Good day, ladies and gentlemen, and welcome to the Second Quarter 2019 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today's call, Mr. Seth Bagshaw, Senior Vice President and Chief Financial Officer. You may begin.

Thank you. Good morning, everyone. I'm Seth Bagshaw, Senior Vice President and Chief Financial Officer. I'm joined this morning by Jerry Colella, our Chief Executive Officer; and John Lee, our President and Chief Operating Officer. Thank you for joining our earnings conference call. Yesterday, after market closed, we released our financial results for second quarter of 2019. Our financial results as scheduled pro forma revenue by market have been posted to our website, www.mksinst.com. As a reminder, various remarks about future expectations, plans and prospects for MKS comprise forward-looking statements. Actual results may differ materially as a result of various important factors, including those discussed in yesterday's press release and in our most recent end report on Form 10-K for the company. These statements represent the company's expectations only as of today and should not be relied upon as representing the company's estimates or views as of any date subsequent to today, and the company disclaims any obligation to update these statements. Today's call also includes non-GAAP adjusted financial measures. Reconciliations to GAAP measures are contained in yesterday's earnings release. In addition, we refer to certain pro forma measures with the acquisition of Electro Scientific Industries Inc., or ESI, which closed on February 1, 2019, had occurred at the beginning of the first quarter of 2018. Now, I'll turn the call over to Jerry.

Thanks, Seth. Good morning, everyone, and thank you for joining us today. I'll start with our results for the second quarter 2019 followed by several business and market highlights, and then I'll turn the call over to John who'll share additional details on our strategy, customers and markets, supplemented by additional information on our financial results and third quarter 2019 guidance, before we open up the call for your questions. Second quarter revenue was $474 million, which was within our guidance range. Non GAAP net earnings for the second quarter were $59.9 million or $0.09 per share which was above the midpoint of our guidance. In the second quarter, we saw headwinds in our Advanced Markets this is primarily due to disruption of the global trade environment highlighted by softening and consumer electronic devices, tariffs and Huawei ban. We see the impact both directly in China and indirectly across other regions as this uncertainty continues to be an overhang in many of our markets and for our customers worldwide. We expect these headwinds to continue impact our Advanced Markets into the third quarter. Despite these headwinds though, we are very pleased to report that revenue on our Advanced Markets achieved a new quarterly record $260 million and comprised 55% of our revenue in the quarter. We do still see moderation and semiconductor capital spending as we mentioned last quarter our business appears to have stabilized returning from market recovery remaining a bit uncertain. One of the strengths of the years has been to manage through cycles. The underlying strategy is the MKS business process which is a disciplined approach to all aspects of our business focusing on operational and financial stewardship. Managing on business with this approach enables us to quickly adapt to any short-term fluctuations and positions us to…

Thanks Jerry. Over the last five years we have transformed MKS from primarily the semiconductor component supplier to a company that delivers solutions for the most challenging problems in advanced manufacturing processes. Broadly our solutions address markets that drive the information economy and equipment tech economy. The information economy is build around T&A growth such as data storage, paths of computation and increasing communications bandwidth. To address these challenges within the semiconductor market the industry has developed vertical structures such as INSED and V-NAND a major inflection with how chips are made. Vertical features requiring increased deposition etch steps, high aspect ratio feature require increase power, include control and atomic layer processing. The second quarter we secured a silicon design win in our power solution business on our new conductor etch tool for a V-NAND memory application. Each chamber requires a multiple 13.56 megahertz RF generators and custom matching networks. We took this business from a competitor. Based on our technical performance and our strong in region support capabilities, our power solutions group was also honored to the excellence partner award from NAURA Technology Group leading China based OEM. We also had a number of design wins for atomic layer deposition in the semiconductor applications for our ozone generators, direct pressure measurement flow and valve solutions. To invest the increasing communication bandwidth challenges from the information economy the industry has adopted flexible and high density interconnect PCBs. We continue to see excellent progress with our ESI acquisition which enabled us to address these markets with complete system solutions for laser micro processing and components testing. In the second quarter, we will see the first order in Europe for our new flexible PCB laser drilling solution which incorporates our spectra-physics nanosecond pulse laser. This order compliments multisystem order already shipped to…

Thank you, John and I’ll cover our Q2 2019 financial results and discuss our Q3 2019 guidance. Sales in second quarter $474 million, an increase of 2% sequentially compared to the first quarter. Revenue was slightly under the midpoint of our Q2 guidance as seven sector market cause has left long expected. In addition our advanced market impacted by the Jones slowdown industrial markets which occurred in the latter the quarter, as well as uncertainty costs by global trade tension. 55% of our sales were customers in our advanced markets or 45% were customers in semiconductor market. This was long-term goal achieving balanced market mix. Sales for advanced markets were a record $260 million, an increase of 7% sequentially due to full quarters impact of the ESI acquisition. Sales for semiconductor customers were $214 million a decrease of 3% sequentially. Non-GAAP gross margin was 45% which was favorable to our expectations at this revenue volume due to product mix and continued cost controls. Non-GAAP operating expenses were $125 million, which was $7 million the above the midpoint of our guidance due to strong focus on managing our cost structure. Non-GAAP operating margin was 19%, which was 103 basis points favorable to the mid-point of our guidance range. A strong future performance reflects our ability to effectively manage the company through all phase of the operating cycle. GAAP gross margin was 44.5% included the impact of $2.5 million of inventory purchase accounting charges. GAAP operating expenses were $147 million, included $17.6 million in amortization of intangible assets, $3.2 million in acquisition integration costs, and $1.2 million in restructuring costs. GAAP net interest expense was $12.7 million, and non-GAAP net interest expense was $11.4 million. Our GAAP tax rate was 27%, and our non-GAAP tax rate was 23%. Tax rate were higher…

[Operator Instructions] Our first question comes from Patrick Ho with Stifel. Your line is now open.

Thank you very much. Jerry maybe just as a follow to some of your comments this morning regarding the Advanced Markets and the impact from some of the global macro and market trends we’re seeing today. Can you give us a little color maybe qualitatively in terms of either the products that were affected whether they were like ultrafast, the ultraviolet lasers or even the markets that felt some of this impact?

Yes. So maybe if I can answer that by kind of setting all the different markets and product areas we participated in. So let’s finally [indiscernible] way to it. I will answer to your question, Patrick. Thank you. So on the semi side, we still see this lumpy and bumping around the bottom but we are encouraged over the last several days of two moving drivers of semi and industrial and then more a positive commentary about their business positioning what they see going forward. And we are having more positive discussions with the semi customers as of late. So but that affects both semi and the industrial side, which is good. The Light, health science, the research and defense parts of our business are solid and consistent. The industrial side has lightened up and the discussions with the customers are more around about timing and factuality and it’s pretty much an effect from the trade issues in Asia, particularly China. So even though we’ve set our records for Advanced Markets, we are seeing that the industrial side of our business more affecting the previous Newport Corporation and has been impacted by some of our concerns of trade and that resonated out into Europe and other parts of the world. We are emboldened by the pockets of strength in China though directly, both in terms of semi and solar, we saw some good strength there. So it’s pretty much the industrial side, pretty much affecting mostly Light and Motion and it's a matter of there’s a lots of engagements, there’s a lots of designing, there’s a lot of the customers who say, I want to buy just a little hesitant right now given some of the circumstances -- circumstances of being expected to come back in a very strong position. And we consider the Advanced Markets right now to be probably flask where we are now and to the end of the year but with the ability to recover if conditions change. Does that help?

Maybe as my follow-up question for John, because we spent some time talking about the evolving laser strategies and particularly with the introduction of new accessory products on the Light and Motion side of thing. Can you give investors an update on how that progress is going and how that can be a growth driver on a going forward basis?

So we didn’t have all the lasers in our portfolio and so that's what we talked a little bit about. Picosecond IceFyre laser that we released, that’s the second Picosecond laser we released this year. The first one was at our lower power and that was a gap in our portfolio even though we had talked about laser business growing and has over last several years, it was growing without a complete portfolio. So now we continue to fill that portfolio and we believe that because of that we will continue to grow the laser business portfolio.

And final question for me Seth, in terms of on the gross margin profile actually came in pretty well despite the projected decline in revenues in the September quarter. What are the key variables there, is it the product mix and the market mix that are helping margins, gross margins to stay pretty much close to that 45% level?

Yes, thanks, Pat. In Q2 we have unexpected margins through a product mix, the ESI grew particular ENS division. It was very favorable in the quarter. Usually as you know, our model the 50% variable gross margins effect the Q3 guidance exactly how that roles out. We have been proactive on controlling our cost structure we started back in really Q3 of last year the 2019 continue to mitigate the cost and the business and cost being sold. So across the board I think very favorable margin profile we are driving cost structure down. Our margin typically cross all divisions are relatively consistent are real high in advanced markets that keeps our business well. But generally again we value we invoice customers we are value based proposition and you can tell that very well in the downturn. So all those factors are kind hanging them pretty well we’re happy still we are in the model.

Yes even in the – this is Jerry Patrick even within this the past quarter we took cost reduction actions based on what we saw with the volume of the business. So one of the things that we've always our product is our financial stewardship of this business, it has never been an impact to our growth of the company. We make we shift our investments where the high profile opportunities are and we will take cost out where we think the cost is either probably based on the volume in the business I would also see the future growth coming. So that’s one thing that we can necessarily control the markets but we certainly control the cost structure and execution that within the company we’re proud of that over our 20-year history of being a public company.

Our next question comes from Amanda Scarnati with Citi. Your line is now open.

I just had a quick follow-up question, just want to know if you said that you expected advanced markets to be somewhat flattish throughout the year. And then how would impact sort of going for next quarter in the semiconductor space that implies somewhat like down high single digit to low double-digit growth in semiconductor. Is that thing can growth with sort of the moderation in SMEs that you're seeing?

Yes Amanda this is John I’ll take that and so I think there is still variability in both markets on the order of plus and minus 5%. So we don’t expect both to be still bumping around and flattish. We guided down a little bit but really it just to be a little cautious. So I am going to take that as any kind of message about semi versus advanced markets.

Yes, and some part of the problem is look with the advanced the company has that we can ramp faster than others is our lead times are very, very short. So the business we have very quick turns business are going into a quarter. So sometimes that covers how we look at things, but we feel very optimistic as the business goes towards the next quarter towards the end of year that things will turnaround. Like John said we want to make sure that we are credible and consistent in the way we project the business right now and I agree with John it could be a mix that goes 5% here or 5% there they are pretty close when you're 50/50 [indiscernible] mix and order to can make a big difference in the mix between semi and non-semi our advanced markets.

Okay and then within the semiconductor market are you starting to see inventory – at more comfortable level and your customers is that fact when your customer start really ramping up isn’t going to be that sort of one quarter inventory delay or is there enough visibility to see what’s happening there?

No from what we can see it looks as holding the inventory have relatively stabilized and normalized. So yeah I know I think we’re at point now where the inventory reduction is not the main concern at this point it’s purely demand.

And the other last question that I have is just on different customers are you seeing different behavior at your key customers [indiscernible] or is everything sort of similar across the board?

Amanda, it’s John, I think we don’t see any real differences between our semi OEM customers beyond the implied [indiscernible]. I think they are all affected equally by discussions and announcements by the key end user. So no I don’t think there is any real difference between them.

They do order differently though, they all have different techniques for ordering which gets some of the customers in an over inventory position. Now some customers are just in time line side supply which we prefer, other customers by bulk quantities. So you have a pig going to the python as they say or wild [indiscernible] and others have more MRP level setting. So their inventory and peculiar practice are different, but soon there probably will be discussing with us where the business are that appears to be consistent at this point.

[Operator Instructions] Our next question comes from Sidney Ho with Deutsche Bank. Your line is now open.

Want to go back to that guidance and to get to the midpoint of the guidance is down 7%, but you seem to think that both semis and the advanced markets are flat plus or minus 5. Just want to make sure I don't miss anything is that because maybe the other way to ask the question is what are you specifically relate to – are you specifically forecasting ESI is going to do in Q3?

Yes, so it’s Seth so Q3 is high about 50 million we believe plus or minus in the quarter and then [that to your question] or advanced markets we said we think in Q3 its feels flat going forward. So certainly Q2 and Q3 expect a little bit of headwind [indiscernible] trade and Huawei being a little impact as well. And then again the semi again as Jerry mentioned your short lead times basically we seen the business level it’s going to bounce around plus or minus order rates. And again that contributed pretty quickly as the OEMs turn on their business, so right now based on the level of business and the order rates that kind of we’re seeing.

The follow-up to that related to semi business you guys have been using the term consistent for the last few months and you guys kind of talk about inventory has kind of stabilized. If you kind of look at the month-to-month basis in terms of orders is there any sudden change in order patterns in the latter part of the Q2 or the first month of this quarter. The reason I am asking is because customers, some of the customers have talked about strength in foundry and logic maybe some weakness in memory. I want to see if you’re seeing the same kind of pattern as well?

Yes Sidney, it’s John. So I don’t think we seen yet but I think as Jerry mentioned our discussions with customers are consistent with those kinds of commentary by the foundry and our foundry customers. So I think going forward that’s why we’re little hopeful that we’re maybe at the bottom, but we haven’t seen that as yet in Q2.

Maybe my last question is on advanced markets you talk about headwinds that will continue to Q3. The business has been – if you take out ESI in that equation, the business has been down year-over-year by about 10%, 11%, 12% in the first and second quarter and maybe in the third quarter. Do you see an inflection point that if you will start seeing year-over-year growth again and I guess it depends on the headwind, but more importantly I don’t want to overreact to one or two quarters. But it does look like your business moves around based on what global GDP does or GPP. Do you see still believe this is a GDP plus kind of growth rate into longer-term?

Sidney yes we do and I think we know exactly when things started tightening for the advanced market industrials. And that was really when the Huawei ban came in and it was right then and you know that many discussions with customers, key customers became much more muted. And so we're still very positive on that market, because this is a geopolitical and issue thus several is demand issue. And so when those things get settled, we expect that light motion division in our surround work piece portfolio should also enter from that.

Yes, and historically for about a 10-year or 12-year period our CAGR line the advanced markets “non-semi” was about 8% historically and consistently. So the history are long track record would suggest that are suggesting that something towards the normalized growth rate is appropriate for us. And the six-month trend nine month trend I think that’s very short-term view of looking at a business just as I would look and people worried about Q2 and Q3 I think that was a short-term view you have to the long-term track record and then again consider the financial performance of the company regardless of the market conditions.

Our next question comes from Krish Sankar with Cowen. Your line is now open.

I had a few of them Jerry on your semi or vacuum analysis business how we characterize the June quarter like compared to three months ago, did it progress for your plan? Did it deteriorate or get materially better over the quarter?

It was pretty consistent. Overall, the semi business about 2% down, so that's annoys as far as concern. It was pretty consistent over the last quarter, so Krish. Like I said you know, in the quarter-to-quarter until the overall conditions solidify and look very strong you can get things that bump around a bit, a project or a big technology buy that gives you a bump in the business, but relatively I would say it’s relatively consistent. And finally -- also one thing to let you know about our confidence in that business, particularly the vacuum analysis, as we put in moving product line over $15 million worth of capital in the last year to give us some upsize search rent capacity and if we didn’t feel good about that business both the short and long-term, we’d never put $15 million of capital into a single product line. So that’s the comps we have in that business right now.

And then the conductor etch power supply and the dimension, I remember you have spoke about one of prior quarter or two, so is this a different thing, is it a same -- it is the same customer, is this for a critical etch application or a not so critical etch application?

Krish, it’s John. I’ll take that. Yes, so we’re about to announce three conductor etch design wins. So you're going out the first one. Couple of months ago we have announced the second one and this one is a third one and it’s multiple customers and its all critical conductor etch.

This is been an area of focus. We live in dielectric etch for critical applications. In the last several years we have made significant investments in engineering and capital to extend our lead to dielectric and to capture the conductor etch business, which we are and we will do.

And then maybe John as a follow-up to that, between conductor etch and dielectric etch, which would you say is more power supply intensive?

Yes, dielectric etch is more power supply intensive because of the turn a lot by the [indiscernible] effects. So there is more power content per chamber as you need to etch higher expect ratio of features. I would say though that conductor etch is starting to be applied to tougher processes, some of them are also high expect ratio, so we see a trend that conductor etch, our power content on conductor etch is also going to be increasing over time.

That’s our sweet spot. Krish, we are not interested in low end, low technology commodity pricing power. There’s plenty people like to do that. It makes the revenue look higher. We're interested in the more critical, long-term high growth applications where it's worth the investment for us and that's where we take in the business from which is really been a strength of our semiconductor business in the last several years, right John.

And then I just had two other questions John and Jerry. One is on the ESI side if you look at some of the downstream data points looks like the PCB is stabilizing but the MLC capacitor is not yet, is it the way to think about your ESI revenue potential as well. Are you going to follow that or is there something else going on?

Krish, it’s Gerry, I‘ll take that. So you are right, the PCB history looks like its stabilizing and so we have talked a little bit about this first delivered for our CapSton, which is the next generation flex drill in Europe. But as I mentioned in the prepared remarks, it also shifts double-digit numbers to Asia customers CapSton already for PCB flex drilling. When you look MLCC, we look at it from a long-term trend perspective, test systems that we have made historically for MLCC have been testing small capacitors and you're right that has had over bill and it’s a digestion period right now. But we recently released on last fall the large chip tester and that's more targeted towards automotive where the small ones are targeted more towards communications. And so that part of the test system actually has been very consistent. So automotive has really continue to incorporate more MLCCs into the cars and so we see that as a long-term positive driver and its has been very consistent over the last couple of quarters. And then the smaller chips are driven lot iPhone’s, so we had overbilled and that was in the digested period. So we’re very positive because smaller chips will continue to be put into phones, especially with 5G, really you will need a lot more of these MLCC profile and so that’s why longer-term we are positive on both small chips and large chips testing.

We’ve got an extra input that the MLCC could be a double-digit CAGR for about a five year period over time due to the applicative transact of our automotive, personal devices, so the short term there’s a bit of a oversupply, but the long-term prospects and relatively sure appears to be very bright for that. Another thing if you get there’s a chance to do, look at the legacy tools and perform value analysis and cost structure those tools. So sometimes you know, little bit of a repeat the best to do things on the cost side that you can do when you're going for war. So we expect the deal to work on the margin of those products overtime as well.

And then last question for Seth, did I hear you right the taxes only 22% seems pretty high and how do you think about in longer term?

Yes. You are right. On normalized real long term more or like 19% you coming into the year. What happens is the way the mix income rolls out slow down, this will dries up the rate dramatically. So I think this year full year 2019, 22% our expectation when volumes pick up and again [indiscernible] of that uptick looking forward 2020 for sure. That will take some time to reach and comes back down to 19% rate back historically it was.

Our next question comes from Mark Miller with Benchmark Company. Your line is now open.

Thank you taking my question. Just wanted it's been some speculation about Samsung and SK Hynix might be moving up there 128 later ramp, I'm just wondering have you heard that and if that be the case how would you interpret that for you for MKS?

Mark, this is John Lee. So certainly can’t comment on those rumors since we don’t know but I would say that when the industry goes to the 128 layer, those will be only enabled by the most advanced meaning outreach , provided by the one large OEM that have that share and that OEM is using the power price that we provide. And so when that happens, we’ll be very positive about that. That obviously drive our power business. So we would lump in there - start that sooner than later.

Have you seen any change, there was a power outage at the Toshiba fabs and digital Toshiba lost a lot of the wafers and estimated could be significant part of the offer for the industry. Has there been any ramifications of that, have you seen with anybody?

We had Mark in terms of wafer starts, [indiscernible] you read about D NAND and DRAM. It does look like D NAND pricing has stabilized and the debate now is whether that’s a short term bullet because of that outage or whether it's just because the supply is catching up to -- the demand is catching up to supply and so we haven’t seen any direct impact for ourselves.

[Operator Instructions] Our next question comes from Weston Twigg with KeyBanc Capital Markets. Your line is now open.

First just wanted to touch base on the HDI product opportunities and the ships embedded in order to several geographies. I am wondering if you could give us an idea of when that might translate in revenue and what kind of revenue that could look like maybe through 2020?

It’s John. I’ll take a stab at that. So we have shifted three regions A, usually what happens they go into application centers and those local customers can come by literally bring their panels and try their different recipes and so Taiwan, Japan, China are the biggest markets for HDI. So the next three to six months what will happen is, these major customers will be testing them proving processes and then usually what happens in this kind of cycle some of the flex it will start ordering in the first half of the next year to put the tool to the factories to make the next generation PCBs for the consumer product cycle, and so we expect that if we’re successful then volume orders should be occurring in the first half of 2020 So how much, the market is 400 million 500 million which we have zero and so if region gain a couple of the design wins with two key customers I think we’ll be pretty happy. Then once they get out, then over the years we would build that market share.

The initial feedback though is extremely positive on the tool, actually we have one of rewards for the technology for that HDI tool based on cost of ownership in terms of speed and accuracy. So that's independent of MKS, I think it's a great tool. So right now, at start, this is extremely positive. We're also going to have a summit in the early fall with bringing customers to be involved with the tool directly. So looking forward to inviting a lot of spot of customers directly to see the tool and operate the tool with us.

And then likewise, just wondering, you mentioned the new higher powered laser that would address some of the manufacturing opportunities in solar and batteries and advanced displays. And I'm wondering if for this market you could help us size it and also maybe discuss the competition that you're facing in that market?

Yes, so this category, laser, is defined by the pulse width, and that's picosecond. So prior to the first announcement, the 30 watt version, we had no participation in the picosecond market. And we participated in the nanosecond market [indiscernible]. So we kind of surrounded the picosecond, we didn't have an entrance there. And so this market is arguably, could be as big as nanosecond and those are large numbers. Because people are moving to shorter pulse width to get more precision in different materials so we're just beginning to participate there, we see a lot of customer interest, demos already out there, by the way, for the first lower power version and we just announced this 50 watt version. So we expect that this will add substantially to our laser revenue going forward.

Maybe I'll give a little historical perspective on it. So in 2016, our laser business up to $100 million, in 2017 it was $227 million, in 2018, it was $282 million for a growth rate of 24% from 2017 to 2018. So there's a huge opportunity for just the laser business in general based on micro processing in the light industrial space and more and more we release these newer applications, the great the opportunity is.

And West, maybe a little more about the differentiation. So there are people out there with picoseconds way before us for sure, but we're trying to leverage what we did in nanosecond. Nanosecond laser we released 5-years ago, Talon, was a change in the industry in terms of cost for the performance. And that's why the Talon has been very extremely successful nanosecond, took a lot of share from incumbent. And we're using and leveraging that same architecture for the picosecond laser. So we're not just going out there with something that's need to, we're going out with something that is much better from a cost performance.

Our next question comes from Tom Diffely with D.A. Davidson. Your line is now open.

So we talked a lot about the inventory levels of the OEM customers. I'm curious, so what other inventories look like at the advanced market customers and what do they typically hold in terms of inventories?

In terms of inventory - your question was about inventory for advanced market customers?

Yes.

Now typically they don't hold the kind of inventory that semi OEMs do. Usually when they have the business they buy, it's pretty fast turn. There's less of the Copy Exact issues there. So they can change quickly, so you don't have that motivation to hold a lot of long-term inventory because you're going to can have this Copy Exact at effect. So, no, we don't actually see a lot of inventory issues with the advanced market customers, industrial customers.

And it sounds like post Huawei ban, you saw a big slowdown in that space. Just curious, have you seen projects being cancelled or are they just kind of put on hold or so for that.

That's a good question. The projects that we were working on prior to the ban, are continuing. Just the magnitudes of the orders are less, just because our customers are being more careful. So instead of ordering $10 million on lasers, for example, they might order $3 million for now and waiting until the clarity of the markets gets better before they order the rest. So it's really about tapering down how much they'd order rather than cancel. That's been our experience so far.

And then when you look at the new power supply for the conductor etch market, you mentioned V-NAND, but I'm curious that that was specially a V-NAND product or is that also applicable to DRAM foundry and logic?

It's actually applicable to DRAM. It's a high aspect ratio type of etch conductor. But as a result of that, obviously, it can do low aspect ratio as well if they so choose to, to win applications there.

And finally Seth it sounds like you were halfway through the cost reduction program on the synergies for ESI. What do you expect the timing to be on the second half, is it more two years outweighted or is it kind of be evenly spread through that period of time?

The whole things [indiscernible] account to 18 to 36 months. Our goal is kind of like the Newport we announced, 18 to 36 months and we got that approximately done in a 20 month period. So, I would say 20 months for ESI for sure, but we'll try to close best we can. So I would say we'll update really on a quarterly base at this point. But we're ahead of schedule. 15 minutes we're very strong about achieving the total cost synergies. But I think we'll have [indiscernible].

And historically, we beat synergy target that we put out. We put 35 for Newport, I think it was 40 we finally achieved. So historically we've come over the top of what our synergy number was. We don't like to justify deal with a big synergy number. We don't think that that is a good message internally to the shareholder of the Company. We feel comfortable at 15 and hopefully we can do better than what we've done historically.

At this time I'm showing no further questions. I'd like to turn the call back to - for closing remarks.

Sure, this is Gerald Colella. We're pleased with our results for the second quarter. It was another quarter of strong operational and financial execution, which drove our non-GAAP operating margin and non-GAAP earnings above the mid-point of our guidance. Our diversification strategy continues to drive growth in our advanced markets. We are confident that our exposure to diverse end markets and the strategy we have put in place have positioned us for our continued long-term success. Thank you for joining us on the call today. If you're interested in MKS, we look forward to updating you on our progress when we report our third quarter 2019 financial results. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.