Mary G. Puma - President & CEO Kevin J. Brewer - EVP & CFO Douglas A. Lawson - EVP, Corporate Marketing and Strategy.

Arthur Su - Needham & Company Jamison Phillips - B. Riley & Co. Unidentified Analyst - Stifel Nicolaus David Duley - Steelhead Securities Mark Miller - Benchmark Edwin Mok - Needham & Company.

Good day, ladies and gentlemen and welcome to the Axcelis Technologies Third Quarter 2015 Conference Call. My name is Janine and I'll be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference. [Operator Instructions].

I would now like to turn the presentation over to your host for today’s call, Mary Puma, President and CEO of Axcelis Technologies. Please proceed ma’am..

Thank you, Janine. With me today is Kevin Brewer, Executive Vice President and CFO; and Doug Lawson, Executive Vice President of Corporate Marketing and Strategy. If you've not seen a copy of our press release issued earlier today, it is available on our website. Playback service will also be available on our website as described in our press release.

Please note that comments made today about our expectations for future revenues, profits and other results are forward-looking statements under the SEC’s Safe Harbor provision. These forward-looking statements are based on management’s current expectations and are subject to the risks inherent in our business.

These risks are described in detail in our Form 10-K Annual Report and other SEC filings, which we urge you to review. Our actual results may differ materially from our current expectations. We do not assume any obligation to update these forward-looking statements.

Today, Axcelis reported strong third quarter financial results driven by continuing customer adoption of all three Purion products and a solid contribution from GSS along with tight control of expenses and improving systems gross margins.

Revenues of $79.3 million and earnings of $0.05 per share were at the high end of company guidance and above analyst consensus estimates. For the fourth consecutive quarter systems revenue showed an even split between the memory and non-leading edge foundry and logic markets.

The commonality of the Purion platform combined with our innovative scanned spot beam, advanced energy filters, and Eterna ELS source has enabled the Purion products family to rapidly gain market share in both of those segments. Year-to-date Purion systems have accounted for approximately 85% of our systems revenue.

As a result of the rapid adoption of the Purion platform we expect that Axcelis will exit 2015 with between 17% and 20% share of the total ion implant market. Turning to fourth quarter guidance, we will be impacted in the near-term by the recent spending slow-down in DRAM.

As a result, a higher percentage of our Q4 revenue will come from the non-leading edge market where customers continued to adopt the Purion platform. We expect fourth quarter revenues of between $60 million and $65 million, gross margins of approximately 33% to 34%, operating profit of approximately $1 million, and EPS at breakeven.

Our cash balance will be approximately $80 million. While our guidance is down quarter-over-quarter, customer activity across our full product line remains very strong. As we manage through this industry slow-down I would like to highlight the significantly different and improved position Axcelis is in.

We now have the full Purion product family in production and multiple customers in multiple fabs with two additional Purion H customers very close to volume production. Our market share has increased significantly highlighting the additional revenue opportunity available to us.

The Internet of Things, image sensor, power device, and automotive markets continued to drive significant non-memory opportunity for Purion as well as for our legacy tool business. Our customer satisfaction level has been the highest in the industry for two consecutive years and we have a strong balance sheet and a much lower cost structure.

Bottom line is that Axcelis is in a much stronger position not just to weather the storm but more importantly to enhance our position during the downturn and enter the next upturn with higher market share, a larger customer base, new product capabilities, and higher earnings potential.

Our accelerated market share growth in 2015 has been primarily driven by the fastest growing new product in Axcelis's 38 year history. This product is the Purion H high current implanter which is having great success in the memory market and also recently penetrated a non-leading edge foundry.

While the Purion H's success is critical to Axcelis, as the high current market represents 60% of the implant TAM, all three Purion platform products have seen significant adoption during the year.

Two large memory customers have all three tools in production, the Purion XE is the industry standard for high energy, and the Purion M has seen increased adoption in image sensor and power device markets. The non-leading edge foundry and logic markets has also become a rapid adopter of the Purion platform.

Customers focused on image sensors and power devices have chosen Purion XE and Purion M for high productivity and low metals contamination. This is a very important market for Axcelis, one in which we will continue to invest. As a result we've recently announced an extended energy option for the Purion XE specifically focused on this market.

We have also announced additional capabilities in wafer substrate, size, and temperature control for the Purion platform, making it capable of handling 150 millimeter to 300 millimeter wafers and multiple substrates. Orders for the Purion M with these capabilities were recently announced.

The Internet of Things continues to permeate society and will become one of the most pervasive data collection systems ever created. This means our IOT customers should continue to expand production capabilities throughout 2016 and likely beyond. But the real winner of the Internet of Things build out will be our [technical difficulty] analysis.

For the last decade memory technology has been relatively stagnant and the supplier base has been consolidating. Recently that has changed. The first new memory type in 15 years was introduced by Intel and Micron.

Intel announced plans to reenter the memory production business, Western Digital announced plans to acquire SanDisk, and the Chinese government and investment community have also targeted entering the memory business. It appears based on recent activities the memory market is switching from consolidation to an expansion phase.

We believe this will result in a prolonged memory build cycle. Memory process flows of all types are capital intensive ion implantation. With our strong position in memory, a prolonged memory build will be positive for Axcelis and will drive market share. Now I would like to turn it over to Kevin to discuss our third quarter financial results. .

Thank you Mary. Looking at our third quarter results revenue finished at $79.3 million up from $78.4 million in Q2 and it is the high end of our guidance. System sales were $47 million up 13% from Q2 sales of 41.6 million with Purion accounting for approximately 80% of new system sales in the quarter.

GSS revenues finished at $32.3 million, down 12.4% from 36.9 million in Q2 as a result of lower used tool sales. Q3 sales to our top ten customers accounted for about 83% of our total sales compared to 74% in Q2 with two of these customers at 10% and above.

Q3 system bookings were $24.4 million compared to 39.7 million in Q2 but the Q3 book-to-bill ratio of 0.5 versus 0.94 in Q2. Backlog in the quarter finished at $37 million compared to $59.9 million in Q2. Q3 combined SG&A and R&D spending finished at $21.5 million compared to our guidance of $20 million to $21 million.

Timing of variable compensation accruals contributed to slightly higher than planned expenses. SG&A in the quarter was $12.9 million with R&D at $8.6 million. We remain committed to holding operating expenses at low levels and expect SG&A and R&D spending to be down $1.2 million to approximately $20.3 million in Q4.

Gross margins in Q3 finished at 36.8% and above our guidance compared to 34.6% in Q2. In the quarter we continued to make steady progress on our Purion cost initiatives and real life improvements on material, labor, and warranty costs.

Q4 gross margins will be in the 33% to 34% range, primarily due to a less favorable mix of systems revenue which includes some higher cost finished goods including legacy Optima high current inventory.

We continued to execute on detailed margin improvement road maps and are on track to drive the business to greater than 40% gross margins as highlighted in our target financial model. Operating profit in Q3 was $7.7 million compared to $7.2 million in Q2.

Q3 net income was $6.1 million or $0.05 per share at the high end of the guidance compared to 5.9 million in Q2. Q3 inventory ended down at $120.1 million compared to $122 million in Q2. We expect Q4 inventory to be flat to slightly down. Q3 accounts payable were $24.4 million compared to $38.8 million in Q2 based on the timing and material input.

Q3 receivables were $38.7 million compared to $42 million in Q2 due to the timing of system shipments. Q3 cash and cash equivalents finished at $79.9 million or $0.66 and within our guidance of approximately $80 million. In the quarter we generated cash from operations bringing our cumulative year-to-date cash from operations to $12.4 million.

We expect total Q4 cash to finish around $80 million. Before I turn the call back to Mary, I would like to update you on the $10 million line of credit that we put in place two years but our cash position was not as strong. The line which expired in October was not renewed to eliminate unnecessary expense.

We never borrowed against the line, and it was still to use the secure letters of credit which will now be cash collateralized. Our balance sheet remains strong and we have further strengthened our cash position throughout 2015. Now I will turn the call back to Mary for closing comments. .

Thank you Kevin. Axcelis is well positioned as the industry slows in the near-term. The full Purion product family is highly competitive and is rapidly increasing both its customer base and market share. Axcelis has a diversified market position with business split between memory and non-leading edge foundry and logic customers.

We have two additional Purion H memory customers' points for volume production in the first half of 2016. We have multiple new product offerings targeted at the non-leading edge foundry and logic market.

In addition we continue to work closely with our leading edge customers to demonstrate the Purion H scanned spot being uniformity advantages that will improve since that yield. Our margin improvement initiatives will yield solid earnings and cash generation as our revenues increase. And most importantly we continue to have strong customer support.

Our customers want two strong implant suppliers who will drive innovation and competition. They like not only the advantages that Purion technology brings them but also highly value our award winning customer support. We're very proud of how Axcelis has executed against 2015 plans.

The rapid adoption of the Purion platform across multiple customers has strengthened Axcelis, allowing us to address the upcoming industry slowdown from a much stronger position. As a result Axcelis will enter the next upturn with higher market share, a larger customer base, new product capabilities, and higher earnings potential.

Axcelis is now positioned to be profitable throughout the cycle and remains on track to deliver the financial performance described in our target model. We thank you for your continued support. And with that I’d like to open it up for questions. .

[Operator Instructions]. Your first question comes from Arthur Su with Needham & Company. Please go ahead..

Hi guys, this is Arthur on behalf of Edwin. Congrats on a great quarter. So our first question is regarding sort of the visibility you have into 2016, into the first half 2016.

I know that you had guided revenues to be down next quarter, but do you see any possibility that things could bounce back pretty quickly beginning in 2016 or do you think that would take a little bit more time to return to above the 70 level?.

Well, we're not giving guidance on 2016 at this point. But in terms of industry and market conditions we expect that the market could continue to be in this slight downturn or pause, maybe for one to three quarters. So that would take us through the first half of 2016 potentially.

We do expect that the second half of 2016 should be stronger based on projects that we understand our customers are planning to make investments in. .

Great, thanks, that was very helpful. And then my follow-up question was on sort of your leading edge and non-leading edge mix. I think you said this quarter was about evenly split between the two and you expected higher non-leading edges in 4Q.

Do you –- can you provide a little more color on sort of what your expectations are, if you think the high mix of non-leading edge is sustainable going forward?.

Yes, so let me just make sure I correct what you said. The split was between memory and non-leading edge, not leading edge logic foundry. So it’s memory and the non-leading edge.

We do expect in Q4, based on some booking we have in hand right now, that most of -– that actually memory is only going to account for about 20% of potentially of our shipments in the quarter and the rest of it would be non-leading edge logic and foundry.

We do expect this segment to continue to be strong into 2016 and even potentially beyond that, based on a lot of the factors that we talked about tied into the Internet of Things, power devices, automotive, and a number of what we call specialty device segments.

So at this point in time that’s the visibility that we have but we do expect the memory market to come back next year. But as I said it is likely to be potentially in the back half of 2016 and that’s one of the factors that would increase potential growth in the second half of next year versus the first..

Great, thanks for that clarification and just one last question, how do you think about OPEX going forward.

I think you said you had tried to keep your OPEX level down, do you see room for further improvement as you start to reduce cost?.

I think what we are saying right now, the 20 million to 21 million range is probably the appropriate range for us. Within Q3 we had a couple of accruals that came in a little bit earlier than we planned but this scenario we continue to focus on. I think you would probably recall that if you go back a few years and this was closer to 30 million.

So we’ve taken down considerably. We’re really keeping a close eye on the investments needing to make from R&D point of view. But again we are committed to hold this in line and I don’t see anything that’s going to drive this up significantly from where it is. .

Great, thanks for that. .

And the next questioner is Jamison Phillips with B. Riley. Please go ahead. .

Hi, Jamison calling in for Craig. Thanks for taking the call.

I guess my first question I have for you guys is if we are looking out at the quarter obviously it is a little bit lower than I think we’d expected and is this basically driven by lower expected Purion sales just in the quarter?.

I mean the real answer is, it’s driven by the DRAM pause which I think is pretty consistent with what our peers and competitors are seeing as well. .

Okay, great and I guess just to follow up on that, you are saying that you are expecting to end the year with a 17% to 20% market share, is this a function -- would this be a function of the total opportunity maybe decreasing a little bit as well as your sales increasing or how do we think about it?.

Yes, I mean I think that is fair, right. It is our sales over the total available market with the market potentially contracting in the fourth quarter, the implant market. We still see a clear path to the 17% to 20% based on the numbers. .

Okay and maybe that’s looking closer to 900 as opposed to 950?.

It’s hard to say Jamison exactly where a Gartner will exactly come out but I think that kind of number is probably reasonable. .

Okay, great thanks.

I guess lastly could you give us a little bit color on the upside to your gross margin in this quarter and why, so I am trying to understand it is going to be lower based on your mix but maybe a little bit better?.

So, we had a very strong quarter in terms of our cost and initiatives on the Purion product. We’ve had very detailed margin improvement roadmaps in place which were -- been following closely and we made a very solid progress there and frankly the uplift in the quarter came from the system side of the business.

So the next quarter Q4 as I said we have a sort of a different mix. We also have some what I would call higher dollar, older inventory that were moving out and in particular the Optima, that’s our prior generation high current tool. So it is good from a cash point of view but it will affect the gross margins a little bit. .

Great, well thank you very much. .

Thank you. .

The next question comes from Patrick Ho with Stifel. Please go ahead. .

Hi there, this is actually Brian calling in for Patrick. Thank you for taking my question. .

Hey Brian. .

I guess I am not sure what the question is on that?.

Well I guess progress towards maybe a rougher start to 2016 and perhaps with that pickup towards out of our impact maybe the 40% gross margin?.

So, as I said on the gross margins again we have very detailed plans of what we need to accomplish from material cost or labor warranty and we're continuing to make progress. There is some component of volume and things, but based on what I’m looking at right now I think we're going to stay right on plan to where we wanted to be.

And I would expect that we've been talking about greater than 40% gross margins in our target model which is longer-term and we’ll stay on this kind of a glide path to 40%.

There may be some quarters that get a little choppy, but that will not be coming from, what I would say, a lack of performance on Purion and maybe more in line with some of the mix within a quarter. But I think the important thing to remember is that we're making progress on Purion and Purion is our mainstream product now.

And as we – as long as we continue to do that we're going to get to our target margins of greater than 40%..

Got it. And maybe I can throw one [Technical Difficulty] I actually lost my train of thought there but, I appreciate – sorry about that, I appreciate the time. .

Great, come back if you want – remember. Okay. .

And the next question is from David Duley with Steelhead. Please go ahead..

Thanks for taking for my question.

You mentioned you had two 10% customers in the quarter, could you just mention in which segments that they were in?.

Yes. One is memory and the other is founder -– is logic, non-leading edge logic. .

Okay. And you also mentioned that you have two new customers that are ready to ramp up on the Purion platform next year, sometime.

Could you talk about, as much as you can, which products will ramp with those customers, and is it one product or two products for instance? And what you currently think about the timing, I think they’re two big memory customers, so maybe just talk about those projects and timing and which products you’ve penetrated there?.

Yes, so the first project and first customer, we expect to see activity in the first quarter. That activity will be with Purion H, the high current tool. That customer is qualified with all three tools. This was a fab project that has been delayed a little bit and so the high energy tools that they require are actually already on site.

Second customer is a NAND project, and that again is with Purion H and that’s targeted for the second quarter..

And when you speak about the downturn lasting into the first half of next year, is that mainly a reference to the DRAM customers or do you think that these two projects or maybe just talk about what you mean by that?.

Yes, I think -- Dave I think the projects that we're discussing we feel pretty confident are moving forward. And so the pause in the DRAM is probably largely being driven by one large customer that doesn’t have a major project scheduled until the end of the year or first of 2017, and so that’s creating a little bit of a gap there.

So, we feel pretty good about the projects that we've discussed. .

So I guess, to put words in your mouth, you would still expect these two new projects and customers to ramp up in Q1, Q2 timeframe that is how I think it has been?.

Yes..

Okay. And I think you mentioned it that your market share goals for the year, 17% to 20% and given your guidance for the fourth quarter, I think would – it’s fair to assume that we will have a reduction in the overall market because of the activity in the fourth quarter.

Where do you think -- if you could take a guess as to where it might come in this year and do you think there’s growth next year or will you be picking up share in 2016 in a spot environment?.

It’s hard to say exactly what the Dataquest or Gartner number will be. It’s probably lower than the top of the range of 950 then, given that Q4 will be a little softer. As far as next year, again the implant market share moves around or TAM moves around plus or minus a couple of hundred thousand on a fairly regular basis, if you look over time.

So I think it’s going to be flat, maybe down just a little bit, but we do believe we're going to gain share regardless, and still have target share goal of 20% to 30%..

Dave, let me just add to that. I mean just because things have slowed down a little bit doesn’t mean that the activity around the Purion penetration has slowed down. We are extremely busy from a sales perspective, applications perspective, running wafers here at Axcelis through our advanced technology center.

I mean things continuing to be very busy and you will see us make announcements on new customer penetrations even throughout this timeframe. So again while it is unfortunate that things have slowed down a little bit, that hasn’t slowed our march towards our market share gains. .

Okay, and I guess to summarize it really I guess the big change in what you’ve seen in the market is mainly with the big DRAM customer and other customers which is one of your big customers in the memory space.

But the other two customers that are supposed to join the party next year are still expected to do that in Q1 and Q2?.

Yes, that’s absolutely correct and I think it is important to note as you comment on that Dave that well, we’ve had a sort of DRAM pause.

I think Mary’s commentary on the script talking about the different position that Axcelis is in, those two points highlight that quite a bit is our market share is up, we got a full product family, we’ve got multiple customers in the pipeline into next year even if the year is a little softer than 2015 was.

And we think that we are going to gain share doing that as a result of that and come out stronger with better profitability. And as we move towards the second part of next year, we do expect the memory side to pick up again. And we do believe there is a fairly big and prolonged memory build on the horizon. .

Okay, other question for me, Kevin, I think you had some evaluation systems out of one of your customers that I thought were going to come through at a lower gross margin target, yet your gross margins were better than expected this quarter.

Was there -– did those systems go through the P&L this quarter or how have they been?.

Dave, we still haven't recognized those systems. It looks like right now it is going to be a Q1 event based on what I am looking at. And I guess what I would say in particular as one of the customers is a situation as you know they have been buying many tools from us. They continue to do R&D work on this tool.

So we are just bringing out some additional capabilities for them. But I would expect that Q1 would be the latest that these would convert and there is also a possibility it could hit in Q4. But for planning I would say Q1 right now..

Okay and that’s one of the reasons why the gross margins would be down sequentially?.

While within Q4 it’s really the one two are highlighted, the old Optima tool which is a high current tool and there are some other what I would call legacy higher dollar tools that were moving out of web.

So those I guess if those came in the quarter it probably won't change things all that much from where we are right now, what I guided, but there is a couple of moving pieces.

So there is like I said there is right now I am thinking more like these may hit in Q1?.

Okay, thank you. .

Dave, what we’ll do is as we said before when these things hit we’ll spike them out and we’ll let you know what the impact of them is..

That would be very helpful. .

Yes, okay, thank you. .

The next question comes from Mark Miller with the Benchmark Company. Please go ahead. .

Congratulations on your upside earnings, just was wondering about OPEX, I guess you had provided some targets fairly recently about $18 million combined R&D in SG&A.

You seem to be running above that last quarter and also in the current quarter where sales are coming down, where can we think that’s going to be going, are you going to still adhere to those targets?.

Well I think we’ve been above 18 all year long. We -- it is in a investor pitch. We had a graph and it kind of showed with the targeted penetration appearing where the expenses will be based on new penetration. So as I said earlier I believe we are going to be in this $20 million to $21 million range, based on what I can see right now.

And Mary’s highlighted it and I think Dough has, we still have a lot of customer activity. And when you’re running things through your demonstration facility and working with new customers there’s certain costs that come with that but it’s going to lead to increased sales down the road. So, yes, I – 18 is not on my lips right now. .

Okay.

In terms of non-system margins, any latitude there to improve, how have they been trending recently?.

Well as we always mentioned our GSS business is very accretive. And GSS is in that $30 million range a quarter. Last quarter it was $36 million, this quarter it was down from that. I continue to believe those margins are going to may be very accretive.

Its good business, it’s just spares and consumable business, its upgrades, it’s some used tools and in the server space. So we continue to work on that Mark. Obviously we're not as satisfied just because the gross margins are good there.

We've got some strategic initiatives to try to win back some additional consumable business and also we're going to add some small incremental spending, that’s not going to move the needle much on R&D side to get some high-dollar upgrades, design in some of these new tools.

So it is an area that we're focusing on and there could be some small growth there, but it continues to be very good outside of business. And then on the systems’ side, we've been making quarter-over-quarter improvements all year long on Purion.

Again, I like to keep focusing on Purion because frankly everything else is non-event, so throw away frankly. So, the Purion’s where we're focused, we're gaining market share, we're doing a really good job driving the cost out, and that’s what’s going to drive the business when you look down the road to the long-term target..

And final question, some people are terming the cross-point chip from Intel and Micron to be transformative in terms of memory.

Just wondering, if you believe that and if so is that a greater opportunity or is that going to provide a challenge for you, if that chip really comes on?.

Well, if you look at what Intel said at their Data Center Analyst day and you look at how data centers and -- what’s going on with the cloud as a whole, it looks like that chip could very much be transformative to the industry. As far as how it affects Axcelis at this point, we’ll have to see how that plays out.

One of the partners in that does have a Purion H, and so we’ll see where it goes. .

Well if I could just slip one more in, anything in terms of changing the landscape for you, Western Digital has an offer for SanDisk, makes them number two in solid space storage. That could really start to – I think the combination personally will be very positive for both firms.

How does that affect you, if it affects you at all?.

I think at this point in time it doesn’t really affect us very much. Because of SanDisk’s relationship with the Japanese, it’s an area where we have not, Japan is an area we haven’t had strength in recent years. So, I don’t see any immediate impact.

But certainly it’s an area where we have focused to move into regionally and through technology partners moving forward. So in the future potentially it could be positive for us..

Thank you..

And the next question comes from Patrick Ho with Stifel..

Hi there, it’s Brian again, I remembered my question..

Hi, Brian..

Okay..

It -– you’ve touched on it a little bit a few questions ago, but the company is entering the slowdown with a strong balance sheet and improved position.

Can you talk about the opportunities you have to perhaps dedicate even more resources towards the new strategic customers during this timeframe, such as with that logic evaluation target you’ve mentioned on prior calls?.

So, I don’t think Brian, I know Brian that resources that we had planned to dedicate to these customers hasn’t changed because of the downturn we're going into.

Kevin mentioned that we're managing our expenses very tightly, but we've also been very clear in saying that we believe we're making the appropriate investments in both R&D and SG&A that we need to grow the business. So what's going on right now in the marketplace really isn't having an impact on what we are doing.

We think we are spending adequate amounts to be able to win those customers over. .

Okay, great. Thanks again for the time. .

Thanks Brian. .

And next we have a question from Edwin Mok with Needham & Company. Please go ahead. .

Hey guys, sorry I called in late.

Hi, but I got some questions just kind in line with Brian and also the question before that, regarding Japan does it makes sense for you guys to maybe on a more aggressive strategy move into targeting Japanese market given the success of Purion products?.

Well, we are. We have a number of initiatives ongoing right now to enter the Japanese market. One of the areas of particular interest for us is bringing the Purion XE and even the newer high energy tool that we announced, that is called the Purion VXE into the Japanese market.

These tools are particularly good for image sensors and there is a very large market in Japan for image sensor.

So yes, to answer your question it does make sense to be more aggressive about entering those markets and yes, we are actively pursuing, improving our presence there, increasing our presence there so that we can capture some of that business. .

Okay, that’s helpful and then based on some of this assessed Purion with the non-leading edge customer and especially with the ones that kind of looks at Purion H, do you guys believe you have cover a technical event that works well in the logical environment that mostly still be on Purion XE, it was mostly targeted on memory side and in terms of applications?.

We believe that this scan spot being offered a significant uniformity advantages for the industry as a whole but especially for many of the device structures that are involved with advance logic. So any high aspect ratio structures and so forth are things that we feel the scan spot will bring tremendous advantage to the customers. .

Okay, great. I will sign off, thank you. .

Thanks Edwin..

And the next question comes from David Duley with Steelhead. Please go ahead..

Yes, a quick follow up from me. You have published a target model, I think its 80 million to 100 million per quarter or something like that. And is that model still relevant when the DRAM spending comes back i.e.

in the second half of next year or whenever you think -- when will that model be relevant again?.

I think the model is relevant because it’s a target so it is not that it has disappeared. Obviously when pieces of the industry slowdown it is going to impact our revenues and our ability to -- or the timing on when we get there.

But it is absolutely relevant and when we start to hit on all cylinders that we’ve talked about in terms of strength and customer mix it is absolutely something that we could hit. And I don’t want to lose sight as a longer term quarterly business model as well.

I mean Kevin’s talked about -- talked about market share and how are target is still to get around 40% market share in that model. Kevin’s talked about the gross margins. We are on track to meet that.

So all the pieces are in place, we just need to keep pushing ahead and then I think the only question at this point in time is timing just based on the market. .

So the model still very much alive you just need the DRAM guy to come back?.

I think Dave we still feel that we’ll get 20% to 30% share in 2016 and so depending on what the TAM of 2016 looks like will determine what those exact revenues are. .

Excellent, thank you. .

And you have no questions at this time. [Operator Instructions]. And this concludes the Q&A portion of the call and we’ll now turn the call back over to Mary Puma who will make a few closing remarks. .

So we will be attending the UBS Global Technology Conference November 18, in San Francisco, the Fourth Annual Midtown Cap Investor Summit in New York City on December 10, and the 18th Annual Needham Growth Conference in New York City from January 12 to the 14.

We will also be on the road during the upcoming months and we look forward to catching up with all of you. Thank you. .

This concludes the presentation. Thank you for your participation in today’s conference. You may now disconnect. Good day..