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Executives

Brian Smith – Director of Investor Relations

Nicholas Konidaris – President, Chief Executive Officer & Director

Paul R. Oldham – Chief Financial Officer, Vice President Administration & Corporate Secretary

Analysts

David Duley – Steelhead Securities, LLC

Jim Ricchiuit – Needham & Company, Inc.

William Frerich – Radnorwood Capital

Shawn Boyd – Westcliff Capital Management

Electro Scientific Industries, Inc. (ESIO) F4Q10 Earnings Call May 11, 2010 5:00 PM ET

Operator

Welcome to the ESI fiscal 2010 fourth quarter earnings conference call. At this time all participants are on a listen only mode. Later, we will conduct a question and answer session. (Operator Instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today Mr. Brian Smith, Director of Investor Relations for ESI.

Brian Smith

My name is Brian Smith, Direct of Investor Relations for ESI. With me today are Nick Konidaris our CEO and Paul Oldham, our Chief Financial Officer. This conference call will cover our fiscal 2010 fourth quarter results. Before we go in to the details of the call I would like to remind you that some of what we say on this call will include forward-looking statements concerning customer orders, shipments, revenue, gross margins, expenses and earnings.

These statements are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include a number of risks and uncertainties that are discussed in more detail in today’s press release and our filings with the SEC. Actual results may differ materially from those forward-looking statements. This call also contains time sensitive information that we believe to be accurate as of today, May 11, 2010 and which could change in the future. This call is the property of ESI.

Now, I will turn the call over to our CEO Nick Konidaris.

Nicholas Konidaris

Welcome to our fourth quarter conference call. This was a very good quarter for ESI with revenues up 50%, higher gross margins and the return to profitability. Consumer and business spending around [inaudible] equipment drove capacity expansion at our customers’ factories. Our market leading solutions have continued to hold or gain share and our new product development engine is running full steam creating new projects that contributed to this outstanding quarter and would allow us to enter adjacent growth markets and applications. Finally, we opened the new state of art manufacturing facility in Singapore which will enable us to be more responsive to our customers and improve our manufacturing efficiency.

Revenues grew 53% from last quarter to $59.6 million reflecting four consecutive quarters of growth from last year’s fourth quarter. Non-GAAP earnings per share came in at $0.16 compared to a loss of $0.03 last quarter. Orders came in at $54 million compared $61 million last quarter. Excluding the large order received last quarter overall orders grew almost 50% sequentially.

We show strong results in passive component tests, LED wafer scribing and flex interconnect. On the other hand our memory repair business remained weak as the DRAM manufacturers still have excess capacity in laser [inaudible] improvement systems. Revenues in our semiconductor business were down 43% sequentially due to a lack of system sales from our memory repair products. Orders were about flat. The LED and LCD end markets continue to show healthy demand and are both benefitting from the strong demand for LED backlit displays and TVs.

Looking forward in our semi business, we expect the LED scribing and LCD repair business to remain healthy. In our DRAM wafer repair business we have begun to see customer activity which we expect to result in orders this quarter. We expect the recovery in this business to be choppy as each of our customers has a different level of capacity utilization and quantities of spare equipment. However, our DRAM customers are seeing strong bit growth and even stronger pricing stability and we are confident that we will start seeing demand for laser repair solutions.

Our interconnect and micro machining group had a record setting quarter with revenues of nearly $44 million and [inaudible] $47 million. The flex interconnect business is showing an early seasonal rebound and we will continue to add new customers driven by the tip towards the need for sub 70 Microvia. Looking forward in to fiscal 2011, we expect growth in the flex business driven by demand for SmartPhones and other complex handheld devices.

Of course, the biggest contributor to our results were strong revenues from our advanced micromachining business. During the quarter we shipped and recorded revenue for the large order received in Q3 for the new model ML 5900. This was a brand new product and I want to thank our engineering and operations groups for their extraordinary efforts in meeting the customer’s delivery timelines.

We also had another quarter of good orders in this business though not as large as Q3. Looking forward in advanced micromachining we continue to pursue new applications and new customers and we’re excited about our long term growth potential. This potential includes applications to drill route and narrow structure, a wide range of materials including metals, organics, dielectrics, semiconductors and hybrid engineered parts.

Our passive components group also had a very good quarter with sales and bookings about flat with the strong Q3. We again saw good demand for our newest high capacitance testers but also excellent demand for our consumable products such as carrier plates and belts. Looking forward, orders in this business maybe a little lumpy as capacity have shortened in the market but we believe that overall growth will continue to be driven by the trend towards more and higher capacitance MLCCs in new electronic devices.

Turning now to the outlook for ESI; we continue to be encouraged by the improvements we have seen in most of our markets and we are starting to see activity in our DRAM application which we expect to result in orders this quarter. Once DRAM fully recovers and our new products penetrate new markets and applications we should see revenues rise significantly above current levels. Until then, given that these new growth drivers will take time to take effect, revenues are expected to remain at or around what we show this quarter. As a result, we expect revenues in the first quarter of fiscal 2011 to be in the low to mid $50 million range and non-GAAP earnings per share of $0.01 to $0.06.

Now, I’ll turn the call over to Paul for a detailed discussion of our results for the fourth quarter.

Paul R. Oldham

The following information includes results from our fourth quarter of fiscal 2010 which ended April 3rd. To improve comparability we are also providing earnings per share and related income statement results on a non-GAAP basis excluding the impact of purchase accounting, equity compensation, restructuring expenses and non-recurring items. Orders for the fourth quarter were $54.2 million compared to $61.2 million in the prior quarter and $16.1 million in the prior year’s fourth quarter.

As Nick mentioned, our third quarter included a large order for our ML 5900 micromachining system which did not repeat. Although we received some follow on orders for this system, we saw strength in many of our other product areas resulting in almost 50% growth excluding the impact of the large order. Overall, we saw good demand in flex via drilling, advanced micromachining, LED scribing and passive component test. As expected, memory repair orders continued to be weak but are showing signs of recovery.

Shipments in Q4 were $66 million, nearly double the $34 million from the previous quarter and included the shipment of the large micromachining order received in Q3. Ending backlog decreased by $12 million to $40.6 million due to the strong shipment level. Deferred revenue increased by $5.9 million with the increase spread across all product groups. Revenue for the fourth quarter was $59.6 million, up 53% sequentially. The sequential increase came from our interconnect micromachining group due again to the large order that shipped and was accepted in Q4.

Gross margin for the fourth quarter was 43% including $531,000 in cost of goods sold for purchase accounting and equity compensation. On a non-GAAP basis gross margins were 44%, up from 39% last quarter reflecting the higher sales volume. GAAP operating expenses were $23.2 million up from $20.7 million in the previous quarter. Included in the fourth quarter’s operating expenses were purchase accounting and amortization of approximately $225,000 and a stock compensation of $1.4 million.

Excluding the impact of these items non-GAAP operating expenses were $21.6 million up $2.6 million from the prior quarter reflecting the elimination of most of our temporary cost reduction measures, increased project expenses for new projects and higher variable pay associated with improved performance and a return to profitability. On a GAAP basis, operating income was $2.4 million or 4% of sales compared to a loss of $5.9 million last quarter. Non-GAAP operating profit was $4.6 million or almost 8% of sales up sequentially from a loss of $3.7 million in the prior quarter.

Other income was impacted by a $1.3 million write down in our auction rate securities primarily due to lower credit spreads and the suspension of dividend payments on one of our securities. We continue to hold approximately $5 million in fair value of auction rate securities. Income tax for the quarter was a benefit of 51%. On a non-GAAP basis the tax rate was 10%. The improved rate was primarily a result of credits to true up estimated annual results and successfully completing our 2008 IRS tax audit. Based on accounting rules for income taxes, some of the benefit for these items was recognized in Q3 and some in Q4. Around these income levels, the tax rate is difficult to project but longer term we expect our non-GAAP tax rate to be in the low 30s.

On a GAAP basis fourth quarter net income was $2.1 million or $0.07. Non-GAAP net income was $4.4 million or $0.16 per diluted share compared to the net loss of $.9 million or $0.03 per share in the prior quarter. Turning now to our balance sheet, cash and investments including restricted cash were $166 million up $3.5 million from the prior quarter. Cash flow from operations was $4 million for the fourth quarter as earnings from operations and lower inventory levels were partially offset by working capital increases mainly in receivables.

Inventories decreased by $6.5 million reflecting good execution in our ongoing inventory reduction efforts. Inventory turns were $1.8 times which is an improvement over last quarter. Accounts receivables increased $38 million on the higher shipments but still reflects excellent DSO performance at 58 days. Capital expenditures were approximately $1.3 million and depreciation and amortization excluding purchase accounting was $2.6 million.

We are pleased that despite the difficult environment over the last two years, our efforts to improve profitability and working capital enabled us to be cash flow positive for the year. Looking forward, we are encouraged by current business activity and market forecasts. However, risks in the macro environment remain causing some customers to continue to be cautious. As a result, we expect near term results to be around our current levels with longer term growth driven by continued economic recovery, improvement in our DRAM markets and new products we expect to bring to market over the course of this fiscal year.

Based on our current booking and backlog levels we expect revenues in the first quarter to be in the low to mid $50 million range as increases across our business mostly offset the larger order shipped last quarter. Stock compensation expense is expected to increase approximately $1 million primarily due to accelerated vesting of our annual board grants. However, non-GAAP operating expenses should stay about flat. As a result, we expect positive non-GAAP earnings excluding stock compensation, purchase accounting and other non-recurring items of $0.01 to $0.06 per share.

Now, I’ll turn the call back to Nick for a brief summary.

Nicholas Konidaris

To summarize, we completed a very successful quarter. Since the market bottomed in 2009, we have delivered four quarters of solid sequential revenue growth. Over that time the markets have taken a step up, where they go from here is still not clear. Most of our markets are strong while DRAM remains weak but we’re looking for that market to begin to recover this quarter. Overall, I feel very good as we entered fiscal year 2011 and we expect to see strong revenue growth year-over-year driven by DRAM recovery in new products.

I would like to thank the many ESI employees and teams who put in tremendous effort to make this a great quarter. This concludes our prepared remarks. We’re ready for your questions.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from David Duley – Steelhead Securities, LLC.

David Duley – Steelhead Securities, LLC

Just a couple of questions from me, just a clarifying one first, did you say your GAAP net income would be positive and you guided to non-GAAP of $0.01 to $0.06?

Paul R. Oldham

I’m sorry we guided to non-GAAP of $0.01 to $0.06 and we didn’t give GAAP guidance.

David Duley – Steelhead Securities, LLC

Could you talk a little bit about the gross margin progression sequentially in the quarter? I realize we had big revenue growth but the revenue growth game from I wouldn’t say at your highest gross margin business but you were still able to achieve this 43% target which is better than you’ve done in a long time. So, maybe talk a little bit about why you were able to get to that gross margin number?

Paul R. Oldham

Gross margin was a function of several things. First, we were able to see higher volumes and with those higher volumes we were able to operate that largely on the lower cost structure that we put in place so we got good leverage out of that. We also saw good mix overall in our business that isn’t exclusively related to the large order that we saw but we saw good mix in other parts of our business and those were the primary two items. There’s always a lot of pluses in minuses in gross margin as you know David but those were the two primary drivers.

David Duley – Steelhead Securities, LLC

I guess what I was driving at is it just appears over time that the gross margins of the other businesses outside of the memory repair business have been improving.

Paul R. Oldham

Yes, that’s true. For example, in our component test business we have seen improving gross margins there as we brought out new products and worked to reduce the cost of those products. Also, we did open our Singapore factory this quarter and we did have some shipments out of that factory and we think that will be a contributor to improved gross margins as we look forward.

David Duley – Steelhead Securities, LLC

Were there any 10% customers in the revenue or the order front or whatever you’re comfortable disclosing to us?

Paul R. Oldham

We did have one 10% customer in the revenue number.

David Duley – Steelhead Securities, LLC

Without mentioning the name can you give us the percentage?

Paul R. Oldham

We typically don’t talk about the percentage of the customer for a quarter related to that but we mentioned that we shipped the large order that we received last quarter and you can get to a rough number from there.

David Duley – Steelhead Securities, LLC

One final one from me and I’ll step back in the queue is you came up with a new product, you received a big order for it, you delivered all of that product to the customer. I thought typically new products had a revenue recognition issue that it might take a quarter or two to get the revenue from it. So, I was wondering how you were able to speed up revenue recognition on this wonderful new product?

Paul R. Oldham

Our new products due require customer acceptance but I think to Nick’s point earlier, I think our engineering, operations and service teams around the world did an excellent job getting those products deployed in the customer’s hands to meet their time line and to have it be accepted for revenue recognition.

David Duley – Steelhead Securities, LLC

So it was execution by you guys getting it to the customer, getting it up and running in production that allowed you to recognize the revenue so rapidly?

Paul R. Oldham

Absolutely.

Operator

Your next question comes from Jim Ricchiuit – Needham & Company, Inc.

Jim Ricchiuit – Needham & Company, Inc.

I was wondering if you could give us a little better sense as to the bookings in the business units? Nick, can you give us some feel for the book-to-bill and the passive component area?

Nicholas Konidaris

Basically I would say in the passive component area the book-to-bill was in the neighborhood of 1.5. The general theme I would give you is that in the semi sector we did better than expected in LED scribing, we did okay in LCD, no business in DRAM. In flex we had excellent results primarily because of early seasonal rebound. In micromachining we had good demand through our follow on business to a very large order from last quarter. In passive we had strong demand for both systems and tooling and consumables.

Jim Ricchiuit – Needham & Company, Inc.

Now with the large order that you delivered on last quarter, can you tell us if you’ve been able to target new customers for these applications? Any momentum in that area where we might see some broadening out of the customer base for that type of application?

Nicholas Konidaris

As I indicated, we are very excited about the opportunities that we see with additional customers in advanced micromachining.

Jim Ricchiuit – Needham & Company, Inc.

Is that something Nick where you think you might see those orders come in, in the next one to two quarters or is there still a fairly long sales cycle?

Nicholas Konidaris

It’s very difficult to forecast at this point in time. It’s a long cycle but in the middle of the cycle we could get surprised by accelerating customer demand.

Jim Ricchiuit – Needham & Company, Inc.

Now, on memory repair you sound a little bit more optimistic about a pickup in bookings in this area. You’re anticipating orders this quarter mostly technology driven?

Nicholas Konidaris

That’s what we said, we’re anticipating orders that are going to be driven by both technology and capacity and they’re going to be focused on our tailored past recent product introductions that basically provide tremendous flexibility to the user of that equipment in processing advanced fuses.

Jim Ricchiuit – Needham & Company, Inc.

Nick, relative to where you were looking at the markets say three or four months ago, and I’m talking about DRAM, is it fair to say you’re more optimistic about what you’re seeing and what you’re hearing from customers?

Nicholas Konidaris

That’s fair to say. I think three or four months ago we were thinking about the second half of the year, that’s what we’re talking now we see an acceleration. We still think however that moving forward for a while things are going to be choppy for reasons that we have fewer customers that have synchronicity in terms of their demand profile and technology situation. But over longer periods of time we really see this thing is going to come back almost to the levels that we have enjoyed prior to the crisis and I think we’re going to start seeing that this quarter. That’s what we expect.

Jim Ricchiuit – Needham & Company, Inc.

Just switching gears for a second, on the passive component side of the business it sounds like your customers are seeing pretty good business conditions and we’re even hearing some tightness in certain supplies capacity. What’s your sense as to the kind of ordering activity you might see out of those customers over the next one or two quarters?

Nicholas Konidaris

The main driver for these MLCCs usually is the consumer that is buying SmartPhones across the globe. SmartPhones not only increase as a percentage of total phones but they have more MLCCs per unit. What we see at this point in time is that those customers who really address SmartPhones are really doing very well and we satisfy their demand and that is what we see in our numbers. But of course, we have other customers who may have focus in automotive and other things and for a while they’re not ordering so we don’t see it across all customers demand that is uniform but we see selected demand around a few customers again, driven by SmartPhones, PCs and LCDs.

Jim Ricchiuit – Needham & Company, Inc.

Paul, can you perhaps quantify the amount of the temporary costs reductions, cost savings that were restored in the quarter in terms of in your op ex line?

Paul R. Oldham

It was probably between $1 to $1.5 million and if you include the variable pay increases it was somewhat more than that. If you look at our cost structure on a going forward basis we would expect our cost structure with all of the temporary items restored to run probably around $20 million. We are choosing to invest at a higher rate than that as we discussed last quarter because we see a lot of new product opportunities in front of us over the coming year.

Jim Ricchiuit – Needham & Company, Inc.

So you’re R&D, we could see that move up from Q4 levels as we go through the year?

Paul R. Oldham

I would say it is certainly going to stay at or around those levels which are higher than they’ve been as you can see.

Jim Ricchiuit – Needham & Company, Inc.

You should very nice margin improvement this past quarter, is there any feel for how you see margins based on the mix that you’re anticipating this quarter?

Paul R. Oldham

The margins bounce around a little bit every quarter based on mix and volume. We’re projecting volumes are a little bit lower and as I did say we had healthy mix this last quarter which may moderate a bit this quarter.

Operator

Your next question comes from William Frerich – Radnorwood Capital.

William Frerich – Radnorwood Capital

Something I caught in the script which I’d like a clarification on, you mentioned accelerated investing in the annual board grant, what is the logic behind that?

Paul R. Oldham

This is something that we started a year ago. Historically our board grants divest over three years, however, the board really consider those to be compensation not really term vesting and so starting with last year when the annual grant came up those vest immediately and therefore we recognize the expense immediately. We’re doing the same thing this year. I think that is pretty standard practice for a lot of boards to have those vestings vest immediately. So expenses will go up next quarter but they’ll moderate back down.

William Frerich – Radnorwood Capital

So it’s a seasonal thing and it’s not a new wrinkle?

Paul R. Oldham

Correct.

Operator

Your next question comes from David Duley – Steelhead Securities, LLC.

David Duley – Steelhead Securities, LLC

A couple more questions from me, can you talk just from a 20,000 foot perspective about let’s just say two new products that you guys are most excited about? Stuff you already announced, I don’t want you to give us the skunk works or something, I just want which new products are you most excited about to provide growth in 2011?

Nicholas Konidaris

Clearly the winner that we’re very excited is the ML 5900. We did enjoy a big revenue quarter in Q4 of fiscal year ’10 and we expect to see additional business from that product this quarter and in the following quarters. But, things that are coming out from the pipeline that we are very excited would be, and I will not take sides right now, would be basically four products are going to contribute this year. One would be a thin wafer dicing program which is based on technology that we have developed internally and technology that was acquired with the Xsil acquisition we have identified the beta sites and we think we will be offering a solution for very thin wafers that is not available today by any other possible competitor.

Another product in the area of micromachining, or two products in micromachining would be the laser direct ablation. This is based on technology that we developed internally. We have already received an order for a demonstrator product of that. We expect go get full on orders and the net effect of this product to the customer is it allows to really shrink already very dense [PCBs] known as either high density interconnects or IS [packets]. The other product that is based on technology that we have developed both internally and through acquisition of the company called Applied Photonics is a product that will allow us to basically cut glass both in small dimensions for [inaudible] as an example and large dimensions like LCDs.

The last product that every time we look and we get surprised by the robustness of the marketplace is the LED test. All of these products we expect to start contributing revenues this year and of course keep growing next year and beyond.

David Duley – Steelhead Securities, LLC

The final question from me is the ML 5900 I think you called it a micro machining system. What exactly does that mean? What does that system do?

Nicholas Konidaris

Well, that system is able to basically do manufacturing of materials so it can morph materials but at the same time it can manufacturer the material, not morphing but altering the characteristics of the material. The system is a very flexible platform. It allows both the micro machining and inspection of what you do at the same time, has a rotary state that as you load the objects you can micro machine and at the same time do the inspection. Again, it’s a very flexible platform that basically there’s no comparable product to it when it comes to the accuracy or the net effect to the material.

David Duley – Steelhead Securities, LLC

So when you say alter the characteristics of the material, I don’t understand what that means. I’m sorry if I’m a little dense here. I can understand that you can inspect and look at what you cut I guess but I’m trying to figure out what exactly you’re cutting?

Nicholas Konidaris

I know that you’re trying to figure that out, unfortunately I’m not at liberty to really talk.

Operator

Your next question comes from Shawn Boyd – Westcliff Capital Management.

Shawn Boyd – Westcliff Capital Management

On the ML 5900 order that you received I guess two quarters ago and then shipped in the March quarter, was that a single system or was that several units in one large order to one customer?

Nicholas Konidaris

It’s a single system in a large order but there is associated to that order there are other kinds of – there are two systems in a way in a big order.

Paul R. Oldham

This is one system but it is multiple units of that system. Probably 10s of units.

Shawn Boyd – Westcliff Capital Management

So when we think about the market size for that product going forward can you help us quantify that a bit and also how many potential customers out there?

Nicholas Konidaris

Well we are working today with a minimum of three customers. The applications are novel applications. It’s very difficult to quantify. The more we talk with those customers plus new customers we find out additional applications. But, one way of thinking about the potential of that product is that that product picks up where an old traditional CNC machine runs out of steam and takes it from there and can do morphing that a CNC machine does on top of that can do other kinds of things that there’s not another way of doing.

Shawn Boyd – Westcliff Capital Management

Would you say that in the three customers you’re talking to that an initial order with each of them could be of similar size to this original?

Nicholas Konidaris

No, I will not.

Shawn Boyd – Westcliff Capital Management

Was that first quarter twice as big as what we might see? Can you give us some magnitude?

Nicholas Konidaris

Well, I know a case of one out of the three, we talked about 10s in one customer. I know another customer that could be [inaudible]. But, it’s not immediate but that’s the potential of what a machine like that could do.

Paul R. Oldham

This business is characterized by being lumpy because it tends to be bought when people are trying to implement new applications that they can’t do on traditional types of machines. So we’ll see an order when we get a design win if you will which will allow us to see anywhere from a few units to many units sold in and then that will sort of level off at some capacity level in the future. So it’s really dependent on our ability to win new designs, new applications on this product. As Nick mentioned, it’s a very flexible platform that will allow you to do many different things with the laser drill that you had historically done with mechanical tools.

Shawn Boyd – Westcliff Capital Management

I know you hit this earlier I think on Jim’s question but in terms of follow up on the existing customer that purchased that new system, have we sort of met their needs for now on potentially their new application or is that still in process and could potentially create follow ons?

Nicholas Konidaris

As we said, there were follow on orders and there will be for a while until we meet the need for that particular application and then there are other applications.

Shawn Boyd – Westcliff Capital Management

If I could just moving over for a minute in to general, and this is across your entire business, can you talk a little bit about lead times and visibility at this stage in terms of that backlog?

Nicholas Konidaris

Lead times are in the neighborhood of about three months in average. We have worked a lot with our suppliers over the last two years to improve the lead times. At the same time we have learned in the downturn that what happens is that your inventories grow and that’s what happened with us and we’re trying to really rationalize the supply chain so we have a more robust supply but basically lead times are in the neighborhood of three months and depending on how much partnership we have with customers that can vary a little bit but it’s around three months.

Shawn Boyd – Westcliff Capital Management

Nick, when you speak or use the comments of the forward outlook being a bit choppy perhaps but at a fairly high revenue level. Can you speak to how you currently see the fiscal year laying out meaning you’ve given guidance low to mid 50s in the June quarter, do you see us actually dipping a bit in September and then reaccelerating or staying at a fairly constant rate and then maybe starting to move up to a new level later in the year?

Nicholas Konidaris

Well, that’s part of the choppiness. We see that the fiscal year is going to be significantly better than last year year-over-year. We provided guidance for the first quarter, we are not providing guidance for the other quarters. But, it’s fair to say that we’re going to see choppiness from quarter-to-quarter.

Shawn Boyd – Westcliff Capital Management

If I could just going back to the company’s longer term model for a second. I’ve got the company at roughly 42% gross margins at a $50 million run rate, as that moves up the gross margins move up so thinking about 50% to 60% incremental gross margins beyond that. Is that correct?

Paul R. Oldham

That’s right.

Shawn Boyd – Westcliff Capital Management

I think we’ve already covered operating expenses but just to hit it one more time to make sure I’m on the same page, we’re at roughly $21.5 million, a little over that on a quarterly basis non-GAAP operating basis and if I heard you correctly we probably stay there and maybe walk them up a little but for the most part $21.5 to maybe $22 million is ample room for the company at this point?

Paul R. Oldham

That’s right and it will vary a little bit quarter-to-quarter depending on timing of the expenses and project timing and things like that but that’s the right range.

Nicholas Konidaris

$21 to $22 million basically.

Operator

With no further questions I would now like to turn the conference over to Mr. Nick Konidaris, CEO of ESI for closing remarks.

Nicholas Konidaris

To reiterate, in our fourth quarter we delivered excellent sequential and year-over-year revenue growth and profitability. We’re executing very well in delivering innovative systems to our customers and developing our next generation of products that will expand our addressable market and fuel profitable growth. Thank you very much for joining us. You are welcome to call Paul, Brian or me if you have further questions. This concludes our call. Thanks for your interest in ESI.

Operator

Ladies and gentlemen that concludes today’s conference. Thank you for your participation. You may now disconnect and have a great day.

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Source: Electro Scientific Industries, Inc. F4Q10 (Quarter End 04/03/10) Earnings Call Transcript
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