Varian Semiconductor Equipment Associates, Inc. F2Q09 (Qtr End 04/03/09) Earnings Call Transcript

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2009-04-30 18:44:10.0

Tags: Call Transcript, Foundry, Earnings, Tool, Varian Semiconductor Equipment Associates Inc., Tool Utilization, Productivity, Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions). Your first question comes from the line of Suresh Balaraman from ThinkEquity. Please proceed.

Suresh Balaraman - ThinkEquity

You talked about tool utilization going up from a few months ago to now. Can you put some numbers on it? Is it going from 20% to 40% percent? And also, can you share your thoughts on how your Q4 or September orders could look, given the fact that the foundries are looking at 75% kind of utilization rates for June quarter? Thanks.

Robert Halliday

Sure, Suresh. A couple of things. One, tool utilization, we don't usually site specific numbers. We'll try and give you qualitative sense for it. We have seen it increase significantly across the board. The most notable increase, which I think everybody has pretty much reported on was in the foundries, but we also see it in other places like memory and logic. So, it was pretty good across the board. Most noteworthy progress was in foundry market.

Second, we don't give orders guidance, particularly for Q4. We're just entering Q3. Qualitatively, we will say again, though, that we're seeing a pickup in customer interest and ordering equipment, and we're pretty hopeful that orders will be in positive direction for us, pretty good amount in Q3 and hopefully in the Q4.

Gary Dickerson

I think the other thing on the tool utilization, we track tools turned off. And in the last couple of months, there has been a significant change in that metric.

Robert Halliday

A lot of tools have been turned back on.

Gary Dickerson

Many tools turned back on.

Suresh Balaraman - ThinkEquity

Are there any comments on the pricing environment? Are you guys subject to the kind of severity and discounting as many of your other peers in the capital equipment land, given that you have limited competition?

Gary Dickerson

I don't think that that had unusual pricing pressure this time. I think our products are pretty valuable products and our position is pretty good with the customers.

Robert Halliday

Right now, who knows for sure what will happen. But the margin forecast looks incrementally positive going forward.

Operator

Your next question comes from the line of C.J. Muse from Barclays Capital.

C.J. Muse - Barclays Capital

Just first a couple of points of clarification. Bob, I think you said there was a bad debt charge in the March quarter. Can you tell me what that amount was again and where it was included?

 

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