Microsemi Corporation (NASDAQ:MSCC) Q1 2018 Earnings Conference Call - Preliminary Transcript

Jan 25, 2018 • 04:45 pm ET


Microsemi Corporation (NASDAQ:MSCC) Q1 2018 Earnings Conference Call - Preliminary Transcript


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Hello, everybody, my name is Ron. I'll be your conference operator today. I'd like to welcome you today to the Microsemi Fiscal First Quarter Earnings Call. And at this time, I'd like to turn the call over to Terri Donnelly, call coordinator. Terri, you may begin your conference.

Unidentified Speaker

Thank you. Good afternoon, and welcome to Microsemi's earnings conference call for the first quarter of fiscal year 2018. I am Terri Donnelly, coordinator of this call. In a few moments, you will hear from and have an opportunity to ask questions of Jim Peterson, our Chairman of the Board and Chief Executive Officer of Paul Pickle, our President and Chief Operating Officer. John Hohener, our Executive Vice President and Chief Financial Officer and of Steve Litchfield, our Executive Vice President and Chief Strategy Officer.

A recording of this conference call will be available on the Microsemi website under the Investors section. Our website is located at www.microsemi.com. Microsemi issues guidance in the form of a limited business outlook on our expectations for the next quarter. This business outlook reflects our current expectations and is continually subject to reassessment due to the changing market conditions and other factors. Therefore, it must be considered only as management's present opinion. Actual results may be materially different. However, management undertakes no obligation to update these or any forward-looking statements, whether as a result of new information, future events, or otherwise. If an update to our business outlook is provided, the information will be in the form of a news release.

We wish to caution you that all of our statements except the company's past financial results are just our current opinions, predictions, and expectations. Actual future events or results may differ materially. For a review of risk factors, please refer to Microsemi's report on Form 10-K for the fiscal year ended October 1, 2016.

With that said, I'm going to turn the call over to Jim. Here's Jim Peterson.

Jim Peterson

Okay. Thank you, Terri. I'd like to start off with some key takeaways for today. And then I'll hand it over to John to discuss the financial details. First, bookings and outlook remained strong for 2018. We performed well in our seasonal first quarter and expect continued success as we benefit from ramping data center markets and improving aerospace defense environments, led by another strong year in satellite, a continuing contribution from our industrial end markets and the constructive outlook for the late year return in the bottomed out communications market.

Second takeaway. We are focused on execution. With favorable tailwinds in 2018, we are diligently executing our plan, growing market share, driving organic growth and delivering industry-leading profitability. Our third takeaway. We are making excellent progress towards our operating margin target. We came in ahead of plan in OpEx savings. We're on a clear path to exceed our long-term operating margin target of 35%.

In Q1, operating margins reached 32.2%, up 170 basis points from Q1 a year ago. As a result of revenue growth and