customer mix changes, if you have a product that needs to come up in ramp-up, and you only have 10% to work with. Ideally, we would want to go with 70%-80%. That’s our ideal. It has actually run at 100% for the past few quarters at times.
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