Sameer Desai Senior Director of Corporate Development and Investor Relations
Tom Edman Chief Executive Officer
Todd Schull Chief Financial Officer
William Stein SunTrust
Matt Sheerin Stifel
Steve Fox Fox Advisors
Mike Crawford B. Riley
Mike Cikos Needham & Company
Paul Chung JP Morgan
Call transcript
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Good day, everyone and ladies and gentlemen, thank you for standing by. Welcome to the TTM Technologies Second Quarter 2020 Financial Results Conference Call.

During today's presentation all parties will be in a listen-only mode.

Following the presentation, the conference will open for questions. [Operator Instructions] As a reminder, this conference is being recorded today, July 29, 2020. Director TTM's Development disclosure Senior will Investor TTM's review now statement. Desai, of and Corporate Relations Sameer

Sameer Desai

Thanks Dan.

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

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

Tom Edman

strategy, you that I begin and thank loved update quarter These on of an our COVID-XX afternoon for and second joining call. us the our review and Good I'll to has impacted of XXXX ones performance and by QX Sameer. hope and you Todd business conference financial a all healthy. with times business, quarter you, Thank continue by highlights unprecedented our safe QX second results. from followed for discussion are how your be a XXXX our an Schull, with will XXXX guidance. CFO including of overview of our and our quarter follow our

XXXX report your questions. in We will the that then range. guided to second non-GAAP pleased I above quarter revenues the call and to am open EPS of TTM the generated

to revenues year-on-year Our markets weakness and grow in aerospace end diversified the markets. allowed end us automotive despite commercial

created employee In COVID-XX COVID-XX. has am have TTM and environment. inefficiencies this worked unprecedented employees costs to addition, of I overcame due to pandemic and difficulties, strong uncertainty proud excellent The extremely the concerns. formidable macro-economic challenges performance, operational despite extra and execution production operational how deliver of

repay our highlight divestiture, of ratio returning to to which net debt Loan have quarantine approximately protocols. in cleared one tested this and have in positive XX X.X. approximately being who with year, testing and for North have following had Asia, employees many COVID-XX work America to after received Term mobile the Finally, proceeds that business I'd applied our unit to like B, and driven we've has them to the EBITDA

were quarantine close team in We infected with to cleaning areas. affected use the to in addition contact individuals tracing work who contact continue and member, deep

transparency had and operations our our communications, events culture checks internal in other such date. manufacturing as on communications, We temperature minimal facilities measures stringent proper these preventative in measures, masking, distancing and and Because have of also our to of worldwide. extensive continue the impact place,

that of provides XX, US. were received unit that it our I we less the Consortium commented million. process to divestiture, pleased to to previously a less China funds increase on for to the had the focus and expected seasonal, to million the the on receive an earlier journey could the AKMMeadville, to $XXX markets. balance cycle April term the capital differentiation and repay transaction up to this of am due proceeds intensive, the $XXX sheet remitting loan. value long our proceeds to divestiture on of to Mobility today, We we This enterprise that report business have end than of closed take Moving Mobility August from announced we the continue flexibility majority able Chinese TTMs of transaction to from us we X,

support Finally XX, these final transition as sub-assemblies. suppliers, and growth this unit, for higher the But to move their our restructuring on operations. commercial last we products end support RF the is one on on plants based a two business of saw rationale had our sequential into two buyers track release increasing plants, press the QX. by XXXX. this margin components issued be restructuring E-MS of for of two focus said we other our to TTMs on shipments for sector during such as that strategic these we differentiated PCBs as absorbing and in April continue down XXXX we we that complete time closing place The We would customers and through previously wind take involved discussed plants

TTM the Additionally, they local facility government intend located. Solutions expropriate authorities is have Shanghai the where E-M to communicated land that to

E-MS historical of to exclude like segment All our contain reported market disclosures unit. markets. I'd Mobility and Now the market business end all end still revenues. The review the disclosures

press end and our XX% of sales, to aerospace market sales end on total second quarter for XXXX The QX in of and details compared defense earnings. refer sales quarter represented QXXXXX. to the please second XX% more of XX% release market For disclosures,

about QX this from sales. our in of sales market end represent expect total We to XX%

in of million yet year backlog ago record solid We by the key commercial QX see quarter. more in as revenues another contributed to A&D end the and Growth aerospace A&D F-XX than Weakness of market bookings year-on-year in million radar strong up offset growth growing $XXX in continue and a our to our $XXX alignment market was fighter with instrumentation to defense. programs AESA systems segment the level X% program such is our key program result jets. for market programs for F-XX of XX% – plants industrial The end and segment, and quarter year our critical strength weakness unit. in medical industrial compared of a of medical support patient Much sales in number that total in and strength business we equipment, We medical quarter and as ventilators two the of to to second facilities the stemmed customers, ago quarter, first our from in the E-MS customers and particularly in our XX% the urgent the the down in XX% strength in monitoring the offset equipment such compared saw for in medical XXXX. by instrumentation the of partially was that to and as our pandemic. needs wind provided by combat defense

to came placed priority Our these facilities way on we as a these in first needs, meet through big customers. critical

was third revenue center quarter, and Networking from second demand the be second QX, and XX% market expect in the second trends quarter, peripherals the year-on-year XXXX we infrastructure. segment data quarter compared year-on-year market XX% the driven the grew expect in demand after in communications represented at in in first in into of XXXX This during of semiconductor QX quarter of compares In slower XG of as for albeit our be continue XX% the Year-on-year revenue, XG to XXXX. of Sales revenues XX% accounted the pace. of by pause from of end this XX% For to and half. of takes QX quarter deployment quarter of the for storage computing market a first a to XX% XX% first revenue QX in This of a strength growth for we as sales XX% total to XX% customers. XXXX. this XXXX. end infrastructure strong

third XXXX. represented the the down. the Approximately well quarter demand sales year during sales. closures, Automotive XXXX, expect revenues approximately of first XX% this ago in of year-over-year compared of end are to and of due represent weakness XX% that market to quarter factory related We market as OEM of quarter was end plants in weakness. sales in COVID-XX being total shut XX% XX% quarter second sales during decline the declined E-MS due Automotive year-on-year the XX% to as to

expect of in We XX% weakness total ongoing to automotive contribute sales QX, global in demand with expected.

to decrease year-on-year decline We XX% XX%. expect and sales by in the our second QX approximately PCB quarter from sequentially to by

I'll cover operations following and that the some exclude business Next, second all Note Mobility of quarter. unit. metrics the the details from

XX% approximately company's in and XX% XX% which our the HDI, revenue. in includes compares business year to This approximately advanced accounted quarter, quarter Rigid-Flex components ago During our QX. of for and and RF the subsystems technology

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

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

backlog ago quarter was of QX. compared versus year in Our in to which end second end the of customer in quarter of the subject ago the top XX% million to technologies $XXX.X sales in XX% year compared quarter cancellations second of sales first our year XX% quarter the QX. of At five of million, for customers of is contributed XXXX. total quarter million largest the the and in second $XXX.X quarter XX% of accounting and to our XXXX, at in QX, XX-day end the XX% Raytheon XX% was the at the $XXX.X and last

was three ratio the ending months June book-to-bill PCB Our for XX. X.XX

half diversification positive customers. to customers. also by operational thanking support we moves Despite appreciated customers that conclude like COVID-XX TTM like areas of industry. mission for and concerted during and these than efforts challenges taken the first of expectations medical our think our for in in performed for TTM excellence, Their critical of I continuing by and market efforts this the times result long-term. end inspiring strengthen direct related to innovation essential better a I'd strategic will to the year, our our as to employees critical faced our businesses are our again We've contribute particularly the engage

in data key in As second as slower automotive I segments markets. optimistic and half look and XG commercial sub a such growth cautiously we the while defense, aerospace expect continued prospects beyond, and longer-term center, about towards and medical, am our I recovery the

our will Todd? financial for Todd quarter. review the Now second performance

Todd Schull

good and Tom Thanks afternoon everyone.

As earlier, sale of its the XX, April on unit. the Tom Mobility of closing TTM, mentioned announced business

solutions the issued previously information guidance. TTMs to as business in results the to has I operation. Please E-M the The facilitate of continuing refer To exited includes Mobility the results results also the As which unit. unit also of schedule the the have non-GAAP reported. on of business disclosure discontinued for Mobility reflects TTMs earnings businesses will business financial a results unit operations. gap we included details additional such, and discuss comparison

year For and XXXX and of instrumentation, to and of to of and and income the our second share million, in quarter XXXX. due loss million will and operations remainder per GAAP XXXX non-GAAP net first diluted by year-over-year for in net diluted end $X.XX in XXXX. continuing or increases per were of net income quarter $X.XX second The last the the of compared unit. GAAP $XXX.X from $XXX.X of quarter aerospace GAAP offset million second communications in income share. $XX.X first was the second These performance. focus per declines or of the of XXXX $X.X This computing, net quarter share basis, sales net to to million from $XXX.X million in in defense On quarter the million of compares Mobility of $X.XX market. financial on a revenue from million million $X.X gain The end $XX of our continuing $XXX.X a in of numbers our XXXX. quarter a $XXX.X million million, first the increase quarter quarter was the industrial markets, compared second diluted second the networking in comments XXXX operations operating of and sale in medical, in include or the was quarter my automotive $XX business partially the

to items business related non-GAAP excludes or our enable infrequent includes non-cash Mobility costs, information items. performance with the but of facilitate the non-GAAP expense through restructuring unusual We to unit, see eyes certain Our M&A company costs, and expectations other present management to in and periods. investors prior financial comparison divested

due of year quarter weeks our market compared of was and year-over-year compared in aerospace million, this business decrease the the the year operations $XXX.X margin net the instrumentation, by net were only of Mobility for quarter the $XXX sales second defense net three For quarter marketing the quarter sales million end versus which offset XX.X% last sale quarter. million the medical, year of second Gross in Mobility automotive quarter the sales in partially primarily expense million. due in $XX.X and compared revenue first lost XXXX. was first the above, in markets sales The the or net $XX unit the as X.X% ago XX.X% growth XXXX communications industrial second quarter computing, year first business in and or of in and to $XX.X year-over-year discussed well a in to net networking or and declines second full $XXX.X XX.X% our gross a ago million and was money year. The from and quarter to increase growth in in Selling quarter was of to X.X% X.X% and continuing of million versus to in of as margin sales the in the prior unit, and markets.

of Second quarter sales year net and or sales to million or the $X.X G&A or X.X% of the ago the million R&D in was revenues, expense $X.X million million same in net X.X% was of quarter $XX.X million a and the second sales, the compared or X.X% net or of to quarter. compared X.X% of X% $XX.X $XX.X in revenues year or previous quarter. quarter, quarter previous in In million $X.X ago X.X%

Our was million a margin $X.X in quarter last quarter, quarter X.X%. second same year the second the lower the from This interest of X.X% million to last and same X.X% expense in $XX quarter Interest operating was quarter compares in to of year first due in decrease the the XXXX. rates.

million incentives $X.X loss $X.XX million of recorded approximately $X.X a and approximately During EPS of approximately foreign or million Government million of to the exchange EPS to compares losses. QX year or in $X.XX XXXX. This gain EPS. quarter, we $X.X gain reduced or in the QX of of $X.X of $X.XX last a of

rate tax the XX% second effective Our in quarter. was

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

to collected inclusive the $XX.X the at same positions last operations remain in flow from accounts balance quarter compares of Our Mobility and liquidity million million strong. in This sheet we receivable second was the quarter, Cash $XXX closed after year. sale. from $XX.X of business the million

$XXX we Term from our from of proceeds million now we was as we were quarter. $XXX.X remaining the sale second sale. million spending million net of for second today, million. debt $XX.X for the the quarter Tom equivalents at Cash repaid $XXX $XX.X end the was Depreciation proceeds have Mobility capital And during end, In Loan of cash million at ratio quarter of our Since X.X. mentioned, the the second second and the the end quarter leverage was all and net quarter, B. XXXX received of received quarter the addition, the

year. plants for year-on-year. on that I'd quarter Revenue second margin a basis excluding the the non-GAAP X.X% two are from the we XX% million for operations a grew grew closing. of business last was and to continuing and give Finally, like $XXX.X E-MS picture was Operating X.X%

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

this expect Looking third may production. own in market million we to within be weakness, $XXX ahead, end to COVID-XX million. of as total as account, revenue the believe our cause quarter disruptions, we inefficiencies Taking of range well $XXX for XXXX that chain the demand supply into

the earnings and on contribution $X.XX a is The that E-MS $X.XX diluted of closing. to in range we from based non-GAAP shares. any be unit, share. still not business includes to operating from EPS results guidance per We the million diluted revenue include plants two the does of Mobility This but share count are XXX.X forecast expect approximately

with of is Our future which share count a securities, our includes options dilutive convertible guidance no shares price. RSUs, associated function but as our stock bonds, such and

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

SG&A that quarter to expect and expense will revenue revenue. X.X% third of R&D of X.X% the be We about in be

interest estimate XX%. To expense information. total the assist finally, And to to our XX% in developing expect million. models, between you We offer your effective tax about $XX financial additional be and we rate we following

third intangibles million, During record $X.X $X.X of approximately expense the amortization $XX.X expense we million be non-cash of expense quarter, depreciation about estimate and expect interest $XX.X compensation million. about million, of approximately stock-based of to we will

to our and Conference participating Technology Bank the we August Leveraged I'd Jefferies virtually in Semiconductor Summit Industrial Industrial prepared will Conference X. Conference August that like Telecom X, the on on remarks. the be announce Finance the Needham and October Deutsche XX, X September Finally, on Hardware Jefferies concludes That on

Now, we'd to line for open like the questions. Dan?


for time go William this comes At open take questions. the Instructions] sir. Stein, [Operator queue ahead. first in SunTrust. our you, from Please floor We'll we'll Thank question

William Stein

one time two which are other and the you'll hoping results. in can longer no beyond the and trends of E-MS the decline of what Thanks the business have facility, sort the over and from but is September comment taking still the my good level final question congrats expected at maybe on in level, Great. for contributing? on you the the I'm linearity

Tom Edman

Sure. Yeah.

So clear when and and facility million has been $XX that million at about talk we already year. that integrated and operations one facility to going that – to for make $XX you. E-MS that between a really facility anywhere and PCB we're Well our just into runs

hard facility – There already that again, balance to and exactly facilities going incorporated you're be operations, down. be in So much forecast to end down we're will PCB equally But into will quarter it's two could QX QX. winding how bring down be the going the of at down. shut QX down each them the effectively to pretty them will you wind say to of

transition we to facilities. those smooth reasonably close move as So

William Stein

And can, the then you're or to one that acquired the Anaren market if that? bring any I two, non-defense follow-up in end trying was that Thanks. that matter, about capability progress the talk progress in the automotive making in others, for any RF particular business, in

Tom Edman

Yes, sure.

more there automotive. actually are a there. about of they're particularly yeah, and So medical becoming optical thinking think areas the if speeds RF activity then and focus about you where we've you and of start challenging, performance – RF yes, some networking, networking, importance And few have

resource And is on world, automotive been are that what who into smaller in we're our all we're particular, Yeah, of of terms RF be areas. improving so we've performance finding true those to is gigahertz and XX customers address that efforts customers working challenged of as a customers moving particularly in constrained. may in are

customers start performance on we've some you're their into with fine lines modules to needs. working to on And you that that. We've efforts, accounts also as of modules working in address or developing a been been potential sensor of number come working going for challenges and one, to also push and to specifically handle RF with can thermal the those several with start thermal we've so challenges been running

two typically are particularly world cycle before three the development on years that will model even these know, you starts sometimes automotive in a work release. As – you

some So are are of them these into – prototyping efforts stage.

yet pretty progress problems. and earlier. think making revenue, but are material with variety We've still got efforts of Not Some we're the but I excited that good a customer those to about momentum those certainly gaining into engagements, there. solving we're contributing we're turning

William Stein

you. Thank

Tom Edman

you. Thank


Our next Please ahead. with question from comes go Stifel. Matt Sheerin

Matt Sheerin

at automotive the that to much cautious have Yes, a figure than questions there. Tom, thank on of out other and the your you I'm first weakness. the on suppliers bit more trying on the me and you. sound A components PCB how think talked commentary based issued perhaps end couple outlook, – that is maybe business for of auto, little of you about I E-MS And guidance

bigger numbers sit figure trying uplift you to but order you of cycle terms in in pools? terms when of maybe over those again, out and go you would So could the a just demand in where expect

Tom Edman

thanks. give Sure the I start E-MS to and in Yeah, you automotive out I'll about tried to second out little you're than do Pulling information Matt. the bit you XX% if to talk earnings market went taking me what without unit down a as – to at that. thanks give if were but quarter-on-quarter, let look right, this to we more the on through this. script, is and volume visibility and E-MS that quarter some proximately we you overall think more performance Yeah, you substantially down

Now, quarter look at down then third look XX% if XX%. looking and about you down the approximately and quarter year-on-year you at the in sequentially being third we're

the X what the the hub which printed our as they'll in circuit was look in were boards, So to If able quarter you inventory components, requirements, to versus time efforts early May. started from second to what's the do early, we of OEM going in to our really their their other they second components, pull saw at customers customers circuit with lead part the service and at printed customers, quarter and longer as look Tier supplier in startup on? boards what help they our relatively started start

seeing we're in what saw also was decline sharp so revenues a result. bookings. as some And a we But heightened

to in quarter. the decline towards into we're the some bookings starts that of that then third weakness feed So guiding

seen bookings. beginning in week we tracking as we carefully. third our And we quarter, of really at now improvement of is, seen hit point, the June, an sequentially we've almost are very those every the what sort so June, And we look low bookings have since where

the and quarter as as so in the would that move well we into into at hub we then and shipments revenue fourth look that for third the see bookings we then that bodes late quarter. And into

as think indicator So expect the but ahead we positive trend that pot of what into look to would quarter, fourth see third we bookings sequentially, as of be look in then is quarter. fourth nice quarter, should we yes, down you I the a

Matt Sheerin

That's helpful. I still time you wins automotive, electrification? know content actually some talked sectors. leveraging us several trends positive you quarter technologies the about last update Could toward on – those design your various in across trends you like seeing and particularly are

Tom Edman

the still interestingly past don't about trend quarter. so quarter the terms like XX were programs, as make of that in Yeah, I is not in nice bookings. I quarters. overall seen of value one seeing ADAS as strong we've strong a what booked is million, What nice lifetime bookings some this out in of program very saw about program of program we a bookings, we but movement $XXX automotive, overall bookings

may to the there move themselves. of a slowdown product are in customers would little programs. of bit in with good But to little of a side overall, continuing bit lead plans the a our be a of think indication efforts programs that forward on of I longer-term pause their bit new some terms that a related ADAS a customer

it. for gives that you feel a So hopefully

Matt Sheerin

sector? the on that breakdown versus in on commercial and aerospace just seeing military remind what defense sounds side. and – the the Absolutely to Could and is you really it strong subjects us defense demand like changing the so you're

Tom Edman

aerospace full The Yes, numbers. commercial We about of year was so aerospace. defense business were and defense. our balance was XX% XXXX

they terms those as as but that. of to aerospace obviously, XXXX, percentage demand seen have percentage. a more were the will aerospace through makes that side commercial worsening up small of That's is relatively for Now, come commercial than down we're of why aerospace the defense with in about that's in revenues, continuing of program here defense again that by, business with, second a and quarter that begin we in the substantially fed What optimistic still strong why business position, overall then seeing we're that side. by forward, in look terms the very defense ongoing to the we X% on and and have we and radar our as growth, breadth really be still already

So for hopefully you a that split. gives the feel

Matt Sheerin

Sure lot. enough, thanks a


ahead. Fox, Please question queue comes Steven The next Fox go in from Advisors.

Steve Fox

Thanks. Good afternoon.

Tom Edman

Hi, Steve.

Steve Fox

with what to I'm guidance? wrong, this looks down agree if associated And got maybe you than was the top you was you surprising Hi, the I so, segment most just your QX some the you significant normally was to just line drove upside that, like cited that it upside sort like to with on of to within continuing of results I up relative greater look guess, line then to drop sort guidance, target. operations back would call to the And of original each Relative but from that. top it, if you maybe and there some contributed markets wondering can would basis. what but that? out Thanks.

Tom Edman

comment and the as jump give on a there can Todd I'll part well. Sure, you second general in

forecast to of were line in markets. On obviously, our pleased, able I we the top very end perform we of performance, were think a ahead number

we going also then would driving growth we that, that the than telecom did had had had better expected the area instrumentation the growth move mainly we at our that sense semiconductor sort we normalizing and what we instrumentation then was really back strong, upside make go communication, sorry, by our quarter. stronger center, does into that of versus the we than of with and really look demand where remains combination one driven customers? – that a we was guidance area And data demand being in being two that forecasting. been if industrial XG also but center had you it growth the medical outperformed to computing and demand with that most networking tremendous on If of and as strong. we quarter of the mainly as stronger COVID data our see third medical, Network forecast, against there, think forecast. I than kind demand back things, you side And tie all

several had well. And absentee well So saw our with tremendous how rate the very to Asia. then an about They America deliberately concerns side, our amazing we the facilities North in teams standpoint, utilization in North that operation contributed? some performed in job COVID improvements push also did from an careful we on been operationally. ability out Particularly, given and as of America production

So I'll there. comments? Todd stop any further

Todd Schull

nail the into the have hit you that going to the think quarter. the I or head expectations performance QX to we relative Well, relative guidance on said

asked stretch a and comments a As that Tom as rally in to basis rather particularly where we ourselves we urgent really do his by to the mentioned in medical customers group. were area on and

into QX. of in markets. And down you're happening some As look seeing those what's a you calming

and notice, where medical little you surge in are industrial initial in QX, slowing very So strong will, here, here. the down it's with ventilators if tapering very off instrumentation was

China, and kind from also commentary seen down in the We're We've little other you well. QX street, QX. executed of back for as I of think a seeing going a we the out, bit some little into getting A centers a politically, in pointed Tom seeing we're there in is As pattern. go of the that into normal otherwise, driven. business out QX. in some of the filtered execution. of lot look with on that QX, half that just lot pausing and effect. the you've and the they're pausing companies are seen all really but in to little quarter-to-quarter, with in is at of pretty that some who we're really a was mentioned – more bit profit A data was driven in in Tom have a it our and the we top XG chip XG a Operationally, definitely driven bit growth made line, by the the of particularly is what's Asia, And QX, the as yes, in of line upside and first year quarter. in of to some that lot top comments his fact revenue comments QX, declining of pausing lot expectations And

midpoint of drop guidance revenue, or than look you and $XXX at drop that. if the we when margin in impact much $XXX sequentially million, smaller So the essentially with the million even is take – incremental

good both And respond down the experiencing. so we're revenue we that managing as job levels the in to try we're pretty costs and a up doing to

Steve Fox

helpful. you. Great. That's very Thank

Tom Edman

Thanks Steve.


Please next from ahead. question go Crawford. comes B. Our Mike in queue Riley.

Mike Crawford

started imagine aerospace in that Thank you pretty I were pretty insulated stays defense via but and cycle well front, and platform keep F-XX and budget ramp same, programs could the there get require any talk year 'XX the that to of F-XX, programs you. that new new about you up you on large election government that on can you're Asia those On much working this opportunities? or are so either before budget some get to will looking

Tom Edman

see in have the interesting you can to tremendous momentum And now. part right years overall to major we're been our in, has an of over program beat, focus in with programs. Mike. the to broad have and been has There in in. we XXX be programs just not depth That's a of involved question programs that moving seen Well, backlog but up that the a set our through

to involvement always whether involve whether Now, and have it's that At – programs, missile particularly services. programs essential good AESA with programs these all radar usually move that radar mentioned, therefore budget we it's and armed whether core point, type jet of to and have fighter not it's need RF ships capability programs the upgrades that's the those while naval is depth are usually so our it's to the of this are out where the core of requirement they're some LTAMDS to the systems as requirements. a a there, because solid backdrop are viewed programs tied radar with we

growth not be requirements with not that backdrop not at a as viewing program we're – I'm growth, point. programs particular that terms so, think I'm going forward, core any driving our nice this as budget being on to got funded, strong I of dependent really backdrop, set in we've that drive our solid And will that be provide of overall will

Mike Crawford

I'll ask Okay, thank you. subject. other just question one

was think beyond. ‘XX for So or and and automotive conventional if change change an where on of not been as I'm any XH what a sure percent that ‘XX sales you might automotive heard mix if vertical. PCBs or exactly XQ there's I then

Tom Edman

sort last at think more end from bit. in quite to provide yeah, content to than of of increase terms in it's XX% another over It continuing circuit with it so printed we a boards electrification occur. on should basis provide the right now I an number likely Yeah, the is because to non-conventional we're we moves quarterly that seeing But year. What this of percentage – lead as year know, around basis. a annual that we misleading you on were

as the that expect we the year. move I course So through happen to of

report first a on we year. – percentage. so on business as in of should could a sensor Again, quarter really, to what and pretty of infotainment infant again challenging of we again, that number really that next the year, face you in growth the solid is side see should the that in increase So the balanced see be we the

to – So if albeit increase. have grow see portion that of of a the you're volumes to – overall market you face That's percentage that dropping. is the continues in unit going that slowly

So that's second see expect half. we the would as what towards move to I

Mike Crawford

Okay, great. much. Thank very you

Tom Edman

Thank you.


question next go Jim ahead. & with Ricchiuti Our Needham Please Company. comes from

Mike Cikos

the were I seen ahead if Did you so, was? trying customers some wind did that a comment Hi, business place heard questions prepared Cikos down? A make benefit if for And it Ricchiuti. first Jim to this yeah, of there have of correctly Mike the orders hear quick sure your to of wanted couple being team, I temporary benefit I business, of may the instead in what you, E-MS on was But quantify just a that that remarks. here correctly?

Tom Edman

the the you'll in on find data and split. press some you'll tables really release, find the So nice

to you'll short-term buys then you with just up Mobility because math, also that feel being year E-MS, to situation a last the So did and both give do the overall. E-MS we will. from But last just of be able and about – time talk that's if so you the a

tables. can me by that. It's will, sort should any those rate you we as – caveat you of sequentially. actually up referring and I TTM. go board So – for year-to-date, printed really –let look as business circuit that that's to business But can noise, we ongoing that the And if remove see you be at then – the here through where will at the

Mike Cikos

baking to I’ll another, forecast because up for guess, we're But Okay. guidance Thank this division? sales help your understand E-MS tables. is I just through and back can of you And expecting you there, us know that what again, on difficult circle have QX down for the those it's I for – the little XXXX. half into you're wind to a this

Tom Edman

Why let if don't walk – I this me just approximately. do through you

a probably printed at business, look look you going with where can If you end board to circuit you the for it. markets be year-on-year and the we're give at that feel

about And year-on-year. you there's defense, in you printed we little E–MS up and so, it about the PCBs there. for guidance think XX% down content year-on-year very should E-MS if if should Automotive obviously we and should look of is circuit X%, board course about only be be aerospace we content, more where

if roughly E-MS flat so look at content year-on-year. look PCB. with MII, networking at is nine roughly If or And computing you comp roughly we be then down X%, there. points there you X.X will percentage be where up should some

are – give more we any the So for you provide the feel where guidance in like Todd table? that the on should to side. a you'd PCB on

Todd Schull

little can bit. I Yeah, help them out a

$XX neighborhood, million. it's X of look in minus press look second or an of talking only going plants can about that table to a at that, see But in you'll exhibit QX release. million are that be QX, You the don't benefit and being the numbers at if that closed, the we're little is fluctuate quarter. the that contributed when have you two revenue although the the bit, about And you plus that to

not So going we the swing immaterial. it's see way it's a huge to right it can one as have now. or And relatively other,

Mike Cikos

It's QX the results helpful, results those with to if one the and to that pandemic sense, the final, guys Are tracing step in COVID-XX you is costs incurring wanted should normalize contact down of we this this, the upfront guys continuation from QX have been hopefully to or are may, outside you help you reflected point? fully I have guys, currently helpful. are a things somewhat handling get very And a costs coming in then and again, those protecting there most and assume and with your you just at of behind potential execution as the a or how personnel. that in

Tom Edman

Todd. ahead Go

Todd Schull

shot take at I'll Maybe a it.

masks, little spent on little basis. with a we temperature equipment they're time of a up So our the contact and here doing like yes, checking, they're all incurred deep and and more things tracing, daily cleaning cleaning, a for frequent follow and costs employees obviously, we

hidden like a a they're productivity. a So some capture. there's I'll said, costs There's I something to and there there's and lot little issue the are little or whole of, of then call direct, And things here difficult like masks that. little a more that the

costs, are not incurred, QX incurred with expected that QX can, we've away. in in is and as numbers associated those QX our are as we've COVID to tried reflected So they as our expensed include going those and costs our we we and as costs guidance. best

you around it's I stats, rather you it's particularly think if the again even nation, and US, difficult the look Hong obviously, at to being in its head look Kong. rear starting the in when

we're people associated sick So people. at protect there And continue our to very of make sites very we're our that sure will that that we're we're our very not and costs that. taking people getting to our work, concerned. or at we're And fortunate with being be But vigilant sick getting to trying with work. care are those

as protect work already our we are We are going our as continue to people best do costs to environment. can forecast. those But the our in reflected protocols within to

Mike Cikos

Thank you the for color guys.

Tom Edman



Please We'll JP ahead. take next from Coster queue, go with Morgan. comes our Paul question in

Paul Chung

taking it's question. guys, on Hey, Paul my for for Thanks Coster. Chung

kind volatility and less particularly a that can us So lot and now it you sold parts operating just long-term sense of – of forward your seasonality to assume the XX%, to your long-term also comment that you give margin a now? Is business you've Mobile E-MS, you're hitting you fair of to in And kind of targets operating between exiting range? on timeline can quarters then a XQ for the the for margins moving of XX% XQ? on kind

Todd Schull

Tom – that want run a at that? try you to do try take

Tom Edman


Todd Schull

second and the question that is seasonality. take me let first So

to So we business. large – of we had when the major used seasonality have we impacts were element a very, very when consumer

With unit the out gets Mobility of sale us of that that. business piece big our of a

exited and your to and first the Now, produce have a that and some – produce ability the and that little to the think quarter in still it subtle bit our there And businesses probably made we there QX New we’re the in customers’ some impacts Year differences. ability have know to so the subtle of as won't We closing. speaking, tends targets, still even don't notes our as regards is in pattern on be season. past. be Chinese take you This two was first I there. plants North being I be of always you because see generally little But America, seasonality vacation But sure COVID. bit And how oftentimes there. think that see we most the it comment impacted. the in significant a in year weird impact have either we or I'm But well, In a particularly QX question will seasonality an out differences pronounced QX, with will I that if that not to you be. my

margin quarter. would about this been past have Our operating X.X%

And towards. we're an in the so driving financial improvement that's that indication of the model

So of seem the doesn't do XX% We getting line top our help. away need to far goal now. XX% so

are their of that need to as in be plants, Asia, not terms have particularly We contribution. utilized as in financial they

need their and ‘XX. of that if are that of line, to or into And to, But a different get we kind solid to back. say organic need the need the to at they're normal get levels get big itself there. from that we of don't few a in our the It's assuming us we've dollars in that's top comes markets. year mid-single And years saw have right million QX. But growth, of We range. that healthy two not those XXX in XXX a – from some are COVID we we're more that bit stretch writes buyers, a so QX, top margin we crystal have some seeing economy consistent line some need I'm slide a four I and strength hundred to growth looking card there, wild to now. big to kind been a those And end that kind at would great here number. We We ‘XX expect is the growth revenue assuming get digits ball, just before end markets in into let's million which but back get of it of the of that's economy. some

Paul Chung

focused to cards? acquisitions years has portfolio business the It Got kind in you add your now existing kind three-year you of up been two Are and since then seem XXX just on gap. to around the to now? of is that to XXX, you two and you bought a follow Anaren on

another So for one? are on

Tom Edman

Thanks Paul. that Yeah. on jump I'll one. Sure.

end there really we about was our we and organic and normal So to the get to and XXX to XXX look times that as is at macro our the we efforts can rates our we believe markets. more growth as Todd business grow return driving to real factors referring the

growth. our in shape our the make customer Really of we're a overall a footprint we've though identified M&A that's that as sure So The got balance part perspective. But perspective – And to pleased now. areas company to at focus. support certainly from right a footprint, look right. From to support as Oregon. we of a that. continue strong One see pursues few we've – you're strategic sheet very is

commercially. the The be RF to our on our and aerospace business other an M&A continue and and engagement bigger also deepen our to efforts of thrust of from will standpoint defense side both

a process processes. move with but it's that of a – difficult we those run of our strategy. one opportunities So our When to continue materialize, always we core that regular as part will core it's to estimate, forward

down that. that. investors the informed our first as work priority to pay debt. to continue we So done And our we've consistently, in We've was meantime, the

of sheet balance really work we'll are with the shape for our growth. pleased continue and strategies We our to

you hope answer, that So an Paul. gives

Paul Chung

Yeah. Perfect. Thank you.

Tom Edman

you. Thank


no the for Edman more queue to questions I Tom There are in it remarks. this over time. turn now will closing at

Tom Edman

thank much. for some like And by Great, us. thank summarizing close made you earlier. joining I I the to you of just all very that points

of a First, on labor which COVID-XX really we range, excellence. productivity, our revenues focus earnings operational challenges delivered demonstration above despite related in guided and is the

operations – our us of allowed continuing Second, despite weakness has to couple diversification grow segments. our has to end in sub a allowed market

our the received Mobility unit, loan. of we term and the Third, divestiture from proceeds repaid sale

with thank continued in as I'd our around to employees, of their support closing, you, customers, associated investors, and for your COVID-XX. challenges our navigate like So our businesses course, our we

our focus differentiation We diversification, and continue will on discipline. strategic long-term

you And and the that, with ask joining I'll you that call. close Thank Thank for all safe. us very so again you much. stay


and ladies you, gentlemen. Thank This concludes today's presentation.

may disconnect. You now