Coherent Inc. (NASDAQ:COHR) Q4 2019 Earnings Conference Call - Final Transcript
Nov 05, 2019 • 04:30 pm ET
Thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question today comes from James Ricchiuti of Needham & Company. Please go ahead.
Hi, thank you. Good afternoon, just a point of clarification, the order, John, that you alluded to, is this a separate order from what you talked about at the end of July or is it the same order?
It is a separate order.
Got it, okay. Thank you. And Kevin, I know it's going to be in the K. Can you give us the backlog at the end of the year and if you're able to the OLS [Phonetic] segment of the backlog?
Yeah, Jim, I'm going to wait for the K to come out. It will come out in a couple of weeks, and you'll have a lot more detail in the K.
Okay. And just with respect to the materials processing portion of the business. John. It sounds like things are soft, is it's softness that you're seeing across all geographic regions. And I'm wondering how much is automotive weighing on you just given that the legacy Rofin business?
Direct sales to automotive are a relatively small percentage of the total business. However, we do sell a lot of lasers that grow into automotive systems, manufacturing systems provided by others, and it's clearly creating pressure across the supply chain.
And the weakness you're seeing in all regions, including US it sounds like --
The US is actually holding up better than Europe, and if you've been following the news, particularly out of the German automotive sector, it's not very encouraging. Numbers are down pretty significantly in the 10s of percentage points.
Thank you. I'll jump back in the queue. Thank you.
The next question comes from Brian Lee of Goldman Sachs.
Hey, guys. Thanks for taking the questions. Maybe first off, on the book to bill above one materials processing. I know you -- you don't want us to read too much into that. And there was a legacy order in there. So maybe if we can just parse that out a little bit, how much was the legacy order. And I guess if you took that out, would the book-to-bill have been below the one. And then, as you look into sort of the near term, do you expect that book-to-bill sort of continue to stay below that one to one level. Just, I guess, you don't want us to be thinking there is any sort of a trough here in the very near term, materials processing?
Yeah, Brian. It's Kevin. So we did say materials processing had a book-to-bill greater than one. In terms of the order, the legacy order. I'm hoping that you didn't confuse that with the OLED order. We did have a legacy large customer in prior quarters. If that's what you're referring to. But even netting that out for the quarter, we still were above one. Forecasting that into the future, there is too much