Ultra Clean Holdings, Inc. (UCTT) Q4 2014 Earnings Report, Transcript and Summary

Good afternoon. My name is Dustin, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ultra Clean Technology Fourth Quarter and Fiscal Year 2014 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Joining us today is Ms. Sheri Brumm, our Vice President of Finance, Mr. Casey Eichler, Chief Financial Officer and Mr. Jim Scholhamer, our Chairman and Chief Executive Officer. I would now like to turn the call over to Ms. Brumm. Ma'am, you may begin.

Thank you, operator. Welcome to our fourth quarter and financial year 2014 financial results conference call. Presenting today are Jim Scholhamer, UCT's Chief Executive Officer, and Casey Eichler, UCT's Chief Financial Officer. Casey will begin by presenting the financial results for our fourth quarter and fiscal year 2014, and Jim will follow with some remarks about the business. A few moments ago, we issued a press release reporting financial results for the fourth quarter and fiscal year 2014 ended December 26, 2014. The press release can be accessed from the Investor Relations section of the UCT's website, along with the information for the tape delay and replay of the live webcast at uct.com. Together with our recently issued press release, this conference call enables the company to comply with the SEC regulations for fair disclosure. Therefore, investors should accept the contents of this call as the company's official guidance for the first quarter of fiscal 2015. Investors should note that only the CEO and CFO are authorized to provide company guidance. If at any time after this call, we communicate any material changes in guidance, it is our intent that such updates will be done officially via public forum, such as a press release or a publicly announced conference call. The matters that we discuss today include forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995, related to matters including our future financial performance, new product orders and shipments and industry growth. Investors are cautioned that forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those projected in the forward-looking statements. Some of those risks and uncertainties are detailed in our filings with the Securities and Exchange Commission. The company disclaims any obligation to publicly update or revise any such forward-looking statements or to reflect events or circumstances that occur after this call. Now, here is Casey to present the fourth quarter and fiscal 2014 results.

Thank you, Sheri. Revenue for the fourth quarter was $120 million, an increase of approximately 2.5% from the prior quarter and a decrease of 5% when compared to the same period a year ago. For fiscal year 2014, revenue was $514 million, a record high for UCT compared to $444 million in fiscal year 2013, an increase of 15.8% year-over-year. We are very pleased with our year-over-year revenue growth. Semiconductor revenue for the fourth quarter was $102.2 million, an increase of 5.7% from the prior quarter and non-semiconductor was $17.8 million, a decrease of 12.3% when compared to the third quarter. Semiconductor revenue was 85.1% of total revenue for the fourth quarter and 82.4% for fiscal 2014. Revenue outside the U.S. was 30% in the fourth quarter and 31% in the prior quarter and 30% for fiscal 2014. Two customers had revenue over 10% for the fourth quarter. Gas delivery systems represented 76.2% of our revenue for the fourth quarter. Gross margin for the fourth quarter increased to 15.3% compared to 8.8% in the third quarter. For fiscal year 2014, gross margin was 14.2% compared to 15.2% in fiscal year 2013. As mentioned in our earnings call last quarter, one of our newer customers GT Advanced Technologies filed for bankruptcy. As a result, approximately $9.3 million was written off in the third quarter. Since then, our supply chain organization has worked very hard with our suppliers to cancel inventory commitments associated with GTAT. During the fourth quarter, we were able to recover approximately $1 million of the previously written off inventory commitments. On a pro forma basis, without the GTAT bankruptcy, our gross margin would have been 15.4% for fiscal year 2014. We continue to believe that 15% to 18% gross margin is an appropriate margin target from our business. Operating expenses were $12.2 million or 10.2%, excluding amortization of intangibles as compared to 13 million or 11.1% in Q3. The decline quarter-over-quarter was mainly due to the non-recurring charge associated with GTAT in the third quarter. Our operating expenses as a percentage of revenue will be up slightly in the first quarter of 2015 as compared to the fourth quarter of 2014, due to an increase in outside services, cost and payroll taxes. We continue to work underwriting our operating expenses below 9%. Operating income was $4.9 million or 4.1% before interest expense and income taxes in the fourth quarter compared to a loss of $4 million 3.4% in the third quarter. For fiscal year 2014 operating income was $18.2 million or 3.5% before interest expense and income taxes as compared to $15.9 million or 3.6% in fiscal year 2013. Excluding amortization of intangibles, our operating income was $6.1 million or 5.1% in the fourth quarter and $23.1 million or 4.5% for fiscal year 2014. Interest expense for the quarter was $471,000, a decrease of approximately $126,000 quarter-over-quarter. The effective tax rate for the fourth quarter was 23.1% or an expense of $1.1 million. The overall tax rate for the fiscal year was affected by the $1.7 million valuation allowance on state deferred tax assets, which was expensed during Q3. The 2014 tax rate includes an incremental 11.3% related to this valuation allowance. As a result, our tax rate for fiscal 2014 was 30.5% and was 19.2% without the valuation allowance expensed taking into consideration. The tax rate for first quarter of fiscal 2015 should be modeled at 28%, due to the increased U.S.-based income associated to Marchi acquisition. Fourth quarter net income was $3.5 million or $0.12 per share. Excluding amortization expense related to acquisitions, fourth quarter income was $4.5 million $0.15 per share compared to a loss of $0.14 per share in the third quarter. Fiscal 2014 net income was $11.4 million or $0.38 per share compared to the net income of $10.4 million or $0.36 per share in fiscal 2013. Excluding amortization expense related to acquisitions, fiscal year 2014 net income was $15.3 million or $0.51 per share as compared to 2013 net income of $15.5 million or $0.53 per share. The diluted share count was $29.9 million, flat with the prior quarter. Non-cash charges for the fourth quarter were $1.2 million related to FAS 123R, $793,000 related to depreciation and $1.2 million related to amortization of intangibles. Turning to the balance sheet, cash was $79 million, an increase of $3.9 million from the prior quarter. This cash balance is another record high for UCT. Net cash increased $3.2 million during the period to $30.8 million. As mentioned in our press release, on February 5th announcing the acquisition of Marchi Thermal Systems, we have also restructured our debt to improve the terms and finance the acquisition. As a result, our long-term and short-term debt position will change in the first quarter of 2015. Accounts receivable was $61.8 million, up $4.4 million from Q3 and days sales outstanding increased to 46 days from 44 days at the end of the third quarter. Accounts payable were $48.9 million, an increase of approximately $6.5 million quarter-over-quarter. Days payable outstanding at the end of the fourth quarter increased to 43 days from 36 days at the end of the third quarter. Net inventory was $56.9 million, an increase of $1.5 million over the prior quarter. The increase in inventory is a result of our first quarter 2015 forecast and the need for inventory ahead of the start of the quarter. Inventory levels are projected to stay flat or slightly lower during the first quarter of 2015. Shifting to our guidance for the first quarter of 2015, UCT's is seeing a continued strength in our semiconductor sector of our business. As a result, we anticipate an overall revenue increase in the first quarter. Our revenue guidance for the first quarter is $123 million to $228 million. Our Q1 earnings guidance is for earnings per share to be in the range of $0.11 to $0.14, excluding amortization charges and other one-time charges. This forecast takes into account the charges that will be taken in association with CEO transition of approximately $1.5 million. The cost associated with the Marchi acquisition of $300,000 to $500,000 and the reversal of amortized bank charges of approximately $700,000 associated with our previous credit facility. In addition, we are in the process of determining the purchase price accounting for the Marchi acquisition, therefore a new amortization of intangibles will be determined prior to the end of the first quarter. We will detail the new amortization and one-time costs associated with the Marchi acquisition in our next earnings call. As I mentioned earlier, the tax rate for the first quarter is expected to be approximately 28%. In summary, I am exceptionally proud of our entire team for delivering continued improvement and operational and financial performance during 2014. I am pleased to introduce Jim Scholhamer, while he has only been here a few weeks, he has already added value to the organization. I very much look forward to working with Jim as our new CEO. Now, Jim will discuss our operating highlights for the fourth quarter. Jim?

Thank you, Casey. I want to start off by saying that I am extremely excited to be part of the UCT team. I have been on board now for several weeks and I have been really impressed by the many talented and dedicated employees I have met. I look forward to leading UCT into its next phase of growth as we improve the performance of the company. I am dedicated to working with our customers and continue to build a world-class organization that serves our customers as the leading systems integrator and complete outsourced solution. I want to thank Clarence Granger for all of his years of service here at UCT and I look forward to working with Clarence as Chairman of the Board. Now, I would like to discuss some highlights for the fourth quarter. During the fourth quarter 2014, we continued to see strong revenues from our semiconductor sector of our business, with an increase in semiconductor revenue of approximately 6% quarter-over-quarter. Our total revenue of $120 million for the fourth quarter was at the high-end of our guidance range. On our previous earnings call, we had guided our fourth quarter adjusted earnings per share, excluding amortization charges of $0.11 to $0.14 and revenue of $115 million to $220 million. We were able to achieve revenue and earnings per share at or above our guidance range for the quarter. In addition, we achieved record revenues of $514 million for fiscal 2014. This is a major accomplishment for UCT. Finally, our cash level of $79 million was at a new record high for the second sequential quarter. We are very pleased with the overall health of the business and our position in semi cap equipment market. In Q4, the percentage of revenue coming from our Asian operations was 30% as compared to 31% in Q3. This percentage fluctuates quarter-to-quarter based upon the mix of products go to our factories. While we continue to move products and revenue to Asia, the portion of our Asia revenue will drop in the short-term due to the Marchi acquisition. At the end of last week, UCT came into an agreement with our customer Intuitive Surgical to transition to in-sourced manufacturing for their next-generation robot, the da Vinci [ph] patient-side cart. UCT will continue to manufacture previous generation robots and also assist with the machine components and spare parts for current and future Intuitive production. This was a mutual decision between our customer and UCT based upon Intuitive Surgical's current manufacturing needs and UCT desire to meet our modeled gross margin profile. The impact of this change is approximately $5 million to $6 million in revenue per quarter. While it is disappointing we could not meet the needs of both, companies UCT will continue to be a strong partner with Intuitive Surgical and look forward to doing business with them in the future. I would now like to talk about some new investments that we are making in 2015, and which will add to UCT's product portfolio and growth opportunities over the next several years. Most recently, on February 5, 2015, we announced the acquisition of Marchi Thermal Systems. Marchi is a manufacturer of custom designed heaters using chemical delivery systems. They design and manufacture application-specific thermal solutions to solve semiconductor equipment customers' temperature management challenges. This acquisition further expands UCT's capability in the gas delivery systems for semiconductor and display products and opens up other opportunities across UCT's broad range of product offerings. As mentioned in our press release, we expect the addition of Marchi to be accretive to earnings immediately. The integration of this business will occur over the course of the next couple of quarters. We welcome Marchi's employees to the UCTT team. Another key investment for UCT during the fourth quarter was the acquisition of Prototype Asia LLC combined with our investment in 3-D printing operations in Southeast Asia. While this was not a large acquisition for UCT, it will allow us to lay a foundation in which to launch an Additive Manufacturing Center located in Singapore. Our new state-of-the-art technology will result in capabilities that complement our current products and services as well as add cutting edge technology applications for existing and new customers. Our goal is to continue to expand and capture new opportunities in manufacturing and integration, presented by the investment in this technology. We plan to have a grand opening of our Additive Manufacturing Center during the second quarter of 2015. In addition, UCT opened up a new prototype center in Fremont, California, in November of 2014. This center will allow UCT to offer quick turn parts and modules required by our semi cap customers, stringent new product development needs. We will be able to assist our customer success with their new products while ensuring UCT has improved prospects of the potential supplier when such product transition to volume production. Our prototype center expands our vertical integration capabilities for existing customer requirements. We expect the benefits of this investment to begin to be realized as our customers' new product gain traction in the marketplace. Finally, we are expanding our Singapore facilities to support our customers as they continue to focus on Southeast Asia. This expansion and increase in capacity directly supports the dramatic growth in our customer requirements within Southeast Asia and supports our customers' production needs as we continue to grow in strengthen in our semiconductor business. In summary, I think 2015 will be another great year for the company. The investments that we are making this year will allow us to accelerate our growth in the future. During the fourth quarter and fiscal year 2014, we had several major achievements and we remain confident in UCT's future and long-term growth. With that, Dustin, we would now like to open the call for questions.

Our first question comes from the line of Dick Ryan with Dougherty & Company.

Hi, guys. This is Ash [ph] for Dick. I wanted to talk to you guy about Intuitive Surgical, first. Did you say it was $5 million to $6 million a quarter hit in revenue?

In revenue, correct.

Okay. What was the margin profile like?

We cannot really discuss the margin profile specific to the different customers. Obviously, we have a model of 15% to 18%, so that is something we have talked about quite a bit. As we have gone through the process of looking at different products, customers and business, we tried to continue to improve our margins as we have talk about over the last year and get within over the last couple of years at 15% to 18%, so obviously I guess you can deduce that there was less than that 15% to 18%.

Sure. Casey, non-semi revenues were also like down $2.5 million to $3 million in the fourth quarter. Did that in-sourcing happen in the fourth quarter or it is starting in the first quarter?

Yes. The main thing there was GTAT. It did not happen in the fourth quarter, so that is really the first quarter news that we are sharing today. Obviously, the GTAT was the big piece coming out last year.

Okay. One question on the gross margin in the fourth quarter, 15.3%, does that include the $1 million benefit from GTAT in the fourth quarter?

Yes.

Okay. The non-GAAP kind of gross margin is at 14.5% then?

I believe that the non-GAAP, well, again it depends on all the things that you want to include in GAAP versus non-GAAP as you can tell it was a fairly active quarter, but I would say that that is probably a rough approximation.

Okay. Sure. I just had one more, the $123 million to $128 million sounds like a really strong guidance given what has happened with Intuitive Surgical. Is that mostly semi-driven and how much is Marchi in that?

Yes. Marchi is going to be, we are not going to breakout our second quarter Marchi, but Marchi is going to be, obviously, two months included in our quarter this quarter. As you can see from the revenue that we talked about when we did the announcement, it is not a huge revenue number on a quarter-by-quarter basis, but we think it is a huge opportunity for the company. I think that when you look at our guidance for the quarter, I think we are feeling good about the semi side of our business, but your point, semi is really going to dominate this year. That is why we have talked over the last quarter about the emphasis obviously with GTAT and now with Intuitive Surgical, our emphasis in 2015 is going to be some of these new initiatives that Jim talked about as well as deeper penetration more broadly across our current existing customers, That is really what the story is going to be all about this year. We continue to do new business, we continue to plant seeds outside of the semi business and we feel good about that, but as you know, Ash, this isn't something that turns on in a quarter or two. It takes time.

Sure. Just one last one, when you guys had a press released on Marchi acquisition, you said $18 million bucks was the annual revenue run rate. How much of that was actually going to UCT, like UCT was a customer of Marchi, right?

Marchi, yeah, the company is actually Marchi. It is pronounced marquee.

Sorry.

Yes. I mean, they were probably $2.5 million a quarter, something like that. You are right. They were supplier to us as well, so they were they were supplying $2 million, $2.5 million a quarter probably.

Okay. All right. Great. Thank you.

You bet. Our next question comes from the line of Edwin Mok with Needham & Company. Kim Donovan - Needham & Company: Hi. This is Kim Donovan on for Edwin Mok. Thanks for taking my question. You said that 30% of revenue came from the operations in Asia. Can you give us impact or an idea of what the impact maybe of Asia manufacturing going forward, whether it is margin mix, anything like that?

Sure. Yes. I mean, we have had a presence in Asia for a long time and it has primarily been focused around China though. In the last few years, we have added Singapore and Cebu as well. We are continuing to see a move more focused towards Southeast Asia, so I think you will see us grow in the Southeast Asia area, in Singapore in particular. We are still committed to all of Asia, but I think a lot of our customers are tending to focused more around Southeast Asia and Singapore than in China. We have set a target of about 50-50 between revenue in Asia and revenue in the U.S., and we have been at around 30% to a third over this last year and we think that will continue to grow over the next year though we are not going to get to the 50% by the end of the year.

Yes. I would like to add. I mean, obviously, we are heavily dependent on where our customers move as well, so as we have many locations which are strategically located to be near where the customers need the product, so those things that are constantly change from quarter-to-quarter, they ebb and flow, so we will be moving along with our customers. Kim Donovan - Needham & Company: Great. Thank you.

You bet.

Our next question comes from the line of Patrick Ho with Stifel Nicolaus.

Thank you very much. Maybe first Casey, in terms of your inventory management, it was done really well this past quarter. Looking forward, I think, you said it is going to be flat quarter-over-quarter March. Given the strong pick up on the semi side of things, how are you managing that side of it, particularly given the volatility in a lot of pulls and pushes that come along with that business?

Yes. As you know, we have had a fairly broad inventory going on over the last year or 18 months, and I think that has given us a lot more efficiency. I also have to give credit to our procurement supply chain team, Mark Bingaman and his organization globally has done a great job of shortening up our lead time to help manage that inventory and get us a better of operating and financial efficiency there. At this point, we feel we have a pretty good grasp of how we can move the levers and keep it flat even on an up quarter and so we are optimistic that we have the right material and the right timing on that material, so it is just a matter of execution and we are pretty confident we are going to be able to do that.

Great. That is helpful. My follow-up question in terms of some of your semi opportunities, I think in the past you had mentioned about your forays into areas like lithography, into Other Process segment, I guess if you could just give an updated in terms of how those penetration are going in terms of how much they can contribute on top of your traditional large customers.

Yes. I think, as I have kind of referenced in the past or kind of kissing cousin of semi. You know, you have got some of these markets like the consumer markets and even the energy markets like solar and some of these. I mean, it is a lot of players and to a large degree it is a lot of the same type of complex manufacturing. I think, we continue to do well, but as you know based on the GTAT situation and some other things, some of those businesses have a more lumpy cycles. Consumer tends to be, where it will come on for a couple quarters and that might shut off for a couple quarters if they boost for capacity versus more of the cyclical nature of the semi cap equipment. I think, we doing a lot of the right things globally to get those connecting [ph] businesses and customers, but we have had to replant a lot of seeds here over the last quarter and it is going to take a little while to develop that more fully.

Patrick, also if I could add, within semiconductor, we really have a broad effort at not only gaining more share in the products and the platforms that we are already present, but also expand our simpler product and the components into adjacent platforms and to penetrate into platform that we currently don't have business on as well. It is really a multiple-level approach at the different segments of the same and tame [ph].

Great. Thank you very much.

Thank you.

Our next question comes from the line of Krishna Shankar with ROTH Capital.

Yes. What was the mix between semi and non-semi as a percent of revenues this last quarter?

For the quarter, it was 85% or 85.1%, it is semi.

Okay.

I said for the year, it was about 82.4% for fiscal 2014.

Okay. Looks like you are projecting a relatively good quarter in Q1 for the semi business. Can you talk about your visibility on the rest of Calendar year '15 for the semi business and any other sort of potential new customers or additional levels of integration you are pursuing in the semi business?

Yes. I will give you a couple of comments and I will ask Jim add some color, because of his depth of knowledge in this business. For us, starting off as gas delivery company and developing this company over the last 10 years or so, we have tried to get not only broader extension outside of semi, but much deeper extension into the semiconductor customers, so a lot of the initiatives, not only like the ones that Jim talked about, the Additive Manufacturing and the prototyping that adds ability for us to get much deeper and broader in our customers, but we also have been partner with our customers in different ways to be able to meet their needs more quickly and get involved more early like an engineering level. Marchi is a good example of that, where we can really add value upfront, so visibility, I will make my standard comment that we feel pretty good about what we are seeing for obviously for Q1, have a pretty good indication outer quarter from that and then from there it really can change pretty quickly, so most people are saying it is going to be up single digits this year and I think that is a reasonable way to think about it. Quarter-by-quarter, you have to kind of take it as it comes, but I think it feel like another decent year for semi if I listen to our customers and their comments that they have been making. Jim, I do not know if you would like to add something to that.

Yes. I would definitely emphasize that the semi cap equipment market is strong this year and it looks to be strong for quite some time to come. Typically, we are going to follow roughly in that trend, however because the mix on the product and the platforms that we are on, there is going to be some significant variation from one quarter to the next, which is not related to the overall market or any major changes in share, it will tend to be product mix-driven whether one quarter is up or down versus the other. We really cannot look at it so much quarter-by-quarter more half year by half year is a little bit more accurate.

Okay. Then the revenues from your new deal with Intuitive Surgical, I guess, the $5 million or so per quarter revenues loss that will basically be offset by the addition of Marchi. Is that the way to think about it?

Yes. I think, there are a lot of ins and outs. Marchi is fairly an in, then picking up some new business and some uptick in our customers' business in the semiconductor side, those obviously help cover the whole that the Intuitive Surgical leaves.

Okay. Thank you.

You bet. Thank you, Krishna.

[Operator Instructions] Our next question comes from the line of Christian Schwab with Craig-Hallum Partners.

Yes. Thanks for taking my question. Casey, this $5 million to $6 million, is that already out of the March quarter or is there some of that $5 million to $6 million in it. How quickly does the $5 million to $6 million go away?

I am sorry?

I guess that was not clear to me.

Okay. Yes. We said it was going to start in this quarter. I don't know if you will see the whole reduction in this quarter, but certainly by Q2 you will see that. That is an approximation, obviously, their business goes up and down as well, so I am trying to approximate kind of the raw impact of that business, so like all businesses that fluctuates and isn't a static number. A lot of it depends on the use of the older generation products in the spares and machine and the things that go along with that, but I think it is a general indication of kind of the gap that the decision leads us.

Yes. I would add that, still, the businesses now go to zero, we will still be making the older generation and spares and some machine components that they will need for their new generation as well. As the older generation revenue slowly declines, we will see that slowly decline, but not to zero.

How big of a customer were they in 2014 roughly?

They were a smaller customer than they had been historically and a lot of that is due to the semi business. I mean, their size kind of cycled with semi a little bit, but they were certainly less than a 10% customer for the year. They have kind of hovered between 5% and 10% depending on the year.

Okay. It is a disproportionate share of the revenue we expect from Intuitive Surgical if I go with your 5% number, right Casey?

Yes. I mean it is certainly is two-thirds of the revenue relate. Now again this estimate, because you are looking at it, again, I knew the question would be asked, I tried to size it in a way that I thought was responsible, but it just kind of depends on what happens moving forward. Then as I said in my comments, they have been a good customer. I think, we have been a good partner for them, but they have had a lot of changes in their business model and scrutiny in a different way. When they looked at how to deal with that, and when we looked at what we needed to do in our model, it just didn't line up and so I think both companies treated that in a responsible way and we are appreciative of continued relationship. There is I think, other opportunities in the future to be progressed on this, but we are just kind of going with that one piece at a time.

If we look at the unfortunate GTAT experience, and now Intuitive Surgical as we go into '15 and '14, even with mid-single digit year-over-year growth participation in '15 versus '14 can absolute revenues on the year-over-year basis be up?

That really depends on semi performance. I think as Jim indicated, and I have talk about as well. I think, it can be up, but we are not going to be like we were last year where we did as we said in the semi business in think we were 15%, 16% up, the whole business grew probably half of that, so our revenues were ups substantially. Part of that was GTAT, some of that got backed out, but part of that was over performing the semi market, so to your point we have got some revenue gaps this year compared to the last year, but I think we have traditionally outgrown the industry in semi and I think, Chris, a few things that we are working on that can help accelerate that for us, but we have to see if those work out and kind of go from there, but it is not unreasonable to think that we would be flat or slightly up.

Then lastly, as we look to the tax rate, it was a little bit high and we had modeled. Should we be assuming a 28% tax rate for the entire year. I know you only said for Q1, but how should we be thinking about the rest of the year?

Yes. Just to clarify looking backwards, I mean, last year we guided to about 20% tax rate. On a full-year basis, we ended up just a little under that actually. The way the taxes works as you know, every quarter you true-up for the full-year in Q4 than as the broadest true-up, that is why we are a little higher about 23% in Q4 and that was just for the full year true-up. Separating out the valuation allowance, obviously, for the California deferred tax asset that we took in Q3 and we have already talked about, looking forward, obviously when you look at your blended tax rate each part of your business has a different effective tax. In the U.S. it tends to be a higher rate. Marchi is a fantastic acquisition and it has many wonderful qualities, but one of the qualities that drive the rate up a little bit as is all U.S.-based today, so in the first quarter as we blend that in, I think that is going to impact our rate. I would go ahead and use 28% right now for the year. I think, we might be able to work that down a little bit by the end of the year so effectively we will start working back down into the low on 20%, 25%, but are really right now at all the moving pieces I thought that was responsible way to look at it. Then we will give a little better guidance as the dust settles next quarter.

Okay. That is very helpful. Thank you.

You got.

There seem to be no further questions at this time.

Great. Well, it has been a very active year and an active quarter in Q4 and Q1 for UCT. I appreciate everybody's continued to support. We look forward to continuing to explain the business, grow the business and I think 2015 will also be an active year, but I think it should be very exciting years, so I thank you for everything.

Absolutely. Thanks, again.

Ladies and gentlemen, this concludes today's conference call. We thank you for your participation. You may all disconnect.