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TTM (TTMI)

Participants
Sameer Desai Senior Director, Corporate Development and IR
Thomas Edman President and Chief Executive Officer
Todd Schull Executive Vice President and Chief Financial Officer
Matthew Sheerin Stifel, Nicolaus & Co., Inc.
William Stein SunTrust Robinson Humphrey
Steven Fox Cross Research LLC
Paul Coster JPMorgan
Woo Jin Ho Bloomberg Intelligence
Call transcript
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Operator

Good day, and welcome to the TTM Technologies Inc., Q1 Earnings Call. At this time, I would like to turn the call over to Sameer Desai, Senior Director of Corporate Development and Investor Relations. Please go ahead, sir.

Sameer Desai

Thank you.

Before we get started, I would like to remind everyone that today's call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to TTM's future business outlook. Report materially risks forward-looking factors the and our recent differ one due explained Securities could and most more XX-K or uncertainties Annual and results Exchange from filings statements these to in our Commission. Actual other Form with on including the assumptions forward-looking These and are date the on based of statements of expectations management's as this presentation. whether other information, any obligation by revise except these statements, or future required to any new of or update undertake as publicly not law. result does circumstances, TTM as events a of Please risks the refer reports which found regarding SEC Form to on our full the statement the registration that may disclosures the and in X-K, TTM may other S-X affect XX-Q, on Form XX-K, Company's be filings.

Company's this as and of measures on and with not non-GAAP will now we measures GAAP substitute would should measures accordance the TTM's you Officer. also TTM's ahead, adjusted I measures reconciliation Such www.ttm.com. considered and to Tom included in over the website at call such to available non-GAAP as be Please press release and call a Executive GAAP direct prepared for is SEC Tom. discuss Edman, was financial to on turn certain in with like Chief EBITDA. presented We the filed which go the

Thomas Edman

highlights business flow QX financial quarter including XXXX XXXX first certain balance will with you, QX I'll of follow of our Thank guidance. strategy, joining for key our CFO, the XXXX first begin cash and an a of Todd results. Sameer. Good by afternoon and our Schull, discussion performance conference sheet call. quarter our overview metrics, a you for our quarter, and us thank with followed review from

questions. open then for call will We your the

joined First two ago. and weeks TTM who employees to Anaren, I the foremost, welcome from like would

In fact, call. Syracuse are today in this for we

more with all to building base. your move and TTM’s strong on to forward of foundation excited to XXXX highest commercial all their of We Board Together, some in trends. operational on We solution thank would expertise our RF we of achieved and for quarter and have you in achievements our and in provide also the value-added our together for for within TTM. the are the aerospace engineering. very comprehensive a despite tremendous and in to our first seasonal to first guidance, company, depths the customer non-GAAP employees be of able revenues history and defense will challenging quarter EPS I like

have of of the continue over capabilities. years. our We The our diversification we which differentiation last elements two past and end this several of our journey the communicated on markets have towards of months validated strategy, many

reduce the challenging markets. two was to of in our volatility in and First, end quarter diversification quarterly revenues a company what help total end our of grow markets

aerospace our automotive networking in end help conditions and computing difficult growth and defense markets. in the end communications Specifically markets the to offset and

electronics content We advanced Second, automotive increasing content as on we adoption key defense be growth the as and our The mega and path see well continues end PCB market. a automotive automotive driver due of core to differentiation in four end trends technologies. towards aerospace driving growth. market continue to the

expected content infotainment; driving; third, autonomous XXXX. increased and per vehicles; by second, PCB $XX grow $XX adoption and of of electric increasing in in to and Estimates vehicle safety vehicle hybrid advanced connectivity. are to First, fourth, XXXX

in design Despite area processors. over electric autonomous well over hybrid currently see as vehicles well concerns both artificial we continue significant vehicle. PCBs activity to employ $XXX as sensor the Some per intelligence and driving, of some

semiconductor, before product much in growth which XXXX vehicle larger, smaller, these well complex and In XG. strategy. differentiation as growth with These high be more that we expect driven we established inherent platforms In design with driving more an high automotive in XX in our than XXXX expect facet and sensor is and customers, we of work ramps areas. increasingly XX in technologies XXXX, ramp. in of as engagement will both being new wins autonomous also PCBs, automotive addition, more sophisticated are OEM The established with we in technology vehicle-to-vehicle newer In seeing electric with RF product OEMs XX companies. XXXX including XXXX. well use registered design radar growth design begins the early suppliers wins Combined the will customer more different as automotive OEMs ramping by market, vehicle, communications,

in design first of of our will new have Two XXXX radar be XXXX. the and radar wins current which customers, to three next XX. XXXX, large brings of total in we Additionally, won major six generation were which quarter our programs, production customers active the platforms for ramping

enhance on strategy. growth increasing technology manufactures as well growth base of for A and market transitions stations drive traffic to components, infrastructure the market XXXX acquisition for by and micro in differentiation defense XXXX. market, demand RF end and number used in is The expected to expect We XX% at XX% designs of technologies adoption aerospace array greatly an end for grow specifically of revenue radars. and scanned products radio the Anaren represents the AESA proprietary represented wireless networking of Anaren’s number the cells. Anaren which portions in of in our increase Anaren’s The in defense step next whose The represents Anaren’s market. XG. technology stands communications as will radar generation are CAGR. driven of our in are advanced use defense presence aerospace XX% in such our focus AESA remainder active and high revenue and data is satellite radar the and electronically a systems, another critical end and beyond. Anaren as increasing

with fits a Anaren We expect wireless drive regards Anaren’s substantial increase market in that TTM. for XG will to in In components. how addressable

strategy we journey. deliver critical particularly the defense step on and that The Anaren solutions and customers, key emphasized our the and consistently aerospace to that is our have differentiate add in this We acquisition a part market. product represents of value automotive a to

customers. have We solution around includes enhance allowing us adds and built product XXX about defense, engage built our specification assembled engineering capabilities aerospace ability to forward. for products. aerospace to in products bring Things and services track. prospects of enhances earlier going Internet represent growth to into experience and our RF TTM's fundamental applications. on in the integrating networking you used RF with automotive, solutions To this spoken design, process which and required is building The and of process solution. of to Anaren in to design will sensors communications The test in technologies our PCB block and acquisition build the with engineers products versus integrated provide engineering This print the TTM more Anaren to than defense, proceeding

months For business operate a as under the separate Anaren several first unit while TTM.

assist Anaren’s this he and execution. and plan and strategy as me Sallah, transition with will business Anaren aerospace to CEO defense is and to defense and aerospace Anaren report will business integration ongoing ultimate to am to Our that commercial sectors. TTM’s thrilled Larry existing TTM, integrate through with and leads commercial I units subsequently businesses the reporting and former remain of

The I number Anaren has met past reaction been critical both positive. with four constituencies and have Over months from our the of the employees. customers with

very are communicating able of another businesses. are teams employee practices share across well to now with our best internal one and and all Our

them. us major acquisition Our engage really This of is our TTM with from to us emphasize customers. one to acquisition with cycle. to on this in our revenue design day customers and execution goal explore to this customers message addition growth. opportunities value behalf remain up allowed chain, has and the to Anaren employees of expanded has focused earlier moves in to The add to to The our capabilities TTM’s been of on new allowing of the higher customers

the we TTM to $XX designed as cost Our outlined customers now solution shareholders. in of closing their acquisition, meet previously run the million years annualized RF of two of a to realize integration additional to be rely can our the the have synergies needs. completely And will aspect rate deliver to within on

plans We accretive identified two-year free have the transaction non-GAAP to on creation EPS, over this it in already and in opportunities to EBITDA operating margins, We and line. value to cash expect of have non-GAAP be immediately firm compelling place Anaren them many see margins, with time flow. execute these adjusted

ago I'd end to quarter during the like XXXX year review sales XX% and markets. XX% of of Now our to Automotive represented XXXX. total during of quarter sales fourth the the sales in of quarter XX% compared first

was of signed in growth encouraged defense that in $XXX Missiles E-M year in revenue which Systems particularly and to in to and XX% market, of the see total grow expect segment QX, to over were & Department XX% We budget are expect year-on-year Solutions TTM, billion Radar two-year a deal and XXXX, growth for $XXX to with automotive the sales. Two expected billion period. In Defense two fastest. Munitions the represents the accelerate contribute significant we areas XXXX funding our

basis, Anaren, XX% defense total XXXX. also $XXX and $XXX a high rose first XXXX for Program the from million been have For in XX% end quarter sales our record by strong which the market QX compared TTM. QX million. quarter, Including backlog XX% would were our QX of a sales driven A&D end year-over-year total the to – of level at we larger TTM aerospace program of is Company. for backlog XX% defense record On and represented sales $XXX revenues of to growth last million customers. saw of XXXX QX

we basis first to revenues. see market be of our sales. segment quarter to applications. XX% fourth from XX% market. for of The and of first QX growth of market, XXXX from of XX% revenue in of by networking offset related saw XXXX. approximately relatively XX% market the expect Sales this Anaren stronger the This for sales communications to We first accounted of from Networking of quarter the to initial declined for We This on due year-over-year revenues in largely revenue includes compares the XX% to and by a in represent to of compared in expect accounted largely ASPs. XXXX. of higher QX quarter in XXXX we three year-over-year during of driven QX XX% the in sales XX% sales phone the quarter revenue and partially XG about QX in end this telecom point end cellular XX% total weakness additional demand the XXXX. In expect XX% of

fourth the instrumentation are We total first in the The expect of of medical contributed XX% in quarter, half. the prior in levels quarter new reduced our second market the X% sales quarter year-ago industrial sales to cellular inventory XX% and compared as XX% in second to quarter, end model XXXX. represent launches of to

for sales of total total the expect fourth and represent quarter. first market We to XX% quarter, compared in sales to computing of in the quarter XX% in sales peripherals end of second market storage XXXX. the Sales XXXX, XX% in approximately of this end QX in the XX% of represented sales

end of well we represent to in We end high approximately high data as continued this leanings see expect rollouts laptops. artificial market sales that XX% product growth machine sales can include quarter capabilities as as centers new in in second and intelligence end

I'll the first Next, some details from cover quarter.

end driven for our revenue. technology and the by advanced QX. in compares XX% approximately This HDI, in cellular includes The accounted XX% rigid-flex substrate was quarter, the quarter, Company's approximately XX% the our business of to year-ago sequential and During market. decline which

and are leverage QX. was continuing in our compared Capacity that opportunities to engagement advanced new XX% new the increased activities We and markets. in capabilities design XX% will utilization Asia-Pacific in technology XX% QX quarter pursue customer to in year-ago in business

capacity and overall in XX% QX compared year-ago XX% XX% utilization to in the America Our quarter North QX. in was in

in and As in markets A&D production end America. drove North growth additional our computing

sales customers quarter five total compared the the first top in Our quarter of the of fourth XXXX in of to in contributed and XX% XX% year-ago quarter XX% XXXX.

Apple, order Tesla. Our Google, Huawei, top the during five and customers quarter were Bosch, in alphabetical OEM

of At quarter and million customer XX% end of quarter for versus which the in of to in quarter QX. year first the compared XX% was end the XX-day is the our XX% backlog largest million to end last the year-ago in QX. at million at and of QX, $XXX.X Our cancellations sales first $XXX.X subject accounted the $XXX.X

the achieved was three manage defense ratio see the the future aerospace for first our We better summary, demonstrated consumer from and the seasonality focus months TTM. of April mix, of oriented continue optimistic on in about markets, positive end our market, remain in to In operational the during book-to-bill expected diversified PCB results we benefits quarter X. market results execution. our ending Our and than X.XX

for first quarter. review performance will the Todd Now, financial our

Todd Schull

margin million quarter some but quarter We Revenue we in quarter. essentially, revenue. our are X.X% good was EPS increasing bucket the Tom, first in on the $X.XXX was given grew or From quarter end above finished into new In us of as new we operating knew these which the guidance. our Non-GAAP ASC adopted face X.X% pretax profit revenues year-over-year. standard non-GAAP either revenue in this the within and them become the going revenue The we executed this afternoon, other our we added commitment. perspective, $X.XX could EPS. revenue recognition a the would $XXX.X product, category. standard depending positive and new quarter, results in impact of an million everyone. or we that delivered to the midpoint of In or the end goods market whether $XX.X in inventory and quarters, inventories recognize the of well Thanks future and reducing XXX, to adoption first build of negative on the million first of standard we $X.X be challenges, requires

to the on details. So

quarter income in million communications net XXXX or diluted million a the first cellular and revenue partially $XXX.X to XXXX first fourth The to and markets. to were in markets of million, quarter, million last year per or of million quarter. last compared net of compared $XX.X aerospace GAAP the million. million net million share financial non-GAAP and of revenue and the fourth per share quarter increase net growth $X.XX due sales quarter of XXXX. remainder $X.XX net $XXX.X of first For networking $XXX.X income first quarter The for fourth by XXXX our in $XX first compares of $XX.X compared the and sales in end standard, comments GAAP in the our was the of quarter million focus $X.XX basis, the our the diluted year-over-year in defense, to first diluted was lower income On end $XX computing $XX.X of year in the quarter share. performance. new quarter This impact my revenue sales will was and and to per the recognition operating of or of $XX offset automotive on in in

non-cash Our excludes of or items. expense the items infrequent these acquisition other non-GAAP performance well and items unusual certain costs, related as as impact associated tax

and due Gross XXXX the cellular year-over-year in in year-ago technology such insight RMB, margin or year financial XX.X%, received negatively Additionally, our Chinese and insurance to and we decline expense X.X% non-GAAP the a management performance. in margin compared the facilities. first and a X.X% costs net exclude in which the sales quarter. impacted expenses as non-operational the marketing to year is $XX.X sequential ongoing or of The in $XX.X which versus settlement, million provide strengthening sales in to of sales network our last QX. in seasonally was which the of of quarter information and the better lower in $X gross to net XX.X% the We the net computing non-cash last quarter. was currency, first X.X% of million due discrete volumes Selling changes $XX.X of operating advance absence fourth quarter million and volumes our was through the quarter million first we to versus The fourth products, was Company XX.X% into lower decrease financial eyes in Company's and items. see of investors present to tax enable

million was of million compared of net quarter X.X% First $XX.X previous expense quarter a or same the to $XX.X G&A the in million X.X% or sales net $XX.X or of sales in net sales X.X% quarter. and year-ago

due and quarter our million quarter. quarter, XX.X% margin the the $X.X of X.X%. $XX.X decrease last was same in as repayments. prior to same first from well fourth the of Interest This the year million last expense a quarter operating as Our in compares debt repricing in to year X.X% debt was in the QX

partially the quarter, $X.X RMB recorded for compares to incentives QX loss exchange government the million by dollar of primarily was a loss net Chinese QX million was due versus million. during This U.S. foreign quarter. year. offset $X.X in the the we XXXX of in net last During loss. of expense the This a The exchange foreign $X.X in X.X% to

Our effective XX% the the tax was year-ago. rate a quarter quarter, it same in XX% in was

XXXX million This $XX.X was with to million $XX.X first of the and adjusted net or net per EBITDA diluted $XX the share net quarter million quarter income net per for of fourth income per XX.X% net was First million compares net or fourth or $X.XX $XX.X diluted $X.XX first million XXXX sales, share. income share. of $X.XX XX.X% XX.X% or XXXX sales. first diluted of Adjusted of quarter was or $XXX.X quarter $XX.X million adjusted EBITDA quarter, quarter compared EBITDA sales. In of or

was the of operating incurred not income with these and X.X% of quarter. Solutions due $XX.X in Cash The to million SG&A in flow Corporate compared with associated was $X.X a quarter special The margin fourth this the in increased segment either compared was to a was first $XX,XXX of sequential the year, our segment to earlier quarter. quarter. capital from segment to first quarter fourth a had margins the year-ago $XX.X sales was in up in the $XX.X $XX.X from fourth quarter operating of gross from quarter. year-ago the Electro-mechanical a net noted and performance, quarter stronger inventory quarter Gross $XXX.X gross quarter. in our and million income sales the $X.X the due improvement $XXX.X for of due of working in use down to in quarter X.X% XX.X% in first the compared segments gross quarter $XX.X XX.X% year-over-year $XX.X reserves from cash the first the quarter on source in due $XX.X change million PCB volumes a quarter the year from of in quarter. lower quarter The in fourth year operations million first million expense XXXX first year-over-year was $XX.X margin up same to was The the quarter sales of ago million was directly in first last in of $XX.X quarter. to $XXX.X quarter The PCB segment the first in were The The versus of the the million end in X.X% decline last and the the the $XXX.X year of The $XX.X flow levels. same net margin XX.X% absence had million million million in Solutions quarter the the first quarter, last Electro-mechanical million quarter XXXX. segment the segments year. was fourth in in my volumes. million year the profit first margin fourth million decline comments. and Moving million the Gross year-over-year automotive compared in quarter quarter down million in in market. and to XXXX, this in increase in loss in and same but fourth the last of last for million segments in same first to

of payments our end in cash our quarter-to-quarter. customer of markets As in combination seasonal certain calls, QX. flow the mentioned be choppy the slowdown in increase previous can resulted of with coupled the timing in The significant

$XX.X and Our totaled the end spending million the equivalents $XXX.X million. remain fundamentals and and for in $XX.X quarter annual quarter. was million to expect first cash however the first $XXX.X of million Cash over under at was flow. generate quarter versus net we capital Depreciation cycle good the fourth control the strong cash

I'd for to to the turn Now guidance second like quarter.

partial revenue the $XX to million recognition for quarter weeks. for million the from of million, XXXX Anaren of be approximately $XX period also revenue the to in revenue total XX million standard. We from of second new includes $XXX approximately the expect which includes $XXX guidance of range This revenues

last As a our reference revenue was year $XXX million. point, second quarter

from the quarter diluted second includes per to of the non-GAAP $X.XX of compares which recognition from in of revenue EPS per a This last to positive $X.XX an and $X.XX expect reported share be in range diluted Anaren to negative a We earnings contribution headwind $X.XX year. standard. the new share, $X.XX

shares. of single-digit Operating In and the year, Anaren And terms years margins EBS at for approximately we with synergies aerospace growth with a modeling million growing count targeting diluted communications modeled of revenues growing rate in million annualized before run the end the rest closing high on from of faster the year-on-year in a be quarter. suggest forecast the our of is share low-XX’s synergies. two end rate market. $XX third should we based by XXX.X defense than are of starting ramp The linear the

guidance future bonds, Our stock roughly our from as such share function options with X price. a security, and includes is dilution as of our which count well associated shares RSUs, convertible as million dilution dilutive

in increase approximately outstanding during a million X.X quarter, every increase average shares. As would the dollar for above a reminder, our share $XX.XX price by shares

We revenue second around of expect will the SG&A that in be X% expense quarter.

term loan associated with the We million, expect $XX.X Anaren. of reflects interest expense which additional the acquisition total to about

additional Finally, in we and the tax following XX%. financial developing be To effective our you your we estimate information. models, between to XX% rate assist offer

of purchase non-cash million, during The million. in depreciation recent estimate yet the $X.X which process. acquisition, to amortization expense quarter, compensation accounting not approximately we expect factor We stock-based pending the million of amortization million, $X and about expense our Anaren intangibles will second is expense does of intangibles approximately interest be of of of completion record $X about $XX

Insight Communications participating Media the Conference in Springs The Colorado Boston Cross and and Boston May Sector in Yield Stifel XX. in XX. like Barclays to Conference in June announce be XX, that on I'd & Loan JPMorgan May the Syndicated High Bond Technology, on Conference Finally, we’d on

an We we'd to Analyst Investor remarks. the Stephanie? like for open prepared be New That concludes XX. City will hosting on in York questions. And line and now May also Day our

Operator

Instructions] go Stifel. And Matt with ahead. Please Sheerin from question [Operator we first our take will

Matthew Sheerin

and Yes. hello Thank everyone. you

year-over-year sectors the Just at regarding – given you're obviously was a had your business different you're outlook think down time the in was a question year the your which you've significantly, mobile guiding it that is In single-digit surprise, then past the starting mid sector. which cellular the you like for in here. growth much expected than base no think March down looks lower greater outlook your and I be of range, around the quarter, and XX% down, you're year, out going to and for in beginning revenue I

big So what customer. visibility with and QX is that your QX outlook that your you that can in - have the relationship in you

Thomas Edman

Matt. Sure,

if and you're up look then half to in in So the last at with market we late to of and that of keeping of the QX difficult on so a And look our the think a half remember all terms QX cellular year. grew year, third QX you not the of revenue that first revenues start compare that just we experienced of impacted it particularly overall side, ASP on actually between itself be QX phone that first But down. to if climb in move last the given X% you you one year the of quarter. so QX that this X% the right hill side, cellular the about in and that's thing on will forecast – mind, the ASP's the to

would So that ramp look as able pace to X% hit to this we'll sort be we in that And provided the full-year, certainly of at we normal prototyping the prototyping stage of we’re into to expect expected. at we're in schedules X%, the terms that still point range you that the comfortable see. as of move

Matthew Sheerin

year that typically And you pointed as sense a Okay. last do year seasonality a this of that hard out, you was versus Or than the in to last different tell? you year? business that normal there's seasonality just see, more getting was it business

Thomas Edman

Well, that left. of the on PCB shift, That The last side technologies ramp other areas certainly see you that I schedules be ramp lead other cycles. to more on this significant shift at and of year in of would you the printed course with at at would being expect a look board and as side be well. we the with circuit think least if extent technology typical one the year would terms look PCB to in would

that, Of at course, years we're in influence But cycle. as normal from was not any shift what in this a control we the seeing certainly, I'm look goes more on what of on rest that side great. so saying or have we're phone, technology a and the PCB

Matthew Sheerin

Anaren and from is quarter, about get percentage? That's helpful. comes sequential in of that have, that how growth. And going to in significant. that in that area, that network the – growth significant defense in this – And looking communications to Anaren on base I of the you. number then is and communications? flat to Or be is you the network then the the be the you for business Anaren, much rest Thank with Is your Okay. terms aerospace guidance you're regarding June think up the talked will contribution slightly, which the

Thomas Edman

a to it. Yes. about think way That's good

Matthew Sheerin

quarters like has in business row comm year-over-year. It seven a looks been network declining. your know I

is, obviously on the corner second, business, Tom? topline? when on outlook so I you are question turn know in one different are? parts your drag and And a this do expect business been growing XG. What's business to that they they kind And Anaren of if there's there the which of has

Thomas Edman

components the in supplying standpoint station, base Sure. of the business microcell. And also but then used RF very the from that yes, the different are Anaren

so so of globally. PCB business infrastructure top PC rollout, that the business. as that continue oriented see base board And out laid as and is you're building on really around growth a is essentially the you see would that From they standpoint, the infrastructure, to station

related communications portion So peak now a spike of we in to about at rolled have been networking the that down, point we're as being to base had that grew And nice you back than that demand very remember our really that XG, a communications as space, and with less XG at communications networking it of out. the rollout, telecom down third back station of back networking XX%, demand. XG

a would Anaren standpoint, standpoint, top From business then out, you microcells. similar but base a that an with that of see we see with kind benefit certainly cycle XG. expect strong to rolling would stations spike on again a profile initial PCB ongoing So from that of with

Matthew Sheerin

very thanks much. Okay,

Operator

Stein Our next question Please will with ahead. go come from William SunTrust.

William Stein

near Great, [indiscernible] question. think let's or In my design I thanks automotive, for But we the that predictability the wins early well can aware of there. that the strong, we a a visibility, and pipeline either say a we're term taking noted very you recently does provide there news in I'm outlook? was opportunity share competitor an of the and factory or are that that fire further of wondering seeing from perspective

Thomas Edman

contract much say we're largest of effect as really support experience the concerned China. out where major our was Taiwan heard Poon tragedy this. really there that attention – lives understand concerned the were would And than TTM makes that and China. were at was go go so sympathies terms who as more determined as effects in the The first two facility, first in automotive. just is as occurred safety out a our anything and and who of Chin our they heightens Chin the thanks is there. employee in well and Sure, least in is our lost facility very and foremost leader to in Taiwan, facility overall affected to like but automotive really Will. after to From are employees market as Yes, fire Poon position affected. in customer TTM, second for and running which not you I And real facility responders, just at they a facilities who haven't the support pretty certainly be in that as in full beyond was I'd say incident their we're those in customers forecasters come through, that a to I’d are line their this – far

So well, customers. we're support going all to to out go

immaterial terms and a second reflected of quarter that you. we forecast rather effect prospects I that in gave think our in it's it's

William Stein

in thoughtful you. that say business might Appreciate we – – you’ve giving you closed the it good answer. or recently? it relatively early other have seen have as lessons any year. and us how it about details should progress Maybe have through Anaren to you let’s surprises one expect Anaren already that Thank Any that might some

Thomas Edman

Sure. else that I would say about more prospects. the about than just our excitement reinforcing is business, anything the been

the – I customer been all of defense certainly anything if on reaction – for think gratifying, the the us. think I aerospace has side and

breadth engineering of assurance I employees. Anaren long-term capability with synergy that PCB the side again in think the synergy, TTM’s on and our and terms the excited revenue just good had home the opportunity the of customers has technologies RF a to also for combination our fantastic of the found then business

integration. for So planning we're now the

our making But key today opportunities, Syracuse – customers, where tremendously care for really be making our that's to and here those and us it's really the prioritizing that us we in grow take with at this focused sure point. we're of call. this we is and properly attention opportunities happy is For exciting that

William Stein

Thanks and the and outlook. congrats good on results

Thomas Edman

Thank you.

Operator

we And with will next Cross Please Instructions] go Fox Research. to [Operator ahead. move Steven

Steven Fox

questions me. Couple afternoon. for Good

you opportunity auto half the for about half auto company? a then us what had little mean ramping First And sales for versus second early, for first a follow-up. all that can I auto just it's of a but that's know all, the sense, I give you think sense you when year, you mentioned a this think that

Thomas Edman

we quarter, right those to the at rate, comfortable excited at ability for going point So get generally between like X% and certainly and through – looking second that provide to at a RF will and overall level the it our at we're customers. this about we're on ongoing a kind our as development but the looking tremendous. still support which very Obviously, year-on-year growth update forecaster X% of again range we're in X%. second growth good the we – is this quarter And X% customers, strong area the looks market of with

and During is that volume of after, years year year the the most paying but X% of the work last even off will course in done now impact commercial this that rate. standpoint year next from couple that the a we've to contributing and X% to growth

Steven Fox

year-over-year then play you other your by year? as How the you. if mix, around technology the standard any benefit mentioned ASP does us anticipate just you products of because you get sense dissipate a that And of become mix year-over-year. benefit ASP thinking out so give into the Does Thank these for Great. about of and you sort in can that? like terms more rest color

Thomas Edman

Sure.

was reference So really change really to a ASP we technology and to to what's spacing cellular substrate result the driven that capability. finer large by dense phone. specific that like of need in circuitry PCB move processing lines was and was And a called get the the more cellular as are

which of occurred resulted that earlier, year and move. less major of mentioned I’d a we move. technology move last in ASP an would less see therefore move an as So year, technology in Well this ASP of course,

quarter year's to you if a quarter difference and thinking less that last quarter third and in so much about And fourth ASP’s be third start ASP. would pronounced fourth

regular up will the move quarter, versus of get cycle, course reduction given be a cycle ramp. the so the ASP's, Of a second that cycle, be third move. the cycle quarter the rather course but to the smaller technology will – the in ramp, the versus you'll see earlier news that then changing they And you would that in that into see course of during during fact ASPs sort in in are of there late you generally benefit, ASP, so not usually previous the a a significantly, the is

hopefully a we're you what for gives So seeing. feel that

Steven Fox

it Yes, Thank you. does.

Thomas Edman

you. Thank

Operator

Coster will Paul question JPMorgan. with go come next ahead. Please Our from

Paul Coster

a of quick couple Yes, just ones.

capacity customers of Have terms some on impacts year? the the in cycle. in phone a additional through as cell products you all, think that over capacity of you margins for rate put should dedicated and and its fell course major for of about that found place our how First customer we went utilization and the

Thomas Edman

There so I there technology, been on Yes, you've as done has been some work this seen. probably announcements. additional think

we’re standpoint an – out into from of I as next then China year. as I think standpoint, Korea third we again course and of through and the in I a think And of that from ramp adoption the fourth QX, see we both quarter, the on where year that occurring tail well the out QX next IP and TTM full would this that effect or year. would expect hit will more be quarter and really end when that so look effect at any you be ramp of

So we see that relatively several cycle we small and through the benefit spreading the technology over of move certainly hope the of and year next this for as then years. to next will forward

Paul Coster

into moment, ramps. particularly in supply that half evolving, make on But sure the should we We evidence of way have seeing of is to in investing looking second what and lead know at the this I'm is we’re into the the the not the there space sheet inventory regarding EMS chain customer quite inventory ahead and of balance which boarding was heading Anaren just some figures long anything year? of heading time. first with your sort of at the what time buying of

Thomas Edman

want what the your by beyond so Yes, question that a also the which circuit we to density seeing cover technology drive Paul and I because that driven didn’t on here is first is phone. you're finish part see off cellular to of just up second

into certainly automotive inventory. it. as it start that of over me technology has you'll that of in all application see legs to data such that expect that would other reliability so technology breadth With for Todd additional as a areas that, let computing I terms to on answer the move for So and here is turn gathered,

Todd Schull

So balance looks it think. right sheet now, when you look at very our I strange

down in. You that, really something see that's this called this like looks contract its kicking then have year-over-year which revenue asset way is and like we standards inventory new revenue new or

of they're really is and used very on this not components When too our be in and saw lot of cash the comments payments And circuit on receivables, where which this to the inventory general really my really levels. unchanged basis be tell levels inventory was there issue reading rule the on versus function we it not world more that’s it around the you more to was change. bad. Well, timing of change about recognition the absent to cash makes within able finished been really can what of that kind What now trouble in flow side. you're revenue having because what will really asset underlying apples-to-apples inventory a and the I've accrued our getting so in board But That's or a are bigger it QX – inventory, inventory customer is EMS revenue discrete for at look at QX some some for you it our challenging a of flow example. is also whatnot. to muddies if is is what's relatively you that or I rule really happening folks goods the you see discern harder and in

Paul Coster

you. Thank it. Got

Operator

[Operator Instructions] Please ahead. with And Jin we Intelligence. Woo Bloomberg to will move Ho next go

Woo Jin Ho

to the basis June still quarter? a bit in on what’s sooner Great. Thanks of your my think down taking to of you customer. phone of quarter one to terms for a terms in terms market. or just visibility, appreciate I expect do But I that come potentially could sequential how orders see should in into cellular timing mean Thanks. we little we the next about [monies] September expect question. or have be I one late happened quick near-term into you that cycle? in the given largest be the

Thomas Edman

standard the because very prototype much end But on certainly of just visibility. for more technology areas I seeing a we’re phones. we're PCB rather other that a versus schedule we a for would is the product as that I what again would affect the there can What comment last year. the just earlier what allows extent a not we normal consider I don't know I – again schedule on call that from Yes ramp launch as is have you and would change what for the huge mentioned more perspective

Woo Jin Ho

Thanks.

Thomas Edman

Q&A of End you. Thank

Operator

there Edman telephone any are I back Tom no over At for additional questions. this turn appear to closing to time, remarks. further like the does conference or It would

Thomas Edman

Thank you. by quickly just points like of close we I'd earlier. to the And made summarizing some

we as well the the guidance first results of in half First, year, Anaren. challenging integration were line of are we're second the with half provided, and executing in first well in we quarter certainly as the excited we while the the is product delivered our ramps that by

to support, I'd our good evening. employees, continued Finally, your all Thank for investors and thank wish customers, you a like and our our you.

Operator

for conference. This Thank concludes you today’s participation. your

You may now disconnect.