Apr 25, 2018 • 05:00 pm ET

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Q & A
Operator
Operator

(Operator Instructions) Sean Hannan, Needham.

Analyst
Sean Hannan

Just a few things to make sure I can clarify and solidify some of this modeling as we're looking out at the back end of the year here. Just to check in on you, the comments on gross margin as well as SG&A. First, gross margin hitting 9.7% or approaching, is this a value for the second half? Or are we talking at some point in the second half to achieve there? And then on the SG&A front, just want to make sure that I understood correctly, we're looking to get that value down to about 5-ish percent, I think, by the end of the year, but I may have misheard you.

Executive
Paul Tufano

So Sean, let me take the gross margin point, and I'll let Roop take the SG&A point. As I said, we believe we have the ability to approach 9.7%. Now that's going to be probably as we exit the year. Our ability to do that will be function of two things: a, how well we can resolve some of these operational issues; and number two, how we can drive or absorb more revenue growth but the revenue growth would be in that second half and the mix of net revenue. So we are focused on maximizing gross margin. And the question would be the trajectory of that from the second quarter to the end of the year, but we are going to be relentless on the gross margin line.

Executive
Roop Lakkaraju

And Sean, just to add some color on the SG&A regarding your question. Obviously, in Q1, we were at about the $35.2 million. And as we think about the range that we provided, $36.5 million to $37.5 million, we're going to be in that range overall. So we expect that. Now with the revenue growth of 2% to 5% that we anticipate for the year, as we get towards the end of the year, we think we'll be in that range of approximately 5%.

Analyst
Sean Hannan

Okay. So I mean this would imply a very significant back end of the year revenue ramp. I mean, I think the math would suggest, we're probably looking at something close to a $700 million type of number for December. Am I thinking about this correctly? Just trying to make sure I understand this appropriately.

Executive
Paul Tufano

Sean, the answer is yes, you're thinking about it correctly. I mean, we will see stronger revenue in the second half than the first. We saw that last year. We expect to see it again this year.

Analyst
Sean Hannan

Okay. And then in terms of these customer ramp headwinds, just want to see if we can get a little bit more color in terms of what exactly is occurring here? You seem to express a fair amount of confidence you can address this and resolve it operationally. Just wanted to see if we could get a little bit more feedback around what's occurring.

Executive
Paul Tufano

Sure. I mean, look, our factories have multiple customers, multiple products in every factory. And