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» Electro Scientific Industries, Inc. F2Q10 (Qtr End 09/26/09) Earnings Call
Now, I will turn the call over to our CEO, Nick Konidaris.Nic k Konidaris Thank you Brian. Good afternoon and welcome to our second quarter conference call. This was another growth quarter for ESI. Orders at $70 million were the highest in over two years. We continue to see strong demand in our memory repair business, and our flex interconnect products had record orders and shipments. Sales grew sequentially and more than doubled year-over-year. Gross margins rebounded from last quarter resulting in solid non-GAAP earnings. Lastly, during the quarter, we acquired PyroPhotonics, a manufacturer of unique tailored-pulse fiber lasers which strengthens our differentiated product offering and enables us to move into adjacent markets. Revenues for the quarter were $60 million, up 2% from Q1. Non-GAAP earnings per share were $0.10. Paul will go into more detail around the financials in a moment. We generated $70 million of orders compared to $64 million last quarter. The increase was driven by strong sequential demand for memory repair systems, as we again received orders from multiple customers. We also saw record orders in flex interconnect and we penetrated a new micromachining application yielding a large order plus several smaller follow-on orders. Revenues in our semiconductor business were $13 million, down from last quarter due to the timing of shipments. However, orders in semi were up sequentially and far above last year. The key driver again was strong demand in our memory repair business, as a result of a large order from Hynix for our newest high performance memory repair system. This product, based on our patented tailored-pulse technology offers the industry’s fastest throughput for the latest technology (knowledge). Our LED scribing business was softer in Q2, after record orders in Q1. Looking forward, in our memory repair business, we expect order levels to be choppy as some customers absorb the new capacity and the other customers come on line. Longer term, we expect this business to continue its recovery but to pre-recession levels, driven by growth in (inaudible) PCs, servers, and smartphones. Additionally, we expect the LED scribing and LCD repair businesses to remain solid.
This quarter, we also entered the thin wafer dicing market with our introduction of the model 9900. This system is under evaluation of multiple customers, and we expect it to generate incremental revenues over the next several quarters.Our Interconnect and Micromachining group had another strong quarter at $33 million, one of its best revenue quarters ever. Within IMG, revenues in our flex interconnect business were particularly strong driven by record demand. Historically, the September quarter is seasonally strong and this year was no exception. We saw good customer acceptance for our new 5330xi high performance via drilling system. Looking forward, we expect this business to continue to perform well driven by strong growth in consumer electronics. We also had a good quarter in our advanced micromachining business. We penetrated a new application with the model 5900 leading to a large order this quarter and we saw strong follow-on business from previous applications. We’re excited about our long-term growth potential as we expand our capabilities in glass, new generation PCBs and other advanced micromachining applications. Revenues in our passive components group were $13 million, down sequentially from very strong sales last quarter, but more than double sales from one year ago. Orders were also slightly lower as capacity adds were absorbed into the market, but still reflect good customer demand for both component tester systems and consumables. Looking forward, we believe that the growth drivers for passive component demand remain healthy, especially demand for smartphones. As such, customer demand in this business should remain solid and would be driven by timing of capacity additions. Read the rest of this transcript for free on seekingalpha.com