Sameer Desai Vice President of Corporate Development and Investor Relations
Tom Edman Chief Executive Officer
Todd Schull Chief Financial Officer
William Stein Truist Securities
Mike Crawford B. Riley Securities
Christian Schwab Craig Hallum
Alvin Park Stifel
Tyler Bailey Needham
Paul Chung JPMorgan
Call transcript
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Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the TTM Technologies First Quarter 2021 Financial Results Conference Call.

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

Following the presentation, the conference will open for questions.

As a reminder, this conference is being recorded today April 28, 2021. statement. to President conference Investor of now TTM's like Desai, to Relations now review Vice TTM's Corporate disclosure will turn over the Sameer will I Development and

Sameer Desai

Thanks, Casey.

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

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

Tom Edman

for business, update our begin review has on Thank And you, by an our an quarter Sameer. discussion XXXX of XXXX Schull, I'll afternoon. financial our our first of Good follow Todd results. and quarter quarter a strategy. will first for of joining the a our Then CFO highlights overview QX business how guidance. COVID-XX conference us our our impacted call. performance followed thank from you with QX XXXX with and

all and questions. than report We your end first in better I material quarter will costs in midpoint performed These growth non-GAAP the was EPS markets data end All guided of COVID-XX. inefficiencies and clad led create currently The guidance, markets. center of range. manufacture a and increasing macro-economic automotive These resin, to by copper foil, concerns. or due limited increases. are pandemic of cloth, CCLs continues prices made which printed challenges are are operational boards. material for being from and lead epoxy price the computing despite achieved higher the revenues to times to key difficulties, the that strength and raw were then seeing glass open and while call of of supply employee copper the results uncertainty, to CCL, laminates year-on-year raw and production the pleased above compounded TTM generated am XXXX circuit by

manufacturing gold copper, metals process. also palladium as and our such addition, In are used in

proud We TTM that operations in have solid QX of times. a to deliver would efficiency operational remained diversification, measures comfortable cash adjustments performance to despite leverage to the I from our and are costs quotation how generated to efforts, TTM. I ongoing X.X through challenges flow am supplier formidable managing also like of at excellent this and environment. we highlight such extremely employees higher the and impact material worked actively mitigate raw

coverage. I into which we stronger across is normal optimistic seeing by supported virtually end backlog our Looking our that markets, than demand are all healthy QX, of trends am

an Next, over more our We I be less stable margins. provide would to flow to time is cyclical, on our journey business that a differentiated. growth, update cash like be investors believe with performance, on and long-term and TTM will strong rewarded to more transform strategy. improving

As part year. transition, Mobility we Business strategic of last this our sold

by Mobility our As of business other X.X% that was a which our non-GAAP reminder, greatly EPS the and of with in business of XXXX among was factors. operating margins as were part impacted $X.XX, QX seasonality

able A longer cash technologies to and We to part and of to that complementary both end are our set our through generate strategy to more will our consistent are products of internally add current now be markets. acquisitions. key cycle strong exposure capabilities broad offerings, flow and earnings ongoing with and

surge At call COVID-XX Looking a cases production. conference needs. winter off. sheet as the is strong then, impact would in And we have we reduction balance were forward, result, North seen the to of cases, our sites as well support a well. in following organic Since investment I seeing which further a have America expected in North we the in our some on last new of like our time as cases in situation. to as a America dropped pursue significant holidays, position have quarter's to to update on acquisitions, COVID February, you also

are and the impact the meantime, rollout place, vaccine we with along customers plants cases. in have culture protective across of to transparency masking, checks, not-so-distant of And on the has will COVID-XX employees important measures, stringent had Because in being welcome into our our distancing such keep communications, precautions. that and and other communications proper back will further less continue preventative the hopeful visitors In reduce than these operations forward the to worldwide, our case looking to TTMs new as our and we might are informed. future. measures without We routine temperature our internal facilities been able

end which production EMS December in disclosures historical markets. our XXXX. Now of exclude All the and two Unit end Business market I'd halted like plants Mobility to the review

end and represented our sales Aerospace first and Defense details our more is to For of compared to market total refer sales on page please The which XX% of of XXXX posted of QX XXXX. quarter XX% in QX website. end presentation, four disclosures, market earnings sales, on XX%

programs. declines defense up Defense our a continue experience backlog AMD in in We Grumman's F-XX climate, in commercial alignment program. and increasing and offset the program the quarter QX. record Aerospace. market for year-on-year to significant positive saw more million sharp strong result a ongoing our radar Defense program with systems compared were is $XXX the bookings for to to of in growth million Growth We bookings franchise solid QX a Northrop revenues $XXX than AESA year-on-year for in strategic key X%

markets quarter to XX% represent represented of We in our XX% XXXX XX% normally Chinese Automotive quarter, total during sales of the during sales XXXX. flow almost fourth sales period year-over-year, and this sales. QX seasonal total in ago slower grew year XX% XX% New to expect quarter Year. the for despite end compared continue the of of and about Automotive from sequentially, first a grow

are not this since automotive semiconductors do currently purchase business, limiting semiconductors. affected that has directly is We the we of our situation production. not But aware storage

closely, very our impact situation the limited to on demand. had PCB date, indirect monitoring are we it While has a

stronger market XX% instrument first XX% year sales of and XXXX. quarter, expected. in instrumentation expect fourth capital to contributed end market instrumentation customers the equipment were in our the XX% than XX% the Automotive ago in the QX. in In contribute total The compared to sales in quarter We of QX total end of quarter, medical semiconductor industrial -

been relative to of a of has quarter the For revenue be In compared market XX% sales ramp. the first We center second be QX, computing slower basis we segment XX% out the the year-on-year end of quarter, Sales and the of XXXX represented to total and expect we revenue. this data in of of in of build on first market XXXX. customers. XXXX. the expect of for during networking to growth to of primarily the quarter, fourth was XX% XX% QX due quarter XX% end segment, This up quarter strength fourth first of Network center in revenues. to telecom data to our from XX% XXXX This quarter year-on-year, and in in compares compared the in accounted the MI&I to segments revenue as in XG XX% XX% XX% XXXX. Communications saw the

as expect sales, continues revenues Please note second the We this segment drive our in growth. year-on-year opportunities. of data end markets quarter center represent to represent approximately the customer to have growth we XX% renamed mix and better to that

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

five plants following operations metrics This two the on Mobility of information available also presentation. EMS that of were the exclude and our earnings Business Unit is All closed. page the

quarter, of XX% HDI, quarter, subsystems XX% rigid year to for in Technology XX% RF our approximately compares our accounted Advanced During includes and in flex and revenue. QX. which the ago, the approximately components and This business,

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

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

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

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

our result PCB TTM TTM ending challenges than as we inspiring the also like engage concerted strategic COVID-XX to positive and to thanking our again customers. the we raw our the related customers. for We've for business Despite to long with our ratio and employees employees of was term. moves our expected, conclude critical I'd that XX. better will X.X by continuing mission for faced support Our our QX, of a March in contribute book-to-bill strengthen innovation and taken months three to performed efforts direct materials

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

Todd Schull

the financial first afternoon, today, as on which shown as six good Tom. posted our for is reviewing Thanks, which well be release results of on earnings everyone. distributed I'll our quarter, And page also are presentation, the our website. in press

automotive, the million declines first industrial was data and and in from in On quarter loss For which XXXX. growth portion closure and year-over-year of GAAP which the $XX.X operations XXXX in the income million first operating operating markets, a compared the bond XXXX. with of of of partially from to million from performance. continuing $XX.X compared the continuing networking, XXXX, in comments of quarter to last defense GAAP telecom to $XX.X operations $X.X net our medical associated of quarter last year. high-yield $X.XX million plants share. EMS This due of first expense GAAP to our $X.X the our non-GAAP loss the was was basis, two included due aerospace first refinancing were per million, first will our $XXX.X end the million, $X.XX first increase computing revenue quarter and instrumentation for The a center of in financial or end my or compares a on per of million in operations to continuing diluted of offset quarter share diluted quarter was by net income in of sales The the remainder markets, focus $XXX.X net year.

expectations material present Business items, We higher of other non-GAAP costs, million. certain These enable divested prior the to or non-cash headwinds quarter increased $XX currency, financial million, through to continued $XX.X investors sales our information But Selling and to or to quarter by related and see restructuring spending was Unit, commodity to in eyes performance and was million net these unusual the excludes the copper, compared the expenses pandemic. Mobility periods. were We Gross of through versus of with a of M&A margin prices, higher production revenue non-GAAP financial non-routine able and marketing infrequent raw first efficiencies. was first facilitate expense or the results tax costs, and first XXXX. reflect Chinese items. company headwinds quarter, X.X% sales in XX.X% in to to $X.X gross profit in comparison the primarily mitigate management XX%, approximately net related most Our stronger year COVID million expenses ago. due X% related higher of costs $XX.X of and

revenue in first or $XX.X million, the X.X% G&A compared year. compared net of net $XX.X quarter, to expense was million, revenues, sales million, to quarter expense quarter. quarter of sales, R&D or ago last year X.X% or million, First X% same in the of X% $X.X was of the or $X.X In

was last the year, decrease as year. million and same of the $XXX first QX quarter, lower we term in convertible from was in due margin $X.X of $XXX quarter X.X%. This expense repaid same bond. quarter operating compares the loan Our the million a in our levels debt, to $XX.X X.X% to Interest our million million of last

the compares During in million, the of resulted $X.X approximately $X.XX positive income to exchange a impact quarter, or operating and approximately foreign there line. $X.X of interest Government below EPS. year. This was minimal or million, $X.XX EPS in incentives of gain QX last a

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

First XX.X% with $XX.X first was quarter for million. sales. diluted of of sales, net of net quarter the the XX.X% quarter adjusted for income $XX million, million, per spending capital share. million. the $XX.X compared was first quarter net This Adjusted first million, was income or of EBITDA EBITDA $XX XXXX or Net the for million diluted $X.XX first was Depreciation $XX.X net $X.XX or quarter or XXXX $XX.X compares share. per quarter

Our liquidity a XXXX. of balance of redeem of the from ABL. with five the $XXX We notes XX [ph] of due strong. $XXX use very coupon to and sheet proceeds and US We in $XX remain and completed of positions million repay issuance interest X% our to million due notes offering at XXXX that senior senior million

debt was end by quarter, equivalents of XXXX At X.X in the at and quarter last first of net divided first In flow months our $XXX.X or the quarter end XX cash operations of addition, EBITDA X.X% were million the $XX.X revenue. the was the from million. of times. cash first Cash

the million stock first this we during program. strength, buyback quarter, a Given financial announced $XXX

However quarter due the of restrictions, to the we to weren't after completed the market blackout senior in implement able notes. until offering program we our late

As during buyback a no quarter. the result, we first activity had

approximately March which XX, TTM our have $XX.XX outstanding acquire XXXX XX.X for convertible holders and share. stock XX, January between expire bond, allow also to at These warrants related per warrants We million XXXX. to redeemed ratably

quarter, of During than rather will stockholders allows cash help a that the the the through these effectively negotiated we in issuing TTM reduce quarter. stock amendment or shares. that potential the program. for expiring renegotiated our settle warrants of to and XX% an dilution second acts exercised option first like TTM has buyback warrants This warrants to

date. for future We settlement quarters whether will determine to at cash a later exercise that option

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

XXXX the to $XXX for to in million range revenue of the total expect We $XXX second quarter million. of be

expect per be XXX to We earnings range non-GAAP based forecast the EPS of count in million share to is a $X.XX of $X.XX diluted share. approximately shares. diluted The on

share includes associated no RSUs, Our our as with guidance and count shares dilutive but such options warrants. security

dollar increase For would by in the quarter, X about price approximately our average shares. during the share every shares outstanding $XX.XX million increase

we will revenue the decline revenue. We We and expect about of through as settle of estimate R&D SG&A this in will the second to expense the be that however year about X.X% quarter, impact X.X% warrants. be

to expense $XX total interest approximately We expect million.

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

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

and Media Credit and Investor we'll the Leveraged I'd several on Hallum the May the Barclays Craig Finally, Sector June Conference Loan UBS including Conference Insight XX, on Consumer on the Casey. remarks. Technology Yield Baird virtually the on Global That that Syndicated announce the in on Needham And XX. be XX, we'd Conference Technology questions. conferences now Finance X, prepared and to quarter, X, on this Goldman our XX, May concludes the Cross and Transportation Conference Conference like like Services the Stifel High Sachs participating Institutional and to for May June on June Global June Industrials Conference X, line and Conference open


Stein Truist [Operator of from Instructions] William question first take Securities. We'll our

William Stein

know lower on of you've that was much don't it was business op I think We're the effect delivered, question. I a where and my goal but And working in shut sold both than ask I the probably long from would home. most more which EMS stabilizing taking lower you have that noise a term we to for And margin down At certainly for certainly think background operating XX% higher think XX%, operating my quite margin. And just your any if about effect higher most trends, it analyst of one net established I recollection. to margins. average, day, thanks are. X.X% I last Great, I wanted volatile. apologize of business, you on you also still bit here.

understand I path what new higher still investors and you're Thank expect But margins we target set to be, for to it what a going probably I should expect take So significantly to a from path that? to whether wonder achieve today. not you. the us can operating will here

Tom Edman

pricing, and our impact to the operations. - quarter the we things try in and we're significant view in the we are that still that wind challenges on with those on headwind thank highlighted about And fact you of a as the in - growth from pretty exchange, we're think on And some challenges neighborhood I facing if this of or that expect, had performance and We will, of XX%. $XX the is issues as our it question, incremental terms that's down line, some foreign pretty that But well kind are of given commodity margin would that COVID we virus permanent. million practical residual these don't unfortunately we for offset, was quarter. that I there. top the growth Well, you question. did of of seeing delivering the

we - that would quite been impacts of the you some mitigate looking $XX steps in and at our and is that And that, margins My you look strong. that's taking to million. cases, million, have measures are if of on that highlighting others, $XX that themselves, though, some long-term operating of We basis. are what we're correct a if - point outside really

rapidly, have while rates, know, do happen challenges through these of exchange things? particular, working those period supply negatively case a when We And, commodity impact margins these short models Well, that, in on diversify commodity our have in also And And operating if on these will you pricing we're passing temporarily, foreign base. - very customers. work pricing our or changes commodity term. we we're to you adjustments in our so sure steep digestion. of how the on work the we're we making obviously, working we're costs the pricing, you that know, adjusting to it

dealing So with just those. the issue our market - original of continued terms with. there, we're you margins, commodity we're still of short revenue, are mind, with, have growth in to as believers in as have the pricing that's out now. the And the that with - where see statement well to back you get both in that target which then and that virus through starting We dealing to made this we term of about we're

hopefully, of context. some gives So you kind that

that the we model confidence some business And itself. have in

William Stein

you. Thank


next Securities. of will Mike Thank you. B. from And take we Crawford question our Riley

Mike Crawford

defense less changes severe any [ph] with in new have you're Thanks. having you Are administration and travel or customers, restrictions? the the a Pentagon there of reopening conversations [ph] with

Tom Edman

point, say on side, I'll that at for of coming commented this answer thanks we know, is on this The to has Mike, encouraging been you first news question. Tom, what quarter budget what of all, the I pass. last the - sort so one. would Yeah,

defense in in how shifts us, budget, Biden There we're great is a think are terms programs which that still in relatively from for because budget. have recognizes budget, overall administration strategy, I flat looking that but the news at benefiting some the that important been of is.

us. I continued to you a, positive be So think that's trend for know, a

up can as I And at As certainly of for a as can strong requirements. of certainly And you in not the our that production in here, manufacturing meet dialogue, defense kind requirements for There a direct priorities, is dialogue an with our yeah, learn opening standpoint, that, how term also defense defense building to mentioned, think use most a while short terms ability a right? TTM, government, the us dual footprint allows those standpoint. customers mentioned, we again, that how department. have in have development things for department technology of those there's a customer strategically, with to gradually being in to able nothing customer, trend, needed, that's more strategic to the also that America. and from And we looking encouraging report that opening our infrastructure, of to continues both make then our cases, there's developments continue up. but - as turn, are, or ongoing we meeting an sure return The requirements from production, a North you such about company to such there, and footprint couple

say. positive developments, would all So I

Mike Crawford

And there follow just North Okay, Asia? aspiration anything or thank is and in Southeast Europe to that up, just one addition to footprint, get on the on footprint, updates you. American the any strong in

Tom Edman

nothing been then We're think that of tone there to of may in in hasn't terms shift in well. from Continuing the in volume the of term doing our The in the terms to the look, really but footprint, as way. tone no Asia I in Southeast that the of need job opportunities urgency is footprint. - need, administration's Europe there are desire long to move Europe shift team be - a in - but does And shift actively let's standpoint, move has a in with customers meeting it support America, still there. I out changed put there North requirements the that our great see of terms a from to think, absolute

around their ensure dialogue right our the needs. for that we continues do So we how footprint customers with have long-term our

Mike. look So continuing that, at to

Mike Crawford

excellent. Okay, Thank you.

Tom Edman

you. Thank


of Schwab Thank from you. And we question will Craig next Christian Hallum. take our

Christian Schwab

letting behalf questions us This here. Hi. on Christian. is few of ask a Thanks for Taylor

know, qualify [ph] revisit these give you headwinds, increases for just could raw $XX exchange, you if commodity a foreign wondering step in because, was you residual up million you you know, in apply QX guidance price a and you a more to QX expected timeline are And color you're on, the know, maybe how much assuming want does in to your I margins. these impacts. seeing, and nice some continues little COVID ease? almost costs I question, First relatively maybe you

any would So great. there, that color be

Tom Edman

Taylor, for with. this the that key I a we're really question, thanks, again asking think because is topic dealing the

are the if take since favorable, of the we're now, COVID, decline increasing know, So year in vaccinations the we're North happening COVID several of or right, the In the where pieces, you general these year. three and population. quarters in end our live certainly employees cases in seeing you the general with some the for beginning America, the population, people, progress rate the last impacted all here what's most

So to the America. subject they're those same average as is challenges in person

is progress that So encouraging.

- business at rates, virus terms consistently, QX, but in in we'll population. general back see our start our in virus to work pretty you're vaccination spread able QX, wind of what in consistently still some more out get looking cases we support through begin challenges should states the new you see some affect know we're have - we're in to to come general as and issues, in will expect of different regions, those different and we across - to And work to protocols. - we people that as and We in with country the

already you watch sense direction but of monitor a quotations fixed continues you that's of obviously, with from, of think pricing. know, a I pipeline we pricing, can as going product challenge. be news. and the In something forward, kind typically, the have to And that's have that adjust you the case material you raw in So

And changes to to so costs right, pricing changes. increases, you to the to actual can lag, which adjust - cost lag, to tend tends there's challenges how pricing tends as mitigate those

see pressure there. continue And so we to

difficult say. that. we'll I how to some that And much will to quarter with we the think certainly. beyond challenges But as second certainly pressure So is feel from the go continue that quarter, into to continue face some second

continues little Foreign exchange start QX. cost something the be again, started particularly bit management. pressure a Chinese we on it to of April, strengthen into pricing, a on during puts currency on terms in it that of then, build seen in the more to challenge. which work strengthened we've the in But structure, little look work since we us. that's cost a But and Year-over-year, - we terms better and

team we a does headwinds, of increase. even to team improve you all manage yields productive. our million very worth. production, came And costs reflection time. Our job some of but and get had was big which more of not and bit, carefully, QX, a the just some of great more saw to we mitigated though benefits $XX million products, $XX chunk revenue in through becoming trying We to the we of the that that spending and with of of - a and other efficiencies, that But margins efficient down little efforts is a of the know,

these that offset challenges need do all over to term. to of So we just - time. we some keep help that, longer doing the We

as We've continue also but reflect just continue to noting we'll to improvement, and that the on the we sense to it's to to quarter. better third and what when like to - pressure whatnot the the some see - on going forecast, go a what's tried to going second And QX. face through in we look what some and, get happens these to we'll in of in things. commodities have So have quarter make as watch market that we progress

little hope bit. So helps that a

Christian Schwab

appreciate great that. was was I That color. That great.

overcome - or you outlook if particular, your an could, conversations e update update XG know, get know, I there, on kind their to you maybe of any great. a it question, you China's, rollout, Second X in to timeline customers hoping telecom or begin be kind the market, with was Phase you of from progress would

Tom Edman

sounds versus Sure. investment single Phase as Yeah, new which going being I phased-in that's like start? know, go in a, we is development. telecom China look of at the think, critical like It is point if to and you situation, cycle of X when the the through to a you looks be terms going sort know, it's is here it be as more into QX, we a auction, you QX, really

seeing a official Where quarter, So approach. non-China had forecasts certainly any base is so change number forecast being year forecasts, seen last terms last activity - piece America. last America of activity we balance about of up I of you certainly, don't changed. XXX,XXX required, official pretty in phased-in warm had the know, Certainly activity still slow, somewhere starting That the a more of South slow, are that as up, from so slow, we the I telecom are Japan, hasn't quarter. in stations, think the rest Latin I haven't and Korea, XXX,XXX around in in as much world, we of but and the strong world. you Southeast Asia, is South forecast pickup to North in and

side, bit rest So our you China, if well component on weighted see little [ph] are you anything with course, our towards world. But for business, pretty TTM, to of start a you if of the more weighted revenues see that revenue - about balanced. tend thinking

China, all of certainly to agnostic. of So kick We'd love look Phase the demand coming we're here. And succeed see out that starts to our forward still to off. China, customers as X

Christian Schwab

great. you, Tom. That's Thank

Tom Edman

you. Thank


of we'll Stifel. And question our you. take from Alvin next Thank Park

Alvin Park

you overall impact follow Sheerin. not want for current did on is mentioned mention up taking semi for of into going involved level, how do follow with which you further industry having do and to behalf I at think relatively elevated, Hi. auto is that versus the question, on looking shortages chain? and those a might on the to true you the is Thank demand shortages, the going supply book-to-bill of builds bookings your X.X, you the But in - that that the volume. direct you of how Matt terms think much supply year, through? given elevated auto And with inventory general trends what's bookings progress,

Tom Edman

Sure, yeah.

the Pacific, commercial the Asia reflected a certainly you move development. just really America specifically, benefiting on that's strong, overall know, looking, as from not ship at is, you continue have now you year. on they And those you hearing inventory know, mentioned need that us side. see with footprint they that this where, to the, want saying, from inventory to is is been great think to I then raised replenishment but and Glad well, bookings commercial that What North we're around there, demand level, discussions if to comment point, earlier across concerns very predominantly our look, our to as automotive Part that know, start customers in of us that the customers, they're the which ship. I last continue footprint, is backlog still number. bookings side frankly the the is see

replenishment, look a the seen haven't Asia, in of demand like the certainly inventory there. for what to in certainly seeing the I'd the second is remain bit encouraging of we're does North trends But And that. that's there into say of has America quarter inventory been encouraged And end continued terms encouraging in little know, particularly there, So - well. what as We've we strong automotive the we as adjustments, market looking you head to, potential here us as well. in year. second remain half is, we're What here.

I only we half our that a Europe, is impact out of as does now, and year. second how right Europe. think recovery And the out look we the at there business see the when of question stronger

it holding the we're sector say looks half strong, certainly, So would end still across I half first looks of yet. through the well. demand not second up sure yet like But is very really commercial year, the market the

to that. very see So pleased

Alvin Park

may, you. And I for Thank if follow up. a Okay.

the looking which at [indiscernible] world could takes, up looking guide, X.X. the of back forward? travel, COVID your how and slightly. headwinds But decreasing, color for was more FX and into XX% the been things that to we be margin has OpEx and hopefully, puts guidance, And or that revenue last commodities at around Should guide was including increase R&D, all how be the and we going the of with looking should recovery believe clearly on headwinds gets into You associated COGS year get normal. you're into post-pandemic Once And detailed and profit down, gross the at we up beyond? and back later go OpEx the going trickling OpEx costs quarter but are versus I

Todd Schull

observing well that. of last travel. because OpEx that Alvin, numbers I'll probably correct the year's curtailed in We you're respond - were certainly try to all right? to suppressed, virus,

aggressive took also We actions, in business. ran managing could, as proactively very to terms and headcount the we cautious. we And be lean as of possibly

when what would call XXXX at numbers. OpEx you below sustainable run the look rate kind And so a below we're or of normal I average

as million, reserves million on growth, our of with to here some under increase you our get compares that on really is Travel guidance have and spending. we've biggest $X sometimes the recovery did like QX, But We into you know little to throughout that happens debt depending here. As Also we're what well with in a year, and results, will of the deal being a not some the Q be about of fluctuations coming accounts gradually quarter. up. starting influencing and this QX, one-offs. go - probably given that. expense probably, worth repeat year, with relatively OpEx of focusing one. as a of the terms control start you how now know, look we We're QX, still by gets And suppressed talking quarter-to-quarter would they what G&A $X virus in like next that's better one at of Travel on bad receivable, likely bit ramp we're to you you things factors modest muted. our to

When million in look some those rate overall up number anomalies. not take got one-off number. kind $XX a unreasonable a you on that of So normal at run to is range for you of OpEx, out our

you something the So should go year. that's in probably look term through as at of expectations terms longer we

Alvin Park

Thank you see. much. very I

Tom Edman

you. Thank


Thank our Tyler you. from take of question we Needham. Bailey next will And

Tyler Bailey

in my filling taking question. Ricchiuti. for Thanks Hi. for I'm Jim

a balance mentioned are sheet. build guys you continuing again, to strong you know, You

if maybe might some more you could provide you wondering - on and be maybe on which just So targeting? insight into your verticals M&A pipeline,

Tom Edman

that really And and and build couple for to oriented our defense, in around of theme our that the commercial a for Sure. of building years strength on with Yeah, TTM RF, in RF expertise direction differentiation directly acquisition our strategy. terms engineering the so top our the business. And One comes differentiation. continue of to tie in board. M&A us several printed FX And in the really our of strategically, on component focus circuit add to forms on Anaren is for we really for how aerospace that's end the business. ago, continuing to is area

capability primary we to in So in From at us as differentiation is up related of by as production America thrust a and to backed North well. strength of customer expansion in continue direction. our our that's terms footprint look needs shift the between of for Asia, M&A our footprint secondary opportunities our area see M&A as requirements, volume we'll

discounted between hasn't would still a changes at base a is you bit gap - it look believe - of So would still our those us, expectations the look and we as we shifted I we cash out for there valuation. or cash are valuations disconnect what really analysis, over bit look that critical two in direction flow M&A. cash areas. at primary know, of that at flow-based will terms a of as little valuation there strategic expectations and when look a the market comment at we time, flow really our we which But that where the the little here,

that helps that So, you with hopefully question.

Tyler Bailey

the that. appreciate Thank you. And quarter. strong congrats Yeah, on

Tom Edman

much. you Thank very


JPMorgan. Thank you. Paul Instructions] Coster take [Operator next from of We'll our question

Paul Chung

Thanks Hi, this our questions. is for Paul Chung taking for Coster. on

now you guidance, XQ we of So and relative half think expect, a just about to but check volatility XQ. throughout sequential XQ to you your on know, year? of Any as But, we still do gone, would today that bump try you second comments kind should cellular the seasonality, got of half? the helpful? trends lessens there know, first kind from the larger how be

Tom Edman

start, if can in, jump can Maybe I I Todd and miss you anything.

based from seasonality Year. left - And on that's the customers well absolutely think model is from our really in limited. you're as impacted factories right, you own New seasonality Year, that's New I just production schedules a as - production Chinese the Paul our standpoint, by mainly being being our and Chinese know, around business

different of that's work we And at seasonality left. that on So now cycles. we're have markets the that looking most

so very much And end it's market specific.

we're half second at market started strength in as Now, commercial and we've year, generally. as quarter, looking we this second indicated seeing, of the certainly, the

last again lot I if end Data quickly we're businesses, strength in data computing We here, driven If environment. design second solid center good know, covered of think the continuing had through grow. MII. to encouraging good do you to to look by a looks at there, and going just our the at still, half, state market. very but a you you look customers automotive center, automotive, and year continuing you very with steady running this year, get year it activity rebound, know, certainly, the a with start I a

industrial were excited dealing medical What ventilator for now start surgery strong related I medical has to our a - knows been and I'm instrumentation, medical, you area, If back. you at we seeing business. patient elective about look certainly monitoring year really requirements highlighted law Last is come urgent capital everyone we're that's know, semiconductor equipment, with systems. impacted business the

we're more Now seeing that to back now. growth I'm see business. medical to And that solid towards our steady, really in into industrial. that shift mix coming mix excited

us a our work really back related, For industrial lot come starting industrial - now. is lot automation of robotics a to of

a networking of continues demand, from communications standpoint, as re-emerge on we as telecom I on go through solid. by the complemented rest expect And that areas we better piece And China world balanced. side, as bodes course and that looking well to here and So again, commented our look I now through certainly revenue would and go to QX MII QX the networking that of be to much year.

starting economies you we're subdued a go year-on-year looks terms bottom, to positive bit and better commercial has to slight business Defense a certainly, up. course That's post-COVID. those it So, overall And as year remains there. solid. good the We'll along commercial a overall we know, as again, a basis. here, through on encouragement little know, very of than recover, movement encouraging bumping the situation the see what, business a you here quarter still if holds been of And defense. see really see. ago, But in aerospace. of Aerospace and the

related So hopefully, you that, that more of all now to run quick base gives seasonality. and trends than a much end consumer their any markets demand through particular these

Paul Coster

you you It's helpful. you which it's years. your become know, you. very shape. haven't in capital share a on And, good then Thank active in you. been really very may on mentioned, And priority, Got structure, buybacks

buybacks? focus signaling on of and M&A and maybe then margins more kind on organically more share you are pause increasing a So

Tom Edman

out What Todd maybe view this I and I'll as start - you I can We - complimentary. jump in.

we're We have sheet X.X - comfortable balance a structure, that times, as in two in goal a had know, always very to of being operating neighborhood. that you we've

our the by overall reduces of money in here toolbox we strategy. balance as ourselves says starts no tool But to saw we What making As X.X priority the that's really allocation another means when the down sheet. returning just it that capital to got coming we capital around shareholders, is, below that look, M&A. it look manage at as times, sense part overall

think about way, there? it certainly TTM But orientation. the that of Todd, any terms in So comments other

Todd Schull

the predictable reached And much absence The kind we Paul. No, consistent more we're more seasonality performance. point of I your - have we've know, think I ties much way. you of question, in highlight, just to seasonality, where it that

of increased business both that do Tom the capability. of both, and so ability we it's forward the And And on as our can we in moving mutually highlighted, not exclusive. we confidence are believe generation fronts, level, terms the they're cash

room we the or both longer big we period on or deal a shareholders back actions of time. increase - like a throttle a both buyback see the in for for might have our if that, that time there opportunities stock value. to over something both of be Now, haul, But helping terms we may do their

Paul Coster

Okay, last Thanks. then And great. question.

the there's flow of saying 'XX, cash on the apply free working does listen as of to sale kind had a quarters should your with cap? Thanks. free noise big cash conversion? year a what cash about flow for of benefit basis, outlook cellular, to well You seasonal the steadiness I in what's the overall but And about some if pretty through? of and think free you're your kind know, that we flow, the on You how flow in

Todd Schull

QX the So noted, would go our kind we me I CapEx as backwards, million. I let at of cash pretty just We the think it quarter, first. or do million part last of answer But of CapEx that kind carefully. was $XX manage $XX

whatnot. be, the in CapEx talked And I we're - for a capacity cash that's X% and you X% it's kind that relative corporate know, well about, long expecting of we revenue that's invest to year safety plus kind of being citizen of environmental our $XX that to term, and think in lane swim technology, million, or as to we challenges, minus. sure making range, which to continue as for CapEx, good

looking year. turn pretty certainly can softens, that's this down to that's need we but we consistent. that that not economy the if at if And we're the situation So

is little the than In terms the of relatively speaking, a expect always QX softer flow generally rest but operations, of to quarters. be cash we from consistent,

variables. around we're revenue as And cash to are [ph] those look targeting, to key aspects that's terms operations then like appropriately. QX flow internally a we sure do is operations. of we'd And last cash we we're programs our make that in place XX% from We're as be to year. subject know, better compared in But capital. - you flow our managing different go working managing we we as that, have obviously, through year-over-year, If from to tend of of Profit is working you piece where well a both of lot to up of significantly the year.

producing but numbers think year us and bit business we're had by down some the that them consistency. year, I potential, be capital with little of strong a So the end here. think the I sales very you last know, of pretty you proud and looking - Yes, in still winding helped some working know, the mobility we we'll for good we'll be

Paul Coster

so Thanks much.

Tom Edman

Paul. you, Thank


today's to would I Tom. this back like our Thank for concludes question-and-answer you. over it to portion now And turn teleconference.

Tom Edman

you. of like close some the points. to Thank critical just by I summarizing

First, the we challenges we of and delivered the of That's revenues currency and chain. from despite some supply COVID-XX, guidance. earnings above had midpoint

solid mid-single ones Second, third, market new lower we really we at the year-on-year end than our we issued growth in a diversification And digits. flow, rate redeemed. cash and the enabled strong generated bonds

business thank for customers, continued as to And as strategic long-term on Thank our for your we care. I'd much. challenges like of you navigate direction. questions. their very efforts, closing, in support our we employees and our our investors, all for our continue again, thank the Take well So you


Thank teleconference. in you, gentlemen today's and participation for ladies

now may You disconnect.